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This past summer marked the beginning of what should be a busy few years for aviation contractors in Houston. The procurement process is under way for George Bush Intercontinental Airport’s international terminal renovation program, valued at $1.4 billion, with preconstruction services scheduled in parallel with architecture and engineering work.

Contracts for additional “enabling” areas that allow the terminal to maintain operations during construction—including a utility corridor, a project management office building and eight hard stands for wide body aircraft parking—are expected to be awarded by the end of the year. Smaller packages of work for airfield renovations, a parking garage, roadwork and possibly a hotel are on tap for 2016, with construction likely to begin in 2017.

“Houston has become the home of oil, so international travel is booming. The airport now has nonstop service to six continents,” says Tina Millan, vice president and head of U.S. aviation for Turner & Townsend, which is serving as executive program manager for the Houston Airport System. “If passengers are getting off a flight from the United Arab Emirates that costs $27,000, they want to walk through an airport that feels convenient and provides certain services.”


[caption id="attachment_5642" align="alignright" width="250"]Houston Airport Houston Airport[/caption]

The activity in Houston reflects consensus that increasing air traffic and airline revenues are supporting capital spending, particularly at major hubs. Stable federal funding has resulted in steady airport runway and taxiway construction work during the past decade. The need to expand and upgrade runways remains crucial at airports across the country, with annual construction starts expected to total about $2 billion this year, according to McGraw-Hill. And with late departures trending higher, FMI reports the push to upgrade or add capacity will continue.

“We need to keep up with the fact the aviation industry is changing. Now there are airplanes fitting 400 to 500 people that are too big to sit at available gates, and there are too many passengers to sit in holding areas and boarding zones,” Millan says. “It’s a combination of fixing aging infrastructure and accommodating quickly changing planes, technology and equipment."

Yet, infrastructure spending has slowed tremendously in the last 25 years. In fact, U.S. airports need an estimated $75.7 billion through 2019 to successfully complete infrastructure projects that accommodate growth in passenger and cargoactivity, rehabilitate existing facilities and support aircraft innovation, according to Airports Council International-North America (ACI-NA). Additionally, passenger facility charges (PFCs)—considered the foundation of airport capital investment—have stayed stagnant for the past 15 years rather than keeping up with cost-of-living increases. To put that into context, ACI-NA reports airports are allowed to charge PFCs up to $4.50, which equates to only $2.42 today.

[caption id="attachment_5643" align="aligncenter" width="333"]Houston Airport Houston Airport[/caption]

Federal Aviation Administration (FAA) grants largely are reserved for pavement projects, and some Transportation Security Administration (TSA) grants are available for security-related construction.

“I don’t foresee a lot of security changes at the most modernized airports,” Millan says. “However, a lot of airports haven’t been modernized, as Miami, New York and Houston did several years ago. The goal is to reduce queuing so people move through security quickly and spend their time and money at concessions.”

When it comes to rehabilitating and growing old airports, one of the major points of emphasis is intermodal connections: how to get people from their planes to their trains or rental cars as fast as possible. “If you add a well-done rental car center with connecting light rail, the traffic surrounding the airport changes tremendously,” Millan says.

Case in point: Orlando International Airport is currently doing a billion-dollar terminal expansion featuring road and parking improvements, as well as an intermodal transportation facility that will accommodate commuter rail stations. The job, spearheaded by Hensel Phelps Construction Co. and Turner-Kiewit Joint Venture, was spurred by the uptick in passengers traveling to or through Orlando (reaching a 9.6 percent increase from 2013 to 2014). The intermodal complex is expected to be done in mid-2017 and includes an expansion of the airport’s automated people mover.


Small and medium-sized airports are playing catch-up as much as the major hubs. While they aren’t necessarily assessing the impact of larger aircraft or runways, they are looking at ways to be more efficient and profitable and accommodate the regional jets that can go longer distances. For example, South Carolina’s Greenville-Spartanburg International Airport is undergoing a multi-phase improvement program consisting of a 407,000-square-foot terminal expansion, consolidated TSA checkpoints, baggage handling systems, and restaurants and tenant spaces. The joint venture Skanska Moss is leading the $80 million job, which should be completed by the end of the year.

F1-LandingMVJust outside Las Vegas, the Boulder City Municipal Airport has zeroed in on the need to enhance airfield drainage. Under a $3.2 million contract, Phoenix-based Meadow Valley Contractors, Inc. replaced the airport’s aging storm drain system in just four months.

The aggressive schedule scared a lot of bidders away, but Meadow Valley Contractors was able to staff extra shifts so work could be done at night, before runways opened the next day.

“With the tight schedule restraints for completing the job on time, we were faced with the challenge of procuring the long lead-time materials in the job specifications,” says Meadow Valley Contractors Project Manager Clarence Lewis. “Getting those materials delivered and on the job when we needed them for our scheduled work activities was one of our immediate challenges.

“Also, the soil conditions were very sandy, which made the excavation work more difficult. Working in the drainage channel where the rain and runoff water would collect posed additional setbacks and delays for completing concrete work.”

