Template revised January 10, 2019.
COMMISSION
AGENDA MEMORANDUM
Item No.
8h
ACTION ITEM
Date of Meeting
December 10, 2024
DATE: November 8, 2024
TO: Stephen P. Metruck, Executive Director
FROM: Kelly Purnell, Capital Project Manager
Jennifer Maietta, Director, Real Estate Asset Management
SUBJECT: Maritime Industrial Center Electrical Infrastructure Replacement (C801241)
Amount of this request:
$ 3,500,000
Total estimated project cost:
$ 15,908,000
ACTION REQUESTED
Request Commission authorization for the Executive Director to increase the project budget for
the Maritime Industrial Center (MIC) Electrical Infrastructure Replacement project in the amount
of $3,500,000 for a total project authorization of $15,908,000.
JUSTIFICATION
The project will include necessary upgrades to the electrical system by replacing current
equipment that is dangerous to work on and at risk of failure. This investment will increase the
asset value of the MIC by ensuring that the site facilities are functioning well and efficiently,
removing dangerous water intrusion into electrical areas, and increasing the reliability of power
to the Port’s tenants. Additionally, the upgraded electrical equipment will provide the flexibility
to utilize electrical capacity for additional future sustainable EV charging capabilities and
potential additional shore power that is not currently possible with the existing equipment.
Additional funding authorization is needed to proceed with awarding and executing a design-
build construction contract to complete the critical upgrades provided by the MIC Electrical
Infrastructure Replacement project. Both proposals that were received in response to the
Request for Proposal (RFP) exceeded the Engineers Estimate by 49% or greater. Since both
proposals exceeded the Engineer’s Estimate, the selection team followed the procedure outlined
in the RFP and awarded the contract to the proposer that received the highest technical score
and has offered a fair and reasonable price.
COMMISSION AGENDA – Action Item No 8h Page 2 of 7
Meeting Date: December 10, 2024
Template revised June 27, 2019 (Diversity in Contracting).
The selected team scored Acceptable, Good, or Outstanding in each of the selection criteria and
provided improvements to the infrastructure scope. The proposal shows an early completion of
approximately one (1) month, and a solution that significantly reduces operational impacts to the
MIC property tenants and fishermen that will utilize the piers during construction.
Additionally, this request authorizes additional funds for the electrical equipment Contract No.
C-00321766 to provide additional budget for temporary storage of the equipment and a scope
change to include code required changes.
Diversity in Contracting
There are multiple elements within the scope of this project that will provide WMBE business
opportunities. The Design Build effort has a goal of 12% WMBE participation rate. The selected
team has committed to exceeding this goal with a total inclusion commitment of 13.78%. This
commitment is split between seven (7) companies.
DETAILS
Scope of Work
The project consists of demolishing existing switchboards, structural concrete pads, and a 1940’s
era steel oil shed; decommissioning conduits and wire; and replacing all with new structural
infrastructure, conduits, wires, switchboards, and associated equipment. The switchboards will
be upsized from existing capacity of between 400 and 600 amps to 2000 amps for the smaller
switchboards and from 2500 Amps to 4000 Amps for the main switchboard for future capacity
needs (e.g., EV chargers, shore power). This project will not increase the electrical load at the site
at this time.
The following electrical equipment will be replaced (owner furnished equipment procured under
Contract No. C-00321766):
1. Switchboard 4SP and 2SPN (service entry to site)
2. Switchboard 4W and 2W (Mooring Pier) installed as make-ready only due to bulkhead
wall conditions
3. Switchboard 4P and 2P (wharf - NE side of Building A-1)
4. Switchboard EY4 (east side of Building A-1)
5. Switchboard SEY4 (lighting connection for east lot)
6. Switchboards EY4 and SEY4 will be consolidated with 4P and 2P in one location that has
better access. Additionally, this will eliminate a stormwater intrusion point at EY4.
COMMISSION AGENDA – Action Item No 8h Page 3 of 7
Meeting Date: December 10, 2024
Template revised June 27, 2019 (Diversity in Contracting).
Site work:
1. Provide new conduits and conductors from Seattle City Light to new MIC main distribution
switchgear.
2. Provide new conduits and conductors from new MIC main distribution switchgear to:
a. New electrical switchboard at Mooring Pier
b. New electrical switchboard at Wharf
3. Provide new electrical vaults.
Schedule
Activity
Commission design authorization
Design start
Commission authorization for major electrical equipment
procurement
Commission authorization for additional electrical equipment
procurement funds
Commission construction authorization for Design-Build contract
Commission authorization for additional funds to award and execute
Design-Build contract – this request
Construction Start
In-Use Date
Cost Breakdown
This Request
Total Project
Design
$0
$1,738,000
Electric Equipment Procurement – C801241
$150,000
$3,760,000
Construction
$3,350,000
$10,410,000
Total
$3,500,000
$15,908,000
Previous authorizations included estimated design costs and procurement costs of the major
electrical equipment. This authorization includes $150k for the electrical equipment contract to
cover a small change order in the equipment, and to provide previously excluded contingency to
mitigate risk of issues during manufacturing and potential need for temporary storage. This
authorization also includes $3.35M for design and construction to award and execute a Design-
Build contract to the successful bidder. Increased costs are due to on-going construction market
volatility and increased awareness and inclusion of costs for risks associated with subsurface
excavation on industrial waterfront properties. Higher than anticipated costs for deep excavation
of trenching in a highly constrained site likely contributed to the higher costs. Design-Build is
more efficient and mitigates construction risk, but upfront costs are often higher due to designer
COMMISSION AGENDA – Action Item No 8h Page 4 of 7
Meeting Date: December 10, 2024
Template revised June 27, 2019 (Diversity in Contracting).
fee allowances, costs to develop the Basis of Design (BOD) and the RFQ/RFP documents, and
inclusion of the cost of anticipated risks that the contractor must own.
