Template revised January 10, 2019.
COMMISSION
AGENDA MEMORANDUM
Item No.
10e
ACTION ITEM
Date of Meeting
August 8, 2023
DATE: June 1, 2023
TO: Stephen P. Metruck, Executive Director
FROM: Mike Tasker, Director, Aviation Maintenance
Jinah Kim, Senior Manager, Aviation Maintenance
SUBJECT: Airport Custodial Services – Zone 1 through 4, Waste Removal Services for Airport
Dining and Retail tenants and Commission Initiative Implementation
Amount of this request:
$ 54,300,000.
Total estimated service cost:
$ 149,300,000.
ACTION REQUESTED
Request Commission authorization for the Executive Director to increase the contract value for
the existing service contracts for Custodial Services at Seattle-Tacoma International Airport by
$54,300,000 for a new total cumulative value of $149,300,000. This commission authorization
will also allow the Executive Director to recompete and execute up to two (2) five-year custodial
service contracts and add waste removal services for the Airport Dining and Retail (ADR) tenants
(through a separate competitive process and separate contract) and add the Commission Public
Health and Safety initiative at Seattle-Tacoma International Airport.
EXECUTIVE SUMMARY
In March 2020, the Commission authorized $95,000,000 for Custodial Services at Seattle-Tacoma
International Airport’s Zones 1-4 through 2026. However, the initial authorization for Custodial
Zone 1 -4 was requested before the procurements were completed and the contract pricing from
2020 through 2022 came back significantly higher than the Port expected.
The requested contract value increase of $54,300,000 would support the following essential
service contracts.
1. Increase authorization to address additional contract costs through 2026.
2. Request authorization to advertise, award, and execute up to two custodial service
contracts in Q3 2023 competitively. The proposed pricing is expected to be higher due
to inflation and an 8.66% increase in minimum wage in 2023.
COMMISSION AGENDA – Action Item No. __10e__ Page 2 of 7
Meeting Date: August 8, 2023
Template revised June 27, 2019 (Diversity in Contracting).
3. Implement Commission Initiative to provide complimentary hygiene products at the
airport to enhance Public Health and Safety and Customer Experience.
4. Contract for waste removal services from the ADR tenants to the ramp areas. This will
reduce the level of security risks due to the increased number of airport badge issued on
the ramp level, also mitigate waste contaminations, and FOD collections, and increase
environmental stewardship, efficiency, and customer experience. This request is only for
the contracting authority as these costs will be funded by the tenant reimbursement.
Custodial services for Zone 5-International Arrival Facility (IAF) were procured separately from
other four zones under a separate Commission Contracting Authority approval; therefore, the
requested amount does not include the cost for Zone 5, IAF.
JUSTIFICATION
Approval of this request will allow the Port to procure market value custodial contracts through
competitive processes and amend existing contracts for cost increases associated with labor
increase, additional products, and other supplemental supplies to support the hygiene service
provided to the public. New procurement of service contracts will align the contracting authority
with actual costs experienced, will aid the airport in meeting the custodial standards under
increasing passenger volume, support the Port’s customer experience goals and support
economic growth and the women- and minority- business enterprise (WMBE) aspirational goals.
Approval of this request will allow the Port to procure market value waste removal service for
ADR tenants in accordance with the Washington State’s prevailing wage structure, which will
create more jobs, aid the Airport in meeting customer service standards under increasing
passenger volume, improve services in accordance with a Continuous Process Improvement
(CPI), and provide more opportunities for the women- and minority- business enterprise
(WMBE).
Diversity in Contracting
Aviation Maintenance staff is working with the Diversity in Contracting Department regarding
setting the women- and minority- business enterprise (WMBE) aspirational goals for contracted
work. A 20% WMBE goal has been set by the Diversity in Contracting Department for custodial
service contracts, based on that determination we anticipate achieving a similar aspirational goal
in the new procurement of the zone RFP and waste removal service RFP.
DETAILS
The facility needs to be clean and well maintained to meet the Port’s customer experience
expectations in support of the Port’s Century Agenda goal to advance as a leading tourism and
business gateway of choice on the West Coast.
COMMISSION AGENDA – Action Item No. __10e__ Page 3 of 7
Meeting Date: August 8, 2023
Template revised June 27, 2019 (Diversity in Contracting).
