Broward County Commission Regular Meeting
Director's Name: Mark Gale
Department: Aviation Division: Capital Development
Information
Requested Action
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MOTION TO APPROVE Seventh Amendment to the Addendum to the Signatory Terminal Building Lease Agreement between Broward County and JetBlue Airways Corporation, for enabling projects associated with the Terminal 3 Modernization Project at Broward County’s Fort Lauderdale-Hollywood International Airport, to resolve claims alleged to be associated with extended time, delays, and other disputed costs, for an increase in the amount of $5,200,000, increasing the total Addendum amount from $265,265,000 to $270,465,000; and authorize the Mayor and Clerk to execute.
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Why Action is Necessary
In accordance with the Broward County Procurement Code, Section 21.47, any changes, including amendments to agreements, must be approved by the appropriate award authority, based on the amendment amount.
What Action Accomplishes
Approves the Seventh Amendment to the Addendum to the Signatory Terminal Building Lease Agreement (“Seventh Amendment”) between Broward County (“County”) and JetBlue Airways Corporation (“JetBlue”), to provide additional funding to resolve pending claims associated with the Terminal 3 (“T3”) Modernization Project (“T3 Project”) at Broward County’s Fort Lauderdale-Hollywood International Airport (“FLL”).
Goal Related Icon(s)
☐County Commission
☐Go Green
☐MAP Broward
Previous Action Taken
None.
Summary Explanation/Background
THE AVIATION DEPARTMENT RECOMMENDS APPROVAL OF THE ABOVE MOTION.
This action approves the Seventh Amendment between the County and JetBlue to provide additional funding to settle pending claims associated with the T3 Project at FLL.
The Office of Economic and Small Business Development (“OESBD”) established a Community Business Enterprise (“CBE”) goal of 22% for this T3 Project. JetBlue committed to 22% CBE participation. To date, JetBlue has been paid $258,865,942 and has paid its sub-contractors $79,314,702, for 30.64% CBE participation (Exhibit 2).
On September 27, 2011 (Item No. 62B), the Broward County Board of County Commissioners (“Board”) approved the Signatory Terminal Building Lease Agreement (“TBLA”) between the County and JetBlue, commencing on October 1, 2011, for a five-year period, expiring on September 30, 2016. On October 28, 2014 (Item No. 6B), the Board approved the Fifth Amendment to the Signatory TBLA between the County and JetBlue, which extended its term for ten years, expiring on September 30, 2026.
On June 4, 2013 (Item No. 88B), the Board approved an Addendum to the Signatory TBLA between the County and JetBlue to manage the design, construction, and installation of an In-Line Baggage Screening System in T3 at FLL, in the amount of $55,000,000. This project was completed. Additional information on the original agreement and subsequent Board actions is included in Exhibit 3.
Despite the T3 Project progressing within budget, in January 2023, JetBlue informed the Broward County Aviation Department (“BCAD”) of an unexpected budget shortfall of approximately $5,200,000, with the caveat that additional costs and claims from project contractors might be forthcoming. Over the next 18 months, BCAD requested and reviewed extensive documentation in support of this additional funding request. BCAD’s review of the documentation determined that the T3 Project had experienced design and construction changes to the original scope of work. Additional factors influencing the budget shortfall included unforeseen conditions and cost increases to the current work budget. The documentation also identified the slow processing of administrative approvals by the JetBlue team and included budget shortfall variations from $5,000,000 to $9,000,000.
BCAD has successfully negotiated a final amount of $5,200,000 in additional funding to address the budget shortfall. The additional funding will settle all pending claims alleged to be associated with extended time, delays, and other unresolved disputed costs, including some claims that are currently in pending litigation in which Broward County could be named as a party. Final payment will be conditioned upon BCAD’s final acceptance of the work.
Approval of the proposed Seventh Amendment provides for an increase in the amount of $5,200,000, increasing the total Addendum amount from $265,265,000 to $270,465,000.
The proposed Seventh Amendment has been reviewed and approved as to form by the Office of the County Attorney.
Source of Additional Information
Mark E. Gale, A.A.E., CEO/Director of Aviation, (954) 359-6199
Fiscal Impact
Fiscal Impact/Cost Summary
The T3 Project is budgeted in the Aviation Capital Fund, 40350.