Feds probe diversity, civil rights claims on $1.5B Kansas City airport project

Dive Brief:

• A $1.5 billion airport project lauded as an example of successfully incorporating diversity and inclusion initiatives in the commercial construction industry is now under scrutiny from the Federal Aviation Administration over whether it is actually meeting those goals.
• The FAA’s civil rights office called out Kansas City, Missouri, officials for failing to track minority and women-owned business participation at Kansas City International Airport’s new terminal project, and not reporting a civil rights and retaliation complaint by a woman-owned contractor that was initially accepted, but then rejected, to work on the project.
• In a Feb. 9 letter to the city’s Aviation Department, the FAA found that the airport and the new terminal’s construction project had “significant compliance deficiencies” on both diversity and civil rights, which are conditions of the airport’s federal grant funding. The agency directed the city to take immediate corrective action and report its progress within 30 days, warning “if these deficiencies are not addressed, Kansas City will be in violation of FAA grant assurances.”

Dive Insight:

In a statement emailed to Construction Dive, the Kansas City Aviation Department, which oversees the airport, said it has been working with the FAA on the review, and that it is coordinating with the city’s department of civil rights and equal opportunity to implement changes now. 

“Complaints and investigations of this nature are not uncommon and we are continuously working to ensure compliance with all local, state and federal rules and regulations,” the statement read. “The Aviation Department understands its grant assurance responsibilities and continues to work closely with the FAA to uphold our commitments.” 

Kansas City International’s new terminal project, which began construction in 2019 and is slated for completion next year, has been highlighted by Bethesda, Maryland-based Clark Construction and its developer affiliate Edgemoor Infrastructure and Real Estate as a positive example of diversity and inclusion initiatives in the industry.

Edgemoor has set goals on the project to employ 20% minority-owned — known as disadvantaged business enterprises, or DBEs — and 15% women-owned contractors on the job. Those goals were a condition of the original contract set by the city, but actual participation numbers have been questioned in the past, according to the Kansas City Star newspaper.  

In an email to Construction Dive, Edgemoor said it is exceeding “participation goals for women and minorities on all fronts,” including:

• A total of $319.8M in contracts, or approximately 21% of the project’s budget, has been awarded to minority- or women-owned firms.
• 129 minority- and women-owned firms are working on the project.
• 20.4% of subcontracting dollars are committed to minority-owned firms and 16.8% to women-owned businesses for professional services.
• 24.9% of subcontracting dollars are committed to minority-owned firms and 19.6% to women-owned businesses for construction services.
• Exceeding workforce hours requirements with 23.03% (goal 20%) performed by minorities and 7.6% by women (goal 2.75%).

Despite these metrics, FAA found the city’s Aviation Department couldn’t provide evidence it was actually measuring the contractor’s progress against its goals, a requirement of its federal grant. 

Instead, the FAA found that the airport tracks its “good faith efforts” to have contracts with DBE goals included in them, but that “no documentation of this kind was provided to FAA before or during the compliance review,” according to the letter.

The agency also found that the airport didn’t actually have a formal DBE program in place, another requirement of its grant funding.

“[Kansas City Airport] has a DBE program in draft form,” the FAA found, “but it has not been signed by the CEO and the liaison officer is not familiar with the details of the program. The existing draft program needs updates and has not been approved by the FAA.”

A rescinded contract

Lisa Garney, the owner of Kansas City-based concrete supplier G2 Construction who filed the civil rights complaint, was dubious about the project’s participation claims, since they weren’t being tracked by the city itself.

“One of the things I’m most proud to see in the FAA’s letter is that they recognized there is no tracking of participation and there’s no reporting,” Garney said. “If no one is holding these guys accountable, they’re not going to actually participate.”

Garney’s firm was partnered with Denver-based ESCO Construction, which was initially awarded a contract of approximately $80 million for concrete work at the project.

But that award was rescinded and rebid after the Heavy Constructors Association of Greater Kansas City, an area trade group, protested that the funds weren’t going to a local contractor. The award eventually went to St. Joseph, Missouri-based Ideker, whose owner, Paul Ideker, served as the trade group’s treasurer, according to the Star, and is its current president, according to its website. 

Ideker did not immediately respond to a request for comment for this article. 

The episode illustrates how two increasingly prominent inclusivity goals of public contracts today — hiring both minority- and women-owned firms, as well as companies from the community where a project is located — can sometimes be at odds.

Garney questioned the city’s response that complaints like hers are commonplace, which she said sounded like an attempt to minimize her grievances.

“If they’re saying complaints like this are not uncommon, then how much more of this is going on?” Garney said. “What else aren’t you doing right?”

With the project scheduled to be complete in 2023, she also lamented that while the FAA’s probe could increase compliance in the future, it would likely come after the fact. 

“It may help moving forward, but now the airport is almost done,” she said. “Women and minorities aren’t really going to benefit from any of these corrective measures on this project.”