PORT OF SEATTLE 
MEMORANDUM 
COMMISSION AGENDA               Item No.      4g 
ACTION ITEM 
Date of Meeting     April 12, 2016 
DATE:    April 4, 2016 
TO:      Ted Fick, Chief Executive Officer 
FROM:   Michael Ehl, Director, Airport Operations 
Wayne Grotheer, Director, Aviation Project Management Group 
SUBJECT:  2016 Fuel System Modifications (CIP #C800692) 
Amount of This Request:          $0      Source of   Airport Development Fund 
Funds: 
Est. Total Project Cost:      $4,680,000 
ACTION REQUESTED 
Request Commission authorization for the Chief Executive Officer to award and execute a major
public works construction contract for the 2016 Fuel System Modifications project with the
lowest responsible bidder, notwithstanding the low bid exceeding the engineers estimate by more
than 10 percent. 
SYNOPSIS 
The Commission authorized advertisement for bids for the 2016 Fuel System Modifications
project on November 10, 2015. Three contractor bids were received and opened on March 1,
2016. T he lowest responsible bid exceeded the engineer's estimate by 18%. This represents a
bid irregularity requiring further Commission action prior to contract award in accordance with
the Port's General Delegation of Authority, Section 4.2.3.4. Port staff has reviewed the bids and
the engineer's estimate and recommends award of the construction contract to the lowest
responsible bidder. The authorized funds are sufficient for the project and no additional funds 
are required. 
BACKGROUND 
On November 11, 2014, the Commission authorized the design for the 2015 Fuel System
Modifications project with a total budget of $2,069,000. On November 10, 2015, the
Commission authorized construction for the 2016 Fuel System Modifications project and a
revised total budget of $4,680,000. Budget changes between these two actions were the result of
scope revisions and updated estimates based on design progression.
Three construction bids were received and opened on March 1, 2016, with Gary Merlino
Construction Company, Inc., as the apparent lowest responsive and responsible bidder with a bid
of $2,772,090. The Port's engineer's estimate for the project was $2,348,030. The difference

Template revised May 30, 2013.

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
April 4, 2016 
Page 2 of 6 
between the engineer's estimate and the low bid is 18%.  The remaining two bids received were
in the amounts of $3,097,750 (32% above estimate) and $3,530,480 (50% above estimate).
Commission action is required to award the contract since the low bid is more than 10% over the
engineer's estimate.
Port staff has reviewed the engineer's estimate and bids and identified some factors that may
have contributed to the bid difference, including but not limited to, underestimated costs for: 1)
lump sum cost items (e.g. safety provisions, mobilization/demobilization, etc.), 2) airfield
pavement reconstruction, and 3) fuel system construction. One key factor to the higher bids may
be associated with the project phasing constraints that generally do not allow more than one gate
to be closed at a time. Phasing makes the costs associated with mobilization and demobilization
difficult to determine. This project is also utilizing a new construction method known as "hot
tapping" to reduce the time needed for fuel system construction. T his is the first time the Port is
utilizing this construction method and the contractor may have added additional costs to cover
perceived risks associated with this work.  Based upon the review of all the bids and the
engineer's estimate, Port staff believes the bid price received from Gary Merlino Construction
Company, Inc., to be fair and reasonable and that the bids received accurately reflect the cost of
the work. 
This project remains critical to support airport operational needs to maximize gate utilization.
Completion of the project in 2016 will avoid construction conflicts and operational impacts that
could otherwise result from other projects that are scheduled to occur in the vicinity in 2017. 

PROJECT JUSTIFICATION AND DETAILS 
This project is necessary to meet the Aviation Division's goals of ensuring safe and secure
operations, avoiding increased air pollutant emissions from fuel trucks, and anticipating and
meeting the needs of airlines in support of activity growth. The Port of Seattle and airlines made
a decision in the past to install a hydrant fueling system and discontinue truck fueling whenever
possible in order to improve safety and reduce emissions on the airfield. Hydrant fueling also
reduces the fueling time as well as the amount of traffic on the ramp area. Delaying this project
would have negative impacts on airport operations and would restrict flexibility to maximize
gate utilization.
Project Objectives 
Project objectives are as follows: 
Installation of fuel system modifications to improve gate operations

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
April 4, 2016 
Page 3 of 6 
Scope of Work 
This scope of work is associated with fuel system modifications to support aircraft gate
operations. The work includes installation of a new fuel pits at approximately 9 gate locations to 
accommodate aircraft parking and improve gate flexibility. 
Schedule 
Execute Construction Contract                             2nd Quarter   2016 
Construction Completion                               4th Quarter   2016 
FINANCIAL IMPLICATIONS 
Budget/Authorization Summary              Capital     Expense   Total Project 
Original budget                       $1,100,000          $0    $1,100,000 
Previous budget increase                 $3,580,000          $0    $3,580,000 
Current budget increase                        $0          $0          $0 
Revised budget                      $4,680,000          $0    $4,680,000 
Previous authorizations                  $4,680,000          $0    $4,680,000 
Current request for authorization                  $0          $0          $0 
Total authorizations, including this request      $4,680,000          $0    $4,680,000 
Remaining budget to be authorized               $0          $0          $0 
Total estimated project cost               $4,170,000          $0    $4,170,000 
Project Cost Breakdown                     This Request       Total Project 
Construction                                     $0         $3,918,000 
Design                                       $0          $471,000 
State & Local Taxes (estimated)                        $0          $291,000 
Total                                           $0         $4,680,000 
Budget Status and Source of Funds 
This project, C800692, is included in the 2016  2020 capital budget and plan of finance with a
budget of $4,680,000. The funding sources will be the Airport Development Fund.
When the budget was established the project was still being defined with several high risk design
and construction items to be determined. The project budget provided for a contingency to
absorb project risk.

