Template revised January 10, 2019.
COMMISSION
AGENDA MEMORANDUM
Item No.
8c
ACTION ITEM
Date of Meeting
March 8, 2022
DATE: February 25, 2022
TO: Stephen P. Metruck, Executive Director
FROM: Wayne Grotheer, Director Aviation Project Management
Jeff Wolf, Interim Director Aviation Commercial Management
SUBJECT: C Concourse Expansion Third-Party Commissioning Agent Authorization
(CIP# C800845)
Amount of this request:
$1,500,000
Total estimated project cost:
$340,000,000
ACTION REQUESTED
Request Commission authorization to execute a Service Agreement for a third-party
commissioning agent for the C Concourse Expansion Project at Seattle-Tacoma International
Airport.
EXECUTIVE SUMMARY
Third-party commissioning agent services provide verification that the Port’s investment in
high-performance systems is yielding optimum results, both in long-term cost reductions and
operational efficiencies. Third-party commissioning agents represent the Port as subject matter
experts, independent of the project designers and the selected construction contractor. The
third-party commissioning agents for the C Concourse Expansion project (formerly known as
the C1 building project) will review drawings, develop commissioning plans and procedures,
conduct field investigations, and submit reports that ensure systems and equipment are
designed, installed and function in accordance with Port standards and all code compliance
requirements. The C Concourse Expansion Project is requesting authorization to advertise and
execute a contract at this time, within the previously approved project budget, so that the
third-party commissioning agent can perform the services above, as well as perform early
design reviews. These design reviews will allow the project to start drafting a Commissioning
Plan and is also one of the commissioning requirements for the project to apply for Leadership
in Energy and Environmental Design (LEED) Silver (or higher) certification.
COMMISSION AGENDA – Action Item No. 8c Page 2 of 5
Meeting Date: March 8, 2022
Template revised June 27, 2019 (Diversity in Contracting).
JUSTIFICATION
Commissioning the systems and equipment provided as part of the C Concourse Expansion
project ensures they perform as intended and designed before the project is complete and put
into operation. The project is also pursuing LEED credits that require use of commissioning
services. Independent third-party commissioning services are also required by building code to
validate the performance of life-safety systems on larger capital projects such as C Concourse
Expansion. Procurement needs to begin now, during the early design phase, so that a
Commissioning Agent can perform LEED required design reviews and start development of pre-
functional checklists and the overall Commissioning Plan prior to the start of major on-site
construction.
Diversity in Contracting
The project team has worked with the Diversity in Contracting team to conduct outreach and
the setting of a women- and minority-owned business enterprise (WMBE) aspirational goal of
15%.
DETAILS
Over the last decade, leasable space post-security at the Airport has become almost non-
existent due to the continued growth of airlines and tenants’ operational and administrative
needs. Staff has identified the C Concourse Expansion Building area as a key location where the
terminal can be expanded without the consumption of additional real estate (building up rather
than out). There are no other viable options for expanding the terminal without significant
negative impacts to existing capacity or operational areas.
The C Concourse Expansion Project will grow Airport Dining and Retail (ADR) services with two
floors of new space. This additional square footage will provide a higher level of service to
travelers and generate additional non-aeronautical revenue. The remaining three new floors
will provide space for two new premium lounges and additional office space. The office space
will serve to support existing tenants, airlines, and Transportation Security Administration (TSA)
in addition to creating support space for the new C Concourse Expansion ADR spaces. The Port
of Seattle has received general a positive Majority-In-Interest (MII) vote from the airlines and
letters of interest for the lounge level spaces.
The C Concourse Expansion Building is an existing three-level structure that was built to house
the C Concourse Expansion in-line baggage screening system (on the baggage claim and bridge
levels) that supports Alaska Airlines. The current C Concourse Expansion Building houses the
TSA in much of the concourse level space, which would be better utilized for publicly accessible
services and amenities. As part of this project, the TSA functions will be relocated to make way
for higher and better uses.
COMMISSION AGENDA – Action Item No. 8c Page 3 of 5
Meeting Date: March 8, 2022
Template revised June 27, 2019 (Diversity in Contracting).
Beyond being one of the few locations for the Airport to expand its footprint without further
encroaching on limited real estate, this will be the first project to utilize the Environmental
Sustainability Framework adopted by the Commission, and a great opportunity to embody the
new SEA brand.
