PORT OF SEATTLE 
MEMORANDUM 
COMMISSION AGENDA               Item No.      6b 
ACTION ITEM 
Date of Meeting     March 22, 2016 
DATE:    March 14, 2016 
TO:      Ted Fick, Chief Executive Officer 
FROM:   Wayne Grotheer, Director, Aviation Project Management Group 
Michael Ehl, Director, Aviation Operations 
SUBJECT:  South Satellite Interior Renovations (SSIR) project at Seattle-Tacoma International
Airport (CIP #C800549) 
Amount of This Request:        $1,900,000   Source of      Airport Development
Funds:                 Fund 
Est. Total Project Cost:          $6,256,000 
Est. State and Local Taxes:         $386,000 
ACTION REQUESTED 
Request Commission authorization for the Chief Executive Officer to (1) award and execute a
major public works construction contract with the low responsive and responsible bidder for the
South Satellite Interior Renovations Project, notwithstanding the low bid exceeding the engineers
estimate by more than 10 percent; (2) execute a construction change order to provide additional
casework for the South Satellite; and (3) increase the project budget by $1,900,000 ($1,400,000
for the bid amount and $500,000 for the change order). The new authorized total project cost will
be $6,256,000. 
SYNOPSIS 
This project will make interior renovations to the mezzanine and departure levels of the South
Satellite. These improvements include new podiums and backstands including the additional
casework to support additional narrow body gates, new wall panels in the escalator wells and on
the concourse level, and new gate boarding door portals. The project is intended to improve
declining airline tenant and customer satisfaction and feedback related to the passenger
experience in the South Satellite. 
Port staff has carefully reviewed the project scope in light of these increased costs and has
determined that this project remains critical to the airlines that use the South Satellite from a
customer service and passenger experience perspective. In early 2014 the airlines that operate at
the South Satellite requested that the concourse be renovated due to its substandard condition. As
recently as the International Arrivals Facility roundtable session in August 2015, international 
airline representatives  testified in public session that they were operating  in substandard
conditions at the South Satellite. Port staff has reviewed the bids with airlines via both the

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
March 14, 2016 
Page 2 of 8 
Airline Airport Affairs Committee and the International Station Managers meetings and the
airlines have reiterated their interest in having the project move forward despite the increased
cost. 
Further, the scope of this project is being increased by $500,000 to include additional casework.
This casework will support three additional narrow body gates for the South Satellite recently
identified and implemented as part of a separately authorized project (South Satellite Narrow
Body Configuration). 
BACKGROUND 
In the first quarter of 2014, ten of the eleven carriers that operate at the South Satellite sent
letters to the Airport Managing Director requesting modifications and upgrades to the terminal to
enhance the overall customer experience. An $18 million project that would include most of the
airline requested modifications and upgrades including new lighting, ceilings, terrazzo, Wi-Fi,
paging system and column covers in addition to the items being completed in phase one and
phase two of the project had been proposed in earlier years. After reviewing the initial scope of
that project, staff determined that the SSIR project could complete some of these scope items
quickly to improve customer experience while others were more appropriate to include in a
future comprehensive renovation of the South Satellite. 
The SSIR project emerged as a way to provide targeted relatively low cost improvements that
could meet the short term needs of the airlines and traveling public until the more comprehensive 
South Satellite renovations would be undertaken in the future. Full South Satellite renovation is
now in the capital investment plan but construction will not begin until the gate closure impacts
of the International Arrivals Facility project are past. Certain improvements, like paint, vending
alcoves, casework replacement, new wall panels and door portals could be completed relatively
quickly and inexpensively in the SSIR project when compared to more expensive and intrusive
work like ceiling or lighting replacement. 
The SSIR project was broken into two phases. The first phase, authorized by the Commission in
December 2014 was work that required little design and could be completed quickly, such as
wall paint and carpet replacement. This phase was completed in June 2015 with a budget savings
of approximately $600,000 from the estimated cost of $1,900,000. The second phase, which is
the subject of this Commission action, required more detailed design and construction activity
phasing based on operational activities and was authorized by the Commission for construction
in November 2015. In November 2014 the airlines approved this project through a Majority In
Interest (MII) vote. 
The Commission authorized advertisement for bids for the SSIR project on November 24, 2015.
Three contractor bids were received and opened on January 26, 2016. The lowest responsive and
responsible bid, from PCL Construction Inc., exceeded the engineer's estimate by nearly 61%.
This represents a bid irregularity requiring further Commission action prior to contract award in
accordance with Section 4.2.3.4 of Resolution No. 3605, as amended by Resolution No. 3628.
Additional authorization of $1,400,000 represents the difference between the engineer's estimate

