The following are corrections of certain statements made in articles concerning Page Airways Inc., Wilmorite Inc. and J.P. Wilmot published during the past year. There is no ongoing dispute between the FAA and Page with respect to an FAA audit of Page's contracts at Dulles and National airport's, as stated in our article. In fact, the matter was settled in February 1975. Page has set aside $9 million with a court to cover an antitrust judgement against it, pending the outcome of its appeal. It is not preparing itself to make such a payment and, therefore, does not have to devote any further funds to this purpose as we suggested. Moreover, the company has paid dividends only once in its corporate history and its not having done so during the past two years is not, as we inferred, necessarily related to its having set aside the above-noted $9 million. Wilmorite was not the recipient of $88 million in federal rent subsidies as reported.It was neither an applicant for, nor a direct beneficiary of, these funds.It only contracted with the recipient to build apartment buildings for which it was paid $16,500,000 to cover the costs of construction. The Post reported that Page's National and Dulles airport contracts were awarded in violation of federal competitive bidding policy. We have been informed by some FAA officials that exceptions to the general competitive bidding requirements are permissible, if certain sole source criteria are satisfied and that they believe these criteria were satisfied and that they believe these criteria were satisfied in Page's case. There is no indication that the FAA decision to extend the Page contracts without rebidding was the product of improper activity by Page or its employes. CAPTION: (NEW-LINE)Picture, Sign marks Page's entrance for passengers who board planes at National Airport. By Vanessa R. Barnes - The Washington Post
Page Airways Inc., a private aviation service, has unusual, lucrative multimillion-dollar contracts at National and Dulles airports that have been awarded in apparent violation of federal competitive bidding policy.
At National Airport, competitive bidding was last held in 1968 for the contracts to fuel and service private aircraft. Page won; and its contract has been extended five times since then, each time without competitive bidding.
The Page contract at Dulles was awarded in 1963 for 25 years, extending to 1988.
In a highly unusual provision, the federal government, according to the contract, promises to "protect the Contractor [Page] from unreasonable and unfair competition from others."
The Federal Aviation Administration is charged with making sure federally funded airports across the country comply with federal laws prohibiting "exclusive contracts," as spelled out in the Federal Aviation Act of 1958. Dulles and National are the only airports run by the FAA.
The FAA has a policy and regulations requiring competitive bidding for its contracts. A Fort Worth, Tex., airport recently lost federal funds when the FAA invoked those rules.
Page spokesman Jim Fingeroth said there is nothing unusual about the two government contracts. Page's substantial investments at the two airports in equipment and site improvements give Page a right to expect to have its contracts extended, according to Fingeroth.
James Murphy, FAA director of Washington Metropolitan Airports, said he and his predecessor have wanted to open the National Airport contract to bids for years. But the future of that facility has been so uncertain, he said, that it was impossible to attract other bidders.
FAA files show, however, that Butler Aviation International and Humble Oil Co. have asked to bid on the aviation service contracts at National.
Murphy last week acknowledged that he is uncomfortable about the repeated extensions on the Page contracts at National.
"It's not a businesslike way to conduct the public's business. The Page contract is atypical of the more than 200 business arrangements we have at National, but it's atypical not by design, chicanery, or sheetheartism," said Murphy.
Page grossed $7.5 million last year at National and another $2 million at Dulles International, according to FAA figures. Spokesmen for Page declined to say how much was profit.
The FAA files spanning a decade are filled with letters from would-be competitors of Page asking for a chance to bid on the National and Dulles contracts.
The Page contract at National was extended without bidding five times - 1970, 1971, 1972, 1973 and 1976.
FAA files show that the federal government told contradictory stories about its intent to open the contract for bids.
For example, E. Nelle Jr., the president of Butler Aviation International Inc., one of the nation's largest aviation service companies, said in a letter to the FAA on Sept. 8, 1975, "We have been awaiting expiration of that company's contracts at both Washington National and Dulles International in order that we might submit new competitive bids."
A week later on Sept. 16, 1975, Murphy, then director of the Metropolitan Washington Airport Service, replied, "We have recorded your interest in both of these facilities."
Three weeks later on Oct. 7, 1975, an FAA contract review board headed by J. F. Cadigan concluded that bidding for the National contract "would not elicit much, if any, response other than from the incumbent [Page]," because of repairs needed in the general aviation terminal and the uncertainty of the airport's future. Cadigan approved extending the Page contract without bidding.
