Template revised January 10, 2019.
COMMISSION
AGENDA MEMORANDUM
Item No.
8g
ACTION ITEM
Date of Meeting
December 10, 2024
DATE: November 22, 2024
TO: Stephen P. Metruck, Executive Director
FROM: Keri Stephens, Director, Aviation Facilities and Capital Programs
Eileen Francisco, Director, Aviation Project Management
SUBJECT: Variable Frequency Drives (VFD) Replacement Phase 2 (CIP #C800978)-Construction
Authorization
Amount of this request:
$7,885,000
Total estimated project cost:
$10,500,000
ACTION REQUESTED
Request Commission authorization for the Executive Director to (1) advertise, award, and
execute a construction contract for Variable Frequency Drives Replacement Phase 2 project, (2)
authorize use of Port crews for abatement work, and (3) include a Project Labor Agreement for
the contract. Total request for this action will be $7,885,000 for a project total authorization of
$10,500,000.
EXECUTIVE SUMMARY
Variable Frequency Drives (VFD) are a motor control device that, for this application, modulate
the Heating, Ventilation, and Air Conditioning (HVAC) fans, pumps, etc. allowing for better
occupancy comfort. VFD Replacement Phase 2 project has identified 68 critical VFDs across the
airport facilities that need to be replaced at an urgent priority since they are beyond their useful
lives and prone to failure. These are old and obsolete VFDs with no replacement parts available
and no longer supported by the manufacturer. Failure of a VFD will cause HVAC or plumbing
systems to become non-operational, resulting in loss of proper ventilation, air flow, temperature,
water flow, an increase in energy consumption, and poor passenger comfort.
JUSTIFICATION
Sporadic VFD failures have occurred in the past and since replacement parts are no longer
provided by the manufacturer, shops need to search for parts to keep VFDs operational. Repair
parts will be salvaged from the replaced VFDs and added to the Port’s spare parts inventory.
Preventing VFD failure will avoid manual HVAC control that leads to poor passenger comfort and
increased energy consumption. VFD failure can also lead to security issues if building
pressurization affects door operation. The new VFDs will save electricity and natural gas by
COMMISSION AGENDA – Action Item No. 8g Page 2 of 5
Meeting Date: December 10, 2024
Template revised June 27, 2019 (Diversity in Contracting).
modulating motor speeds to meet the real-time demands. The recently completed and approved
project drawings and specifications identified 68 VFDs in critical condition and in need of
immediate replacement. There has been no change to the project budget of $10.5M which was
approved by airport leadership in Q1, 2023.
Diversity in Contracting
Through the Diversity in Contracting program, a Women and Minority Business Enterprise
(WMBE) aspirational goal was evaluated and established at 8% which will be included in the
procurement of the construction contract.
DETAILS
A Project Labor Agreement will be used for this project based on the importance of labor
continuity and the need to minimize any risk of impact to operations during construction.
Scope of Work
The project will be replacing 68 critical VFDs that are beyond their useful lives and are subject to
failure. These VFDs are located at multiple locations at the SEA such as parking garage, fuel farms,
cooling towers, north toll plaza, concourses A, B, C, D, NSAT, SSAT, and main terminal.
The key elements of the project’s scope of work include, but are not limited to, the following:
(1) Replacement of 68 VFDs per the phasing schedule.
(2) Connection of VFDs to Port’s Building Automation System (BAS).
(3) Provide wiring, testing, commissioning, and associated equipment for a fully functional
system.
(4) Replacement of electrical line and load conductors per electrical plans.
(5) Salvage components from these existing VFDs and add those to Port’s spare parts
inventory for use in other obsolete VFDs.
Schedule
Activity
Construction start
2025 Quarter 2
In-use date
2026 Quarter 3
Cost Breakdown
This Request
Total Project
Design
$0
$2,615,000
Construction
$7,885,000
$7,885,000
Total
$7,885,000
$10,500,000
COMMISSION AGENDA – Action Item No. 8g Page 3 of 5
Meeting Date: December 10, 2024
Template revised June 27, 2019 (Diversity in Contracting).
ALTERNATIVES AND IMPLICATIONS CONSIDERED
Alternative 1 – Status Quo. Do not proceed with the project.
