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 airports, as stated in our article. In fact, the matter was settled on 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 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.
The federal agency in charge of Washington National and Dulles International airports has failed to collect upwards of $3.7 million from private car rental, airplane servicing and parking companies that have been granted lucrative contracts at the two airports, government auditors have said.
The money is due the Federal Aviation Administration as part of the government's share of revenues from the firms' rental contracts at the airports.
Hertz, Avis and National car rental concerns owe the government more than $1.2 million, according to previously undisclosed reports made in 1977 and 1978. Government auditors said Hertz, for example, used cars from its Baltimore fleet at the airports as a means of avoiding paying the FAA $213,000. Hertz officials could not be reached for comment.
A report by the Federal Aviation Administration's top auditor last year severely critized the way the agency has handled private business contracts at the ariports and accused FAA administrators of repeatedly ignoring government regulations and highly critical audits.
Other items that the auditors questioned:
$1,051,167 that System Auto Parks and Garages Inc. was allowed to deduct as the cost of various improvements to airport parking lots. The improvements were made under private contracts that did not meet government regulations, the auditors said.
At least $686,000 from Page Airways Inc., an aircraft servicing concern, whose fuel sales were not fully reported, the auditors said. A 1973 report said the underpayment to the FAA could have been as high as $2 million, but the matter was settled later when the company paid the FAA $30,000.
$44,319 said due from Airport Parking Co. of America, which the auditors said underpaid the FAA and submitted falsified records to the agency. The FBI was called to investigate the records, and no criminal charges were filed in the case. APCOA officials settled the controversy, paying the FAA $30,000, according to the auditors.
James Murphy, the FAA official who has been in charge of the two airports since 1974, defended his operation, saying that any problems the auditors cited resulted from attempts to meet public demands on short notice.
But in a May 1, 1978 memo - one of many critical documents obtained by The Washington Post - the FAA's top auditor said the way that concessions are granted at the airports "is not in the government's best financial interests" and called for changes. That memo and others attacked airport officials for refusing to pay attention to critical audits.
E.M. Keeling, the FAA's director of accounting and audits, said that many of the contracts were based on fees negotiated "far in the past" and should not be extended. Despite his warning, checks with other FAA records indicate that the agency continued to extend several of the large contracts without seeking competitive bids.
In his report, Keeling cited a total of 13 contracts at the airports. Among the most troublesome to the auditors were the airport administration's dealings with Page Airways, of Rochester, N.Y., whose contracts for aircraft servicing and fueling have been extended five times since 1978 without competitive bidding.
On April 7, 1978, an FAA audit said that Page "underpaid fees to the government in the amount of $309,000 for the six-year period ended June 1977" at its Dulles operation.
The audit is being disputed by Page, which challenged earlier government claims for years.
On Oct. 24, 1974 letter from Charles E. Weithoner, a top FAA official, noted that the airport administration had taken no action to collect an estimated $2 million claim against Page despite four years of audits calling attention to the matter.
"Because of the large amount of money involved, the agency could be subject to severe criticism for our failure to take prompt action on these matters," Weithoner wrote.
A letter from FAA Counsel Lawrence Brock dated Nov. 12, 1974, refers to a meeting between Page representatives, Airport Manager C. R. Melugin, and other FAA officials in which the officials supposedly agreed to forgo any payment of the disputed money.
No amendment was made to the contract and no record of the meeting was kept, according to the Brock letter. Brock told the airport administration that whatever they may have agreed to at the meeting was not binding on the government.
Airport Director Murphy, who retired yesterday, said the dispute was a matter of "contract interpretation." The auditors said Page's sales of fuel to government aircraft were subject to the FAA contract, but Page disputed the claim.
Page refused to comment on any mtter related to its FAA contracts.
Page also encountered a cost overrun of $180,000 on the $350,000 of work the FAA authorized in 1977 for the Page-run general aviation terminal at National Airport.
An FAA audit of that construction work disclosed that $67,247 of that overrun went to Wilmorite Inc., a construction firm owned in part by James. B. Wilmot, Page's board chairman and chief executive officer.
A Feb. 8, 1978 letter from the FAA external audit division stated that much of the work at National was "extremely expensive." Page took a sales tax credit at Dulles based on work done at National Airport, the auditor siad, "leading one to surmise that some of the material was used for Dulles Airport."
The government is considering whether to pay for the cost overruns.
Page's servicing contract at National will be extended for another six to nine months when it expires this August, according to Murphy.
FAA auditor Keeling also sharply criticized the car rental contracts. "Substantial amounts of revenues being realized by the car rental companies from airport business were not being reported and fees due thereon were not being paid," Keeling said in a May 1978 memorandum.
"The auditors could not find any valid basis for these exclusions and estimated that the government had lost in excess of $1 million since the exclusions were first permitted," he said, citing a May 26, 1977 audit.