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Supervisors question doubling of escalator contract as airport seeks $9M increase
Summary
The committee approved sending an amendment to the full Board that accepts the Budget Analyst's recommendation for a third modification to an SFO escalator/electric walk maintenance contract; supervisors pressed airport staff on why KONE's contract needed an approximately $9 million increase and why bid variance was large.
The Budget & Finance Committee forwarded Item 2 to the full Board with a positive recommendation after airport staff explained the requested third modification to contract #50205 for escalator and electric walk maintenance and on‑call services.
Airport presenters said the modification is needed because KONE identified major repair and overhaul needs after the contract began; the work shifted the contract from largely preventative maintenance toward significant overhauls that were not apparent to bidders who could not inspect internal structures during the RFP. The modification increases the not‑to‑exceed contract amount by approximately $9 million (the airport proposed reducing the increase by $500,000 to an ~$18.27M ceiling).
Supervisor Gordon Marr pressed airport staff on why the contract amount nearly doubled without changing the term (the contract still ends June 2021) and whether the additional work should have been anticipated in the original RFP. Airport staff said KONE’s on‑site inspection revealed more extensive needs and that the engineering estimate and KONE's bid were similar; other bidders could not assess internal equipment conditions during the procurement.
The Budget Analyst's Office recommended a modest reduction in the proposed increase and supported approval as amended. The committee accepted the BLA recommendation and voted to forward the item to the full Board with a positive recommendation.
Representative quote
"Once KONE actually looked under the hood, so to speak, they realized the amount of overhaul and needs that they needed to do," — airport presenter (transcript).
What's next: The amended modification will go to the full Board; airport staff said they will continue to review the contract and consider the single three‑year extension option if necessary after the overhaul work is completed.
Closing note: Supervisors indicated concern about procurement transparency and the need to ensure bid reviews flag wide variances in future procurements.
