Bechtel Won’t Get San Jose Airport Job Because of Insurance Issues

The job of upgrading Norman Y. Mineta San Jose International Airport won’t go to Bechtel Infrastructure Group, city officials announced.

Negotiations between the city and the San Francisco-based contractor broke down over insurance issues. Instead, San Jose is talking with Greeley, Colo.-based Hensel Phelps Construction about the $712 million contract.

If a deal is worked out, Hensel Phelps would oversee the modification of the airport’s Terminal A, demolition of Terminal C, creation of a new Terminal B, major roadway improvements, and other projects.

Airport spokesman Rich Dressler said the disagreements with Bechtel, the country’s largest design-build firm, were insurance related. They included how much Bechtel would pay if the work was not done on time and the “assignment of general liability,” or how much risk Bechtel would assume if something went wrong during construction.

Dressler would not be more specific, saying the city does not want to jeopardize its negotiating position with Hensel Phelps.

The collapse of the city’s negotiations with Bechtel came as the company faces liability questions from its role as the lead contractor on Boston’s problem-plagued, $14.6 billion Big Dig project.

A driver was killed in the tunnel last month when ceiling tiles collapsed. A spokeswoman for Bechtel said the breakdown of talks with San Jose was unrelated to its work in Boston or elsewhere.