Baltimore/Washington Int'l Relies on "Army" of Contractors

Author: 
Thomas J. Smith
Published in: 
October
2014

Constrained by a state-mandated maximum employee headcount, Baltimore/Washington International Thurgood Marshall Airport (BWI) relies heavily on the private sector to complete many of its everyday and not-so-everyday tasks.

Of the 14,000 people working at BWI, about 450 (3%) are directly employed by the Maryland Aviation Administration, the agency that owns and operates the airport. From policing the terminal to maintaining boarding bridges, outside contractors provide a variety of key services and account for fully $84 million of the airport's  $180 million operating budget.

"You need literally an army of contractors to operate and maintain the airport," says Chief Financial Officer Jim Walsh. "It is difficult to have all the expertise from A to Z, soup to nuts, do all the types of (specialty) services. We don't need an elevator maintenance expert on staff; we need an airfield operations person. You prioritize what you want and need."

factsfigures
Project: Contracting Outside Services
Location: Baltimore/Washington Int'l Thurgood Marshall Airport
Owner/Operator:
Maryland Aviation
Administration
Total Operating Budget: $180 million
Contract Spending: $84 million
Total Workforce: 14,000
Airport Employees: 450
Outside Contractors
Baggage System Maintenance:

Aircraft Service Int'l Group (ASIG)
Boarding Bridge Maintenance: ASIG
Fueling, Ground Handling
& Ramp Services:
ASIG
Gate & Ticket Counter Staffing: ASIG
Police Services: Maryland Transportation Authority Police
Annual Contract: $18 million
Unarmed Private Security: AKAL Security Services
Annual Contract: $8 million
Facility Maintenance: Chimes D.C.
Parking Operations: Maryland Parking
Shuttle Services: First Transit


BWI prefers to concentrate its direct hires on airfield operations, keeping airport-specific tasks such as runway/taxiway lighting, wildlife management, snow removal and vegetation control in-house. "We focus on safety and security," Walsh specifics. "We train our own people in the maintenance and operations of the airfield. They are the airport's people, and they have the most familiarity of this complex system."

Conversely, contract personnel dominate on the ramp as well as inside and around the terminal. "The private sector has the training and expertise available to us," explains Walsh. "We can take advantage of that through the competitive bidding process."

On the Ramp

BWI contracts Aircraft Service International Group (ASIG) to provide carrier services, such as maintaining the baggage handling system and loading bridges. ASIG also holds direct contracts with the airlines for ground handling and ramp services, deicing, aircraft fueling and staffing ticket counters and gates. In addition, the company fuels and maintains ground support equipment at BWI via third-party contracts.

"Baltimore is an all-inclusive operation for us," says Douglas Hofsass, vice president of operations planning for ASIG. "It is a location where we provide all lines of business."

With such a broad spectrum of services at the key Mid-Atlantic hub, ASIG stresses cross training among its crews. "We qualify our mechanics to maintain ground equipment, jetways and baggage conveyance systems," explains Hofsass. "Having cross-functional technical skill sets on the airfield allows us to provide bundled/expanded services to the airport and airlines."

ASIG handles all aircraft fueling at BWI - including the fuel farms, hydrant system and into-plane service. In addition to managing its own fuel farm, the company also operates Southwest Airlines' facilities. Together, the two farms have a capacity of 6.1 million gallons. Last year, ASIG pumped roughly 210 million gallons of aviation fuel at BWI.

ASIG is a unit of BBA Aviation and a sister company of Signature Flight Support, the fixed-base operator that services general aviation operations at BWI. According to Hofsass, the company has operations at 85 airports worldwide and employs approximately 8,000 team members; he declined to say how many work at BWI.

Inside & Around the Terminal

While ASIG may have the most moving parts at BWI, it is not the airport's largest contractor. That distinction belongs to security. The airport pays $18 million a year to the Maryland Transportation Authority Police for a force of about 200 police officers, reports Walsh. "There are many airports that have their own law enforcement; we do not," he notes. "We literally rent our cops."

In addition, the airport pays $8 million annually to a private security firm. AKAL Security Services provides unarmed guards at various employee-only portals.

BWI also outsources its facilities maintenance - and supports a local social initiative in the process. Since 1998, the airport has contracted its terminal cleaning services to Chimes, a non-profit agency that hires people with physical, intellectual and mental health disabilities. Three shifts of about 275 Chimes employees work around the clock maintaining hundreds of thousands of square feet in the terminal, notes Imoh Matthews, chief operating officer of Chimes D.C. Although the agency subcontracts carpet cleaning and nightly terrazzo polishing to other organizations, those agencies also hire people with disabilities.
 
BWI contracts with other non-profit agencies for exterior maintenance projects and landscaping services.

