Air Board Displeased With JCI

December 3, 2004
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GRAND RAPIDS — Kent County Board of Aeronautics had intended to withhold the latest payment on a contract with Johnson Controls Inc. to upgrade the airport’s access control system because the project was supposed to be completed a month ago.

Though commissioners agreed Nov. 24 to temporarily suspend payment, shortly thereafter the board’s legal counsel advised them that terms of the contract obligated the airport to make the scheduled payments to JCI.

The board had warded Johnson Controls Inc. (JCI) the contract in August 2003 under an agreement that specified the project be completed by Nov. 6, 2004. JCI’s bid of just under $2.6 million was the lowest of three finalists competing for the job, and at the time was considered the “most compliant” in terms of project specifications.

JCI subsequently pushed back the date of completion to May 2005, citing technical problems. Gerald Ford International Airport staff estimates the additional construction engineering services for the seven-month extension will run $140,935.

The project involves upgrades to Ford International’s closed circuit TV system and its automated access control system that controls the doors and gates of airport facilities. The system controls employee access to secured airport areas by scanning and validating employee ID cards. The new system will use “smart cards” instead of the old stripe-on-the-back card.

The new system is expected to position the airport to meet future federal requirements in terms of biometrics, Rob Benstein, the airport’s public safety and operations director, has said.

“Right now the use of biometrics isn’t mandated, but by going to this new system we’ll be able to meet those types of requirements that may come out in the future.”

As a result of delays in getting the new system in place, the airport is assessing JCI liquidated damages of $1,125 per day.

“We feel very confident in our position that we have not been the ones that have caused the delays. It’s been their lack of responsiveness in providing a system that meets our specifications that were clearly identified,” Benstein told the board. “We’re confident that we will be able to complete this system and that we will recover liquidated damages to cover the increased cost of the contract.”

He anticipates the total of liquidated damages will more than offset the cost of additional construction engineering services.

Commissioner Dan Koorndyke expressed disappointment in Johnson Controls’ performance and its inability to get the job done on time.

Commissioner Dean Agee questioned whether it was appropriate to pay any JCI bills given the company’s performance on the project.

“I think the patience of this board with this contract is waning,” Agee remarked.

Aeronautics Director James Koslosky responded that terms of the contract require the airport to pay on time for materials and for the work that has been accomplished.

As Construction Manager Ward Walters explained, the JCI contract is a little bit different than most. He referred to it as a “milestone event contract” under which each milestone in the payment schedule is paid when the work is completed.

The first milestone was removing the old security system conduits and card readers from the doors of all the buildings, and the second milestone, which is still ongoing, involves installing the backbone of new infrastructure to support the access control system.

“The only thing they really have left to do is the ASC system and we have more than enough money to cover it,” Walters told the board.

JCI hasn’t been able to move forward with the ACS because it hasn’t been able to pass factory acceptance tests, Koslosky said. The next test is scheduled for early this month, he said.

“That will be the benchmark,” he said. “That will tell whether they can meet our specification or not. And we’re holding them to specification.”

Agee had suggested, and the board initially concurred, to withhold payment for a couple of weeks to see whether or not that happens. The board changed its position a couple of days later under the advice of its lawyer.    

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