Meadow Valley was up to the task given its experience meeting stringent FAA specs and doing runway work at the much larger McCarran International Airport in Las Vegas (which switched over to project labor agreements about seven years ago, effectively limiting open shop contractors from competing for work).

“It takes a great management team to run a project like the one in Boulder City,” says Shane Haycock, Meadow Valley Contractors’ vice president for the Nevada area. “Safety and security were big issues. We had a full-time escort bring subcontractors and materials suppliers on and off the site. We also had to coordinate with the air traffic control tower when crossing active runways or moving equipment and materials. Communication with crews was very important.”


TMG Construction Corporation, Purcellville, Va., agrees technical expertise is paramount in the aviation construction sector. The company has been working on commercial and military airfields since the early 2000s, when Washington Dulles International Airport announced a $2 billion renovation and expansion.

“It was practically in our front yard, so it was a no-brainer to follow the money,” says TMG President Tanya Matthews.

F1-LandingTMG2Since then, TMG has performed hundreds of projects at Dulles, Ronald Regan Washington National Airport and Baltimore/Washington International Thurgood Marshall Airport, as well as at Armed Forces airfields such as Joint Base Andrews in Maryland and FAA facilities across the country. The firm usually has several aviation projects going on at any given time, and is currently doing a major MEP modernization at the Houston airport.

“It’s really specialized work. You can’t learn what we do out of book,” says TMG Superintendent Taylor Vogel. “On a regular private job, you build based on the set of plans. For government aviation work, you have to be able to follow a 1,500-page spec book. It can make it hard to recruit people qualified to manage safety, environmental and FAA requirements on these jobs, so when we find someone good on the private side, we often train them up.”

While experience is a valuable asset, Vogel notes not all lessons learned translate from project to project. In other words, just because it was one way on one job doesn’t mean it will be the same on another job.

One area in flux is the trend toward high-performance materials. Concrete mixes must be researched and tested, resulting in more front-end work to prove the planned course of action will give the owner what it wants. Essentially, concrete mix designs are becoming more stringent, leading to better durability for airfield pavement.

“Airports are going for extreme quality, not quantity. They want quality components and quality field work,” Vogel says. “Most of these jobs go to the lowest bidder that is technically qualified. We aren’t the lowest bidder, but we are technically qualified. A lot of contracts account for technically qualified over lowest bid because the owner can’t afford to re-do the work.”


In addition to quality, a contractor’s safety culture makes a big difference when it comes to selecting project partners. “We want to work with contractors that understand the need for an airport to continue operating safely while work is going on,” Millan says. “It’s like tiling a bathroom while you’re taking a shower.”

Because large, long-term airport renovation programs can be like a marriage, the ability to communicate with project partners and implement best practices presents a major competitive advantage. For example, Millan reports one project team scheduled a quarterly dispute resolution board meeting in which members ended up discussing mutual challenges and working together to solve them (rather than letting problems escalate to the dispute phase).

Experience with project turnover is another factor that can set contractors apart. Looking ahead, Millan expects a large—albeit slow-moving—trend toward addressing the full life cycle and maintenance of a project. Specifically, Operational Readiness and Airport Transfer (ORAT) is a more detailed way of commissioning a building that has demonstrated success abroad. “It’s a best practice from the UK and Middle East,” Millan says. “I have heard people using the term ORAT during the last few years as owners begin to be look at projects more holistically.”

Improving Diversity In The Aviation Sector

The Surety & Fidelity Association of America (SFAA) and Airport Minority Advisory Council (AMAC) formed an alliance in April with the goal of improving diversity in the aviation construction sector by facilitating access to surety bonding opportunities and technical assistance for small and emerging contractors. In short, education is critical for small, emerging and minority contractors to learn how to structure their businesses so they can take advantage of bonding opportunities available to them.

As part of the agreement, SFAA will work with AMAC to educate and prepare contractors for opportunities by connecting them to a network of qualified, licensed surety professionals across the United States. The groups also will collaborate to offer bonding education where major aviation construction projects are taking place. For more information, visit www.surety.org or www.amac-org.com.

FAA Aerospace Forecast: Fiscal Years 2015-2035

For the next two decades, the Federal Aviation Administration foresees a competitive and profitable aviation industry characterized by increasing demand for air travel and airfares rising more slowly than inflation—reflecting a growing U.S. economy over the long term. Significant industry changes have transpired during the past 15 years, including air carriers lowering operating costs, eliminating unprofitable routes and grounding older, less fuel-efficient aircraft; plus charging separately for services that historically were bundled with the price of a ticket. As a result, there is cautious optimism that the aviation industry will transform its boom-to-bust cycle into sustainable profits.

2% - Average annual growth in U.S. carrier passengers during the next 20 years

1.8% - Average annual increase in domestic capacity growth (i.e., available seat miles) through 2035

4% - Domestic capacity growth for regional carriers in 2015

1.9% - Average annual increase in commercial air carrier domestic revenue passenger miles through 2035

2.6% - Increase in domestic enplanements in 2015

128.2 - Average number of seats on domestic aircraft in 2015

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