Template revised April 12, 2018.
COMMISSION
AGENDA MEMORANDUM
Item No.
11a
BRIEFING ITEM
Date of Meeting
April 26, 2022
DATE: April 19, 2022
TO: Stephen P. Metruck, Executive Director
FROM: Jeffrey Brown, Aviation Chief Development Officer
Wayne Grotheer, Director Aviation Project Management
SUBJECT: Baggage Optimization Program Update – Quarter 2, 2022
EXECUTIVE SUMMARY
Baggage Optimization Program (BOP) is an airport-wide public safety and security program that
improves customer service for both airlines and passengers. This is a long-term, three-phase
program that is anticipated to be completed in 2026. Prior to Baggage Optimization the Airport
baggage system was actually six separate systems. Modifying the separate systems was the
best way to rapidly increase security after September 11. However, to meet long-term growth
needs of the overall Airport, BOP replaces six aging individual baggage screening systems with
one centralized system at Seattle-Tacoma International Airport. The new system will meet
Transportation Security Administration (TSA) safety and security requirements while ensuring
reliability, flexibility and efficiency for airlines and passengers. When complete, BOP enables
the flexibility for bags to be checked in from any ticket counter and be efficiently conveyed to
any airplane gate. This program allows the airport to meet the demands of growing airlines.
Due to the lack of interconnectivity until the project is complete, continuous 24/7 operation,
and a fixed footprint this project is complex and has various constraints that require detailed
construction sequencing plans.
PROGRAM STATUS UPDATE
BOP is being bid and constructed in three separate phases. Phase 1 focused on the central
terminal building, the core of the centralized screening system, and installed eight new
screening machines. Phase 1 construction was complete Q2 2020 and was $37M under budget
at $98M total cost.
Phase 2 is under construction to install four additional screening machines, new tenant storage
and maintenance shop, final baggage handling system sortation matrix, and additional capacity
to South Satellite. Phase 2 was delayed approximately six months due to a negative Majority-In-
Interest (MII) vote when the airlines did not support the budget increase needed due to
unexpected high bids. However, together with the Contractor, the Port team worked to regain
the time by taking advantage of low passenger volume due to COVID-19 to re-sequence the
construction steps and through efficiencies receive credits and gain back six months.
COMMISSION AGENDA – Briefing Item No. _11a_ Page 2 of 5
Meeting Date: April 26, 2022
Template revised September 22, 2016.
In Phase 2, the project team together with the Airline stakeholders have completed over 375
major and complex shutdowns including the baggage system in a 24/7 operating airport. Phase
2 is within budget and is approximately 45% complete. Phase 2 is scheduled for completion in
Q2 2024.
Phase 3 is the final phase of the program. It will focus on the tie-in of the south end systems to
centralized screening, tie-in of the International Arrivals Facility (IAF), and finalize the sortation
and ticket counter connections. After conducting lessons learned from previous phases and
discussions with executives and airlines, Phase 3 project delivery method is recommended to
be General Contractor/Construction Manager (GC/CM) to allow for the contractor to be part of
the design and gain earlier insight and control of construction costs. The following will be
brought to Commission later in 2022: 1) recommendation and request to change the project
delivery method; 2) increase the design consultant’s contract amount to complete Phase 3
design; 3) advertise and execute a project specific construction management contract to
provide GC/CM expertise; and 4) advertise and execute a contract for preconstruction services.
As the Phase 3 estimate is better defined, a request for a budget increase will also be brought
to Commission. Development of Phase 3 design will begin in Q3 2022.
PROJECT RISKS AND MITIGATION
• Supply Chain – The impacts of COVID-19 on the supply chain are currently causing
delayed manufacturing and delivery of critical equipment that could impact the project
schedule if delays continue. We are seeing delays of motors, gear boxes, bearings,
power turns, and fiber optic cable, all of which are major required components of the
baggage system. Cost or schedule impacts (or both) are possible. The team is mitigating
some of the issues with early shipment and storage of delivered material in an offsite
warehouse and continued outreach to suppliers. The team is also prioritizing equipment
and approving alternative products.
