Template revised January 10, 2019.
COMMISSION
AGENDA MEMORANDUM
Item No.
8h
ACTION ITEM
Date of Meeting
December 15, 2020
DATE: December, 4, 2020
TO: Stephen P. Metruck, Executive Director
FROM: Wendy Reiter, Director Aviation Security
Wayne Grotheer, Director Aviation Project Management
SUBJECT: Authorization for Alternative Project Delivery Terminal Security Enhancements
(CIP #C800862)
Amount of this request:
$1,500,000
Total estimated project cost:
$21,400,000
ACTION REQUESTED
Request Commission authorization for the Executive Director to: 1) utilize the traditional
design-build contracting methodology, 2) advertise and award the design-build contract, and 3)
complete final design and construct Phase II of the Terminal Security Enhancements project at
Seattle-Tacoma International Airport (Airport). An additional budget in the amount of
$1,500,000 is included in the request for a total estimated cost of $21,40,000.
EXECUTIVE SUMMARY
The Terminal Security Enhancements (TSE) Phase II project 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 the Americans
with Disabilities Act (ADA) access improvements along the arrivals and departures curbsides.
The project was advertised in 2019 with competitive bids coming in well above budget. To
reduce costs, Port staff determined to split the procurement of the bollard materials from the
construction contract, as an owner-furnished contractor-installed material. An evaluation of the
bollard contract was performed, and construction bids were opened with results well within the
authorized budget. The bollard procurement was then protested by multiple vendors. Following
an administrative hearing for the protests, the bollard procurement was cancelled. The Port
also cancelled the major construction procurement because of the interdependency of the
bollards purchase with the install contract. The project team reassessed the project and given
the complexity of the project and how the bollards are structurally connected to our existing
COMMISSION AGENDA – Action Item No. __8h__ Page 2 of 6
Meeting Date: December 15, 2020
Template revised June 27, 2019 (Diversity in Contracting).
facilities, concluded that the design-build alternative delivery method is the best option for
delivering the project scope while addressing procurement and construction risks.
This project was initially approved by a majority-in-interest (MII) vote of the signatory airlines
per the Signatory Lease and Operating Agreement (SLOA). The project increase of $1,500,000
will not require an additional MII vote, since the increase is less than the 10% allowed per the
SLOA.
JUSTIFICATION
The Phase II of the TSE program is necessary as it will provide security improvements,
accessibility improvements as recommended by the Accessibility Study completed by the Open
Doors Organization (ODO), and corrective actions per an agreement with the FAA. These
improvements support the Port’s goal of making SEA the most accessible airport in the nation
for people with disabilities and provide a safe environment for SEA’s passengers, staff and
visitors.
Diversity in Contracting
Project staff worked with the Diversity in Contracting Department and have established an
eight percent (8%) Women- and Minority-Owned Business Enterprise (WMBE) aspirational goal
for the project supporting the Port’s objective of increasing WMBE participation in Port
contracts.
DETAILS
On July 23, 2019, the project was advertised for construction bids with an engineer’s estimate
in the amount of $8,568,103 for a total estimated project cost of $16,116,000. The Port
cancelled the procurement because all bids significantly exceeded the engineers estimate and
the Port determined it was in our best interest to re-design the project and delivery method.
Based upon the bids received the total estimated project cost was $24,000,000.
On January 28, 2020, the Commission authorized the procurement of the structural bollards as
owner procured materials to increase competition resulting in a lower bollard cost. A total of
five proposals were received, ranging in cost from $1.5 to $2.9 million. A notice of intent to
award was issued on August 3, 2020.
After issuing the notice of intent to award for the bollard procurement, multiple vendors
protested the selection in early September. Following an administrative hearing for the
protests, the bollard procurement was cancelled. As a result of this decision, the dependent
major works construction procurement was also cancelled. Bids had just been opened for the
major works construction contract where the low apparent bidder was 34% below the
engineer’s estimate.
COMMISSION AGENDA – Action Item No. __8h__ Page 3 of 6
Meeting Date: December 15, 2020
Template revised June 27, 2019 (Diversity in Contracting).
Additionally, the Federal Aviation Administration (FAA) received a complaint regarding the lack
of accessibility improvements on the curbside and has requested that the airport remedy the
situation. FAA has been notified of the delayed project schedule and understands the decision
to cancel the contracts.
Scope of Work
The project will install security and ADA access improvements at the entrances to the main
terminal from the arrivals and departures curbsides. The number of accessible loading zones
will increase from two to 12 on the arrival’s curbside, and from three to 12 on the departure’s
curbside. Security improvements will also be installed in the Main Garage at the entrance to
each of the six pedestrian sky bridges and along the third-floor courtesy vehicle plaza.
Schedule
Activity
Commission Authorization
2020 Quarter 4
Issue Request For Qualifications (RFQ)
2021 Quarter 1
Issue Request For Proposal (RFP)
2021 Quarter 1
Construction start
2021 Quarter 3
In-use date
2022 Quarter 4
Cost Breakdown
This Request
Total Project
Design
$1,500,000
$3,397,104
Construction
$0
$17,402,896
Total
$1,500,000
$21,400,000
ALTERNATIVES AND IMPLICATIONS CONSIDERED
Alternative 1 – Do not proceed with Phase II of the TSE project
Cost Implications: $ 1,302,000 for a total of $4,300,000 (includes Phase I)
Pros:
(1) No capital investment by the Port.
