PORT OF SEATTLE 
MEMORANDUM 
COMMISSION AGENDA             Item No.      4b 
ACTION ITEM             Date of Meeting    August 5, 2014 
DATE:    July 23, 2014 
TO:      Tay Yoshitani, Chief Executive Officer 
FROM:    Ralph Graves, Managing Director, Capital Development 
Janice Zahn, Assistant Engineering Director  Construction Management Services 
Paul Bintinger, Senior Port Counsel 
SUBJECT:  Consolidated Rental Car Facility Project Contract MC-0315405 Change Order
No. 1353  Settlement of Elcon Request for Equitable, and No. 1354  Settlement
of Turner's Owner Caused Delay Claim 
Amount of This Request:                $0   Source of Funds:       Customer Facility
Charges 
Est. Total Project Cost:           $377,346,515 
Est. State and Local Taxes:         $25,394,336   Est. Jobs Created:           N/A 

ACTION REQUESTED
Request Commission authorization to approve a global settlement and issue two associated
change orders in the combined amount of $11,273,500 to resolve all remaining claims associated
with Consolidated Rental Car Facility (RCF) project. There is no additional funding associated
with this request, as there is adequate project budget remaining to cover the expenditure. 
SYNOPSIS
The Consolidated Rental Car Facility (RCF) opened May 17, 2012, and serves 13 rental car
companies operating at Seattle-Tacoma International Airport. Since completion of the project,
Port staff has been engaged in project close-out activities, which include the settlement of 
contractor claims. 
Electrical Subcontractor's Request for Equitable Adjustment 
The Port received a certified claim on May 30, 2013, from the electrical subcontractor on the
project. The claim supersedes all earlier claims and is in the amount of $19,439,280, inclusive of
interest. The claim documents state that the subcontractor incurred increased costs from a
number of causes including impacts on labor productivity, increased field overhead, increased
home office overhead, unresolved change orders, schedule delays, acceleration, and claim
preparation. Port staff previously completed its review of the claim and validated parts of the
claimed costs. Based on that review, the Port issued four Change Orders (1348, 1350, 1351, and

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
July 22, 2014 
Page 2 of 5 
1352) to date, totaling $2,055,410 (excluding the GC/CM contractor's 7.4% fee). The Port and
the electrical subsubcontractor have now reached a settlement on the disputed portions of the
claim. Change Order No. 1353 in the amount of $7,750,000 (excluding the GC/CM contractor's
7.4% fee) settles all remaining costs stemming from the electrical subcontractor's request for
equitable adjustment. Including the GC/CM contractor's contractually agreed fee, the settlement
total is $8,323,500. 
Turner Construction Company's Claim 
The Port also received a certified Owner Caused Delay Claim from Turner Construction
Company, the project's general contractor/construction manager, on September 9, 2011. That
claim seeks a 191-day time extension and $6,371,013 in additional costs. The claim documents
list various design and existing-condition issues as the cause of the delay. The claim asserts that
the Port was responsible for all of these issues. Port staff previously reviewed this claim and
issued three change orders (846, 893, and 1108) which provided, in total, a 91-day Contract
Time extension for concurrent, non-compensable schedule delays. The Port and Turner have now
reached a settlement on the disputed portions of the claim. Change Order 1354 in the amount of
$2,950,000 (and no additional time extension) settles all remaining costs and time requests
stemming from Turner's claim. This amount is not subject to any additional GC/CM fee. 
The total anticipated payment under Change Orders No. 1353 and No. 1354, is $11,273,500,
excluding sales tax. Including sales tax, the total is $12,344,483. As a result of earlier project
savings and prior Commission authorizations, adequate budget exists to cover this requested
expenditure. As a result, no additional funds are requested within this authorization request.
BACKGROUND 
The Port constructed the RCF project utilizing the general contractor/construction manager
(GC/CM) delivery methodology authorized under Washington law. Turner Construction
Companywas the GC/CM contractor for the project. During the course of the project, the Port 
issued a number of change orders to Turner, many of which related to the electrical system. The
primary electrical subcontractor on the project, Elcon Corporation, claims that the amount of
changed work was excessive, and that the added work caused an impact to its ability to
efficiently perform the work. The Port received, through the GC/CM contractor, several notices
during the construction of the project that the  electrical subcontractor was suffering 
inefficiencies. Although earlier requests for equitable adjustment were submitted to the Port,
those requests were superseded by a final, all-encompassing claim received in late May 2013. As
noted above, the value of the claim is $19,439,280, inclusive of interest. The Port denied Elcon's
claim in large part, concluding that it was entitled to no more than $1,572,298 for the claimed
inefficiencies. 
Separately, Turner claims that the amount of changed work as well as other project conditions
beyond Turner's control caused delays and increased its costs on the project. The Port
recognized that there were some excusable delays arising, in part, from issues for which the Port
was responsible. In total, the Port issued three change orders to extend the Contract Time for a

