Template revised April 12, 2018.
COMMISSION
AGENDA MEMORANDUM
Item No.
6k
ACTION ITEM
Date of Meeting
February 26, 2019
DATE: February 6, 2019
TO: Stephen P. Metruck, Executive Director
FROM: Jeffrey Brown, Director of Aviation Facilities and Capital Programs
Michael Tasker, Senior Manager of Aviation Facilities and Infrastructure
SUBJECT: Aviation Asset Management Program
Amount of this request:
$5,000,000
ACTION REQUESTED
Request Commission authorization for the Executive Director to execute an asset management
services contract for up to 5 years for Seattle-Tacoma International Airport, with an estimated
value of $5,000,000.
EXECUTIVE SUMMARY
The Airport has more than $4 billion in facilities and equipment assets (historical cost, before
depreciation). The capital program will be delivering many more assets to the Port of Seattle in
the near future. Asset Information is critical for managing the Port of Seattle infrastructure,
fleet, and facilities. It helps inform maintenance and capital planning for renewal and
replacement or for capacity enhancement, allowing the Port to manage total cost of ownership
and ensure investment in the right assets at the right time to achieve the right level of service.
This request is for consultant services to assist Aviation staff in obtaining asset data that will be
placed into system where the information can be can be readily used to inform decision makers
on managing the airport’s assets.
JUSTIFICATION
Sound asset management practices reduce the total cost of ownership and enhance maximum
asset life and reliability. Asset management is widely recognized as a smart ownership practice
and widely adopted by large infrastructure system owners. Asset management is one of the
most cost-effective methods for ensuring system reliability, safety, and energy efficiency.
Typical Return on Investment (ROI) of the implementation of an Enterprise Asset Management
System and development of an asset inventory is as follows:
1. Labor utilization/ productivity is improved by 10-20% through better organization of
work activities. (it is noted that the 10-20% improvement identified above includes
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Meeting Date: February 26, 2019
Template revised September 22, 2016; format updates October 19, 2016.
improved decisions coming from an asset management program not just
implementation of those decisions).
2. Inventory stock is typically reduced by 20-30% as a result of better managed work
activities – resulting in reduce stock holding, which has both a direct finance impact as
well as indirect through storage etc.
3. Asset downtime is typically reduced 5-20%.
4. Productivity benefit – 20 - 30% reduction in labor hours after a 5 to 10-year period.
5. Improved safety – 2 to 3 times reduction in safety incidents
6. Improved performance – 40 to 80% improvement in customer service
7. Improved use of available resources – 20 to 30% reduced outages, reduced overtime
8. Improved environmental performance – reduced CO
2
emissions and reduced
environmental incidents
9. Reduced risks – resulting in reduced insurance premiums (up to 30% reduction in
premiums), and incident payouts.
Another perspective is that the asset will cost on average 20% less to maintain over its lifetime
to achieve the same performance outcomes.
Effective asset management provides guidance direction and optimization of intelligent
maintenance practices that become a resource generating substantial energy savings.
Inadequate maintenance of energy-using systems is a major cause of energy waste. Energy
losses from steam, water and air leaks, uninsulated pipes, maladjusted or inoperable controls,
and other losses from poor maintenance can be substantial.
DETAILS
The Aviation Division is looking to improve its existing asset management program by using
industry best practices to place geo-referenced asset management and work order history
information into our Computerized Maintenance Management System (CMMS). This will allow
reporting that will drive renewal and replacement strategies and maximize asset life, reducing
total cost of ownership.
The current asset management system, begun in 2011-2012 for the Aviation Division, has
naming conventions, hierarchies, and asset condition analysis completed for approximately 50
percent of the airport assets. The system has identified and defined assets and links PeopleSoft
(financial) information with the Port’s CMMS (Maximo) information. The data is currently
maintained in excel spreadsheets.
In January 2018, the Aviation Division began a gap analysis of its asset management program
and current practices against industry best practices. This gap analysis was done with WSP, an
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Meeting Date: February 26, 2019
Template revised September 22, 2016; format updates October 19, 2016.
industry leading asset management consulting firm, headed up by Dr. Christian Roberts. Dr.
Roberts was one of the authors of the ISO 55000: the international standard for asset
management.