According to FAA files, a copy of the Butler request to submit a bid had been sent to Cadigan.
On Nov. 7, 1975, FAA airport director Murphy approved the Page contract extension and forwarded the extension proposal to FAA Administrator James E. Dow, who approved the extension on Nov. 14, 1975. On Jan. 27, 1976, the Page contract was extended without bidding for three more years.
In 1971 and 1972 when the FAA was deciding what to do with the Page contract, the FAA files again show officials saying one thing and doing another.
Humble Oil & Refining Co. expressed interest in bidding on the airport service contract at National in 1971, the files show. C. R. Melugin, then National's manager, noted the failure to open the contract for bids in an April 2, 1971, memo to FAA headquarters. He wrote, "Public criticism has been leveled at the agency claiming that we do not do in our house what we ask others to do."
But no bidding was held, according to FAA files and officials.
On June 28, 1972 - more than a year later - the Page contract was extended "informally" in a letter from the FAA to Page Vice President Douglas W. Juston.
The Page contract gives the company a virtual monopoly to service private aircraft at National, including electronic repairs.
In a Nov. 15, 1973 letter, Robert Dobbs of Capital Aviation Instrument Corp. asked then FAA airports director Dan Mahaney to lease space from the FAA at National for an electronics repair office.
"Rather than enter into a separate agreement with your organization to establish an independent facility on the airport, this should be either performed by Page or through Page," answered Mahaney in a Dec. 23, 1973, letter.
On March 15, 1974, the manager of National, Hugh Riddle, denied a sublease to Capital Aviation on the premise that Page had not agreed to it.
"Capital Aviation was under the impression that Page Airways did not have a monopoly or an exclusive franchise to perform the type of services which Capital Aviation performs," wrote Richard Jones, an attorney retained by Capital Aviation, in an April 25, 1974, letter.
"There is no exclusive franchise," responded Riddle in an April 30 letter to Jones, still insisting that Capital Aviation get Page's permission to work in areas assigned to Page. Riddle said it would work to the advantage of all concerned." No space was sublet to Capital.
In the last correspondence on the matter, Capital's attorney asked the airport manager: "If there is no exclusive franchise to Page why is an agreement between Page and Capital necessary?"
Meacham Aero, Inc. of Fort Worth is the most recent aviation service firm to seek the National and Dulles contracts. On Dec. 14, 1978, the firm asked to bid on both contracts, according to FAA files.
Riddle answered on Jan. 23 of this year that there was no room for a second service firm at National.
"However," Riddle wrote, "we are pleased to add your firm's name to our source list of those who will be mailed a copy of our solicitation for operation...at the appropriate time."
Dulles International manager Dexter P. Davis told the Texas firm that Page's "rights are not exclusive. We believe the time will come when a second fixed base operator will be added here at Dulles."
Meacham Aero was recently ordered by the FAA's southwest region to move over and make room for two more aviation service companies at the Fort Worth municipal airport.
The FAA attorney for the southwest region, Bob Smith, notified the city of Fort Worth on May 30 of this year that is was not in compliance with the Federal Aviation Act, which prohibits exclusive contracts. Smith had nearly $200,000 of federal funds cut off to the airport.
"It's not a policy we came up with in the southwest region only. It's national policy," said Smith. Asked about the situation at National and Dulles, the only airports run by the FAA itself, Smith said, "I'm in a quandry."
Oscar Shienbrood, an FAA attorney in the general counsel's office here, said he could not tell if the FAA's operation of its own airports is in compliance with federal laws and its regulations without an exhaustive study, and said he doesn't have the time to conduct one in the midst of the DC10 safety inquiry.
Meacham Vice President Ronald Nicholson said, "With one hand the government's saying you can't have a monopoly, and with the other it's giving a monopoly."
"It's inconsistent as hell," said Fort Worth Mayor Jim Bradshaw, who claims the cut-off in funds threatens to affect air traffic safety at the airport. An FAA hearing on the issue has been set for June 26.
The current Page contract with the FAA at National is due to expire this year on Aug. 31, but no announcement for bids have gone out. Because the bidding process takes a year or longer, FAA officials say they will have to extend the Page contract once again.
But they say they have every intention now of letting the contract go out for bids in the future.