Template revised January 10, 2019.
COMMISSION
AGENDA MEMORANDUM
Item No.
6g
ACTION ITEM
Date of Meeting
January 28, 2020
DATE: January 21, 2020
TO: Stephen P. Metruck, Executive Director
FROM: Wendy Reiter, Director of Aviation Security
Wayne Grotheer, Director Aviation Project Management
SUBJECT: Bollard Procurement for Airport Terminal Accessibility and Safety Enhancements
(TSE) Phase II (CIP #C800862)
Estimated contract:
$2,000,000 - $3,000,000
ACTION REQUESTED
Request commission authorization for the Executive Director to execute a contract to purchase
structural bollards for the Terminal Security Enhancements Phase II Project at Seattle-Tacoma
International Airport. The contract value for the 443 bollards is estimated between $2 million
and $3 million.
EXECUTIVE SUMMARY
The purchase of the structural bollards is to complete the second phase of the TSE program and
is intended to improve passenger safety with the installation of structural bollards along the
airport’s arrivals and departures curbsides, the courtesy vehicle plaza, and the pedestrian sky
bridge entrances in the main garage. The installation of these bollards has been identified as a
key component of the overall comprehensive security program at the airport. The project will
also complete American with Disabilities Act (ADA) access improvements along the arrivals and
departures curbsides and resurface the sidewalks.
By purchasing the bollards, the port hopes to increase competition among suppliers to lower
the overall unit price per bollard and hopefully lowers construction cost the overall TSE project.
In August 2019, construction bids were opened for this project that were significantly higher
than the engineer’s estimate. Due to the significant cost increase and the wide range of cost
between the bids, the procurement was cancelled. One factor for the high construction bids
was linked to the cost of the bollards. By pursuing owner procurement, the port also
anticipates improving the overall project schedule since bollards are a long lead item. The
project is planned to be redesigned and re-advertised in Q2 2020 with construction to begin in
Q3 2020.
COMMISSION AGENDA – Action Item No. __6g__ Page 2 of 6
Meeting Date: January 28, 2020
Template revised June 27, 2019 (Diversity in Contracting).
No additional funds are being requested as part of this action; however, a future Commission
action will be required to authorize additional funding to complete the project. The additional
budget required will not be known until redesign is complete and new estimate developed. The
overall project cost increase is also subject to a majority-in-interest (MII) vote of signatory
airlines, anticipated to occur in April 2020. Should a negative MII vote occur, the delivery of the
bollards, as well as the construction of the project, will be delayed one year per the terms of
the Airline Operating Agreement.
JUSTIFICATION
The Phase II of the TSE program is necessary, as it will provide an improved safe environment
for the airport passengers, vendors and staff. These improvements also provide ADA compliant
access improvements as recommended by the Accessibility Study completed by the Open Doors
Organization (ODO). These improvements support the port’s goal of making Seattle-Tacoma
International Airport the most accessible airport in the nation for people with disabilities.
Diversity in Contracting
Project staff worked with the Diversity in Contracting Department and have established an
eight percent women- and minority-owned business enterprise (WMBE) aspirational goal for
the construction project.
DETAILS
TSE Phase II includes the installation of bollards on the arrivals and departures curbsides and at
the entrances to each of the pedestrian skybridges and along the courtesy vehicle plaza in the
main garage. Site and structural facility constraints limit the type of crash rated bollards that
can be used, and therefore the number of potential vendors who can meet the project
requirements.
On July 23, 2019, the project was advertised for construction bids with an engineer’s estimate
in the amount of $8,568,103. A total of four bids were received, on August 28, 2019, ranging in
price from $11,660,474 to $20,697,925. The apparent low bid was withdrawn due to a
significant bid error resulting in a new apparent low bid of $14,654,750 for a total overall
project cost of $24,500,000. Port staff reviewed the bid information and determined that one
of the key differences between the engineer’s estimate and the bids was a higher cost for the
bollards. The review identified that the cost for the 443 vendor supplied bollards was $3
million, more than double the engineer’s estimate value of $1.3 million. The bid review also
clarified that all bidders were sourcing bollards from the same vendor, who likely realized they
were sole source and as a result was able to demand a higher overall cost.
With the information from the bid results, the project team determined procuring the
structural bollards separately may increase supplier competition resulting in a lower bollard
cost. Since the initial bid opening, four vendors have been identified that can provide bollards
that meet the project’s requirements; two located in the United States and the two new
COMMISSION AGENDA – Action Item No. __6g__ Page 3 of 6
Meeting Date: January 28, 2020
Template revised June 27, 2019 (Diversity in Contracting).
vendors located in the United Kingdom. By purchasing the bollards ahead of the major works
construction contract, the bollards should be supplied in time to support the anticipated
construction schedule.
There are risks with the port purchasing the bollards for installation by the construction
contractor and they are discussed below:
• Delay Claims: Any delay in the purchasing, production and delivery of the bollards could
impact the contractor’s construction schedule, putting the port at risk for a delay claim.
This risk will be mitigated by purchasing the bollards in advance of the major works
construction contract and planning enough time that they could be produced and delivered
from the United Kingdom prior to issuing notice to proceed.
• Damaged Bollards: The port is responsible for the condition of the bollards until they are
delivered to the contractor. The port is mitigating this risk by requiring the contractor to
inspect and accept delivery of the bollards when they arrive at a location identified by the
contractor. The contractor will be responsible for storage, transportation and installation of
the bollards.
• Design Error: The port is responsible for ensuring that the bollards meet the project
requirements. The port is having the design team prepare the requirements for the bollard
procurement, and review the supplier provided shop drawings to ensure they meet the
requirements. The shop drawings will also be provided to the contractor to support the
installation effort.