Throughout the property, outside contractors operate and maintain airport-owned equipment and infrastructure. Walsh points to the parking lots and associated shuttle buses as prime examples: "We own the buses (a fleet of 49 vehicles), but the maintenance and operation is contracted out."

Cincinnati-based First Transit provides 135 drivers, technicians and support staff to run BWI's 24/7 shuttle system. The firm has held the contract for more than 10 years.

"First Transit partners with BWI to customize solutions to their specific needs while delivering the highest level of safety, customer service and quality," says Brad Thomas, the firm's president.

Similarly, the airport built two parking garages and developed surface lots with total parking spots for 25,000 vehicles, but they are operated by Maryland Parking, a partnership of Parking Management and Tyroc Construction. The firm's 140 employees collect customer parking fees, provide vehicle assistance, clean the lots and conduct license plate surveys, explains Facility Manager Steven Hill.

Two Sides to Every Contract

Walsh acknowledges that relying on so many outside contractors at an airport with nearly 700 daily flights presents both advantages and disadvantages.

On the plus side is expediency. The Maryland General Assembly, which meets only 90 days a year, has to approve any new positions at the airport. As a result, BWI's core of 450 employees does not change very much, reports Walsh.

Contracting with outside companies often provides the airport with greater flexibility, pricing and control, he adds.

It's typically much easier to terminate a contractor than an employee for inadequate performance, Walsh explains. Many of BWI's contracts have "time triggers" requiring response to various issues within a specified period. Maintenance contractors, for instance, may be contractually required to fix moving walkways that have stopped working within a certain number of hours.

Contracted labor is also frequently less expensive, because public sector employees generally have more expensive benefits. "There is a cost advantage in some cases, but not all," Walsh specifies.

Outsourcing tasks such as holdroom cleaning and boarding bridge maintenance allows BWI to control services that affect its facilities - and how passengers perceive the overall airport environment. "We believe, quite frankly, that our standards are higher than the airlines," explains Walsh. "We have seen airlines skimp at some airports on the day-to-day work. We choose to handle these tasks; we have more control over our assets."

Since the airport handles traditional airline responsibilities, the cost of such services is included in the airport's standard rates and charges - part of lease agreements that were negotiated with carriers about 15 years ago, Walsh notes.

One of the drawbacks about using a vast network of outside contractors is the amount of airport resources it takes to hire and manage them. Because state procurement laws govern how BWI selects its providers, contracts go through an official competitive bidding process every three to five years. "We have very few sole-source contractors," Walsh notes. Given the size of its contracts, the airport normally has active competition for the business.

"Managing (our contractors) is a challenge, because there are so many," he adds. "We need strong management to oversee the performance. There is a management burden to it, but we believe that outweighs any drawbacks."

BWI, in fact, considers contracting various maintenance and operation functions a best practice. "It gives an airport considerable flexibility and a higher level of performance," Walsh explains. "It enables an airport operator to focus on what is most important - that is the maintenance and operation of the airfield, terminal and landside complex. That is what we do best." 

 

Contactor or Consortium?

While Baltimore/Washington International Thurgood Marshall Airport and many others outsource various terminal and airfield functions, airline consortiums provide key services at others.

Two U.S. airports have consortiums operating entire terminals. At John F. Kennedy International Airport, Terminal One Group Association operates Terminal 1 and JFKIAT operates Terminal 4. The Atlanta Airlines Terminal Corp. has maintenance responsibilities for the central passenger terminal complex at Atlanta Hartsfield-Jackson International Airport.

Although the consortium model has been used in the industry since the 1960s, it has grown in use in the last 10 years. Currently, there are 38 consortiums in place at U.S. airports, reports Paul Demkovich, a consultant with AvAirPros and author of A Guidebook for Airport-Airline Consortiums, studies for the Airport Cooperative Research Program. 

According to Demkovich's findings, nine of the 39 consortiums are equipment-focused - with most emerging since the Sept. 11, 2001, terrorist attacks to operate and maintain common-use baggage systems that are now tied to in-line explosives detection systems.

"The consortium puts the airlines in control and relieves the airport of the daily operational responsibilities and management headaches," Demkovich explains. "The airport sets the standards ... but no longer has to worry about the day-to-day operation functions. Someone else gets the calls about the lost luggage."

Consortiums can also help an airport reduce its reported operations, because expenses for various services assigned to the airlines are typically not added to the airport's cost per enplanement figures, he adds.

Fully 25 of 39 consortiums currently operating at U.S. airports reflect the historic genesis for the model: providing fuel storage and distribution infrastructure.

To view or dowload A Guidebook for Airport-Airline Consortiums, visit http://onlinepubs.trb.org/onlinepubs/acrp/acrp_rpt_111.pdf.

 

Subcategory: 
Operations

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