Item No. 9c_supp
Meeting Date: February 26, 2019

Baggage Optimization
Fourth Quarter Briefing and
Project Update

AGENDA
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Project Overview
2018 Quarter 4 Update
Budget
Schedule
Challenges
Accomplishments
Progress
Sustainability

Baggage Optimization Project

2

PROJECT OVERVIEW
•

Replaces six individual baggage
screening systems with a centralized
system that optimizes the operation
and functionality of the checked
baggage system

Key elements:
• 60 Million Annual Passengers (MAP)
• Reliability
• Redundancy
• Security

Complete Overhaul of Outbound System

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2018 Q4 Update
• Schedule

- Contractor Fell Behind on Submittals and Fabrication

• Phase 1:

- Contractor Maintaining Two Work Shifts (Mon. through Sat.)
- Conveyor Installation is ongoing (Critical Path)

• Phase 2:

- 100% Design Documents completed
- Permit set has been submitted to Building Department
- Developing Phase 2 Bid Documents & estimate

Phase 1 Schedule Concerns

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FINANCIAL PROGRESS REPORT
Millions

Authorization Summary

Capital

Expense

Total

Current Budget

$444.90 M

$0.15 M

$445.05 M

$400

Current Authorization

$136.16 M

$0.15 M

$136.31 M

$350

Amount Remaining to be
Authorized

$308.74 M

$0 M

$308.74 M

$450

$300
$250

Total Project (Capital + Expense)

$200
$150

Budget

Spent to
Date

Forecast at
Completion

Variance

$100

Soft Cost

$64.99 M

$23.20 M

$64.99 M

$0 M

$50

Construction

$359.43 M

$41.41 M

$359.43 M

$0 M

Management
Reserve

$20.63 M

$0 M

$20.63 M

$0 M

$445.05 M

$64.62 M

$445.05 M

$0 M

$Management Reserve Remaining
Construction Spent
Soft Cost Spent

Financial Breakdown

Construction Remaining
Soft Cost Remaining

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FUNDING CONTRIBUTION
(Port Contribution to
Date $33.7M)

Port
$351M
79%
TSA
$94M
21%

TSA OTA/LOI Reimbursement

(TSA Contribution to
Date $30.9M)

Total Project Budget
Total TSA Contribution
Total Port Contribution
Amount Spent to Date
TSA Reimbursement to Date

$445,050,000
$94,043,296
$351,006,704
$64,621,035
$30,899,397

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SCHEDULE

Contractor Delay Extends Overall Completion Date

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SMALL BUSINESS/APPRENTICESHIP UTILIZATION
SCS/SBE

APPRENTICESHIP
Overall
(15%)

SBE Const
(15%)

Women
(10%)
Minority
(15%)

SCS Const
(5.0%)
0.0%

50.0%

100.0%

Goal

150.0%

200.0%

Actual

Tracking Close to or Exceeding Goals - status as of January 2019

0.0%

50.0% 100.0% 150.0% 200.0%
Goal

Actual

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CHALLENGES
• Phase 1 Construction Schedule

• Baggage Handling/Steel Market Conditions for Phase 2 Bid
• Operational Impacts Through Construction
• IAF Coordination - Must be operational prior to Phase 2 SSAT
construction
• Project Coordination - Have coordinated with 60+ projects so far
Overcoming Challenges

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COST INCREASES SINCE 2013 ESTIMATE

•

15% Increase (Adjusted for Inflation) in Domestic Baggage Projects
(Estimate from Baggage Designer)

•

Material Cost of Structural Steel and Metals Increased 25% in 2018, as a
Reaction to the Tariffs

•

Construction Market Escalation Averaged 5% per year since 2013
(Approximately 25% Over 5 Year Period)

Cost / Market Conditions

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ACCOMPLISHMENTS
• All conveyor equipment delivered and stored at warehouse.
• Phase 2 permit set has been submitted to Building Department.
• Structural steel on Central Terminal bump out has been completed.

• Purchased and received baggage handling network equipment.

• Conveyor Factory Acceptance Retest conducted and successful.
• Continued construction on conveyors, utilities and infrastructure.

Baggage Optimization Construction Progress

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SUSTAINABILITY
Energy Conservation
Optimized system is projected to result
in up to 30% energy savings

Water Conservation
No opportunity
Working Environment
Improved ergonomics

Waste Reduction
Contractual requirement to recycle
demolished material when possible

Opportunity in Energy Conservation

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T106 Warehouse Space

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New Conveyor Sections

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Structural steel on Central Terminal Bump Out

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Factory Acceptance Testing Facility- Detroit, MI

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