Starting in January 2018, the Airport transitioned to the performance-based zone model of four
contracts covering the then identified four zones at the Airport. The original procurement
provided for the four contracts to have a two-year initial contract duration with the opportunity
to renew any of the contracts for up to an additional three years in one-year increments. This
initial procurement resulted in three prime contractors being awarded the four zone contracts.
In 2020 we received commission authorization for $95M prior to the award of the contracts for
services through 2026. After awarding the contracts it was determined that we would need
approximately $135M to get through 2026.
After the four-zone procurement, a fifth zone has been developed to incorporate the facilities
generated by the building of the International Arrivals Facility (IAF). Zone 5 service contract was
procured and executed in 2021, and the service eventually started in early 2022 when the facility
was open. The staff will have an opportunity to procure the Zone 5 service contract with Central
Procurement Office (CPO) in 2026.
Since the award in 2020, inflation has increased the cost of custodial services in zones one
through four to approximately $149M.
If this authorization request is approved, up to two zone custodial services Request for Proposal
(RFP) will be advertised in Q3 2023, awarded, and executed in Q4 2023 for the services to start
on 01/01/2024 through a competitive procurement process.
Port staff anticipate incorporating Labor Harmony language into the RFPs for each of these zones
and ADR supporting waste removal services. Aviation Maintenance staff has been coordinating
with Labor Relations staff and Legal staff on the specific language as each RFP is developed for
the custodial services contracts and will coordinate the same effort for ADR waste service
contract.
The cost increase to provide public health hygiene products at the airport facilities is estimated
at $60,000.00 per year and $300,000.00 for the next 5 years.
COMMISSION AGENDA – Action Item No. __10e__ Page 4 of 7
Meeting Date: August 8, 2023
Template revised June 27, 2019 (Diversity in Contracting).
Scope of Work
Advertise, award, and execute five-year custodial service contracts in Q3 2023 for the following
essential services at Seattle-Tacoma International Airport to enhance customer experience:
(1) Perform competitive RFP process for Custodial services in up to 2 zones covering 1.2
million Square Feet of the Airport for the services begin on January 1
st
, 2024.
(2) Add Public Health and Safety Commission initiative service, Complimentary Hygiene
Products to All.
(3) Establish details to perform competitive RFP process for Waste removal services for
Airport Dining and Retail (ADR) tenants; Port teams will work through details with ADR
tenants to determine the contract start date.
Schedule
The following schedule represents the key areas and dates for each of the existing zone
contracts:
(1) Zone 1’s (consisting of Concourses A, B and the South Satellite) custodial two-year
contract will expire on December 31, 2023. 3 additional one-year renewal options are
available if deemed appropriate to execute. However, the future of the contractor’s
successful performance is not guaranteed at this time, and the Port may or may not
exercise its option to extend another year in 2024. If Airport staff chose not to exercise
the option, staff will work with the Central Procurement Office (CPO) to make a request
for proposals in 2023. The new 2-base year contract with three 1-year option years will
start on January 1, 2024, and end December 31, 2028.
(2) Zone 3’s (consisting of Ticketing, Baggage Claim, Curbside, Light Rail Walkway, Ground
Transportation customer facing stops, Garage elevators and escalators and Cruise Lot &
Lobby), custodial contract terminated February 2023 due to performance issues, and a
new contract was executed with another contractor in March 2023 within the Port
rights and Central Procurement Office process. However, the short-term contract will
end in December 2023, and the staff will work with the Central Procurement Office
(CPO) to make a request for proposals in 2023. The new 2-base year contract with three
1-year option years will start on January 1, 2024, and end December 31, 2028.
The table below shows contract start and end year for each zone, however Zone 5, International
Arrival Facility (IAF), is not included in the exiting contract authority.
COMMISSION AGENDA – Action Item No. __10e__ Page 5 of 7
Meeting Date: August 8, 2023
Template revised June 27, 2019 (Diversity in Contracting).
2023 Quarter 3
2023 Quarter 3
2024 Quarter 1
January 1, 2024
TBD
Cost Breakdown
This Request
Custodial Z1-4 New RFP Contract price
$54,000,000.
Additional Service Scope – Public Health &
Safety
$300,000.
ADR Tenant Waste removal Svc
$0.
Total
$54,300,000.
