Legal Issues Related to Large-Scale Airport Construction Projects (2020)

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Legal Issues Related to Large-Scale Airport Construction Projects Copyright National Academy of Sciences. All rights reserved. ACRP LRD 38 17 This included outreach to central utility plant operators and en- gineers, as well as to the end users of the facility, prior to the start of the procurement, in order to educate them on what the air- port should build into the procurement or contract documents. The airport found this outreach to be extremely helpful, and one of its most important lessons learned on the project. VII. ENVIRONMENTAL REQUIREMENTS AND PERMITTING For large-scale construction projects, airports must both comply with applicable environmental requirements and ob- tain all necessary permits. Airports should generally follow and fulfill environmental requirements put forth by the National Environmental Policy Act (NEPA), as well as other federal envi- ronmental laws and regulations (FAA 2018c). These regulations relate to airport air quality and noise, environmental reviews for airport development, as well as application of the Uniform Relo- cation Assistance and Real Property Acquisition Policies Act of 1970. The FAA has environmental programs in which airports may participate to facilitate compliance with NEPA and other federal requirements. These voluntary programs are related to airport air quality, airport noise, and airport sustainability. The FAA’s Office of Airports is responsible for fulfilling NEPA re- quirements for airport actions under the FAA’s authority (FAA 2018g). This Order 5050.4B, issued by the FAA, is to ensure that airports have clear instructions to address potential effects re- sulting in major airport constructions or actions. According to the FAA Order 5050.4B, paragraph 200, “Airport sponsors may seek FAA approvals for changes to their Airport Layout Plans (ALP) or for Federal funds under the Airport Improvement Program (AIP) to build airport facilities. Sponsors may also seek approvals of ALP changes to accommodate airport proj- ects funded by Passenger Facility Charges or other local funds” (FAA 2018h). Related to air quality at airports, various programs are aimed at reducing carbon emissions, including a voluntary airport low-emissions program, and airport zero-emissions vehicles. Under the airport carbon-emissions reduction plan, the goal is to reduce emissions of carbon dioxide (CO2) and other green- house gases from airports. The FAA provides grants to airports to reduce CO2 and greenhouse gas emissions through voluntary airport low-emissions and zero-emissions vehicle programs (FAA 2018f,j). These are not federal programs but are industry initiative programs administered by the Airports Council In- ternational. Additionally, airports receive state and federal in- centives for using certain measures to ensure energy efficiency. These programs provide AIP grants for eligible airport projects that reduce greenhouse gas emissions. Title 14, Part 150, of the Code of Federal Regulations is an FAA rule related to airport noise compatibility planning (FAA 2004). Airports may participate in 14 CFR Part 150, but are not required to do so. Airport sustainability planning is a standard eligible component of airport master planning studies funded by the AIP (FAA 2018e). Even if the FAA funds a master plan- ning study, sustainability planning is not required. communicate any potential issues to the airport. To facilitate this, ahead of setting a GMP, the airport required weekly meet- ings between the airport and the designer–builder to address potential design/cost issues. During the design review process, the owner’s interaction with the designer–builder under the two progressive DB con- tracts was very different; the owner believed that this difference was due in part to how the two designer–builders were paid during the design phase (prior to GMP). In one contract, the designer–builder was required to bid a lump-sum fee. For the other, the designer–builder was paid on the basis of time and materials. In the case where the designer–builder bid a lump- sum fee, the airport found the designer–builder to be less re- sponsive and unwilling to accommodate additional coordina- tion with the owner to address potential design issues. In contrast, the designer–builder that was paid during the design period on a time and materials basis was willing to both add ad- ditional staff to the project and meet more frequently with the owner. Considering the difference between the responsiveness of these two designer–builders, it is interesting to note that it took the designer–builder that had bid a lump-sum fee much longer to reach a GMP (reaching GMP at roughly 95% comple- tion of design) than the designer–builder that was paid based on time and materials. C. Lump-Sum DB Case Study Results The most significant lesson learned by the airport owner from the lump-sum DB case study was the need for early train- ing of airport staff to avoid potential claims and other legal is- sues. The airport owner felt that without proper training, when reviewing designs, staff members accustomed to the DBB deliv- ery process were prone to dictate design solutions that otherwise are left to the designer–builder, potentially resulting in costly change orders, adding both an increased cost to the work and potential schedule delays. The airport determined that it was important to conduct this training ahead of the commencement of contract implementation, and to follow up on this training throughout the design review process. According to the airport, part of this training should provide an overview of the terms of the lump-sum DB contract and should emphasize the need for staff members and outside consultants to become familiar with the contract requirements, in order to avoid providing direction on items that have been left to the designer–builder. Moreover, this airport emphasized the critical need for sig- nificant and early education and outreach to airport manage- ment and stakeholders on what the lump-sum DB process entails. To this point, a misunderstanding arose during the pro- curement and contract implementation processes for the case study project, and later questions from management occurred, which the airport felt could have been avoided had management and stakeholders been more thoroughly educated on these pro- cesses up front. In addition to outreach to its own management and stake- holders, the airport performed significant outreach to private industry to educate them on the project and the chosen PDM.

