Template revised September 22, 2016.
COMMISSION
AGENDA MEMORANDUM
Item No.
8d
ACTION ITEM
Date of Meeting
April 13, 2021
DATE: March 18, 2021
TO: Steve Metruck Executive Director
FROM: Pete Ramels, General Counsel
Loren Armstrong, Sr. Port Counsel
Janice Zahn, Asst. Engineering Director, Construction
SUBJECT: Baggage Optimization Phase 1 Water Damage Settlement Agreement
Amount Payable to the Port:
$1,600,000
ACTION REQUESTED
Request Commission authorization for the Executive Director to execute a settlement agreement
to resolve claims and potential claims arising out of two TSA-owned Explosive Detection System
Machines (the “EDS Machines”) that were damaged and required replacement during the
Baggage Optimization Phase 1 project (“BOP1”).
SUMMARY
The Port asserted pre-litigation claims against PCL, the general contractor on the BOP1 project,
and Red Hawk Fire Protection LLC (“Red Hawk”), one of PCL’s subcontractors. PCL and Red Hawk
asserted that they were not contractually responsible for the replacement cost of the two water-
damaged EDS Machines.
The parties (and their respective insurers) first mediated on November 4, 2020, and then
continued to negotiate with the mediator’s assistance until early March 2021 when the parties
successfully resolved the dispute subject to authorization by the Port Commission. The proposed
settlement involves an aggregate payment to the Port of $1,600,000. The settlement agreement
does not constitute an admission of liability or wrongdoing on the part of any party; rather, the
settlement is recommended to avoid the time, expense, disruption, and uncertainty of litigating
claims.
This matter was discussed in executive session.
There are no attachments to this memo.
