Template revised January 10, 2019.
COMMISSION
AGENDA MEMORANDUM
Item No.
8e
ACTION ITEM
Date of Meeting
March 26, 2019
DATE: March 21, 2019
TO: Stephen P. Metruck, Executive Director
FROM: Ralph Graves, Senior Director, Capital Development
Greg Carey, Capital Program Leader
SUBJECT: Agreement with Transportation Security Administration (TSA) for Replacement
Computer Tomography X-Ray (CTX) Machines
Amount of this request:
Up to $4,000,000
ACTION REQUESTED
Request Commission authorization for the Executive Director to execute an agreement with the
Transportation Security Administration (TSA) for two replacement Computer Tomography X-
Ray (CTX) explosive detection machines for the Baggage Optimization Phase 1 construction
project, to reimburse TSA or their supplier for up to $4,000,000 from public expense funds as
necessary and to pursue reimbursement from the construction contractors for the cost.
EXECUTIVE SUMMARY
Baggage Optimization is an airport-wide project that improves customer service for both
airlines and passengers. This is a long-term, 3-phase project that is scheduled to be completed
in 2025. Phase 1 is currently under construction, and TSA has provided CTX machines to be
incorporated into the system. On March 5, two of the machines were damaged in the course of
construction work. This threatens further to delay the project. TSA will provide two
replacement machines once the Port signs an agreement ensuring that TSA will be reimbursed
for the cost. TSA may direct that payment be made directly to the manufacturer of the
machines. While staff is confident of eventual payment from the construction contractor
and/or its insurer, the Port may need to provide initial payment in the interim to mitigate
further costs/delays and thereafter seek reimbursement from contractors who damaged the
machines or their insurers.
JUSTIFICATION
The Baggage Optimization project is an essential element in meeting the air transportation
needs of the region. The CTX machines screen all checked baggage for indications of potential
security risks. TSA provides them but retains ownership and control. The two machines in
question had been supplied and positioned within the Phase 1 construction project. On March
5, the fire protection subcontractor on the Baggage Optimization project was testing a newly
COMMISSION AGENDA – Action Item No. 8e Page 2 of 2
Meeting Date: March 26, 2019
Template revised September 22, 2016; format updates October 19, 2016.
installed sprinkler system when a coupling failed and spilled approximately sixty gallons of
water on conveyor equipment and the two CTX machines. TSA’s contractor inspected the
machines and declared that they need to be replaced. TSA has identified two available
machines in Dallas to be delivered to the project once the Port signs an agreement ensuring
they will be reimbursed for the approximately $3.6 million combined cost. The authorization
request for $4 million provides contingency for unanticipated variation in the amount.
The project before the accident was already running more than 90 days behind schedule and
replacing the water-damaged elements is expected to add another 60 days of delay. Receiving
the CTX machines promptly is essential to minimizing the delay and promptly completing this
phase and the overall program.
DETAILS
The construction contract holds the general contractor and subcontractors liable for damage
they cause. The Port has formally notified the general contractor of their liability for costs
associated with the accident, including replacement of the CTX machines, and staff is confident
of eventual recovery of damages.
TSA is in the process of preparing the Memorandum of Agreement. They have informed Port
staff that it will promise release of the two CTX machines in return for assurance of
reimbursement. Depending on the timing of the required reimbursement, the Port may need to
pay TSA before we receive payment from the construction contractor.
FINANCIAL IMPLICATIONS
The Port has the capacity to finance the $4 million cost while seeking reimbursement. For
accounting purposes, the costs would be categorized as Public Expense to acquire public assets
not owned by the Port – purchase of a publicly-owned machine from the government. The
funding source will be the Airport Development Fund. Other Public Expense actions by the Port
include the Lander Street overpass owned by City of Seattle, and aviation’s rental car facility
entrance to State Route 518 freeway.
ATTACHMENTS TO THIS REQUEST
None.
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS
None.
