Template revised January 10, 2019.
COMMISSION
AGENDA MEMORANDUM
Item No.
6p
ACTION ITEM
Date of Meeting
December 10, 2019
DATE: December 3, 2019
TO: Stephen P. Metruck, Executive Director
FROM: Wendy Reiter, Director, Aviation Security
Wayne Grotheer, Director, Aviation Project Management
SUBJECT: Vanderlande Contract Amendment, Automated Screening Lanes (CIP #C800920)
Amount of contract amendment:
$445,000
ACTION REQUESTED
Request Commission authorization for the Executive Director to execute a contract amendment
with Vanderlande Industries Inc. in the amount of $445,000 for the Automated Screening Lanes
Project at Seattle-Tacoma International Airport. No additional project funding is requested.
EXECUTIVE SUMMARY
In 2017, the Port of Seattle Commission authorized this $17,000,000 project to increase security
effectiveness and efficiency and improve the passenger experience at the Airport by installing
Automated Screening Lanes (ASL) at three passenger security checkpoints and providing
equipment for a fourth. To meet a Transportation Security Administration (TSA) deadline, the
Port expedited the ASL equipment procurement and selected Vanderlande Industries Inc. in
September 2017. A contract in the amount of $8,715,000 (not including sales tax) was executed
for the purchase of 21 ASL lanes of equipment.
The project has now proceeded through design, construction, and installation at one
checkpoint and is continuing installation at the second checkpoint. Changes in contract scope
require an amendment to the Vanderlande contract in the amount of $445,000. While there is
no change in the overall project budget, this change will shift $445,000 of project budget from
capital to expense.
JUSTIFICATION
The Port is proposing the following change to the Vanderlande contract:
To facilitate the installation of the new ASL equipment, existing third-party, TSA-owned security
equipment must be relocated, re-installed, and re-certified. The port excluded the movement
of this third-party equipment from the vendor contract because the equipment belonged to the
TSA and would be moved by the TSA. During design, TSA clarified that they were unable to
COMMISSION AGENDA – Action Item No. __6p__ Page 2 of 4
Meeting Date: December 10, 2019
Template revised June 27, 2019 (Diversity in Contracting).
complete the moves of their equipment and Vanderlande took on this effort as a part of their
work, not realizing the exclusion. This exclusion became apparent during the second checkpoint
installation. To complete the installation, Vanderlande undertook this additional work. This
proposed contract change in the amount of $445,000 will pay for the remaining work to move
third-party equipment at Checkpoints 2 and 3 and the International Arrivals Facility (IAF).
Per the General Delegation of Authority, Section 4.2.3.8, Commission authorization is required
to execute a contract amendment greater than $300,000.
Schedule
Due to design challenges, electrical and data infrastructure construction contracting issues,
equipment damage, and most recently vendor equipment production issues, this project has
fallen behind schedule. The project has limited “windows” of time to complete equipment
installations and avoid peak travel periods. These issues have delayed the installation of the
remaining equipment until 2020, with an anticipated project completion of Q3 2020, which
includes the International Arrivals Facility (IAF) checkpoint installation.
ALTERNATIVES AND IMPLICATIONS CONSIDERED
Alternative 1 – Procure a separate entity to perform the remaining third-party equipment
moves and testing for the remainder of the project
Cost Implications: $500,000
Pros:
(1) The equipment move work would be competed among potential vendors.
Cons:
(1) The pool of eligible vendors is limited by TSA contracting certification requirements.
(2) Internal costs to the project will increase for additional procurement and coordination
effort.
(3) Coordination during installation will be more difficult and risk of mis-communication
and change orders will increase.
(4) This will result in further schedule impacts to the project to acquire contract(s) with
different vendors.
This is not the recommended alternative.
Alternative 2 – Complete the change order as requested
Cost Implications: Increase to the contract of $445,000; there is no budget increase to the
project
Pros:
(1) Less overall cost and performance risk to the project having Vanderlande supply third-
party equipment moves.
(2) Schedule will not be impacted by having to contract and coordinate separately with a
third-party equipment move vendor.
COMMISSION AGENDA – Action Item No. __6p__ Page 3 of 4
Meeting Date: December 10, 2019
Template revised June 27, 2019 (Diversity in Contracting).
Cons:
(1) This work would not be competed as a separate procurement.
This is the recommended alternative.
FINANCIAL IMPLICATIONS
The budget for this project has not changed.
Capital
Expense
Total
COST ESTIMATE
Original estimate
$30,000,000
$0
$30,000,000
Budget reduction/addition
($21,700,000)
$8,700,000
($13,000,000)
Previous Changes
($821,380)
$821,380
Current change
($445,000)
$445,000
$0
Revised estimate
$7,033,620
$9,966,380
$17,000,000
AUTHORIZATION
Previous authorizations
$17,000,000
$0
$17,000,000
Current request for authorization
$0
$0
$0
Total authorizations, including this request
$17,000,000
$0
$17,000,000
Remaining amount to be authorized
$0
$0
$0
Annual Budget Status and Source of Funds
The Automated Security Lane (CIP #C800920) was included in the 2020-2024 capital budget and
plan of finance. The funding source for this project will be revenue bonds and airport
development fund.
The ownership of the screening equipment will be transferred to the TSA. Accordingly, the cost
of the equipment and the costs of the equipment installation will be accounted for as public
expense. In the table above, the estimated cost of the screening equipment and installation are
indicated in the expense column. The cost of this expense has been included in the 2020
operating budget.
Financial Analysis and Summary
Project cost for analysis
$17,000,000
Business Unit (BU)
Terminal Building
Effect on business performance
(NOI after depreciation)
NOI after depreciation will increase due to inclusion of
capital (and operating) costs in airline rate base.
IRR/NPV (if relevant)
N/A
CPE Impact
$0.04 in 2020
COMMISSION AGENDA – Action Item No. __6p__ Page 4 of 4
Meeting Date: December 10, 2019
Template revised June 27, 2019 (Diversity in Contracting).
Future Revenues and Expenses (Total cost of ownership)
The ownership of the screening equipment will be assigned to the TSA, so the cost of the
equipment will be accounted for as public expense.
ADDITIONAL BACKGROUND
The Vanderlande contract has been amended four times:
(1) Amendment #1 for $188,000 addressed third-party equipment storage, and requests
from TSA end users for design changes to provide additional security enhancements,
including the purchase of additional secondary screening stations for the new ASL
lanes and additional screening resolution services to allow for remote screening.
(2) Amendment #2 for $252,000 addressed the completed third-party equipment moves
and was ratified at a staff level.
(3) Amendment #3 for $188,380 addressed equipment inspections and movement
required to respond to equipment damage resulting from a construction accident
where a damaged fire sprinkler inundated two ASL lanes and required the equipment
to be replaced and was ratified at a staff level.
(4) Amendment #4 for $178,000 addressed purchase of an improved model for the IAF
security checkpoint.
ATTACHMENTS TO THIS REQUEST
None
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS
January 22, 2019 – The Commission authorized advertisement for bids and execution of a
major works contract.
December 12, 2017 – The Commission authorized construction and installation of lanes by
use of Port crews for construction efforts.
July 25, 2017 – The Commission authorized design, procurement of equipment and use of
Port crews.