After nearly two weeks of brainstorming, collaboration, and value engineering, Walbridge and HNTB came back with just over $10 million in savings.  This is still $3 million more than originally budgeted, but the reduction is $5 million greater than estimated at the last meeting.

Not a quarrel was made about the savings, but there was plenty of discussion about the fee at which HNTB was to charge for the services rendered in order to perform the savings exercise.  We’ll get into that is a bit, but first, lets discuss the savings and what they entail.

Among other things, the terminal canopy is being reduced “dramatically”.  The renderings have changed, reflecting the overall look of the new terminal.  The new canopy will be of a different material with the materials used for the wall structure consisting of steel frame that will be covered with stucco – replacing the previous wall of windows.  The savings in the canopy modifications alone ring in around $1 million.

In the redesign of the terminal, the architecture firm was striving to keep consistent with the “Florida Cracker” look and feel using wood and other natural-looking materials.  The trellis arrangement that was originally to be visible from the inside of the terminal has been removed from the plans with the structure support now coming from a series of columns, some visible and others built into the walls.

Also, instead of purchasing new passenger bridges that will pass passengers to the aircraft, the board will purchase “pre-owned” bridges.

One of the largest savings came with a modification of the baggage handling/screening process.  The original system, the way I understand it, consisted of a sophisticated automatic process that far exceeded the minimum safety requirements of the TSA. A savings of $1.6 million brought in a system that still meets TSA requirements, but isn’t as “fancy” as the original system.

Now the topic of much debate.  Why should the Airport Authority Board have to pay a fee to HNTB for the redesign process that was to get the cost back down to budget.  This is a very valid point in that, if I tell you a web site I build for you will be one price, then after we work through a process to determine your needs and hammer out all the details, the price is 25% more than the original quote, then I charge you money to work through with you to get the price back down to budget, is that right?

Well, I’m afraid the answer is actually quite a bit more complex than that.  In fact, it is probably quite a bit more complex than I understand.

You see, it all started in April or May of this year when the bid was 95% complete and all the numbers still looked on target.  As one of the board members so pointedly put it, “so the terminal went over budget $14 million in the last 5%?”

Jeff Dealy, with KBR, explained this as sort of an anomaly.  With materials costs rising sharply right around the April/May time period and the “bid sheets hitting the streets” at that same time, the bids the architecture firm was receiving from its consultants were coming in higher than originally anticipated.  The problem is that today was the first many had heard of this; and the question is who’s fault is it?

The Airport Authority Board insists that the fault lies with HNTB.  Joe Tannehill stated that if HNTB had noticed the costs going out of control, they should have said something early on so as not to have had to go through this excersise in the first place.  Board member Bill Cramer was pushing for an “outside” number, a “not to exceed” estimate on the fee HNTB would be charging the board to perform the VE excersise.  At the time of the meeting, HNTB didn’t have the fee number solidified and was unprepared to give a quote.  Joe Tannehill stated that he didn’t beleive there should be a fee at all because if the architecture firm was “doing their job”, they would be at budget.

After around 30 minutes of rather interesting dialogue, Chairman Tannehill made a motion to have a recess and return at 12 giving HNTB time to figure out what the fee would be and to return with a suitable number.

The decision had to be make today, so the Board needed all the information so as to eliminate as many future unknowns as possible.

After the recess, it was decided by HNTB that the fee cost would be more than what was considered suitable, but that they would cap it at $500,000.

It was suggested by Andy McKenzie that HNTB only charge the Board the direct costs it incured and payed out to outside consultants that HNTB did not own.

A motion was made and passed to approve the bid and award the contract with the allowance of the board to address who was going to pay for HNTB’s fee.

That was it as I understand it, please feel free to correct anything I said if it was wrong or the wrong assumption was made at any point.

Mr. Minor, will you please send me an email as I’d like to pick your brain a little on the dynamics of all of this.