NEW QUITO INTERNATIONAL AIRPORT
PROCUREMENT METHOD REPORT
Prepared by Diego Daqui – November, 2014
INTRODUCTION
After of 30 years of planning and halting, in 1995 the
Ecuadorian government start the process to replace the
Quito Airport built in 1960’s for a new airport to face the
21 Century. This report describes the procurement
process for the Build, Operate, and Transfer BOT
concession and the Design-Build construction over a five
years until the project was awarded, these processes
cannot be separated because the concession process
explain the decision made for the construction of the
new airport. Also, describes the problems encountered
during the construction like price escalation due to
construction period extension, social and environmental
issues and subcontracts problems. Finally, it provides
some recommendations to improve the procurement
process and the lessons learned from this analysis
DESCRIPTION OF THE PROJECT
The former Quito International Airport “Mariscal Sucre”
(AIMS) was located in the northern part of the city over,
bounded by a local road network, the southeast, the
northeast, the north and to the west. It comprehended a
3210-meter runway at an altitude of 2800m above sea
level. In 2003 alone, it processed 2.6 million passengers
and 140,000 tonnes of cargo (Marshal Macklin
Monaghan, 2004).
FIGURE 1. FORMER QUITO INTERNATIONAL AIRPORT
CM520 - Construction Procurement System
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The New Quito International Airport (NQIA) is located in
Quito – Ecuador to 40 km from downtown in Tababela
County over an undeveloped area of 1,400 hectares. The
project is a green project that was designed completely
from ground zero. The new airport has a 4,100-meter
runway with capacity of 90,000 annual aircraft
movements, three (3) rapid exit ways, two (2)
perpendicular taxiways and one parallel taxiway. The
airport complex comprehends: a Passenger Terminal
Building with a gross area of 38,050 sq. m in three levels
to accommodate 3,617,453 passengers per year, one Air
Traffic Control Tower of 42 meter height and hangars for
aircraft codes D and E. Additionally, during phase 1 the
following ancillary facilities was built: Fuel Farm, 1
Hangar for Code C aircrafts, 1 Cargo building, 2 Catering
Buildings, 1 General Aviation Building, 1 Ground Service
Equipment Building, and the related electrical, sanitary
and communication infrastructure (Quiport, 2005).
FIGURE 2 NEW QUITO INTERNATIONAL AIRPORT
PROCUREMENT METHOD
The procurement method used was Build, Operate, and
Transfer BOT concession for the AIMS (California Aviation
Alliance, 2001). As a previous step, the Ecuadorian
government created a local agency in charge of managing
the concession process for the operation of the former
airport and construction of the new airport. The new
authority hired a consultant firm to help it to determine
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the procurement strategy for the concession. The
consultant recommended a BOT concession and on
February of 2001, one of the prequalified bidders from a
previous bid process for the construction of NQIA sent a
proposal for the concession. At the end of 2001, Quito
municipality called for a Request for qualifications /
Request for proposal for the Build, Operate, and Transfer
BOT concession for the AIMS (California Aviation Alliance,
2001) under a Swiss Challenge process based on the early
submitted proposal. In this process, only one bidder
submitted a proposal for the concession, the other
bidders resigned to submit a proposal mainly due to the
9/11 attack and the possible consequences for the
aviation industry and their repercussions in the rest of
Latin America.
With only one bidder in the process, the authority
entered in a direct negotiation process for the concession
and signed the contract in 2002 for a 35-year concession.
Right after this, the concessionaire started a direct
negotiation with a joint-venture of construction
companies for the design-build of the new airport
located in Tababela County. The construction contract
was awarded in 2005 on a Lump sum basis.
The Build-Operate-Transfer concession method was
selected at that time because the country had started a
concession process in all areas including water, power
generation and roads, mainly due to the oil low prices
that reduced the government investment capacity.
Design-Build method for the construction was selected
mainly because to the cost of improve the former airport
was high. Since it was located inside the city, and it
required extend the runway over streets and land
acquisition and expropriation and the north and south
side. Moreover, the cost of operation and maintenance
of the former airport were high and the runway
pavement required repairs every day. As a result, the
concessionaire preferred to move the airport operations
as soon as possible to the new airport.
The general contractor self-performed the earthworks,
asphalt and concrete pavements; the rest of works were
done by trade subcontractors. The subcontracts were
awarded based on a Request for Qualifications/Request
for Proposal from a short list of the major trade
subcontractors in the local market, for special systems
CM520 - Construction Procurement System
Diego Daqui V
NEW QUITO INTERNATIONAL AIRPORT
PROCUREMENT METHOD REPORT
(Navaids, Security systems, etc.) and for treatment plants
(sanitary and treated water) there was an invitation to
bid process to Canadian and Brazilian companies.
PROBLEMS ENCOUNTERED DURING THE
PROJECT EXECUTION
Two main problems related to contract during the
execution of the contract were lack of price escalation
and an excessive supervision. First, the contract was
pricing as a lump sum contract, and the contract does not
require a price escalation since the construction period
was established as 51 months, starting in 2005; however
due to political issues with new major, the contract
entered in a renegotiation phase in early 2009. This
renegotiation took one a half year, extending the original
period to 2012. As a consequence, the costs were
increased but the prices were not escalated by the
concessionaire. Moreover, there were some variation
orders issued by the owner in 2010 that must be
negotiated at 2005 prices that causes losses to the
general contractor.
Due to the opposition from some councilmen and the
pressure from international lenders, the project was built
under close supervision of three different consultants;
Lender engineer, Owner engineer and environmental
consultant. This kind of supervision lead to increase the
construction costs since all activities must be carried out
with excessive care, as example, a discharge line must be
built from the storm water retention pond to the river in
a 500-meter height slope, but due to environmental
regulation, only a 2-meter wide access trail was approved
by the environmental authority, and the materials only
can be carried in 50-kg bags by the workers. This kind of
excessive care increased the costs and affected the
productivity. Moreover, this situation leaded to an
adversarial relationship between the concessionaire and
the contractor.
Another problem that was not related to the contract but
influenced in the performance of the contractor was the
relation with the government aviation authority (Civil
Aviation Directorate – DAC) and municipality aviation
authority (Corporacion Aeropuerto –CORPAQ). In the
contract was stated that the aviation authority must
review, approve and accept the navigation aids and Air
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Control Traffic Tower equipment since they are the only
authorized to control the air traffic however they
maintained out of the process due to political pressure
since the major and the president of Ecuador did not
concur with the scheme applied to contract the
construction. In the same way, the municipality aviation
authority CORPAQ, tried to take over the security system
design and implementation but after the contract was
signed, without issuing any VO and changing the scope of
the work. These events, at the time of testing and
commissioning, caused disputes and a claim for the
security system; this ends in the change of the entire
security system scheduled for the next year and delaying
the acceptance of the Navaids and ATCT equipment by
DAC. As a consequence, the final completion certificate
has not been issued until the date of this report, despite
of the fact that the airport has been operating for more
than 18 months and the Airport has been certified by
DAC.
Regarding to the subcontracts, the main problem was
that most of subcontractors were unfamiliar with the
means and methods expected by the General Contractor
and the lenders requirements, especially those related to
safety and construction methods related cost, e. g.
formwork, trenches excavation, curing methods,
documentation management practices, etc. These
unforeseen issues brought delays in shop drawings
approval, rework, additional costs among others
problems (Medina, 2014).
Another problem with subcontracts was the services
furnished by the general contractor like surveying,
purchase of materials. These services were not managed
adequately and they causes delays and disputes
especially surveying since there was no subcontractors
surveyors, superintendents rely only in GC team
eliminating the possibility of double check leading to
errors on site. Moreover, the GC material furnished –
Subcontractor installed creates problems in plumbing
and mechanical trades since the contracts were awarded
with a 60% design and the quantity take offs were not
enough accurate, requiring new purchases with the
additional cost for the GC.
RECOMMENDATIONS
CM520 - Construction Procurement System
Diego Daqui V
NEW QUITO INTERNATIONAL AIRPORT
PROCUREMENT METHOD REPORT
A price escalation clause must be included in the
contract; this clause shall be effective in case that the
construction period extend for more than 50% of the
original period when the cause cannot be attributable to
the contractor. This can be especially applied to Variation
Orders issued after the original period to recognize that
prices increment can occur.
Regarding the issues with aviation authority and the
concessionaire, it advisable to incorporate them as soon
as possible in order to minimize any possible conflict and
transform into a win-win relationship.
It is advisable to use best value criteria instead of a low
bid for subcontractors, especially in an international
environment since there are cultural differences in
means and methods between a North American GC and
South American Builders that can lead to a poor
subcontractor performance affecting the overall schedule
and budget.
The materials quantification and acquisition by the
General Contractor must be improved in order to avoid
mistakes and delays caused by shortages or wrong
purchases that cause losses and delays.
LESSONS LEARNED
The analyzed project contained all of the components
and process learned in class; indeed it includes hiring a
consultant to develop a procurement strategy early in
the project. Also, a Swiss Challenge process was
implemented because one of the bidders sent an
unsolicited proposal; if the political and economic
conditions were different at the time of the invitation to
bid probably the owner could maximize its investment.
Although the liquidated damages for delay (67,000 for
the first 60 days, 68,000 USD for the following 90 days
and 69,000 USD for the next 90 days and 70,000 USD
thereafter) was not mentioned in the report, it
constitutes a powerful tool to enforce the schedule
compliment.
Due to the review of the General Contractor contract and
all the subcontracts, a better comprehension of the
contract language and structure was gained. This will be
helpful in the contracting world.
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 NEW QUITO INTERNATIONAL AIRPORT
PROCUREMENT METHOD REPORT

