Construction Firm Asks Feds to Investigate Why It was Denied $75 Million MCI Contract

A Colorado-based company that lost out on more than $70 million in construction work at Kansas City International Airport — after the City Council intervened — is asking federal aviation officials to investigate, according to a letter obtained by The Star.

The developer of the single terminal project underway at KCI had recommended in July that ESCO Construction handle some major concrete work, called Package 7a. At that time, ESCO was the low bidder.

But the City Council voted in early August to reject bids submitted by both ESCO and competitor Ideker Inc. and ask for best and final offers, saying that ESCO didn’t have enough minority- and women-owned subcontractors on its team. Some council members also expressed an interest in seeing the job go to a local contractor. Ideker is based in St. Joseph.

Ideker, which lowered its price and became the cheaper option, won that rebid despite having reportedly less participation from minorities and women than ESCO.

Now, outside legal counsel for ESCO has asked the Federal Aviation Administration to investigate.

“The bidding procedures employed to award Package 7A typify the City Council’s favor for Ideker — a favor that effectively disqualifies other competitive bidders such as ESCO,” Kory George, a Denver-based attorney for Woods Aitken LLP, wrote in a letter dated Sept. 15.

Eric Taylor, of ESCO, said the firm was upset and angry by the reversal.

“It appears that Kansas City does not promote a competitive bidding atmosphere,” Taylor said.

In a statement, the FAA said it had received the letter and was reviewing it, but did not answer a series of questions asking whether it was investigating and about its procedures.

Selecting a contractor

Kansas City broke ground on the new terminal project a year and a half ago, and it’s expected to open in early 2023, just weeks before the city hosts the NFL Draft. The City Council approved a contract with Edgemoor Infrastructure & Real Estate to develop the terminal.

The general contractor on the project, which largely handles procurement, is a joint venture of three construction firms known as Clark Weitz Clarkson, or CWC.

As part of its agreement with the city, Edgemoor-CWC promised that 35% of the work on the job would go to subcontractors owned by minorities and women. Those are known as minority business enterprises, MBEs, and women business enterprises, WBEs.

According to George’s letter, CWC informed ESCO on July 12 that it was the lowest and most qualified bidder for the concrete work. Two days later, a coalition of trade groups and some City Council members held a press conference, demanding that the work go to Ideker because — though they said its bid was slightly more expensive at that time — the firm had more M/WBE participation.

The council later voted 10-2-1 to reject both Ideker and ESCO’s bids and seek final offers from the two firms. The council’s action did not necessarily mean Ideker would be selected. When they both resubmitted, Ideker became the low bidder, both firms have said. Edgemoor-CWC then selected Ideker on the rebid.

ESCO’s letter said its final offer included 20% MBE participation and 27.2% WBE participation, for a total of more than 47% between the two. In an interview Thursday, Paul Ideker, president of Ideker, said his firm’s final offer included between 35% and 40% M/WBE participation.

The Star has not been able to independently verify either firm’s quoted price or M/WBE participation because it does not have copies of the previously closed bids.

George’s letter notes the significant discussion in City Council meetings regarding the bids and asks the FAA to investigate whether city officials violated the confidentiality of ESCO’s bid.

It also asks the FAA to investigate whether City Council members had conflicts of interest that should have kept them from voting based on relationships with trade groups or contractors. It asks the FAA to investigate whether Ideker was given an improper advantage and whether the city violated any FAA funding requirements.

“The process that we went through was not fair,” Taylor said. “I think CWC handled it fairly, but when it got into the council chambers, we were attacked, and it was clearly — from anybody looking from the outside in — that this was a very flawed process.”

Choosing local

Councilman Kevin O’Neill, 1st District at-large, sponsored the resolution asking city officials to reject ESCO’s bid and seek final offers.

O’Neill said the city’s legal department believed the council had every right to ask for new bids. He stressed then and now that he preferred work on the KCI job go to local contractors, and he said the city saved more money and got more MBEs and WBEs on the rebid.

“You can investigate anything, but I feel very comfortable with the process and how we accounted for ourselves,” O’Neill said.

The letter asked the FAA to investigate whether Ideker got unfair advantage because it was based in St. Joseph.

Asked about that and his preference for local businesses, O’Neill said he wasn’t sure what the ramifications were, but that he would always fight for a local contractor.

“We’ve already lost thousands of hours to out-of-state contractors, and I just think it’s wrong for us to continue to do that,” O’Neill said.

Asked if his firm had received preferential treatment because it was from St. Joseph or had connections to the council, Ideker said no.

“I think we are the most qualified bidder for the project,” he said. “We have the experience. We have everything.”

The Star filed a Missouri Sunshine Law request for the bids and related documents. In response, a city attorney said the documents are owned by CWC and are not necessarily public records.

“I have been advised by the Aviation Department that none of its employees were provided and/or retained any of the documents described in your Sunshine Law request,” Galen Beaufort, a senior associate city attorney, wrote.

Asked again for them on Friday, Edgemoor, which had previously denied such requests until there was a construction contract signed, did not immediately provide them.

Justin Meyer, a spokesman for the city’s Aviation Department, said Aviation Director Pat Klein had not seen George’s letter nor heard anything from the FAA.

He said the FAA had “not provided any guidance or questions to us regarding the procurement process, especially as it relates to 7a.”

Edgemoor’s managing director, Geoff Stricker, said in a statment it was not appropriate for the company to comment on the letter because it had not been informed of it or seen it.

“The Edgemoor Team selects project partners based on the winning bidder’s ability to provide the best value for our client and airline partners,” Stricker said. “The bids are thoroughly reviewed and vetted by our procurement team, and all decisions are submitted to (the Aviation Department) for final approval.”

Council members Lee Barnes and Teresa Loar voted against the legislation asking the city to reject Ideker and ESCO’s bids and seek new offers. Councilman Brandon Ellington abstained. The remaining nine members of the City Council and Mayor Quinton Lucas voted for the legislation.

Loar did not return a call seeking comment Friday.

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