PORT OF SEATTLE
MEMORANDUM
COMMISSION AGENDA
Item No.
6b
Date of Meeting
October 4, 2011
DATE: September 23, 2011
TO: Tay Yoshitani, Chief Executive Officer
FROM: Ralph Graves, Director, Capital Development Division
George England, Program Leader, Project Management Group
SUBJECT: Construction of the Small Operator Area Ready Return Area Build-Out Project
(CIP # C100266)
Amount of This Request: $512,780 Total Project Cost: $837,000
Estimated Taxes $48,780 Est. Jobs Created: 12
ACTION REQUESTED:
Request authorization for the Chief Executive Officer to execute a contract with the low
responsive and responsible bidder for the Small Operator Area (SOA) Ready Return Area Build-
Out Project in the amount of $512,780. Sufficient funds for this contract were previously
authorized under the May 13, 2008, Commission authorization to proceed with construction of
the Rental Car Facility. The SOA Ready Return Build-Out Project was subsequently authorized
for advertisement and award at the May 10, 2011, Commission meeting (CIP #C100266).
Commission action is required at this time by Resolution No. 3605, as amended, Section 4.2.3.4.
because the bids were greater than 10 percent over the engineer’s estimate.
SYNOPSIS:
The Port of Seattle is required under the Rental Car Concession Lease to construct the SOA and
recover the cost through lease rent charges to each of the small operators that sign the lease. On
August 25, 2011, the Port of Seattle bid the SOA as a Major Public Works project. The
engineer’s estimate was $304,274. On September 14, 2011, the Port of Seattle received 4 bids
ranging from $512,780 to $678,169, see table below. Bids were greater than 10% over the
engineer’s estimate; therefore, in accordance with Resolution No. 3605, as amended, staff is
seeking Commission approval to execute this contract.
COMMISSION AGENDA
Tay Yoshitani, Chief Executive Officer
September 27, 2011
Page 2 of 3
Contractor
Bid
M.D. Moore
$512,780.00
Skanska, USA Building
$535,000.00
Bayley Construction
$567,000.00
Phillips Construction Services
$678,169.00
Staff analyzed the engineers estimate of $304,274 and found the following items either were not
priced appropriately for the final scope or were not accounted for in the final estimate:
The customer service kiosks require customization and as a result are more expensive
than estimated as off-the-shelf. The estimate was completed before design documents
were final.
The kiosks, security gate assemblies and other access control systems are long lead items.
Given the aggressive schedule the estimate did not consider the potential risk.
The estimate did not consider costs associated with being under the 1999 Project Labor
Agreement or higher contractor mark-ups typical of a small project.
The engineer’s estimate did not take into account any costs that may have been included
related to the new Port Small Contractor & Supplier (SCS) initiative. The contract had a
6% requirement for SCS firms.
The successful contractor will be required to comply with the current RCF contractor’s
safety and security requirements and limited access, laydown and on-site employee
parking requirements that may have been perceived as a risk not considered in the
estimate.
Based on the reasons stated above, the three lower bidders were within 10.5% of each other,
which appears representative of the marketplace, and because all four were above the engineer’s
estimate, Port staff believes the low bid represents a fair and reasonable price.
BACKGROUND & PROJECT SCOPE OF WORK:
The RCF program provides a long-term solution for rental car company operations at the Airport
by centralizing all rental car operations in a single facility located at the north end of the Airport.
It will provide operational space for up to three (3) small operator rental car companies to
operate at the RCF. As defined the Consolidated Rental Car Facility Lease Agreement: “Small
Operator” shall generally mean and refer to an Operator whose market share constitutes less than
two percent (2%) of the overall Market Share for rental cars at the Airport and which operates
from the Small Operator Area.
The project is designed to accommodate three (3) Small Operators in the new RCF. During the
design of the RCF, it was not known how many Small Operators would participate or how large
an area would be required to accommodate them. During the contract negotiations with Turner
Construction, an area was identified and shown within their contract to accommodate any future
Small Operators. Design and construction of this SOAwas not in Turner’s contract. Aviation
COMMISSION AGENDA
Tay Yoshitani, Chief Executive Officer
September 27, 2011
Page 3 of 3
Business Development now has better information on the number and space needs of potential
Small Operators.
Initially, the project was scoped and estimated to be constructed by Port Construction Services
and a small works contractor. After further design parameters and cost estimates were finalized,
the construction cost estimates were close to exceeding the allowable state small works limits.
Staff made the decision to bid the SOA as a major works project due to this concern. The SOA
project was advertised as a major construction contract.
ALTERNATIVES CONSIDERED:
Award Contract: Based upon our technical analysis of the factors which affected the bid prices
and the consistency of high bids across all the bidders, Port staff believes this bid price from MD
Moore is fair and reasonable. Staff recommends the Commission authorize for contract award.
Port Construction Services (PCS) Constructs: Staff evaluated going back to the original plan of
having PCS construct this project. Due to the magnitude of the estimate exceeding small works
dollar limits, the limited amount of work Port crews could perform, the schedule impact to get
PCS re-engaged and prepared to construct, the long lead items schedules and cost of the
customize booths there is insufficient time for PCS to meet the required completion date. This
alternative is not recommended.
OTHER DOCUMENTS ASSOCIATED WITH THIS REQUEST:
None.
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS:
May 13, 2008, Commission authorized to proceed with construction of the RCF. The scope
and budget for the SOA was within this authorization.
May 10, 2011, Commission authorization for the Chief Executive Officer to advertise for
bids, execute, and award major construction contracts and perform contract administration
for the SOA project as part of the RCF program at Airport.
