City Council to consider facility management and labor services contract for airport’s South Terminal

On Thursday, City Council will consider a $9 million contract with ClearedDirect LLC for facility management and labor services for the South Terminal at the Austin-Bergstrom International Airport.

The contract, if approved, will run from Nov. 1, 2023, through Dec. 31, 2025. The contract is needed as the city’s aviation department takes over operation of the South Terminal from Lonestar Holdings LLC, which recently settled an $88 million contract dispute with the city.

The Airport Advisory Commission recommended approval of the contract at its Oct. 11 meeting, despite questions from commissioners regarding the length and purpose of the contract.

The airport’s chief administrative officer, Tracy Thompson, said the timing is necessary because the city must keep the South Terminal operational until its demolition sometime in early 2026. That demolition can move forward when the Barbara Jordan Terminal is prepared to receive airlines Legion and Frontier, which will be when the capacity enhancements and improvements are completed.

“We certainly don’t want to create any interruption to our airlines or the air service of the airport until we can (demolish the South Terminal),” Thompson said. “And it also coincides with the timing of the taxiway program. The tenants and airlines operating from the South Terminal understand this time frame. We’ve had in-depth conversations with them on the timing and the relocation of their operations to Barbara Jordan. So they’re well aware of it and they’re well aware that they would like to keep their operations at the South Terminal and the transition consistent until that time.”

According to documents provided for meeting attendees, ClearedDirect LLC has provided these management and labor services at the South Terminal for more than five years. “Their knowledge and established presence at the South Terminal will facilitate a seamless transition of airline and passenger service operations at the South Terminal facility,” the document reads. The Department of Aviation was able to negotiate modifications to the contract to conform with the city’s Living Wage Program and other standards.

“These services are critical to efficient transition of management and operation of the South Terminal to the City on November 1, 2023, and will insure the continued successful operation of the South Terminal for the term of the contract,” the document reads. “If the City does not assume the ClearedDirect contract, it will lead to an immediate stoppage of facility management and operations at the South Terminal potentially having a direct impact to airport/airline operations and passenger services. Any interruption of operations will adversely impact airport and airline revenues.”

Commissioner Chad Ennis summed it up this way. “Basically, they have a contract with Lonestar right now to do janitorial work and security work, and all we’re doing is moving that contract from Lonestar, who’s now out of the picture, over to us,” he said. “So we can continue however long to operate the South Terminal with clean toilets and security and the other things we need to get through the day?”

“That’s correct,” Thompson said.

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