• Project Coordination - There are four other projects that are critical for BOP
coordination in order to mitigate risks of incompatibility in equipment, design, or
construction. The BOP team is involved in coordination, design reviews, and planning to
manage the risks and expectations.
1. International Arrivals Facility (IAF) – In order for BOP Phase 2 to start
construction of the South Satellite baggage feeds and makeup devices for
loading to baggage carts, the project requires IAF to be fully operational. Delays
of the IAF opening directly impact the construction schedule and delays are
costing about $10,000 per day for the BOP Phase 2 contract.
2. C Concourse Expansion – This project will transfer scope and budget to the
Baggage Optimization Project to manage, design, and construct conveyor
transfer lines that are impacted by C Concourse Expansion construction pending
Commission action in Q2 2022. The baggage work will be done by the BOP
project to minimize construction and operational risk and operational
constraints.
COMMISSION AGENDA – Briefing Item No. _11a_ Page 3 of 5
Meeting Date: April 26, 2022
Template revised September 22, 2016.
3. North Main Terminal Redevelopment Project (NMTRP) – The two projects are
currently coordinating critical ticket counter main line connections, odd size
baggage handling scope, construction sequencing, and schedule to minimize risk
and operational impacts on both the BOP and NMTRP projects.
4. North Main Terminal Utilities Upgrade Project (NTUUP) – This project intends to
transfer scope to BOP to construct a utilidor in the area of BOP Phase 2
construction and be sequenced within the construction schedule with minimal
disruptions to either project.
• Airline Operational Impacts – Constructing a complex project in a 24/7 operating airport
with minimal disruptions to live operations and within the same space as the existing
system will continue to be a challenge. The baggage team continues to take steps to
communicate with all stakeholders including Airline Technical Representatives (ATR) and
develop detailed plans, run trials, and monitor the work.
• Airline Manual Baggage Handling – Constructing the new baggage system while
maintaining the existing system will at times leave long term temporary conditions
within the baggage system. The temporary conditions may result in manual baggage
handling of the bags by an Airline employee due to construction and schedule
complexity. The baggage team has tried to identify the most impactful steps in the
construction and coordinates frequently with the Airlines and ATR to minimize the risk
and impact to operations.
Program Schedule
Phase 1 was completed in Q2 2020. Phase 2 is currently under construction scheduled to be
completed in Q2 2024; however, the end date is tied to the IAF opening and supply chain
issues. Phase 3 design is scheduled to start in Q3 2022 and is scheduled to be constructed by
Q3 2026.
Phase Design Construction
Phase 1 Q3 2015 Q2 2020
Phase 2 Q1 2020 Q3 2020 – Q2 2024
Phase 3 Q2 2023 – Q1 2024 Q1 2024 – Q3 2026
Program Budget
Phase 2 budget and authorization includes $10M executive director reserve. At this time the
project has not utilized any funds from the reserve. Phase 3 has not started construction and in
the process of developing an estimate. The current range for Phase 3 is between $400M -
$500M. Phase 3 authorization of $13M is for design and pre-construction funding. TSA
COMMISSION AGENDA – Briefing Item No. _11a_ Page 4 of 5
Meeting Date: April 26, 2022
Template revised September 22, 2016.
contributes $94M to the overall project budget. The Port has been reimbursed for more than
$65M to date from TSA (March 2022).
Phase Current Budget Forecast at Completion Current Authorization
Phase 1 $101,375,000 $97,488,982 $101,375,000
Phase 2 $425,675,000 $415,675,000 $425,675,000
Phase 3 $313,000,000
$400,000,000 to
$500,000,000
$13,000,000
Total $840,050,000 $914M - $1.1B $540,000,000
Diversity in Contracting
Baggage Optimization Phase 2 has a WMBE goal of 2% due to the nature of the scope of work
primarily being baggage conveyors and limited building work. The project is approximately 45%
complete and WMBE utilization is at 1.21% of the total contract; the project is on track for
meeting the 2% goal.