Legal Issues Related to Large-Scale Airport Construction Projects Copyright National Academy of Sciences. All rights reserved. 18 ACRP LRD 38 any legal or other issues regarding environmental permitting for their CMAR projects. B. Progressive DB Case Study Results For the two progressive DB contracts, the airport completed the NEPA and corresponding state environmental permitting processes ahead of commencing procurement. This timing re- flected the airport’s desire to complete these processes to avoid any confusion regarding the scope or viability of the project for prospective proposers. The airport owner believed that the chosen PDM did not affect its approach to, or the results of, the environmental review process. The terminal expansion project faced two politically moti- vated potential challenges to the environmental approvals re- quired for the project. These challenges highlight the difficulties airports often face when attempting to environmentally clear large construction projects, which are highly visible and are prime targets for challenges. The first involved the state attorney general threatening a challenge in an effort to convince the airport to agree to conces- sions on the production of greenhouse gases. The airport under- stood that the attorney general threatened a challenge to send a message to any entity planning a large construction project, and not due to any particular characteristic of the project. To ad- dress this threat, the airport and attorney general entered into a memorandum of understanding that officially documented the steps the airport had already planned to take to minimize green- house gas production. The second challenge came from a local mayor’s office that opposed the placement of a proposed parking garage that the airport planned to build in conjunction with the new terminal. To address this challenge, the airport entered into a memoran- dum of understanding that required the airport to perform a study regarding the location of the garage. The process of nego- tiating this memorandum of understanding ultimately led to an 18-month delay in commencing the procurement, as well as re- moving this scope from the terminal expansion progressive DB contract. Based on the results of the required study, the airport ultimately built the garage in the originally planned location. C. Lump-Sum DB Case Study Results Similar to the airport authority for the progressive DB case study, for the central utility plant project, the airport completed the NEPA and corresponding state permitting processes ahead of commencing the procurement for the lump-sum DB con- tract. The airport did not think that its decision to use lump- sum DB affected its approach to, or the results of, the environ- mental review process. However, it is worth noting that the airport faced legal issues related to compliance with other envi- ronmental requirements. According to the airport representative interviewed, while there were no significant problems in obtaining the NEPA and corresponding state environmental approvals for the project, there were challenges related to obtaining the operating permit under Title V of the Clean Air Act. The airport procured the Independent of the PDM that an airport selects, there is often confusion regarding the extent of project design that an airport may legally perform ahead of completing the environ- mental permitting process. As clarified by the FAA in the FAA Order 5050.4B, an airport may proceed with preliminary and conceptual design efforts ahead of completing the NEPA pro- cess, provided it does not “take any action . . . that would cause adverse environmental effects or limit the range of reasonable alternatives” under consideration (FAA 2018i). To this point, when using an alternative PDM, an airport may want to procure a contractor (e.g., a designer–builder under a progressive DB contract or CM under a CMAR contract) and have that entity help develop the design to the point needed to properly ana- lyze any alternatives under consideration, acknowledging that this analysis normally requires no more than a 25% design level, and that an airport should not proceed to preparation of a final design while an environmental Impact statement is being pre- pared (FAA 2018i). A. CMAR Case Study Results Participants in the case study stated that the CMAR delivery method did not have any effect on the environmental require- ments or permitting processes for the case study projects. In ac- cord with FAA Order 5050.4B, all project participants sought the necessary FAA approvals and followed all required NEPA regulations for these projects. Regarding the timing for the environmental permitting pro- cess, one airport completed all its environmental permitting before the design commenced. According to other case study participants, their airports took about 1 to 2 months after their CMAR contracts were executed to complete the environmen- tal permitting processes. In terms of timing, the environmental permitting processes for both CMAR and DBB projects did not differ significantly. Consistent with the discussion in Section VII, above, the major lesson learned by the case study airports was that before completing the environmental permitting process, airports can execute a CMAR contract and proceed with preliminary and conceptual design efforts to the degree needed to facilitate envi- ronmental review (FAA 2018i). To this point, the airports had no problems in hiring CM firms ahead of obtaining the required environmental approvals, provided that the firms did not get in- volved in any detailed design work until permitting was com- pleted. To avoid any complications, one participant stated that for both DBB and CMAR projects, the typical approach of their airport was to procure the designer and construction manage- ment firm after the environmental permitting was completed. A key lesson learned by one of the case study participants was that when using the CMAR delivery method, the airport had greater flexibility in using sustainable construction practices related to environmental benefits if the construction manage- ment firm was engaged earlier, rather than later, in the design phase of the project. That way, the firm could use constructabil- ity reviews to gain more environmental benefits when design- ing the project. None of the participants in the case study faced