*Editor’s Note: This story has been updated to include comments from the city’s Aviation Department and the project’s main contractor.
ALBUQUERQUE, N.M. (KRQE) – It was a project at the Albuquerque Sunport that was supposed to take just over a year to renovate lights, signs, baggage claim and ticketing areas. In the end, travelers dealt with construction for more than three and a half years, and the project cost the city an extra $3 million.
The massive delay and added costs on the terminal renovation are the focus of a recent internal audit from the city, which, in part, suggests the city’s Aviation Department should try to reclaim hundreds of thousands of dollars from Flintco, the primary contractor hired to do the work. It also suggests the city’s Aviation Department didn’t have the right rules in place to control project costs.
Originally built in 1965, Sunport’s main terminal has been expanded and improved numerous times over the years. In 2015, then-Mayor Richard Berry unveiled the project plans to KRQE News 13, saying the goal was to help put “the best possible face on Albuquerque.”
“The Albuquerque International Sunport is the front porch for our state,” Berry said in 2015. “We want the best first impression we can have.”
The plan was to add new lighting inside and out front of the terminal, to update the look of baggage claim, and to update the outdoor “arrivals” area with new seats, signs and more light. The original contract outlined 456 days for construction at a budget of nearly $30 million. By February 2017, the city held a groundbreaking ceremony for the project.
It ended up taking contractors almost three times as long to finish the job, for a total of 1,265 days of construction. The final cost of the project was $32.9 million. The new city audit puts some of the blame on the city’s Aviation Department.
“Aviation did not have the appropriate framework in place to effectively monitor and control project costs and progression, resulting in an additional $3 million in change orders and over two years of project delays after the original contract completion date,” the audit says.
And the audit says the city overpaid by nearly $200,000. That’s money that the auditors say the city was never obligated to pay.
The money for the project didn’t come directly from taxpayers, but could still be considered public funding. The funds came from fees the Sunport charges, but ultimately, the Sunport is a public airport.
And this isn’t the first time an audit has found problems with Sunport construction. In 2016, KRQE News 13 reported on holes in the bidding process for remodeling work.
One change after another
To pay for the construction, the city worked with SMPC Architects, which had a preexisting contract with the city, the audit says. And the city contracted with Flintco, LLC as the general contractor for the renovation, which oversaw the day-to-day work on the project.
The city agreed to pay Flintco $29.8 million as a lump sum to complete the project, according to the audit. Under that contract, the audit says Flintco was responsible for completing the work.
But as the project wore on, more and more change orders — adjustments to the original contract — began adding up.
The audit counts 26 different change orders to the original agreement. Most of those changes increased the project cost and some increased the timeline. Ultimately, the project took 809 days longer than originally planned and cost $3,023,059 more than planned.
Four of the change orders were to replace the project’s electrical subcontractor, who was terminated from the project. Ultimately, that added 502 days to the work and hundreds of thousands of dollars in cost to the project, the audit reveals.
Additionally, the city paid for $193,404 worth of “unnecessary expenses,” according to the audit. The majority of that is a payment that the auditors say the city is not under contract to pay.
In one of the change orders, the contractor allegedly claimed that previous payments didn’t make up for the contractor’s general expenses. As a result, the contractor asked for and received $189,779. The auditors say that the city should lawyer-up and try to get that cash back. The Aviation Department told KRQE News 13 that they’re currently consulting the city’s Legal Department.
The audit also suggests the City Attorney’s Office should look into receiving as much as $753,000 in so-called “liquidated damages” from Flintco for delays associated with the project. According to the audit, the city’s public work construction contracts outline that “liquidated damages may be assessed when a contractor does not deliver projects timely as agreed.”
Flintco says they were unaware of the audit. But Flintco says they performed their contractual obligations for the project.
The city’s Aviation Department “agreed to extend the project schedule for a number of reasons, including changes to the project design, added work, and delays beyond Flintco’s control,” Steve Eikanger, the president of Flintco, told KRQE News 13 in an email. “There is no basis for AD [the Aviation Department] to seek recovery of any amount it paid to Flintco for its work on the Project.”
More construction coming soon
Despite the problems with the last round of construction, the Sunport has more construction work coming.
In 2020, the airport announced plans for around $20 million in additional improvements. This is phase two of the work that started back in 2017.
Now, the idea is to get a new concession area and to relocate the security checkpoints. The city’s Aviation Department says that they’ll use an updated contracting method for future phases of work.
“The upcoming project is a new and different project. The Aviation Department will act in accordance with the recommendations of the auditor/investigator as indicated in the report, and the new project will employ a different method of contracting,” the Aviation Department says.