INTERNAL AUDIT REPORT 
LIMITED OPERATIONAL AUDIT  CAPITAL PROGRAM 

RUNWAY 16C-34C RECONSTRUCTION PROJECT 

2015 CONSTRUCTION ACTIVITIES 

ISSUE DATE: MAY 9, 2016 
REPORT NO. 2016-09

LIMITED OPERATIONAL AUDIT  CAPITAL PROGRAM                         INTERNAL AUDIT 
2015 CONSTRUCTION ACTIVITIES 
RUNWAY 16C-34C RECONSTRUCTION 

EXECUTIVE SUMMARY 

AUDIT OBJECTIVES AND SCOPE 
The purpose of the audit was to ensure that: 
1.  The contractors have complied with key contract deliverables such as: 
providing materials of the specified quality and quantity, including quality control 
meeting affirmative action goals 
meeting apprenticeship goals 
paying wage rates per the Project Labor Agreement (PLA) 
complying with safety and operational requirements 

2.  Management controls were adequate to ensure that: 
the terms and conditions of the applicable FAA grant are met 
change orders are appropriately authorized 
status and regulatory reporting is accurate and timely 
work oversight and inspection is adequate 
Details of our audit's scope and methodology are on page 3. 

BACKGROUND 
This capital construction project includes reconstruction of 9,426 foot Runway 16C  34C, the center
runway, and portions of interconnecting taxiways. Related work includes pavement demolition,
excavation, grading, Portland cement concrete and asphalt paving, storm drainage, water mains and
flush fire hydrants, electrical duct-banks, LED airfield lighting systems and guidance signs, an
automated electronic Foreign Object Debris (FOD) detection system, and other miscellaneous work. 

O 
AUDIT RESULT
The contractors have complied with the key contract deliverables. Management controls over the
construction project were adequate.

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LIMITED OPERATIONAL AUDIT  CAPITAL PROGRAM                         INTERNAL AUDIT 
2015 CONSTRUCTION ACTIVITIES 
RUNWAY 16C-34C RECONSTRUCTION 

TABLE OF CONTENTS 

EXECUTIVE SUMMARY ................................................................................................................................................. i 
TRANSMITTAL LETTER ................................................................................................................................................ 1 
BACKGROUND ............................................................................................................................................................. 2 
HIGHLIGHTS AND ACCOMPLISHMENTS ................................................................................................................... 2 
AUDIT SCOPE AND METHODOLOGY .......................................................................................................................... 2 
CONCLUSION ............................................................................................................................................................... 2

LIMITED OPERATIONAL AUDIT  CAPITAL PROGRAM                         INTERNAL AUDIT 
2015 CONSTRUCTION ACTIVITIES 
RUNWAY 16C-34C RECONSTRUCTION 

TRANSMITTAL LETTER 
Audit Committee 
Port of Seattle 
Seattle, Washington 
We have completed an interim audit of the Runway 16C-34C Reconstruction project. 
We conducted this performance audit in accordance with Generally Accepted Government Auditing
Standards and the International Standards for the Professional Practice of Internal Auditing. Those
standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to
provide a reasonable basis of our findings and conclusions based on our audit objectives. We believe
that the evidence obtained provides a reasonable basis for our findings and conclusions based on our
audit objectives. 
We extend our appreciation to the management and staff of Capital Development Division and Central
Procurement Office, and the prime contractors, for their assistance and cooperation during the audit. 


Joyce Kirangi, CPA, CGMA 
Internal Audit, Director 

AUDIT TEAM                      RESPONSIBLE MANAGEMENT TEAM 
Wayne Grotheer, Director, AV PMG 
Brian Nancekivell, Sr. Auditor             Janice Zahn, Asst. Director, Engineering 
Nora Huey, Director, CPO 





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LIMITED OPERATIONAL AUDIT  CAPITAL PROGRAM                         INTERNAL AUDIT 
2015 CONSTRUCTION ACTIVITIES 
RUNWAY 16C-34C RECONSTRUCTION 

BACKGROUND 

This capital construction project includes reconstruction of 9,426 foot Runway 16C  34C, the center
runway, and portions of interconnecting taxiways. Related work includes pavement demolition,
excavation, grading, Portland cement concrete and asphalt paving, storm drainage, water mains and
flush fire hydrants, electrical duct-banks, LED airfield lighting systems and guidance signs, an
automated electronic Foreign Object Debris (FOD) detection system (2nd such system installed in the
USA) , and other miscellaneous work. 