Besides the cost of the bollards, two other factors were attributed to the higher than
anticipated bid costs: mobilization costs and labor risk associated with operational constraints
and an aggressive construction schedule. While the budget increase for the project has yet to
be established, the project team has begun additional efforts to try and minimize the overall
increase. The port held a design charette to simplify the sidewalk resurfacing design, along with
conducting contractor and supplier information meetings in mid-January to discuss the logistic
and labor requirements for the work. Currently port staff estimates the completion of Phase II
for an estimated $17,500,000 to $19,500,000, for a total project cost in the amount of
$21,000,000 to $23,000,000 including Phase I.
Scope of Work
The TSE Phase II project will install bollards and ADA access ramps and resurface sidewalks. The
access ramps will be installed at or near to entrances to the Main Terminal from the arrivals
and departures curbsides. The number of accessible loading zones will increase from two to
twelve on the arrivals curbside, and from three to twelve on the departures curbside. Bollards
will also be installed in the main garage at the entrance to each of the six sky bridges, and along
the third-floor courtesy vehicle plaza. The entire sidewalk along the arrivals, departures, and
courtesy vehicle plaza will be resurfaced improving the customer experience for those facilities.
COMMISSION AGENDA – Action Item No. __6g__ Page 4 of 6
Meeting Date: January 28, 2020
Template revised June 27, 2019 (Diversity in Contracting).
Schedule
Activity
Issue Invitation to Bid – Bollards
2020 Quarter 1
Commission Authorization - Construction
2020 Quarter 1
Execute Purchase Contract – Bollards
2020 Quarter 2
Advertise for Construction Bids
2020 Quarter 2
Receive Bollards
2020 Quarter 3
Start Construction / Issue Notice to Proceed
2020 Quarter 3
Construction Complete
2021 Quarter 3
Estimated Cost Breakdown
This Request
Total Project
Design Phase
$0
$2,465,000
Construction Phase
$0
S13,651,000
Total
$0
$16,116,000
ALTERNATIVES AND IMPLICATIONS CONSIDERED
Alternative 1 – Do not proceed with the project
Cost Implications: $930,250
Pros:
(1) No additional capital investment by the port.
Cons:
(1) Does not increase the safety and security of the occupants of the Main Terminal.
(2) Does not enhance ADA accessibility at the Main Terminal curbside.
(3) Does not enhance the aesthetics of the Main Terminal curbside and courtesy vehicle
plaza.
(4) Design costs of $930,250 would need to be expensed.
This is not the recommended alternative.
Alternative 2 – Have contractor procure bollards for project
Cost Implications: $2,500,000-$3,500,000
Pros:
(1) Removes risk from port for owner procured material including delay claims, damaged
bollards, and design errors.
Cons:
(1) May result in higher bollard costs.
(2) Delay the start of construction so that construction would need to be phased around
summer arrivals and departures curbside operations. Summer curbside operations
would also be significantly impacted by partially completed facilities.
COMMISSION AGENDA – Action Item No. __6g__ Page 5 of 6
Meeting Date: January 28, 2020
Template revised June 27, 2019 (Diversity in Contracting).
This is not the recommended alternative.
Alternative 3 – Execute a contract to procure structural bollards.
Cost Implications: $2,000,000 - $3,000,000
Pros:
(1) Through more competition we anticipate obtaining a lower bollard costs thereby
reducing overall project costs
(2) Construction could start at the end of summer operations supporting the completion
of the arrivals and departures curbsides prior to the next summer operation.
Cons:
(1) Shifts risk to port for owner-procured material including delay claims, damaged
bollards, and design error.
This is the recommended alternative.
FINANCIAL IMPLICATIONS
Cost Estimate/Authorization Summary
Capital
Expense
Total
COST ESTIMATE
Original estimate
$9,854,000
$0
$9,854,000
Previous changes
$5,469,546
$792,454
$6,262,000
Revised estimate
$15,323,546
$792,454
$16,116,000
AUTHORIZATION
Previous authorizations
$15,616,000
$500,000
$16,116,000
Current request for authorization
($292,454)
$292,454
0
Total authorizations, including this request
$15,323,546
$792,454
$16,116,000
Remaining amount to be authorized
$TBD
$0
$TBD
Please note that the “$TBD” remainder of the project is a result of the project being redesigned
to help minimize overall project costs. The early overall project cost is currently estimated
between $21,000,000 to $23,000,000.
Annual Budget Status and Source of Funds
This project was included in the 2020 – 2024 capital budget and plan of finance with a budget
amount of $15,323,000. The funding source will be the Airport Development Fund and future
revenue bonds. This project was approved by the airlines via the April 2019 majority-in-interest
vote. However, the anticipated budget increase will require an additional majority-in-interest
vote planned for April 2020.
COMMISSION AGENDA – Action Item No. __6g__ Page 6 of 6
Meeting Date: January 28, 2020
Template revised June 27, 2019 (Diversity in Contracting).
Financial Analysis and Summary
Project cost for analysis
$16,116,000
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
$TBD in 2020
Future Revenues and Expenses (Total cost of ownership)
Port staff does not anticipate a significant change in the on-going operation and maintenance
costs associated with these improvements since preventative maintenance is not performed on
the security and access improvements.
ATTACHMENTS TO THIS REQUEST
None
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS
May 3, 2019 – The Commission authorized the advertisement and execution of a major
works construction contract for the Phase II of the Airport Terminal Safety
Enhancements and Security Improvements project.
January 30, 2018 – The Commission authorized Design of Phase II of the Airport Terminal
Safety Enhancements and Security Improvements.
October 24, 2017 – The Commission authorized Design and Construction of Phase I of the
Airport Terminal Safety Enhancements and Security Improvements.