Cost Implications: Expenses incurred for notebook and design development approximately
$1,000,000 will need to be expensed.
Pros:
(1) Capital investment won’t be required.
Cons:
(1) Obsolete VFDs are no longer supported by the manufacturer.
(2) In case of a failure, the VFD will have to be controlled manually, resulting in poor
passenger comfort and increased energy consumption.
(3) Inventory for spare parts will be depleted.
This is not the recommended alternative.
Alternative 2 – Replace only 30 to 35 VFDs in order reduce the project budget.
Cost Implications: Capital investment of $5,000,000.
Pros:
(1) Lower capital cost due to reduction in scope of work.
Cons:
(1) The cost per VFD will be higher.
(2) This approach still leaves SEA vulnerable to VFD failures that may cause HVAC outages.
(3) This approach doesn’t provide a planned and sustainable asset management schedule.
(4) The availability of spare parts will be lower.
This is not the recommended alternative.
Alternative 3 – Replace all of the proposed 68 VFDs.
Cost Implications: Capital investment of $10,500,000.
Pros:
(1) The cost per VFD will be lower.
(2) The risk of VFD failure leading to system outages will be significantly lower.
(3) The availability of spare parts will be higher.
(4) Maintain passenger comfort
Cons:
(1) Capital cost.
This is the recommended alternative.
COMMISSION AGENDA – Action Item No. 8g Page 4 of 5
Meeting Date: December 10, 2024
Template revised June 27, 2019 (Diversity in Contracting).
FINANCIAL IMPLICATIONS
Cost Estimate/Authorization Summary
Capital
Expense
Total
COST ESTIMATE
Original estimate
$4,300,000
$0
$4,300,000
Previous changes – net
$6,200,000
$0
$6,200,000
Current change
$0
$0
$0
Revised estimate
$10,500,000
$0
$10,500,000
AUTHORIZATION
Previous authorizations
$2,615,000
$0
$2,615,000
Current request for authorization
$7,885,000
$0
$7,885,000
Total authorizations, including this request
$10,500,000
$0
$10,500,000
Remaining amount to be authorized
$0
$0
$0
Annual Budget Status and Source of Funds
The Variable Frequency Drives (VFD) Replacement Phase 2 C800978 was included in the 2024-
2028 capital budget and plan of finance with a budget of $10,500,000. The funding source
includes Airport Development Fund (ADF) and revenue bonds.
Financial Analysis and Summary
Project cost for analysis
$10,500,000
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
$0.03 in 2027
Future Revenues and Expenses (Total cost of ownership)
The scope of the project is to replace existing equipment which is beyond useful life and not to
introduce any additional assets. Replacement of the equipment will require a similar level of
maintenance; therefore, AVM anticipates it will not have a material impact on O&M costs. The
new VFDs will result in energy efficiency and reduction in greenhouse gas emissions as compared
to the older technology VFDs. The calculations to determine the exact percentages will be
performed during the commissioning phase.
ADDITIONAL BACKGROUND
47 critical VFDs were replaced in Phase 1 project which achieved substantial completion in Q4
2020. These were replaced using a phasing schedule where VFDs were grouped into summer,
winter, and shoulder season for replacement. VFD locations included IWTP, Main Terminal, A &
C Concourse, Central Plant, Cooling Tower, and Boiler Room. In addition to the 68 VFDs proposed
COMMISSION AGENDA – Action Item No. 8g Page 5 of 5
Meeting Date: December 10, 2024
Template revised June 27, 2019 (Diversity in Contracting).
in Phase 2 project, there are an additional 125 VFDs slated for replacement in Phase 3 project.
The Phase 3 project (M03541) was approved for Status 2 by the Investment Committee on
October 30, 2024. This project is estimated to finish in Q3 2028 and will complete the renewal
and replacement of all the remaining Robicon VFDs.
ATTACHMENTS TO THIS REQUEST
(1) Presentation slides
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS
June 27, 2023 – The Commission authorized for the Executive Director to (1) prepare design
and construction bid documents for the Variable Frequency Drives (VFD) Replacement
Phase 2 project; (2) utilize Port of Seattle crews to support design and pre-construction
activities.