ACKNOWLEDGEMENTS
I want to express my acknowledgments to all the AECON
AG Staff for their collaboration, especially to Nelson
Medina, Engineering Manager at AECON AG for his
advice and long discussion along this seven years.

REFERENCES
California Aviation Alliance. (2001, 12 20). California
Aviation Alliance. Retrieved 11 29, 2014, from
Ecuador Calls For Bids On Building New Quito
Airport:
http://archives.californiaaviation.org/airport/ms
g19117.html

Explored. (1998, 07 08). Explored. Retrieved 11 29, 2014,

from Corre El Plazo De Un AÑo Para
Aeropuertos:
http://www.explored.com.ec/noticias-
ecuador/corre-el-plazo-de-un-aa-o-para-
aeropuertos-1744.html

Marshal Macklin Monaghan. (2004). Quito International

Airport - Master Plan. Quito: MMM.

Medina, N. (2014, October). Personal Interview. (D.

Daqui, Interviewer)

Quiport. (2005). Construction Agreement - Appendix K2

Design Brief. Quito.

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 Location NQIA
Former Airport

‐Quito New Quito 
Ecuador
‐ 40 Km Away International Airport
‐1.500 Hectares
‐350 Hectaresof
development
2012 New Quito Internacional Airport
Camp
AECON‐AG Passenger Terminal 
Building

Air Traffic 
Control Tower
Catering
2006 2007 Cargo
Hangar
Fire Station & 
Maintenance 
Building

General Aviation

Police Station
Alpachaca
Connector
Taxi Way
2008 2009 Run Way