ADDITIONAL BACKGROUND
The Baggage Optimization project was scoped in 2012 to accommodate 45 million annual
passengers (MAP) with an expandable design to accommodate future growth. At the time,
growth forecasts were flat and predicted that 45 MAP would be adequate through 2027. The
decision was made to proceed in building an expandable 45 MAP system with the expectation
that an expansion would occur in the future in time to accommodate growth up to the 60 MAP
level. Due to unprecedented growth at the airport, the 45 MAP threshold was met in 2016, over
ten years earlier than anticipated. In June 2017, the Commission authorized the project to
incorporate a capacity expansion of the Baggage Optimization project in order for the new
outbound baggage system to accommodate 60 MAP.
ATTACHMENTS TO THIS BRIEFING
(1) Presentation slides
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS
• January 28, 2020 – Commission Authorization to (1) execute a construction contract
with the low responsive and responsible bidder for the Baggage Optimization Phase 2
Project at Seattle-Tacoma International Airport, notwithstanding the low bid
exceeding the estimate at time of bid by more than 10 percent, and (2) authorize an
additional $190,737,800 for Phase 2 construction and Phase 3 design for a total
program authorization of $540,050,000
COMMISSION AGENDA – Briefing Item No. _11a_ Page 5 of 5
Meeting Date: April 26, 2022
Template revised September 22, 2016.
• April 23, 2019 – Commission Authorization to (1) advertise, award, and execute a
construction contract for the Baggage Optimization Phase 2 project at Seattle-Tacoma
International Airport; (2) employ a project labor agreement (PLA); and (3) utilize Port
crews and small works contracts to perform construction work
• February 26, 2019 – Baggage Optimization Quarter 4 Project Briefing
• October 23, 2018 – Baggage Optimization Quarter 3 Project Briefing
• June 12, 2018 – Baggage Optimization Quarter 2 Project Briefing
• January 9, 2018 – Baggage Optimization Quarter 4 Project Briefing
• September 26, 2017 – Baggage Optimization Quarter 3 Project Briefing
• June 27, 2017 – Commission authorization to (1) authorize additional design and project
management funds to expand the capacity to 60 million annual passengers (MAP); (2)
use Port crews and small works contracts to perform additional construction work; and
(3) amend Service Agreement P-00317641 to add $10,160,000
• October 25, 2016 – Baggage Optimization Quarter 4 Project Briefing
• July 12, 2016 – Commission authorization to advertise and execute a contract for
construction Phase 1
• June 28, 2016– Baggage Program Briefing
• May 17, 2016 – Checked Baggage Optimization Project Briefing
• March 8, 2016 – Commission authorization for the Chief Executive Officer to amend the
Baggage Optimization Design Services contract
• June 23, 2015 – Checked Baggage Optimization Project Briefing
• September 10, 2013 – The Commission authorized the execution of an
Other Transaction Agreement (OTA) with TSA for reimbursable costs for design;
construction, and to authorize $15 million to continue from 30% to 100% design; and
execute a consultant service agreement for program management support services
• August 20, 2013 – Response to questions from Commissioners asked during August 6,
2013 Commission Meeting
• August 6, 2013 – The Commission was briefed on the near-term and long-term
challenges related to handling checked baggage at the Airport
• January 22, 2013 – The Commission authorized $5 million for staff to begin design
through 30%, and to enter into an agreement to allow reimbursement from the federal
government to the Port for eligible elements of the 30% design effort
• January 8, 2013 – Baggage Systems Briefing
• August 14, 2012 – Baggage system recapitalization/optimization was noted in the 2013
business plan and capital briefing as a significant capital project not included in 2013-17
capital program
• August 7, 2012 – Baggage system recapitalization/optimization was referenced as one of
the drivers for the need to develop an Airport Sustainability Master Plan
• June 26, 2012 – The Airport’s baggage systems were discussed during a briefing on
terminal development challenges
• May 10, 2012 – TSA’s interest in a national recapitalization/optimization plan for all
baggage-screening operations was referenced in a design authorization request for the
C60-C61 Baggage Handling System Modifications Project
