Airport Controversy Heats Up as Supervisors Award Contract to Low-Ranked Firm

County of Orange

A private business jet at John Wayne Airport.

An intense battle over a lucrative John Wayne Airport lease ratcheted up Tuesday, with promises of legal action after Orange County supervisors granted the lease to a firm that was ranked fifth out of six by the county’s evaluation panel.

Two companies – first-ranked Signature Flight Support, which has held the lease for over 20 years, and fifth-ranked ACI Jet – have been locked in an intense competition for the lease to run general aviation services at the airport, which covers everything from corporate jets to small propeller planes. 

“It is astonishing that the Orange County Board of Supervisors ignored California and federal law by moving forward with a change in fixed based operators at John Wayne Airport,” said Geoff Heck a senior vice president at Signature, in a statement.

“Today’s action was not transparent, fair, or objective, and will cause unnecessary disruption at the airport…Given the Board’s unwise action, we will vigorously pursue all avenues of redress.”

In response, county officials said the board can choose whichever contractor it deems is best for the public.

“The Orange County Board of Supervisors has the right and responsibility in any procurement process to make the decision that is best for the County and its residents,” said the county statement.

“While those who do not compete favorably in a procurement process may disagree with the final selection, this does not make it illegal nor does it render it outside the County’s standard protocol.”

Both sides turned out dozens of speakers at the Board of Supervisors meeting Tuesday, where supervisors voted 4-1 to award the two-year lease to ACI Jet. Supervisor Lisa Bartlett was the only no vote.

At the end of the new lease, the county is supposed to issue longer leases as part of a new airport master plan.

Supervisor Shawn Nelson and several Signature tenants have said at recent board meetings that Signature overcharged customers at John Wayne Airport with fuel prices that far exceed market rates. Signature disputes such claims and alleges supervisors illegally sidestepped bidding rules.

None of the supervisors have explained why they chose the No. 5 firm, ACI, instead of a higher-ranked company. Supervisors have collected thousands of dollars in campaign donations from people who work or advocate for the companies vying for the lease.

As the lease decision was approaching in the second half of last year, ACI and its supporters outspent Signature by 2-to-1 in contributions to supervisors, according to a Voice of OC review of campaign filings. ACI’s supporters contributed $7,700, while Signature’s supporters spent $2,750.

Todd Spitzer received $4,300 from ACI supporters and $1,250 from Signature supporters, Andrew Do received $1,900 from ACI supporters and $250 from Signature supporters, Nelson received $1,000 from ACI supporters, and Bartlett received $500 from ACI supporters and $1,250 from Signature supporters.

In a series of escalating moves, Signature publicly accused supervisors of breaking the law to pick ACI, complained earlier this month to the Federal Aviation Administration, and vowed to lodge a formal complaint with the FAA that could impact the airport’s federal funding.

“The Board [of Supervisors] has gone to extraordinary lengths to manipulate the process to achieve a predetermined outcome,” said Katie Thomson, a former chief legal counsel to the Federal Aviation Administration who now represents Signature, in public comments to supervisors before the vote.

“If the board continues to persist in violating federal law, Signature will also persist in pursuing appropriate legal remedies, including filing a formal Part 16 complaint with FAA and urging the agency to withhold funding from the airport.”

She then handed officials what she described as a draft complaint under Part 16, a lawsuit-like process in which the FAA can hold back airport grants if it determines the county violated federal contracting rules and the county refuses to correct it. Those rules require airport owners to “negotiate in good faith and on reasonable terms” when choosing companies to provide aircraft services, according to the FAA.

A formal complaint would be an escalation of an earlier complaint by Signature, which was submitted under a more informal process and is still under FAA review.

After the vote, Signature issued a statement calling the supervisors’ selection of ACI illegal and vowing to “pursue all avenues” in response.

County officials, meanwhile, said the claims had no merit and that the legal filing would probably go nowhere.

The FAA has the authority to issue a cease and desist letter against the county but the facts of the case don’t support that happening, County Counsel Leon Page said during the meeting.

That view was backed up by an attorney for ACI who also once served as chief counsel to the FAA.

The attorney, Kenneth P. Quinn, said discussions with FAA officials led him to believe the county is “far from having your federal funds jeopardized in any way.”

By choosing ACI, he said supervisors are doing exactly what the federal contracting rules are supposed to do: bring in competition. “I think you’re going to be commended,” Quinn said.

County officials have pointed to a chart showing Signature was significantly overcharging for fuel along with the airport’s other fixed-base operator, Atlantic Aviation. The chart also shows Signature’s proposed future fuel pricing being much higher than ACI’s, at $5.50 per gallon versus $3.78.

Nelson, who’s been the board’s most vocal supporter of ACI, said it was false for Signature to claim the evaluation panel’s rankings should be followed.

When it comes to bid evaluation panels, Nelson said, “sometimes they’re just there to give us a guide.”

Signature isn’t treating all of its customers the same, Nelson said, adding it’s his “duty” to ensure the airport serves all of its customers fairly.

And he wasn’t happy with how a Signature executive argued with him about fuel prices at a public meeting.

“One of you stood up at our December meeting and publicly wanted to argue with me,” Nelson said.

Signature, meanwhile, has made clear it plans to keep up its campaign against the supervisors’ action.

Nick Gerda covers county government and Santa Ana for Voice of OC. You can contact him at ngerda@voiceofoc.org.