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
March 14, 2016 
Page 3 of 8 
and the lowest bid, plus additional sales tax, and construction contingency amounts. This project
was included in the 2016  2020 capital budget and plan of finance. 
Port staff has reviewed the bids with the lowest responsive and responsible bidder and has
determined that the bid irregularity is based on a market condition not previously known. The
lowest responsive and responsible bidder identified the various cost elements of their bid,
including the cost for manufacturing the casework (podiums, backstands, door portals). The
breakdown of the budget increase is: 
$1,054,000 for casework associated with the podiums and backstands, 
$68,000 for casework associated with the door portals, and 
$34,000  for demolition. 
$1,156,000 Subtotal - increased contractor cost above the engineers estimate 
$123,000  additional construction contingency 
$121,000 additional sales tax. 
$1,400,000 Total additional budget required for original project scope. 
The increased costs for the casework include both manufacturing and materials costs. The lowest
responsive and responsible bidder indicated they had received bids from three casework
manufacturers. All three of those casework bids were closely grouped. This indicates an accurate
reflection of the current competitive marketplace for casework. This request includes additional
contingency in the request because the current contingency is very low for a remodel project 
with a construction cost of $4.8 million. 
Increased airport passenger growth has created a need for additional aircraft parking. On
February 23, 2016, Port Commission authorized a project to provide three added narrow body
aircraft parking positions at the South Satellite. To improve the airlines' ability to use these
additional parking spaces for departure flights, additional casework is needed for passenger
processing and boarding. 
PROJECT JUSTIFICATION AND DETAILS 
The South Satellite, with the exception of the west end, was last updated in the 1990s, when new
carpet was installed. Many of the original 1970s finishes remain today in run-down condition.
The existing lighting is insufficient compared to other newer concourses. Passengers flying
through or departing from the South Satellite, the international gateway to and from the Puget
Sound region, should be provided with the experience expected from a major modern
international airport, with newer clean modern finishes and more light. 
The existing gate podium casework is outdated, does not allow light into the interior of the
satellite and does not match the new gate standards established in 2013. The white wall panels
were part of the original construction, and the pink wall panels on some interior public walls
installed in the 1980s are also old and outdated. The gate boarding door portals which serve as
entrances to the loading bridges are original to the building and should be replaced with new
doors with modern signage, and door and security hardware. Additional casework to support the
addition of three narrow body gates has been included to meet current and future needs.

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
March 14, 2016 
Page 4 of 8 
Project Objectives 
The project is intended to improve the declining airline tenant and customer satisfaction and
feedback related to the look and feel of the departure experience in the South Satellite. 
Scope of Work 
This project will make interior renovations to the mezzanine and departure levels of the South
Satellite. These improvements include: 
New podiums and backstands including the additional casework to support additional
narrow body gates. 
New wall panels in the escalator wells and on the concourse level. 
New gate boarding door portals. 
Schedule 
Remaining project schedule items: 
Issue Notice to Proceed                             2nd Quarter 2016 
Construction Complete                            3rd Quarter 2016 
FINANCIAL IMPLICATIONS 
Budget/Authorization Summary              Capital     Expense   Total Project 
Original Budget                     $18,900,000    $1,829,000   $20,729,000 
Previous Budget Adjustments           $(15,674,000)    $(699,000)  $(16,373,000) 
Revised Budget                     $3,226,000    $1,130,000    $4,356,000 
Current Request for Authorization           $1,900,000          $0    $1,900,000 
Total Authorizations, including this request     $5,126,000    $1,130,000    $6,256,000 
Remaining Budget to be Authorized              $0          $0          $0 
Total Estimated Project Cost               $5,126,000    $1,130,000    $6,256,000 
Project Cost Breakdown                     This Request       Total Project 
Design Phase                               $58,000        $1,029,000 
Construction Phase                          $1,721,000         $4,841,000 
Sales Tax                                  $121,000          $386,000 
Total                                      $1,900,000         $6,256,000 
Budget Status and Source of Funds 
The SSIR project, CIP #C800549 was originally included in the 2014 capital plan with a budget
of $18.9 million. The scope and budget was reduced when it became clear that the South Satellite
would need a full renovation sooner than originally anticipated and that this level of investment
for the short term was not appropriate. The capital budget of $3,226,000 is included in the 2016-

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
March 14, 2016 
Page 5 of 8 
2020 capital budget and plan of finance. The new funds of $1,900,000 will come from the 
Airport Development Fund. 
Financial Analysis and Summary 
CIP Category             Renewal/Enhancement 
Project Type              Renewal and Replacement 
Risk adjusted discount rate     N/A 
Key risk factors             N/A 
Project cost for analysis        $6,256,000 
Business Unit (BU)          Terminal 
Effect on business performance  NOI after depreciation will decrease 
IRR/NPV             N/A 
CPE Impact             $0.04 in 2017 
Lifecycle Cost and Savings 
The existing conditions in the South Satellite have been largely unchanged for 20 to 40 years.
The life expectancy for the wall panels, door portals and casework systems and finishes has been
exceeded, in some cases drastically. The new systems and finishes are not expected to have
significant repair over their life span. Preventative maintenance costs will be consistent with the
current maintenance program. 
STRATEGIES AND OBJECTIVES 
This project supports the Century Agenda strategy of "advancing this region as a leading tourism
destination and business gateway" by providing targeted improvements to the departure level of
the South Satellite. 
The project manager collaborated with the Office of Social Responsibility to set an 11% small
business participation requirement for this project. 
ALTERNATIVES AND IMPLICATIONS CONSIDERED 
Note: These alternative cost comparisons are for the cost to complete and do not include Phase
One costs. 
Alternative 1)  Reject all bids - Redesign to stay within the existing project budget by
removing all scope items except the casework from the project and re-bid after design is
complete. 
Cost Estimate: $3.3 Million (remaining existing project budget, Capital and Expense)

