Template revised January 10, 2019.
COMMISSION
AGENDA MEMORANDUM
Item No.
8e
ACTION ITEM
Date of Meeting
October 22, 2019
DATE: October 14, 2019
TO: Stephen P. Metruck, Executive Director
FROM: Wayne Grotheer, Director, Aviation Project Management Group
Jeffrey Brown, Director, Aviation Facilities and Capital Programs
SUBJECT: North Terminals Utilities Upgrade Project (#C800717) Phase 1 Construction
Authorization.
Amount of this request:
$12,064,000
Total estimated project cost:
$40,000,000
ACTION REQUESTED
Request Commission authorization for the Executive Director to (1) advertise and award a
construction contract for Phase 1 of the North Terminals Utilities Upgrade project at Seattle-
Tacoma International Airport; (2) employ a project labor agreement (PLA);. The amount of this
request is $12,064,000. The total estimated Phase 1 and Phase 2 project cost is $40,000,000.
EXECUTIVE SUMMARY
This project will replace and extend the existing 45-year-old undersized steam, condensate and
chilled water supply and return piping from the Central Mechanical Plant and create a
redundant interconnected piping loop in two phases.
Phase 1 will provide new upsized piping from the Central Mechanical Plant to points of
connection for the Concourse D Annex and North Satellite. Phase 1 work is time critical as it is
required for the planned 2021 opening of the newly renovated North Satellite.
Phase 2 will provide a fully redundant loop system that will enable any part of the airport
terminal to operate Heating, Ventilation, and Air Conditioning (HVAC) systems while being
supplied from the south or north steam, condensate, chilled water supply and return piping.
This level of redundancy currently exists for Concourse A, B, and the South Satellite.
Completing this project will enable airport wide HVAC system redundancy for all concourses
and satellites.
The full project scope cannot be completed for the previously estimated amount of
$21,335,000.
COMMISSION AGENDA – Action Item No. _8e___ Page 2 of 6
Meeting Date: October 22, 2019
Template revised June 27, 2019 (Diversity in Contracting).
This authorization is for Phase 1 construction only. The project team will return to Commission
for Phase 2 construction authorization at a later date.
JUSTIFICATION
The existing steam, condensate, and chilled water supply and return piping are undersized for
current and future projected system loads. The project is required to supply adequate heating
and cooling to the Terminal building and North Satellite. The NorthSTAR Program is currently
under construction and requires the completion of this work to support the operational
readiness of Phase 2 of the NorthSTAR Program by summer 2021.
Diversity in Contracting
The project manager is working with the Diversity in Contracting Department to determine
participation opportunities and set goals for women and minority business enterprises (WMBE)
attainment.
DETAILS
The existing steam, condensate, and chilled water supply and return piping are undersized for
current and future projected system loads. The project is required to supply adequate heating
and cooling infrastructure to the Terminal building and North Satellite. The project is planned to
be implemented in two phases.
The Commission authorized the full project scope on June 28, 2016. Since this time the project
team has prioritized the approved scope into two phases. Phase 1 will provide capacity
improvements to support the Terminal building and North Satellite in support of the NorthSTAR
Program. New piping will be installed from the Central Mechanical Plant to the new valve room
located north of the Main Terminal building, and from the valve room to the existing Concourse
D Annex and North Satellite connections. Phase 2 will provide capacity improvements to
support Concourses C and D and complete the interconnected loop system making the system
fully redundant. The Phase 2 scope of work requires close coordination with the baggage
optimization program, airline baggage operations, and will require additional design analysis.
Phase 2 of this project is significantly more complex in design and construction than Phase 1
and will require much more coordination construction effort.
The scope and complexity of this project has increased significantly since it was originally
presented to Commission in 2016. The new Concourse D Annex and Baggage Optimization
projects have imposed substantial cost and schedule impacts. To accommodate the Concourse
D Annex facility, the project will need to build a new valve room. This new valve room will
displace existing facilities that must also be relocated. The technical difficulties and
complexities of working in and around assets installed by the Baggage Optimization project
were also not properly accounted for in the early construction estimate. Finally, this project has
faced costly challenges associated with maintaining full airport operations during construction.
COMMISSION AGENDA – Action Item No. _8e___ Page 3 of 6
Meeting Date: October 22, 2019
Template revised June 27, 2019 (Diversity in Contracting).
Scope of Work
Phase 1 - Install new upsized chilled water, steam and condensate piping from the Central
Mechanical Plant to a new valve room located in the north ground transportation lot adjacent
to the D Annex sloped walkway and from the valve room as far as the North Satellite tunnel
connection. This will provide the required infrastructure for the HVAC system for the North
Terminal building and the North Satellite.
Phase 2 - Install steam, condensate, and chilled water supply and return piping from the Central
Terminal baggage level connection point to the new valve room building that will be in the north
east corner of the north GT lot east of the D Concourse Annex sloped walkway. Provide a fully
redundant loop system. Enable any part of the airport terminal to operate HVAC systems while
being supplied from the south or north steam, condensate, chilled water supply and return
piping. This level of redundancy currently exists for Concourse A, B, and the South Satellite.
Completing this project will enable airport wide HVAC system redundancy for all concourses and
satellites.
