PORT OF SEATTLE 
MEMORANDUM 
COMMISSION AGENDA               Item No.      4a 
ACTION ITEM 
Date of Meeting     August 23, 2016 
DATE:    August 15, 2016 
TO:      Ted Fick, Chief Executive Officer 
FROM:   Ralph Graves, Senior Director, Capital Development 
Mike Tasker, Senior Manager, Aviation Facilities & Infrastructure 
Dwight Rives, Director, Port Construction Services 
SUBJECT:  Air Cargo 4 HVAC Upgrade Project at Seattle-Tacoma International Airport 
(WP 105074; CIP #C800017) 
Amount of This Request:          $15,000   Source of Funds:   Airport Development
Fund 
Est. Total Project Cost:           $325,000 
Est. State and Local Taxes:         $19,046 
ACTION REQUESTED 
Request Commission authorization for the Chief Executive Officer to increase the Project budget
for the Air Cargo 4 Building HVAC Upgrade Project (WP 105074) by $15,000 for an authorized
project budget total of $325,000. 
SYNOPSIS 
The Air Cargo 4 HVAC Upgrade Project (WP 105074) added 4 new heating, ventilating and air
conditioning (HVAC) units to serve the offices on the second floor of the Air Cargo 4 Building.
The Commission previously authorized an increase of the Project budget from $290,000 to 
$310,000. After further review of costs to complete the Project, the budget should have been 
increased to $325,000. The reasons for this $15,000 budget increase are: 
The estimate by Port Construction Services (PCS) for the previously authorized budget 
increase incorrectly used the encumbered Purchase Order amount in PeopleSoft and not
the executed Contract amount. The Purchase Order had been partially entered due to the
budget having insufficient funds.  As a result, the approved May 24, 2016 budget
increase was not sufficient to fund the full amount of the Contract. 
Construction Safety incorrectly charged labor hours to the Project over several weeks. 
This resulted in a variance estimated at ($6,500), of which $5,000 has been corrected.
However, allocated overhead will still impact the Project. 
As a result, a budget increase of $8,000 plus $7,000 contingency is requested to cover actual
costs for the Project. 

Template revised May 30, 2013.

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
August 15, 2016 
Page 2 of 3 
Timeline and future process improvements: 
11/11/2015    Contract SW-0318452 Executed 
3/22/2016     Attempt to issue a PO for the contract  PeopleSoft would not issue PO
due to a budget error. 
3/22/2016     Purchase Order 0000276879 was written for $180,000 (this is less than
the executed Contract amount), so the contractor could receive payment
on invoice #01. 
In order to prevent this issue in the future we will do the following: 
Verify encumbered costs in PeopleSoft and reconcile to expected costs in the Project
Management Information System (PMIS). 
Consult Central Procurement Office to review and confirm budget requests are sufficient
to cover Change Order costs on Purchase Orders. 
BACKGROUND 
A project budget of $310,000 for the Air Cargo 4 HVAC Project (WP 105074) was requested
and authorized by the Port of Seattle Commission at the May 24, 2016 Meeting. At the time of
the request, Aviation Facilities and Infrastructure (F&I) and Port Construction Services (PCS)
believed that $310,000 would cover all costs to complete the Project. 
After a detailed review of project costs, it was determined that actual costs to complete the
project exceeded the $310,000 budget. The reasons for this cost overrun are detailed below: 
Contractor Purchase Order - $6,500 
Due to PCS using the encumbrance on the existing Purchase Order instead of using the executed
Contract amount in the estimate to complete, an insufficient dollar amount was used to establish
the project budget authorized by Commission on May 24, 2016. The Project did not request
enough budget to update the Purchase Order to the contractual dollar amount. At this time,
$6,500 remains to be paid to the Contractor to close out the last partially paid invoice.
Unanticipated Wage Costs - $1,500 
Following installation of the HVAC equipment, Operations & Maintenance Training was
conducted for the Aviation Maintenance Operating Engineers that will service the equipment.
The Engineers incorrectly charged their labor hours to the project, resulting in a small variance.
In addition, Port Construction Safety incorrectly charged labor hours to the Project over several
weeks. This resulted in a variance estimated at ($6,500), of which $5,000 has been corrected.
However, Overhead will still impact the project. 
Closeout and Contingency - $7,000 
An additional amount is requested to cover any salary and administration costs associated with
closing out the project, as well as providing a buffer for future Allocated Overhead and
unanticipated costs to complete the Project. 

Revised March 28, 2016  pjw

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
August 15, 2016 
Page 3 of 3 
FINANCIAL IMPLICATIONS 
Budget/Authorization Summary              Capital     Expense   Total Project 
Original Budget                       $290,000          $0     $290,000 
Previous Authorizations                  $310,000          $0     $310,000 
Current request for authorization              $15,000          $0       $15,000 
Total Authorizations, including this request      $325,000          $0      $325,000 
Total Estimated Project Cost               $318,000          $0     $318,000 
ATTACHMENTS TO THIS REQUEST 
None. 
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS 
May 24, 2016: Commission authorized a Project budget of $310,000 for WP 105074. 












Revised March 28, 2016  pjw