This was the first reconstruction of the runway since it was originally built in 1969. It was
designed with a 20-year lifespan and, after nearly 46 years, needed to be replaced. Over the course of
the last 20 years, 600+ panels (out of 4,000) have been replaced to keep the runway operational. 
The newly constructed runway contains 8 inches of crushed rock sub-base, 4 inches of asphalt and 18
inches of Portland cement concrete. It includes more than 4,000 panels, each 20 by 18.75 feet in size.
While Group 5 runway standards require 35-foot shoulders, the Port chose to incorporate 50-foot
shoulders to allow the runway to accommodate larger aircraft in the future. 
Airport staff designed the reconstruction project. A joint venture of Scarsella Brothers & Acme Paving
executed the design as general contractors under a unit price contract. The contractors are paid based
on progress completed. 
The construction happened in phases along the runway so as to always have crossing taxiways open on
each end of the runway. The FAA, as always, manages the use of the two operational runways. 
Reconstruction did not impact flight schedules, passenger traffic, or any other airport operations.
During the reconstruction all air operations (takeoffs and landings) were directed to the airport's two 
adjacent runways. Nearly 1,000 daily operations occur on the airfield and detailed plans were
developed to minimize conflicts between construction activities and aircraft operation. 
This project included extensive recycling of materials including using the old runway concrete being
crushed and reused for a base material. Further environmental stewardship included airfield LED
lighting installed for greater energy efficiency and less maintenance. 
The project budget was $106.5 million. The estimated project cost is $80 million. The project is still in
progress. The Port was approved for $25 million in FAA grants. The remaining funding was allocated
from Airport Development Funds and future revenue bonds. 




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LIMITED OPERATIONAL AUDIT  CAPITAL PROGRAM                         INTERNAL AUDIT 
2015 CONSTRUCTION ACTIVITIES 
RUNWAY 16C-34C RECONSTRUCTION 

HIGHLIGHTS AND ACCOMPLISHMENTS 

During the course of the audit, we observed the following effective and efficient management
practices: 
The project to date has been under budget - $11.7 million was returned to overall capital program in
March 2015 and $10 million returned to overall capital program in December 2015. That is a $21.7 million
in savings realized to date. 
There were no operational incidents and no incursions  despite challenging demolition and construction 
work in the middle of an active airfield. 
The contractors exceeded the apprenticeship and affirmative action goals, providing higher paying 
construction jobs for women and minorities. 
Oversight by Engineering ensured that the contractors and sub-contractors paid the appropriate PLA wage
rates, which were higher than the prevailing wage rates. 
Potential quality issues with the concrete for the runway were identified early in the project and
satisfactorily resolved, with a resulting unavoidable delay in the schedule. 
There was active and close co-ordination with the FAA who was responsible for some of the construction
and for certifying that navigation equipment was properly functioning. 

AUDIT SCOPE AND METHODOLOGY 

This is an interim audit as the project is still in progress. There is additional construction on both the
inboard and center runways scheduled for 2016. 
This is a limited scope audit of contract management (execution) phase of the Runway 16C-34C
Reconstruction project. It did not include all contract deliverables or requirements. There are several
major phases in the Capital Project Lifecycle. This audit did not include the phases of Pre-
Feasibility/Feasibility & Planning, Resource Allocation & Commitment, Contractor Selection or Project
Financials. Further audit work will be done on Contract Management and the Post-Completion phases
of Commission & Turnover and Maintenance, as they occur. 
We audited the construction phase, not the design, of the project, and only activity in 2015. This
project has been intermittently underway several years. 
The audit is focused on the contractors and those groups directly involved in contract management,
namely Aviation Project Management Group and Construction Management (Engineering) of the Capital
Development Division, and Central Procurement Office. There are numerous other Port departments
and groups and the FAA involved in the project that are ancillary to this audit. This audit did not
include an audit of the project management process. 



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LIMITED OPERATIONAL AUDIT  CAPITAL PROGRAM                         INTERNAL AUDIT 
2015 CONSTRUCTION ACTIVITIES 
RUNWAY 16C-34C RECONSTRUCTION 

To ensure that the contractors complied with key contract deliverables, we: 
reviewed the applicable records of sub-contractors and suppliers at the prime
contractor for materials of the specified quality and quantity. Detailed audit testing
was deferred until the Close-out phase of the project. 
reviewed affirmative action reporting and apprenticeship utilization for the two prime
contractors for June-August 2015, the major construction period, and tested the
accuracy of the reporting by reviewing the applicable personnel records at one of the
prime contractors 
reviewed Collective Bargaining Agreement wage rates, as required by the Project Labor
Agreement, and tested wage rates for all employees of the two prime contractors and
six sub-contractors for June-August 2015 
reviewed safety reporting and the safety program 
interviewed airport operations for any operational incidents or incursions. 
To ensure management controls over the construction project were adequate, we: 
reviewed the terms and conditions of the applicable FAA grant and assessed compliance
with those requirements 
reviewed change orders and tested that the only large dollar one was appropriately
authorized 
observed status meetings and reviewed status reports 
reviewed regulatory reporting for any environmental issues 
observed on-going work oversight and inspection during construction. 

CONCLUSION 

The contractors have complied with the key contract deliverables. Management controls over
the construction project were adequate. 






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