Schedule
1
st
Quarter 2020
2
nd
Quarter 2021
3
rd
Quarter 2023
Cost Breakdown
This Request
Total Project
Design Phase
$3,427,000
$7,039,000
Construction Phase
$8,637,000
$32,961,000
Total
$12,064,000
$40,000,000
ALTERNATIVES AND IMPLICATIONS CONSIDERED
Alternative 1 – Proceed with Phase 1 only - replace and upsize the existing 50-year-old HVAC
piping. Do not proceed with installing a redundant interconnected loop.
Cost Implications: $21,335,000 (approximately $1,600,000 in design funds associated with
Phase 2 work will need to be expensed.)
Pros:
(1) North Satellite will have the utilities required for opening and operation as identified
in the NorthSTAR Program basis of design.
COMMISSION AGENDA – Action Item No. _8e___ Page 4 of 6
Meeting Date: October 22, 2019
Template revised June 27, 2019 (Diversity in Contracting).
Cons:
(1) Does not provide capacity improvements to Concourses C and D.
(2) Does not create a fully redundant interconnected chilled water, steam and
condensate piping system.
This is not the recommended alternative.
Alternative 2 – Proceed with Phase 1 and defer Phase 2 to a future Capital Improvement
Project.
Cost Implications: $44,925,000 (Phase 1, $21,335,000 - Phase 2, $23,590,000)
Pros:
(1) North Satellite will have the utilities required for opening and operation as identified
in the NorthSTAR Program basis of design.
(2) Improves system reliability by creating a fully redundant interconnected chilled water,
steam and condensate piping system.
(3) Improves maintainability of system by allowing maintenance bypass.
Cons:
(1) Largest Capital investment.
(2) Current design work related to Phase 2 may need to be expensed.
(3) Benefit of capacity improvements to support Concourse C and D are not realized until
a future date.
(4) Benefit of redundant loop is not realized until future date.
This is the not recommended alternative.
Alternative 3 – Proceed with full project scope (Phase 1 and Phase 2). Phase 1 (urgent work)
will replace and upsize the existing 50-year-old HVAC piping. Phase 2 will install a redundant
interconnected loop.
Cost Implications: $40,000,000
Pros:
(1) North Satellite will have the utilities required for opening and operation as identified
in the NorthSTAR Program basis of design.
(2) Provides the capacity improvements to support Concourses C and D, and the North
Satellite.
(3) Improves system reliability by creating a fully redundant interconnected chilled water,
steam and condensate piping system.
(4) Improves maintainability of system by allowing maintenance bypass.
Cons:
(1) Requires a substantial capital and expense investment.
This is the recommended alternative.
COMMISSION AGENDA – Action Item No. _8e___ Page 5 of 6
Meeting Date: October 22, 2019
Template revised June 27, 2019 (Diversity in Contracting).
FINANCIAL IMPLICATIONS
Cost Estimate/Authorization Summary
Capital
Expense
Total
COST ESTIMATE
Original estimate
$11,950,000
$50,000
$12,000,000
Previous changes – net
$8,349,000
$986,000
$9,335,000
Current change
$18,665,000
$0
$18,665,000
Revised estimate
$38,964,000
$1,036,000
$40,000,000
AUTHORIZATION
Previous authorizations
$9,036,000
$235,000
$9,271,000
Current request for authorization
$12,033,000
$31,000
$12,064,000
Total authorizations, including this request
$21,069,000
$266,000
$21,335,000
Remaining amount to be authorized
$17,895,000
$770,000
$18,665,000
Annual Budget Status and Source of Funds
The North Terminals Utilities Upgrade Project (#C800717) was included in the 2019-2023
capital budget and plan a finance with a budget of $20,299,000. The cost increase is related to
constructability and operational challenges that were significantly underrepresented in the pre-
design cost estimate. The budget increase will be transferred from the Aeronautical Reserve CIP
(C800753) resulting in no net change to the Aviation Division capital plan. The funding source
would be the Airport Development Fund and future revenue bonds.
Financial Analysis and Summary
Project cost for analysis
$40,000,000
Business Unit (BU)
Terminal Building
Effect on business performance
(NOI after depreciation)
NOI after depreciation will increase
IRR/NPV (if relevant)
N/A
CPE Impact
$.13 by 2023
Future Revenues and Expenses (Total cost of ownership)
A steam, condensate and chilled water supply and return piping systems have an expected life
cycle of 25-30 years. The technology and insulation materials designed into this project will
extend the life cycle to 40-50 years.
ADDITIONAL BACKGROUND
This project was originally proposed as part of the Year 2000 Mechanical Systems Master Plan
but was deferred due to the elimination of the North End Air Terminal (NEAT) program.
COMMISSION AGENDA – Action Item No. _8e___ Page 6 of 6
Meeting Date: October 22, 2019
Template revised June 27, 2019 (Diversity in Contracting).
ATTACHMENTS TO THIS REQUEST
(1) PowerPoint slides
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS
September 12, 2017 – The Commission authorized the Executive Director to extend the
North Terminals Utilities Upgrade Project major construction contract for the Early Work
Mechanical Contract by adding 250 days to the contract duration.
June 28, 2016 – The Commission authorized the Chief Executive Officer to increase the
North Terminals Utilities Upgrade Project scope, budget, authorization, utilize Port crew
advertise and award a major construction contract for the Early Work Mechanical Contract
for an additional $7,271,000.
April 28, 2015 – The Commission authorized the Chief Executive Officer to execute service
agreements and conduct studies, cost estimates, design and prepare construction
documents for the North Terminals Utilities Upgrade Project in the amount of $2,000,000.