WSP leveraged their industry-leading Asset Management Capability Assessment model, which
draws on over 20 years of experience managing critical infrastructure, to assess the Port of
Seattle’s Aviation Division level of asset management maturity.
Scope of Work
The contract’s scope of work includes the following:
1. Develop and Implement Enterprise Asset Hierarchies
2. Develop Data Collection Process
3. Asset Inventory Data Collection
4. Develop Condition Assessment Guidelines and Scoring for All Asset Classes
5. Conduct Condition and Capacity Assessments across All Asset Classes
6. Develop Asset Management Reporting
7. Perform PeopleSoft / Maximo Integration/ GIS Integration assess applicability of
design attribute integration via a design management tool
8. Develop Introductory and Ongoing Asset Management Training
9. Migrate existing Asset data into Maximo
10. Develop Enhancements to Asset Commissioning/Onboarding Process
11. Develop a process for Asset Program Sustainability
Schedule
Q3 2019 – Selection of Asset Management Consultant.
2019- Develop and Implement Asset Hierarchies
Develop Discovered Asset Process
Develop Condition Assessment Guidelines and Scoring
Begin Asset Discovery, Inventory Collection and Condition Assessment
2020- Develop Asset Management reporting
Continue Asset Discovery, Inventory Collection and Condition Assessment
Migrate Existing Data into Maximo
Develop enhancements to Asset Commissioning Onboarding process
Develop Introductory and ongoing asset management training
2021- Perform Tool integration
Continue Asset Discovery, Inventory Collection and Condition Assessment
Develop a process for Asset Program Sustainability
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Meeting Date: February 26, 2019
Template revised September 22, 2016; format updates October 19, 2016.
Diversity in Contracting
This contract will include a 15 percent woman- and minority-owned business enterprise
(WMBE) aspirational goal.
ALTERNATIVES AND IMPLICATIONS CONSIDERED
Alternative 1 – Use Port staff and existing resources.
Cost Implications:
It is estimated that the current STIA Asset Management system has assessed approximately
50% of all airport facility capital assets over the course of the last 7 years, utilizing
approximately 20,000 staff hours working around other duties as assigned.
Completion of these tasks for the rest of the STIA assets would require roughly an additional
20,000 hours of staff engagement.
Pros:
(1) Saves expense budget.
(2) Develops staff knowledge to be able to manage the future requirement
Cons:
(1) Requires additional FTEs and resources to complete in a timeframe that supports the
capital program.
(2) Training required for the staff to implement industry best practices.
(3) Could take another 7 years to implement working around other job responsibilities.
(4) Capital program projections will be delayed.
This is not the recommended alternative.
Alternative 2 – Hire additional staff and perform the work with in-house resources.
Cost Implications:
Assessing the remaining assets is approximately 20,000 hours.
Pros:
(1) Develops staff knowledge to manage the future requirement.
Cons:
(1) Training of staff will be required to implement industry best practices.
(2) Could take longer to implement as the time required would be dependent on the
number of staff hired. Once the bow wave of work implementation is accomplished
the number of staff required to sustain the program will be less. Staff would have to
be reassigned.
This is not the recommended alternative.
COMMISSION AGENDA – Action Item No. _6k___ Page 5 of 5
Meeting Date: February 26, 2019
Template revised September 22, 2016; format updates October 19, 2016.
Alternative 3 – Hire an asset management consulting firm to implement industry best asset
management practices and develop a training and maintenance program where the work can
potentially be transitioned to staff in the future.
Cost Implications:
$5,000,000 in expense authorization required over 5 years.
Pros:
(1) Faster implementation of industry best practices.
(2) Better Capital Budget projection.
(3) Reduction in total cost of ownership.
(4) Better asset reliability.
(5) Better capital decision making, using data and metrics for informing decisions.
(6) Develop training programs to share with and mentor staff to develop best practices.
Cons:
(1) Higher expense burn rate.
This is the recommended alternative.
FINANCIAL IMPLICATIONS
Annual Budget Status and Source of Funds
The 2019 operating budget includes $1,000,000 for this effort. The remainder of the funding
will be included in the operating budget of future years. The funding source will be the Airport
Development Fund.
ATTACHMENTS TO THIS REQUEST
(1) Presentation slides
(2) Aviation Asset Management Gap Assessment Report
(3) Facility Information Exchange (Fx) Roadmap
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS
None
