The latest tension in Mayor Rahm Emanuel's testy relationship with major Chicago labor unions is centered on O'Hare International Airport, where the city is poised to award a new janitorial contract that could cost hundreds of workers their jobs.

The Service Employees International Union is appealing to the mayor and the city inspector general to head off a $99 million bid from a company that union leaders accuse of undercutting competitors by planning to replace veteran custodians and window cleaners with cheaper labor.

"The mayor holds the ultimate decision on this," said SEIU Local 1 President Tom Balanoff. "The mayor can look at a situation and say, 'I don't think that's a responsible contractor. I don't want that.' "

The current contract for custodial services at O'Hare, with a company called Scrub Inc., expired June 30, and City Hall's decision on a new contract could come at any time.

"While we cannot comment on a pending contract or potential bidder, the city is committed to providing top-rate custodial services at the airports for our passengers at a competitive cost," said Emanuel spokeswoman Sarah Hamilton.

SEIU said Scrub has been paying workers according to prevailing rates that begin at $12.05 an hour and top out at $15.45 an hour for those with five years or more of seniority.

City records show that Chicago-based United Maintenance Company Inc. underbid Scrub by more than $11 million for the new five-year contract and also came in below eight other bidders that are signatories to SEIU's master agreement with janitorial companies.

Balanoff said he has met with the general counsel for United Maintenance and was told the company would hire its own workforce if it gets the contract, a move that would allow janitors with no union seniority to be hired at the bottom of the prevailing wage scale to do the work of current employees who are making more. He said that is enough for the city to declare the company is not a responsible bidder.

United Maintenance's president, Richard Simon, did not return calls for comment. It is not the first time Simon has been embroiled in complaints about undercutting labor agreements.

In 2002, Simon and United Maintenance's parent company were named in a federal Independent Review Board investigation of Chicago Teamsters union leaders. Simon was found to have colluded with Teamster boss William Hogan Jr. and another official on a contract for workers for Las Vegas trade shows "for which Simon's company would pay lower wages ... from what the existing collective bargaining agreement required."

Under the agreement the board investigated, Simon would have been able to control the hours of temporary workers to prevent them from building up enough time to earn certain benefits. Simon disputed the claims the contract was substandard and said his goal was to raise wages for the Las Vegas local.

The new turmoil comes as Emanuel is wrangling with a number of city unions. The Chicago Teachers Union as well as the labor unions for the Police and Fire departments are in the midst of contract talks, and the mayor's moves to change work rules and foster competition with the private sector have put him at odds with some public employee unions.

Just last week, other SEIU janitors held a City Hall news conference to complain they were losing their jobs at municipal buildings after the city began doing business with another contractor.

Balanoff contends there is no direct savings for taxpayers if his approximately 340 union workers are cut loose at O'Hare because the contract is paid through airline fees and concessions at the airport. Hamilton said that when airport costs are high, they can be passed on to Chicago residents and businesses.

The union has long supported Democrats including President Barack Obama, whom Emanuel worked for as White House chief of staff, but SEIU has not squarely backed the new Chicago mayor.

Before his election, Emanuel met with Balanoff and other SEIU leaders to seek their support and discuss priorities. Balanoff recalled the meeting was positive and Emanuel said he would consider the union's push for a city ordinance guaranteeing wages and benefits for janitors and other workers.

But ultimately the union stayed neutral in the mayor's race that Emanuel won handily over his nearest competitor.

"No, we didn't endorse him, but we didn't endorse anyone else," Balanoff noted.

The union's proposed "responsible bidder in services" ordinance, which could include a provision for keeping longtime employees, is in limbo at City Hall. More than 30 aldermen co-signed an early version of the proposal that included prevailing wage language but not a retention clause.

"The responsibility ordinance has little to do with a responsible vendor," said Hamilton, the mayor's spokeswoman. "We are already required to review responsibility as a matter of state law."

Ald. William Burns, 4th, a sponsor of the proposal, said he understands SEIU and the administration still are in discussions about it, and he is hopeful Emanuel eventually could support it.

"It's about basic fairness for long-standing employees who serve the citizens of the city," Burns said.

jcoen@tribune.com