ALTERNATIVES AND IMPLICATIONS CONSIDERED
Alternative 1 – Advertise, award and execute a new Zone 3 Custodial Service contract only and
receive funding for other exiting custodial contracts.
Cost Implications: $47,000,000.
Pros:
(1) This alternative is the lowest cost option to manage custodial contracts.
(2) This alternative allows for the Port to explore and pay a fair market price determined
through a competitive process.
Cons:
(1) This alternative could potentially allow underperforming contractors to continue at
the airport for another year or more.
(2) This alternative would not satisfy the Port goals or initiatives.
(3) This alternative would eliminate a motivational lever available to the Airport staff to
drive performance in a positive direction in terms of service quality.
(4) These alternative delays the next round of competition for at least one and potentially
more zones. It would put the Port in risk of paying the contractor above market price
due to the lack of competition.
(5) This alternative would not support ADR waste removal service.
Contract
Timeline
Jul -
Dec 21
2022 2023 2024 2025
Jan-
Jun 26
Jul -
Dec 26
2027 2028
Zone 1 Z1 Z1
Zone 2 Z2 Z2
Zone 3 Z3 Z3
New Z3
Zone 4 Z4 Z4
Zone 5 Z5 Z5
NEW 5-year contract
COMMISSION AGENDA – Action Item No. __10e__ Page 6 of 7
Meeting Date: August 8, 2023
Template revised June 27, 2019 (Diversity in Contracting).
This is not the recommended alternative.
Alternative 2 – Advertise, award and execute up to two (2) new 5-year contracts by 2023, receive
new funding to fulfil other zone contracts until 2026 and add ADR waste removal service and
Commission Public health and safety initiative.
Cost Implications: $54,300,000.00
Pros:
(1) This alternative allows for the Port to explore and pay a fair market price determined
through a competitive process.
(2) This alternative provides opportunities to revise the current contract terms with
enforcement and incentives to hold the contractor more accountable to meet the
Airport standards.
(3) Staggering the RFPs for the new contracts would provide different contract periods,
load leveling the workload for Airport and Contractor staff. Four smaller scale
transitions over multiple years can be more manageably accomplished. Transitioning all
four zones at one time has a high risk of service quality degradation.
(4) This alternative will allow the Port to procure a new contract and amend the existing
contracts to capture the cost of providing hygiene products to the traveling public at
the airport.
(5) Add a new ADR waste mgmt. contract to enhance customer experience.
Cons:
(1) The alternative brings the complexities of multiple transitions and Contracting Authority
requests.
This is the recommended alternative.
FINANCIAL IMPLICATIONS
Cost Estimate/Authorization Summary
Capital
Expense
Total
COST ESTIMATE
Original estimate
$95,000,000.
$95,000,000.
2020-2023 increase
$0.
$54,300,000.
$54,300,000.
Revised estimate
$0.
$149,300,000.
$149,300,000.
AUTHORIZATION
Previous authorizations
$0.
$95,000,000.
$95,000,000.
Current request for authorization
$0.
$54,300,000.
$54,300,000.
Total authorizations, including this request
$0.
$149,300,000.
$149,300,000.
Remaining amount to be authorized
$0.
$0.
$0.
COMMISSION AGENDA – Action Item No. __10e__ Page 7 of 7
Meeting Date: August 8, 2023
Template revised June 27, 2019 (Diversity in Contracting).
Annual Budget Status and Source of Funds
Custodial service costs are included in Aviation Maintenance’s annual operating budget. The
funding source will be the Airport Development Fund.
Future Revenues and Expenses (Total cost of ownership)
N/A.
ADDITIONAL BACKGROUND
(1) Airport Custodial Services ppt.
ATTACHMENTS TO THIS REQUEST
(1) Graphic of the SEA Zones 1 through 5
(2) Presentation
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS
March 24, 2020 – The Commission authorized the Executive Director to execute up to 4
contracts for Zone 1-4 for Seattle-Tacoma International Airport.
June 25, 2019 – The Commission authorized the Executive Director to execute a contract for
janitorial services for Zone 5, consisting of the IAF new construction facilities for Seattle-
Tacoma International Airport.
September 27, 2016 – The Commission authorized the Chief Executive Officer to execute up
to four contracts for janitorial services for Seattle-Tacoma International Airport.
August 23, 2016 – The Commission was briefed “Contract for Janitorial Services at Sea-Tac
Airport.”