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
April 4, 2016 
Page 4 of 6 
Financial Analysis and Summary 
CIP Category             New/Enhancement 
Project Type              Renewal/Replacement 
Risk adjusted discount rate     N/A 
Key risk factors             N/A 
Project cost for analysis        $4,680,000 
Business Unit (BU)          Apron Area Cost Center 
Effect on business performance  NOI after depreciation will increase 
IRR/NPV             N/A 
CPE Impact             There is no CPE impact as the capital costs will be
recovered directly from the airline fuel consortium. 
The fuel system at Seattle-Tacoma International Airport is leased to and operated by SEATAC
Fuels, LLC, an airline consortium. The Port will negotiate an amendment to the lease to add
these new fuel pits to the lease as it has with other fuel pits added in the past. If successful, the
consortium would pay for the operating and maintenance costs of these new pits and would pay
additional rent to the Port equivalent to the annual amortization of the capital costs. Thus, under
such a lease amendment, there would be no impact to passenger airline CPE. 
Lifecycle Cost and Savings 
The fuel pits will be leased to and operated by SEATAC Fuels, LLC, an airline consortium. 
STRATEGIES AND OBJECTIVES 
The 2016 Fuel System Modifications project supports the Century Agenda goal to advance this
region as a leading tourism destination and business gateway by meeting the region's air
transportation needs and encouraging the cost-effective expansion of domestic and international
passenger service. This project also supports the Aviation Division's strategic goals of operating
a world-class international airport, providing extraordinary customer service, and being a model
of environmental innovation for the region and industry. 
One of the Century Agenda goals is to use the Port's influence as an institution to promote small
business growth and workforce development. Although some of this work may be specialized,
Port staff will coordinate with the Office of Social Responsibility to identify and maximize the
opportunities within the scope of work for small business utilization.

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
April 4, 2016 
Page 5 of 6 
ALTERNATIVES AND IMPLICATIONS CONSIDERED 
Alternative 1  Do not award the project or proceed with the installation of additional fuel 
hydrants. 
Cost Implications: Cost from Planned Budget deferred:  ~$4,440,000 for return of remaining
budget 
Pros: 
(1)  Under this option there is no near-term capital investment for the Airport 
Cons: 
(1)  The airlines and fuel service providers would need to purchase additional fuel
tanker trucks.
(2)  Aircraft turn times (time between landing, servicing and then departing) would be
impacted by slower fueling rates and impacts of fuel tankers on other vehicles and
equipment servicing aircraft.
(3)  Traffic on the ramp would increase, especially between the South Satellite and the
current fuel rack which is north of the North Satellite.
(4)  The airport would need to identify ramp storage areas (already in high demand) for
fuel trucks and maintenance facilities. 
(5)  Increase in air emissions as a result of fuel trucks deliveries.
(6)   Cost-to-date would be expensed 
This is not the recommended alternative. 
Alternative 2  Re-bid the project as currently scoped. 
Cost Implications: Estimated $150,000 minimum of additional costs from escalation and
administrative time. 
Pros:
(1)   None the cost of adding new fuel hydrant pits is fully recovered through the fuel
consortium lease. 
Cons: 
(1)  Delays the project to 2017 
(2)  Potential conflicts with other construction projects on the airfield 
(3)  Impacts airport operations ability to maximize gate utilization 
(4)  Re-advertisement could result in higher bids since current bids are now public
information 
(5)  Additional costs due to escalation and re-advertisement
This is not the recommended alternative.

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
April 4, 2016 
Page 6 of 6 
Alternative 3  Award the major works construction contract to the lowest responsive and
responsible bidder. This alternative delivers the project when needed. 
Cost Implications: None, accomplished within existing budget. 
Pros:
(1)  No additional costs or delays for re-bid 
(2)  Scope of the project has already been justified and approved by airlines, airport
management and the Commission 
(3)  Minimizes conflicts with other construction projects on the airfield 
(4)  The cost of adding new fuel hydrant pits is fully recovered through the fuel
consortium lease.
Cons: 
(1)  None 
This is the recommended alternative. 
ATTACHMENTS TO THIS REQUEST 
(1)  None 
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS 
November 10, 2015  Commission authorized construction funds to construct fuel
system modifications. Total estimated cost was $4,680,000. 
November 11, 2014  Commission authorized the Chief Executive Officer to design
and prepare construction documents for the 2015 fuel system modifications in the
amount of $188,000. At that time, the total estimated project cost was $2,069,000.