Charter Amendment May Get 1st Test : Government: Firm that lost bidding war for airport security work wants council to overturn decision of commissioners. It is first attempt to invoke provision approved by voters in June.

A company spurned in a bidding war over a lucrative contract to beef up security at Los Angeles International Airport is trying to invoke a new City Charter amendment to overturn the contract award.

In what could become the first test of Charter Amendment 5, which passed June 4 and gives the City Council final authority over decisions made by city commissions, Ogden Allied Services Inc. has asked the council to scuttle the $11-million contract awarded by the Department of Airport’s Board of Airport Commissioners.

“Without Charter Amendment 5, the board’s decision would have been final,” said Don Miller, deputy executive director of administration and operation for the Department of Airports.

The dispute came to a head on June 26 when the commission determined that another firm, Systemhouse Inc., was most capable of installing a new computer-controlled security system needed to control access by persons through 572 doors in sensitive locations throughout the nation’s third-largest airport, airport authorities said.

“Our staff recommended this company to us and they are clearly superior,” said Johnnie Cochran, president of the Board of Airport Commissioners.

“It will be unfortunate if this becomes the first test of Charter Amendment 5,” Cochran added. “If companies appeal the City Council every time they lose a contract, wouldn’t that be preposterous?”

Ogden attorney and lobbyist Neil Papiano, however, argued that his company should have won the award on grounds that “we had the lowest bid and the best qualifications.”

“All we are asking is this: ‘What is the reason you disregarded the lowest bidder and what we believe to be the best qualified equipment?’ ” Papiano said in an interview. “Where’s the flaw?”

But airport authorities insist that the bidding process in this case was never intended to favor the lowest bidder.

“This was not a bid process in which low bid wins,” Miller said. “We decided on who best suited our needs.”

Systemhouse, which has not hired a lobbyist, is anxiously awaiting council approval to begin installing the security system.

“The airport has chosen our company because of superior strength in project management, a proven track record and excellent references,” said Norman Kyle, vice president of sales for Systemhouse. “The competitor, which quite frankly doesn’t have that background, is simply trying to have another shot at it--I don’t think that is going to happen.”

Papiano launched his protest of the bidding process in a letter dated May 3 to City Council President John Ferraro. The letter disputed an earlier commission decision authorizing airport officials to begin final contract negotiations with Systemhouse.

In the letter, Papiano also pointed out that Ogden Allied along with a group of subcontractors “submitted the lowest price by over $2 million. . . .” In a telephone interview, Papiano said, “Charter Amendment 5 gives the council additional means” to review the contract.

Ferraro referred the matter to the council’s Commerce, Energy and Natural Resources Committee, which has scheduled a hearing on the matter Tuesday. The committee could decide to forward the matter to the City Council for a vote or to do nothing at all, city officials said.

Under the Charter amendment, the council has five meeting days from the day the contract was awarded--or until July 12--in which to decide whether to consider taking the matter away from the commission, said Senior Assistant City Atty. Gary Netzer.

“I think we have to look at it,” said Ferraro. “This is new territory for us.”

The city’s chief administrative office on Friday issued a recommendation that the commission’s decision stand on grounds that the bidding process was “technically thorough and reasonable” and “the Systemhouse proposal has been evaluated as superior.”

Meanwhile, federal aviation officials have threatened to impose fines against the airport if the improvements in security are not operational by Sept. 1.

The federal order was prompted by the 1987 crash of a Pacific Southwest Airlines jet near San Luis Obispo with 43 people on board, airport authorities said.

An FBI investigation indicated that the plane was brought down by a fired airline employee who used his airport credentials to board the plane and allegedly shot the pilot after it departed from LAX.

Although the FAA has not published possible fines for noncompliance, airport authorities anticipate penalties ranging from $1,000 a day to decertification of LAX as a FAA-approved commercial airport, said David Cardenas, superintendent of operations for the Department of Airports.

“Ogden is trying to cloud the issue,” he said. “. . .We could wind up being fined for delays in getting this equipment operating.”