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
March 14, 2016 
Page 6 of 8 
Pros: 
No added cost or budget increase. 
The airlines get the casework element of the project rather than everything that they 
approved through the MII. 
Cons: 
This alternative would require some redesign work to determine where cuts can be made. 
The added design cost means less scope can be completed. 
This alternative delays construction completion to the 1st quarter 2017 for a delay of 7 
months relative to the recommended alternative. 
Additional staff and designer expense for the redesign efforts. 
The airlines will not get all the improvements that they have requested and approved via
MII. 
Providing additional casework to support the additional narrow body gates at a later time,
via a separate project will cost more (approximately $100,000). 
There is no guarantee that the casework market conditions would improve. 
This is not the recommended alternative. 
Alternative 2)  Reject all bids  Redesign using alternative casework that is less expensive than
the project casework, to minimize the cost increase and rebid after design is complete and
include the casework to support additional narrow body gates. 
Cost Estimate: $4.5 Million (Capital and Expense) 
Pros: 
The proposed casework may be purchased as an "off-the-shelf" or predesigned and not
custom product. 
The airlines get all the elements of the project that they approved through the MII. 
Cons: 
This alternative delays construction completion to the 1st quarter 2017 for a delay of 5 
months relative to the recommended alternative. 
Additional staff and designer expense for the redesign efforts. 
Current estimates have not been tested in actual market conditions. 
Off-the-shelf casework is generally manufactured when ordered, and thus is likely not
immediately available which can extend the project schedule. 
Off-the-shelf casework may not be able to accommodate the common use equipment and
this may limit choices during design and extend the design time. 
Current market investigations indicate that off-the-shelf casework found to date does not
include the storage that the airlines have requested.

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
March 14, 2016 
Page 7 of 8 
Off-the-shelf casework may not be durable enough to last until the full renovation of the
South Satellite, that is, seven years. 
Door portal storage may not match the casework. 
This is not the recommended alternative 
Alternative 3)  Reject all bids  Redesign to use the existing casework with modified finishes,
(Port crews would apply new plastic laminates to existing surfaces), and remove the storage
casework from the door portals. Rebid a new major works contract to complete the door portals
and wall panels only.
Cost Estimate: $2.9 Million (Capital and Expense) 
Pros: 
This is the least costly alternative. 
Port crews could start the casework modifications immediately and this work could be
completed by the end of 2016. 
Cost for redesign is less than for a project that includes new casework design. 
Casework is designed to accommodate Port common use equipment and meets current
Port standard. 
The casework can be redesigned to allow some increased natural light into the space. 
Cons: 
Reduces the scope of the original project further. 
Requires Commission authorization for the use of Port crews. 
Public works portion of the project would complete construction in the 1st quarter 2017 
for a delay of 7 months relative to the recommended alternative. 
Additional staff and designer expense for the redesign efforts. 
No products have been selected to support the monitors on the backstands. 
Requires portal redesign. 
This is not the recommended alternative. 
Alternative 4)  Accept the bid and add the casework to support additional narrow body gates. 
Cost Estimate: $5.3 Million ($4,126,000 Capital and $1,130,000 Expense) 
Pros: 
No additional costs or delays for redesign and re-bid. 
The airlines get all of the elements that have been requested and approved through the
MII. 
The scope of this project has already been justified and approved by airlines, airport
management and the Commission.

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
March 14, 2016 
Page 8 of 8 
One of the complaints by the airlines in requesting this work was that the South Satellite
needs improved light within the space. The casework best allows additional natural light
into the space. 
Casework is designed to accommodate Port common use equipment and meets current
Port standard. 
Casework is composed of durable materials and is expected to be long-lasting, so there is
a possibility that this casework could be used in other areas of the airport if it is not used
in the South Satellite after the major remodel is complete. 
Minimal schedule delay. 
Cons: 
Cost/budget increase of $1.9 Million. 
This is the most costly alternative. 
Would require a change order to the SSIR project for the additional casework. 
This is the recommended alternative. 
ATTACHMENTS TO THIS REQUEST 
Presentation slides. 
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS 
November 24, 2015  The Commission authorized construction of Phase Two of this
project. 
August 11, 2015  The Commission and Airlines met in a Forum on Seattle-Tacoma
Airport's International Arrivals Facility: Airline Roundtable. 
December 9, 2014  The Commission authorized construction of Phase One of this
project. 
August 5, 2014  The Commission authorized design funds for the South Satellite
Interior Renovations project.