Scope of Work
The scope of work for the commissioning services provided in this Service Agreement will
include design review followed by verification and documentation that the systems and
equipment delivered as part of the C Concourse Expansion project are fully functioning in
accordance with the contract documents, LEED goals, and applicable building and fire codes.
Commissioning services will also validate that Port personnel are trained to operate, maintain,
and troubleshoot equipment and systems provided as part of the project.
Schedule
Commission design authorization
Design start
Commission construction authorization (MAC)
Construction start (enabling work packages)
In-use date
Cost Breakdown
This Request
Total Project
Design
$1,500,000
Construction
$0
Total
$1,500,000
COMMISSION AGENDA – Action Item No. 8c Page 4 of 5
Meeting Date: March 8, 2022
Template revised June 27, 2019 (Diversity in Contracting).
ALTERNATIVES AND IMPLICATIONS CONSIDERED
Alternative 1 – Utilize an existing Indefinite Delivery Indefinite Quantity (IDIQ) Contract for
Commissioning Services
Cost Implications: $1,500,000
Pros:
(1) No procurement required
(2) Meets code requirements
Cons:
(1) No current IDIQ’s exist with available capacity for this work.
(2) C Concourse Expansion commissioning needs would utilize a large percentage of any
available IDIQ, should one exist, limiting use by other projects.
(3) Current IDIQs expire prior to the project being complete requiring use of a second
IDIQ, and potentially a different Commissioning Agent, to finish the project.
This is not the recommended alternative.
Alternative 2 – Procure a project specific Commissioning Agent Service Agreement
Cost Implications: $1,500,000
Pros:
(1) Meets code requirements
(2) Service Agreement duration can match project duration
(3) Single agent for the duration of the project
Cons:
(1) Procurement of a new Service Agreement takes longer than other alternatives
This is the recommended alternative.
FINANCIAL IMPLICATIONS
Cost Estimate/Authorization Summary
Capital
Expense
Total
COST ESTIMATE
Original estimate
$331,776,000
$8,224,000
$340,000,000
AUTHORIZATION
Previous authorizations
$84,674,000
$7,926,000
$92,600,000
Current request for authorization
$1,500,000
$0
$1,500,000
Total authorizations, including this request
$86,174,000
$7,926,000
$94,100,000
Remaining amount to be authorized
$245,602,000
$298,000
$245,900,000
COMMISSION AGENDA – Action Item No. 8c Page 5 of 5
Meeting Date: March 8, 2022
Template revised June 27, 2019 (Diversity in Contracting).
Annual Budget Status and Source of Funds
This project is included in the 2022-2026 capital budget and plan of finance with a budget of
$340,000,000. The capital budget decrease of $8,224,000 would be transferred to the
Aeronautical Allowance CIP C800753. The expense budget would be included in the Aviation
Division’s annual operating expense budget. The funding sources will include the Airport
Development Fund and future revenue bonds. This project was approved by airlines through a
Majority-In-Interest (MII) vote in April 2021.
Financial Analysis and Summary
Project cost for analysis
$340,000,000
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)
NPV (40 years) for non-aero $44.5 million
CPE Impact
$0.68 in 2028
Future Revenues and Expenses (Total cost of ownership)
As presented on April 27, 2021, when completed the project will generate incremental non-
airline revenues of $12 million by 2028 and over $15 million by 2031. Aeronautical revenues
will also increase as the allocated operating and capital costs (debt service) are included in
airline terminal rate base.
ATTACHMENTS TO THIS REQUEST
None.
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS
• April 27, 2021 – C1 Building Project Additional Design and General
Contractor/Construction Manager Early Work Authorization – Special Inspection and
Testing Authorization
• May 26, 2020 – C1 Building Project Design and General Contractor/Construction
Manager Authorization
• March 10, 2020 – C1 Building Project Briefing and Introduction
• June 26, 2018 – C1 Building Project Authorization for Planning Funds
• January 26, 2016 – The Commission authorized design of an expansion for the existing
Gate C3 passenger Holdroom at Seattle-Tacoma International Airport.
• July 11, 2017 – The Commission authorized (1) advertise and execute a construction
contract for the Gate C3 Holdroom Expansion project at Seattle-Tacoma International
Airport; and (2) use Port crews in executing the project