Government has received only two bids from companies wishing to operate the Airport when the US Navy quits Bermuda next year.

Nine companies or partnerships were invited to bid on the five-year contract which could be worth $50 million. Management and Technology Minister the Hon.

Grant Gibbons admitted yesterday he was disappointed with the number of bids received by Friday's deadline.

"I think it would have been nicer to have a slightly larger field to choose from,'' Dr. Gibbons told The Royal Gazette .

However, "we've got two very well-known players,'' he said. "Both companies are first-class.'' The Navy officially leaves the Island next September, but Bermuda must be ready to take over air operations on June 1.

Bids were received from Allied Signal Technical Services Inc. of the United States, which has teamed up with Bermuda Aviation Services, and Serco Aviation Services Inc., the Canadian subsidiary of a large United Kingdom company.

Controversy arose in August because Serco's Canadian subsidiary was formerly Thompson Hickling Aviation of Canada -- the company Government hired to help write the specifications for the air operations contract.

One of the invited bidders, who spoke on condition of anonymity, expressed astonishment at the time, saying it was "highly unusual'' for a company involved in setting contract specifications to be invited to bid.

But Dr. Gibbons said there was no conflict of interest and Serco gained no unfair advantage.

And yesterday, he said there was no indication that concerns over Serco's inclusion in the bidding were related to decisions by seven invitees not to submit tenders.

"Really what it comes down to, and I think one has to be aware of this, is that we operate a fairly small airport here,'' he said. "All of these companies have to make a commercial decision in terms of where they put their resources.

"Generally, this is not a large job in the grand scheme of things, but it is large in terms of the liabilities.'' Lockheed Air Terminal Inc. of the US decided not to bid after its planned partnership with National Air Traffic Services of the UK fell through, Dr.

Gibbons said. Johnson Controls World Services Inc. of the US said its decision not to bid was "internal,'' and "not a result of any problems at the Bermuda end,'' he said. Frank E. Basil Inc. of the US did not attend a bidders' conference in Bermuda in August and said at the time it would not pursue the contract.

The other companies -- including two that were only intending to bid on specific parts of the contract -- have not been heard from.

The companies that bid did so on the understanding that other companies were bidding, so Dr. Gibbons said he was not concerned about a lack of competitive bids.

As of yesterday, the large tender documents had not been opened. Dr. Gibbons said they would undergo detailed technical and financial scrutiny. He hoped a contractor would be selected by the end of the month and be in place before the end of the year.

Johnson Controls and Lockheed said they were still interested in bidding on another contract to manage the Airport infrastructure, he said.