June 26, 2008
DOT Finds No Crimes in Failed Horry Terminal
By Mike Cherney, The Sun News, Myrtle Beach, S.C.
Jun. 26--A federal investigation into Horry County's failed plans to build a new terminal on the west side of Myrtle Beach International Airport found the Federal Aviation Administration could have overseen the project better but did not find evidence of criminal activity.The Office of Inspector General at the U.S. Department of Transportation is planning future audits of the FAA's oversight of grants awarded for airport improvements nationwide, a spokesman said, partly as a result of the local investigation that was completed in March and released this week.
The office initiated the investigation after it received a complaint from an area resident about the project. The complaint alleged that the letter submitted to the FAA to receive grant money was fraudulent and there were no public hearings on the project. Those allegations were unwarranted, the report found.
During the investigation, the FAA, which is part of the DOT, told inspectors it did not have enough personnel to oversee every aspect of every project. Instead, it relies on the honesty of grant recipients.
Brian Dettelbach, an assistant inspector general, said in an e-mail that his office found that the FAA and Horry County officials followed most FAA policies. Some actions could have been "performed more effectively" but that did not adversely affect the project, he said.
The project was suspended in April 2007 when Myrtle Beach's appearance board, which must approve most city construction, voted against it.
Horry County was to receive $43 million from the FAA for the estimated $228 million west side terminal. The county spent about $16 million in federal funds on the project, the report said, and paid back $7 million after the project was canceled.
County Council Chairwoman Liz Gilland said the findings were relatively minor. Any time a large organization is thoroughly vetted, little things are bound to turn up that could have been done better, she said.
"Imagine how much money it cost to do that investigation," Gilland said. "It's frustrating and dismaying that there's that much negative attention being put on our airport."
But Councilman Marion Foxworth said he agreed with the report. He hoped the county's airport department was not making the same mistakes in building a new general aviation terminal, which will probably exceed its original $4 million budget.
The investigation began after Doug Decker, a retired executive in the aviation construction division at Johnson Controls who lives in Pawleys Island, complained to the inspector general's office.
"The investigators in the field did an excellent job," Decker said. "I think there are some technical conclusions that they arrived at that are not proper, and I intend to redress to the inspector general."
The investigation did turn up an instance where county officials did not follow FAA procurement policies. In early 2006, HNTB, the county's design firm, left the project when the county did not agree to pay extra design fees.
Skanska USA, the construction manager, hired another firm -- Gresham Smith & Partners -- to complete the design work. Skanska only considered four firms with ties to Skanska and did not go through a public bid process, contrary to FAA guidelines, the federal report said.
After HNTB's departure, the county also modified the contract with Skanska to make the company responsible for finishing the terminal's design, instead of only its construction. The change was significant, so the county should have sought offers from other firms, the report said.
No federal funds were used for the contract changes, so the report found no illegal action had taken place.
The federal investigation also found that Horry County used FAA funds for a fence that contained some foreign steel. Federal law requires projects using FAA funds to use all U.S.-made materials.
The law does allow exemptions if the materials are 60 percent American-made. The fencing at Grand Stand Airport was 98.2 percent American steel, the report found. Still, the county should have requested an exemption, the report said.
ONLINE Do you agree with the results of the federal investigation? Vote at MyrtleBeachOnline.com.
Contact MIKE CHERNEY at 444-1765.
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