ALTERNATIVES AND IMPLICATIONS CONSIDERED
Alternative 1 – Cancel or defer the project.
Cost Implications: Approximately $2.4M would need to be expensed. It is also likely cost recovery
would not be feasible for remaining value of $2.17M owed on owner-furnished electrical
equipment due to the equipment currently being in manufacturing.
Pros:
(1) Retain Port capital for other priority projects and financial initiatives.
Cons:
(1) The equipment cannot currently be serviced safely.
(2) The equipment is already in a state of advanced disrepair due to the proximity to
maritime environment and areas of stormwater intrusion.
(3) If the equipment fails, a long-term diesel generator will be required to provide power
to the tenants. This will impact air quality and cost significantly more over time, in large
part due to high fuel costs.
(4) Major electrical equipment is on order and would need to be stored long-term until
project is built.
(5) Does not allow for streamlining of design and construction of the of the project. Creates
more risk for change orders during construction.
This is not the recommended alternative.
Alternative 2 – Rebid the project with scope reduction.
Cost Implications: $200,000 to $1,000,000
Pros:
(1) Will meet Century Agenda goals of investing in maritime industries.
Cons:
(1) This will delay the project another 4-6 months due to scope reduction, revision of
procurement documents, and re-advertising the project, and completing all required
components of the Design-Build procurement process.
(2) Unlikely to result in a cost reduction and could increase project costs overall due to
schedule delay, rework of procurement documents, and potential construction market
volatility impacts.
This is not the recommended alternative.
COMMISSION AGENDA – Action Item No 8h Page 5 of 7
Meeting Date: December 10, 2024
Template revised June 27, 2019 (Diversity in Contracting).
Alternative 3 – Continue with the current proposal.
Cost Implications: Increase of $3.5M to the current budget
Pros:
(1) Advances Century Agenda goals and Maritime Division strategic goals.
(2) Upgrades and replaces degraded electrical infrastructure that is not safe to maintain
and does not meet current National Electrical Code (NEC) standards.
(3) Reduces potential construction escalation costs due to market volatility.
(4) Will provide for a stronger tenant experience by increasing power reliability and
resiliency.
(5) Will provide for additional electrical capacity for additional future EV charging and
possible increased shore power.
(6) Streamlines construction logistics between for the electrical replacement and provides
construction risk mitigation due to complex site conditions and operational constraints.
(7) Minimizes operational impacts by having a Design-Build contractor engage earlier in the
project to plan the best construction methodology prior to construction.
(8) Maintains construction schedule that avoids operational impacts during fishing season.
(9) Exceeds WMBE aspirational goal.
Cons:
(1) Additional capital investment.
This is the recommended alternative.
FINANCIAL IMPLICATIONS
Cost Estimate/Authorization Summary
COST ESTIMATE
Capital
Expense
Total
Original estimate
$1,500,000
$0
$1,500,000
Previous Changes - Net
$10,908,000
$0
$10,908,000
Current Change
$3,500,000
$0
$3,500,000
Revised estimate
$15,908,000
$0
$15,908,000
AUTHORIZATION
Previous authorizations
$12,408,000
$0
$12,408,000
• Design
$850,000
$0
$850,000
• Electrical Equipment
Procurement
• Design-Build Funding
$3,610,000
$7,948,000
$0
$3,610,000
$7,948,000
Current request for
authorization
• Design-Build Funding
• Electrical Equipment
Procurement
$3,500,000
$3,350,000
$150,000
$0
$3,500,000
$3,350,000
$150,000
COMMISSION AGENDA – Action Item No 8h Page 6 of 7
Meeting Date: December 10, 2024
Template revised June 27, 2019 (Diversity in Contracting).
Total authorizations, including
this request
$15,908,000
$0
$15,908,000
Remaining amount to be
authorized
$0
$0
$0
Annual Budget Status and Source of Funds
This project was included in the 2024 Capital Plan under Maritime Industrial Center Electrical
Infrastructure Replacement (C801241) at an estimated total project cost of $7,179,000. The
project has been included in the draft 2025 Capital Plan under C801241 with a total project cost
of $9,640,000. Additional funding for the project will be provided from C800002 Maritime
Reserve.
This project will be funded by the General Fund.
Financial Analysis and Summary
Project cost for analysis
$15,908,000
Business Unit (BU)
Maritime Portfolio Management, and
Ship Canal Fishing & Commercial
Effect on business
performance (NOI after
depreciation)
Annual depreciation will increase by approximately $514K
based on estimated 30-year service life, thereby reducing the
NOI by the same amount.
IRR/NPV (if relevant)
NA
CPE Impact
NA
Future Revenues and Expenses (Total cost of ownership)
This project will provide for reliable and resilient electrical power to the MIC facilities for the next
25-30 years. These upgrades will provide protection of Port assets and extend their useful life,
provide for additional future electrical capacity to support Port sustainability goals, and increase
economic development potential. Maintaining existing assets will preserve the economic vitality
of our operations and serve the Port, tenants, and their customers well by providing a safe and
sustainable working environment.
ADDITIONAL BACKGROUND
N/A
ATTACHMENTS TO THIS REQUEST
None.
COMMISSION AGENDA – Action Item No 8h Page 7 of 7
Meeting Date: December 10, 2024
Template revised June 27, 2019 (Diversity in Contracting).
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS
October 11, 2022 – The Commission authorized design for design-bid-build.
March 28, 2023 – The Commission authorized procurement of the electrical equipment for
$1,800,000.
November 14, 2023 – The Commission authorized additional funds for the electrical equipment
procurement in the amount of $1,810,000.
March 26, 2024 – The Commission authorized Design-Build funds in the amount of $7,948,000