Denver International Airport will bring in a new shuttle operator next year to transport passengers and employees to and from its parking lots after the City Council on Monday approved a contract potentially worth $371 million.
LAZ Parking Midwest will replace replacing DIA’s longstanding contactor, which missed goals for on-time service every day for three straight years before the pandemic, city auditors found.
DIA’s contract with LAZ will start in February 2025 and stands as the airport’s largest single operations agreement. The council approved the nine-figure contract on Monday as part of a block vote, without discussion.
The company is replacing ABM Parking Services, a company whose performance resulted in a scathing audit of the airport’s contract oversight in 2021. The audit’s fallout included DIA’s discipline of at least three employees, and it contributed to the dismissal of the high-ranking airport official in charge of DIA’s Parking and Transportation Department.
The pact with LAZ will remain in place for at least seven years, with options to renew it on a one-year basis in 2032, 2033 and 2034, according to a presentation airport officials delivered to a council committee earlier this month.
All told, the contract is worth up to $371.1 million, depending on the contractor’s costs each year — demonstrating the key role buses play in the airport’s operations.
Last year, airport shuttles recorded 8 million individual passenger trips between DIA’s terminal and its outlying parking lots, according to Mark Nagel, the airport’s current senior vice president of parking. Of those, 5 million were taken by airport employees.
The contract includes financing for LAZ to purchase up to 65 new 40-foot buses that run on compressed natural gas, according to Nagel. Through a grant from the state health department, the airport is also expected to buy eight smaller electric buses to service economy lots. The goal is to explore how electric vehicles hold up as shuttles in all types of weather, Nagel said during his committee presentation.
LAZ, which also holds a $83.8 million parking management contract at DIA that starts this year, is expected to reach out to the United Mineworkers, the union that represents shuttle drivers, to negotiate a new labor contract before taking over next year.
Under the terms of DIA’s agreement, the minimum pay for all commercially licensed drivers employed by LAZ will be $29 per hour, Nagel said.
Nagel promised close oversight of the contract once it goes into effect.
“The airport is going to have a robust audit program that ensures that any costs that are being thought of under this contract will be reviewed and approved before any purchase or cost (is) expended,” he said.
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