Template revised September 22, 2016.
COMMISSION
AGENDA MEMORANDUM
Item No.
6d
ACTION ITEM
Date of Meeting
May 8, 2018
DATE: March 15, 2018
TO: Stephen P. Metruck, Executive Director
FROM: Erik Knowles, Senior Manager, Aviation Maintenance
Stuart Mathews, Director, Aviation Maintenance
SUBJECT: Authorization to procure a service contract to provide Manual Encoding services for
Airport Baggage Conveyor Systems.
Amount of this request:
Contracting authority of $3.1 million over 5 years
ACTION REQUESTED
Request Commission authorization for the Executive Director to: execute a contract for Manual
Encoder Console Services (MEC) at Seattle-Tacoma International Airport. The contract duration
is for up to five years (one year base contract with four 1-year options). The estimated total
cost of the contract is $3.1 million over the 5 years.
EXECUTIVE SUMMARY
When a baggage tag is not read, bags are sent to a location where an individual can intervene
and properly scan and dispatch the bag. This service contract will provide staffing for this
function. The Manual Encoder staff will be responsible for the timely scanning of all bags
diverted to the Manual Encoding console, so bags continue to flow through the Baggage
systems without delay. The two MEC systems will be staffed from approximately 3:30 a.m. until
1:00 a.m. (22.5 hours a day), seven days per week, 365 days per year, and will require at least 1
person to staff each location.
JUSTIFICATION
This contract authorization will allow the Airport to meet customer on-time baggage needs
efficiently throughout its term. It directly supports the Port’s Century Agenda item of meeting
the region’s air transportation needs at Sea-Tac Airport and aligns well with current Airport
objectives to provide opportunity for small and disadvantaged business service providers.
Maintenance will be working closely with the Economic Development Division-Small Business
Program to incorporate a small or disadvantaged business component to the bid.
COMMISSION AGENDA – Action Item No. _6d___ Page 2 of 4
Meeting Date: May 8, 2018
Template revised September 22, 2016; format updates October 19, 2016.
DETAILS
In 2017, the incumbent contractor for the MEC requested to be released from contract citing
their inability to sustain staffing at the current levels of compensation agreed-to in the previous
competitively bid contract. As a result, the Port solicited for and executed a 1 year contract with
the successful bidder being McGee Air Services. McGee self performs MEC service on baggage
systems that are utilized by Alaska Airlines. The Baggage Optimization Project will NOT change
the configuration of these portions of the baggage system as bags will still need to sort to
designated airline locations. This service will still be required after the Baggage Optimization
project is complete.
Scope of Work
The scope of work is to provide services necessary to staff two manual encoding stations for
22.5 hours per day, seven days per week, 52 weeks per year.
Schedule
The current contract expires in July of 2018. We intend to secure a contractor through the
competitive bid process no later than June of 2018.
ALTERNATIVES AND IMPLICATIONS CONSIDERED
Alternative 1 – Perform the work using Port staff.
Cost Implications: Cost Estimate: $800,000 for year one, or approximately $4.2 million over 5
years.
Pros:
(1) This alternative would allow the Port staff to oversee this work. Staff would have more
direct control to correct any MEC staff issues.
Cons:
(1) This option is estimated to be a more costly option on an annual basis.
(2) This option eliminates an opportunity to utilize small or disadvantaged businesses for
this work.
This is not the recommended alternative.
Alternative 2 – Turn over work to Airline consortium
Cost Implications: Cost Estimate: $0 to the Port, but costs would be incurred by the Airlines
through a Consortium. We reached out to the consortium regarding this scope of work; they
did NOT express any interest in pursuing an RFP to contract this work.
Pros:
(1) This work would be turned over to the Airlines to control and administer. No further
Port action would be required to manage it.
COMMISSION AGENDA – Action Item No. _6d___ Page 3 of 4
Meeting Date: May 8, 2018
Template revised September 22, 2016; format updates October 19, 2016.
Cons:
(1) The current Airline Consortium has struggled with some of their current service
providers and has shown inability to agree on corrective actions at times. Adding this
element to the services provided could create situations which result in disruption to
the baggage system operation.
(2) As this service only supports a portion of the Airlines at Sea-Tac Airport, the Airlines may
not favor taking on this work as a collective.
(3) This option does not allow for the opportunity to target small and/or disadvantaged
business enterprises.
This is not the recommended alternative.
Alternative 3 – Rebid the contract
Advertise and execute a contract for a 2 year term with at least 3 / 1 year extensions.
Cost Implications: Cost Estimate: $3.1 million
Pros:
(1) This recommendation allows for one contract for MEC services that will be the
responsibility of Port staff. It will allow the Port to control and deliver consistent and
reliable service to the MECs. This alternative is directly aligned with our philosophy to
make Sea-Tac Airport the West Coast gateway of choice through positive customer
experience via on-time baggage performance.
(2) This is a good contracting opportunity for small or disadvantaged businesses as the scale
of work aligns well with current Airport small and disadvantaged business service
providers.
(3) By the Port directly controlling the MECs, the Port can insure the flow of baggage is
undisrupted for all air carriers, and if not - we can directly solve the problem.
(4) It is anticipated that a multi-year contract offering will provide incentive for a larger pool
of proposers to participate.
Cons:
(1) The costs estimated to perform this work has risen due to SeaTac minimum wage
increases. This escalation has been forecasted in our budget estimate.
This is the recommended alternative.
FINANCIAL IMPLICATIONS
Annual Budget Status and Source of Funds
The 2018 operating budget includes $420,000 in the Aviation Maintenance budget for these
services. The future annual contract amount will be included in annual operating budgets. The
requested amount has an increase to the operating budget by $180,000, equaling estimated
COMMISSION AGENDA – Action Item No. _6d___ Page 4 of 4
Meeting Date: May 8, 2018
Template revised September 22, 2016; format updates October 19, 2016.
costs of $600,000 per year. This increase is based on economic forecasts provided by CPO for
increases to staff wages from $25 an hour to $35 an hour.
Future Revenues and Expenses (Total cost of ownership)
Future expenses for this service will be included in the Aviation Maintenance budget and will be
budgeted through the annual expense budgeting process. The necessary budget value will be
determined through the RFP process.
ATTACHMENTS TO THIS REQUEST
None
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS
None