Cons:
(1) Does not increase the safety and security of the occupants of the Main Terminal.
(2) Does not fulfill obligation to FAA to enhance ADA accessibility at the Main Terminal
curbside.
(3) A total of $1,302,000 would need to be expensed.
This is not the recommended alternative.
COMMISSION AGENDA – Action Item No. __8h__ Page 4 of 6
Meeting Date: December 15, 2020
Template revised June 27, 2019 (Diversity in Contracting).
Alternative 2 – Proceed with bollard installation and ADA access ramp improvements using
design-bid-build approach.
Cost Implications: Minimum of $16,182,912 for a total of $19,500,000 (includes Phase I)
Pros:
(1) The safety and security of the occupants of the Main Terminal will be increased.
(2) The arrival and departures curbside will become compliant with current ADA
standards and helps expedite achieving the Port goal of making the Airport the most
accessible airport for people with disabilities in the nation.
(3) Existing design can be re-used and modified to support this approach.
Cons:
(1) Requires capital investment of over $16 million by the Port.
(2) Longer implementation schedule than traditional design-build approach.
(3) Potential for significant budget increase since structural improvements would need to
be designed to support range of bollard vendors.
This is not the recommended alternative.
Alternative 3 – Proceed with bollard installation and ADA access ramp improvements using
traditional design-build approach.
Cost Implications: $17,682,912 for a total of $21,400,000 (includes Phase I)
Pros:
(1) The safety and security of the occupants of the Main Terminal will be increased.
(2) The Arrivals and Departures curbsides will become compliant with current ADA
standards and helps expedite achieving the Port goal of making the Airport the most
accessible airport for people with disabilities in the nation.
(3) Approach places risk with design builder who is in a better position to address risk
related to bollard design and installation and interaction with connected structures.
(4) Design build allows for efficiencies and supports innovation.
(5) Shorter implementation schedule than design-bid-build approach.
Cons:
(1) Requires capital investment of over $17 million by the Port.
(2) Will require approximately $1,100,000 of current project costs to be expensed given
change in procurement approach.
This is the recommended alternative.
COMMISSION AGENDA – Action Item No. __8h__ Page 5 of 6
Meeting Date: December 15, 2020
Template revised June 27, 2019 (Diversity in Contracting).
FINANCIAL IMPLICATIONS
Cost Estimate/Authorization Summary
Capital
Expense
Total
COST ESTIMATE
Original estimate
$9,854,000
$0
$9,854,000
Previous changes – net
$9,541,885
$504,115
$10,046,000
Current change
$400,000
$1,100,000
$1,500,000
Revised estimate
$19,795,885
$1,604,115
$21,400,000
AUTHORIZATION
Previous authorizations
$19,395,885
$504,115
$19,900,000
Current request for authorization
$400,000
$1,100,000
$1,500,000
Total authorizations, including this request
$19,795,885
$1,604,115
$21,400,000
Remaining amount to be authorized
$0
$0
$0
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. A budget increase of $4,472,8855 was transferred from the
Aeronautical Reserve CIP (C800753) resulting in zero net change to the Aviation capital budget.
The funding source will be existing revenue bonds.
This project was initially approved by the signatory airlines via the April 2019 MII vote, and
again in May 2020 for a total project capital cost of $18,996,000. The increase in capital budget
does not require additional approval from the signatory airlines since it is within 10% of the
approved amount.
Financial Analysis and Summary
Project cost for analysis
$21,400,000
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
$0.11 in 2022
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 efforts since minimal preventive maintenance is performed on the
security and access improvements.
COMMISSION AGENDA – Action Item No. __8h__ Page 6 of 6
Meeting Date: December 15, 2020
Template revised June 27, 2019 (Diversity in Contracting).
The project will be installing new roadway directional signing that will be replace existing
signage attached to the pedestrian sky bridges. Currently, the airport receives revenue from
advertising signage that is placed on the exterior of the pedestrian sky bridges. The new
roadway direction signage will be slightly taller than the existing signage and may impact the
revenue potential from the advertising signage.
ATTACHMENTS TO THIS REQUEST
(1) Presentation slides
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS
June 9, 2020 - The Commission authorized the advertisement and execution of a major
works construction contract for Phase II of the Airport Terminal Accessibility and Safety
Enhancements project.
January 28, 2020 – The Commission authorized the purchase of structural bollards for Phase
II of the Airport Terminal Accessibility and Safety Enhancements project.
May 3, 2019 – The Commission authorized the advertisement and execution of a major
works construction contract for Phase II of the Airport Terminal Accessibility and Safety
Enhancements project.
January 30, 2018 – The Commission authorized the design and preparation of contract bid
documents for Phase II of the Airport Terminal Safety and Security Enhancements
project.
October 24, 2017 – The Commission authorized the design, preparation of contract bid
documents, advertisement and execution of a major works construction contract for
Phase I of the Airport Terminal Safety and Security Enhancements project.
