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San Francisco International Airpork

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The archive will include rare books, purchased for $200,000 from a collector in New York City, that focus on airplanes. These books are not part of the spending on art that must, by law, be included in San Francisco's public works projects; they were added to the master plan in March 1999, even as the budget was closing in on being $1 billion overdrawn.

Every SFO change order was approved first by the construction managers overseeing the master plan, then by the advisory board, and finally by the Airport Commission. Any of the changes could have been stopped at any stage of the approval process. Instead of denying the airlines what they wanted, or holding architects and contractors responsible for what appear to be mistakes or substandard work, the commission generally decided to go deeper into debt to fund the cascades of change orders. And the change orders led to delays.

For instance, the two long concourses connected to the cavernous international terminal -- boarding areas A and G -- are more than a year behind schedule. And the concrete aprons surrounding them -- the airplane parking lots -- will not be fully ready for airplane traffic until after the terminal's recently revised opening date. One apron will not be ready until December 2000, two months beyond the opening. The other is on hold until December 2001, 14 months past the opening.

SFO Associates' Bruce Swanson says that most of the gates will be in operation by September, if all goes as planned.

But it seems that very little goes as planned at SFO. During construction, the costs of boarding area G rose from $64 million to $91 million, a 68 percent increase. Some of this additional cost was caused by adding extra concession space, which is needed to pay for such added items as the airlines' new first-class lounges.

VIP lounges aside, the airport has fined Tutor-Saliba $1.5 million for delays in building boarding area G. But this fine is the exception, not the rule. An airport spokesperson says this is the only penalty charged to date against a master plan contractor, architect, or engineer.

The San Francisco airport has hired 12 construction management partnerships, composed of 25 firms in various couplings, to oversee the airport master plan contracts. As agents of the airport, these firms are responsible for keeping the master plan on budget and on time. The leading construction manager is SFO Associates, a joint venture formed specifically for the SFO job. Its partners include Pasadena-based Parsons Infrastructure and Technology Group Inc.; AGS Inc., consulting engineers in San Francisco; EPC Consultants Inc., San Francisco-based office engineers with several city contracts; and Business Development Inc. of San Francisco, which specializes in hiring out its "odor control specialist" for city sewer contracts.

Jason Yuen and the airport advisory board keep tabs on the construction managers and make recommendations to the Airport Commission concerning those managers' fees. One member of the advisory board is Robert Luster, president of Luster CM Inc. of San Francisco. His firm is a partner in four of the interlocking private joint ventures that have contracts to manage elements of the master plan. Another member, Loren Smith, is a vice president of Parsons Infrastructure and Technology Group Inc.

As members of the advisory board, Luster and Smith are in charge of monitoring the quality of their own firms' work. They sign off on budget overruns, including fee increases for their own firms. Yuen says this is not a conflict of interest for the two construction managers. Luster, says Yuen, is so "high up" that he does not get involved in the daily business of his company, and can be objective and disinterested when voting on issues that affect it.

Neither Luster nor Smith returned telephone calls from SF Weekly. A Luster representative said that tying construction management fees to budget overruns is "an anomaly of the system."

The upper limit that construction managers overseeing SFO master-plan projects can charge is set as a percentage of construction costs. Therefore, every delay and change order that increases construction costs means that the total amount construction managers can bill also increases. As the master plan budgets have expanded, the Airport Commission has not punished the construction managers; rather, they have apparently been rewarded for failing to control costs. The commission has voted to nearly double the management consortiums' potential fee, from 5 percent to 9.2 percent of construction costs, bringing the projected fee to more than $196 million. So far, construction management fees are 150 percent above the $80 million originally budgeted.

The system in which construction managers and contractors supervise themselves, and gain with every cost overrun, has raised questions both large and small.

In January 1997, an airport auditor named George Suter flamed at SFO Associates, refusing to approve requests for reimbursement for valet parking tips and laundry for consultants who were already billing the airport $1,500 a day. He objected to "similar small sundry amounts for meals, paper towels, bottled water and the like." He axed multithousand-dollar requests for lunches and dinners submitted without copies of the restaurant bills. He killed credit card purchases, and a $2,612 bill for improper car rentals. He laughed at $22.25 for "donuts for meeting."

Regarding what he seemed to view as gouging, Suter wrote: "The amounts become incongruous in the context of the millions the airport is spending, and must be as embarrassing to submit as they are to turn down."

Swanson says he remembers Suter's rejection of SFO Associates invoices, but he cannot recall their ultimate fate.

Other internal audits reveal construction managers double-billing for office supplies, and seeking $125 an hour as reimbursement for copy machine clerks. One of the construction management joint ventures was criticized for change-ordering a $335,000 "procedures manual" that had not been authorized. The auditors also found that some construction manager time sheets contained $100,000 errors -- in favor of the managers.

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