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
July 22, 2014 
Page 3 of 5 
total of 91 calendar days. Turner formally submitted a certified claim on September 9, 2011. The
value of this claim was $6,371,013. The claim also included a request for a 191-day time
extension. The Port denied Turner's request for additional compensation and additional time
beyond the 91 days previously provided. 
By agreement dated November 11, 2013, the Port, Turner, and Elcon agreed to arbitrate the
outstanding claims before the three members of the Dispute Resolution Board, who had been
retained by the Port and Turner at the commencement of the construction project. Through June
2014, the parties had engaged in substantial discovery, both formal and informal. The parties had
also held several preliminary hearings before the arbitration panel related, primarily, to schedulerelated
issues. As of June 2014, the parties were on the eve of addressing, by motion, the order of
arbitration proceedings and establishing specific hearing dates for, what was expected to be,
several phases of arbitration hearings. 
Recognizing that the parties would soon be required to firmly entrench their positions as the
arbitration proceeded, the Port engaged with both Turner and Elcon to examine whether
settlement was possible. These meetings began in March 2014 and stretched through early July
2014. Legal counsel for all parties were involved throughout the negotiations. In March and
April, the Port and Elcon were able to resolve a significant number of unresolved change orders 
included in Elcon's claim. These agreements were reflected in three previous change orders
totaling $483,112 (excluding the GC/CM contractor's 7.4% fee). All of the parties were then
able to agree on a global settlement of all outstanding claims on July 7 and 8, 2014, which
settlement is documented in a written agreement specifically subject to Port Commission
approval. Under the terms of that settlement, the Port will pay the electrical subcontractor
$7,750,000 on its remaining claim. The Port will also pay Turner $2,950,000 on its claim. Turner
is, by contract, also entitled to receive a markup of 7.4% on the amounts paid to the electrical
subcontractor. The total value of the settlement, including the GC/CM contractor's fee but
excluding sales tax, is $11,273,500. Inclusive of sales tax, the amount is $12,344,483. 
FINANCIAL IMPLICATIONS 
There are no financial implications. 
Budget/Authorization Summary 
The total RCF program budget, including both capital and expense components, is $400,506,369
and the total RCF program authorization is $417,006,000. 
The following budget and authorization summary is for the RCF construction (CIP #C100266)
and does not include rental car bus purchase (CIP #C800032). 
Original Budget                             $360,793,256 
Revised Scope                              $5,787,330 
Program Savings                           ($12,211,704)

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
July 22, 2014 
Page 4 of 5 
Budget Transfers                             $12,777,633 
Current Budget                             $367,146,515 
Budget Increase                              $10,200,000 
Revised Budget                            $377,346,515 
Previous Authorizations                        $357,933,654 
Authorization Transfers                         $21,583,501 
Current request for Authorization                          $0 
Total Authorizations, including this request            $379,517,155 
Remaining Budget to be Authorized                       $0 
Source of Funds 
The RCF construction project (CIP #C100266) is included in the 2014-2018 capital budget and
plan of finance as a committed project. The source of funds for this project, as identified in the
plan of finance, includes Customer Facility Charge (CFC) revenues, bonds backed by CFC
revenues, and other Aviation sources. 
A total of $12,211,704 has been previously identified as savings for the RCF Construction
project.  The total anticipated payment for these two change orders, including sales tax, is
$12,344,483.00.  In order to fully fund this payment, $10,200,000 of previously identified
savings will be returned to the project budget. 
Contract Information 
The following information relates to the RCF construction contract and competitive award: 
Contract award date:                             May 30, 2008 
Original period of performance:           May 30, 2008, to April 1, 2011 
Previous contract extensions:                           333 Days 
Current Contract Completion Date:                February 28, 2012 
Contract extension this change order:                        0 Days 
Revised Contract Completion Date:                         N/A 
Original contract amount:                       $224,837,739.00 
Previous Change Order Nos. 001  1352:              $11,447,053.00 
Current contract amount                         $236,284,792.00 
CO 1353 & 1354 Amount                     $11,273,500.00 
Revised contract amount:                       $247,558,292.00 
Total Request, Change Orders No. 1353 & No. 1354       $11,273,500.00

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
July 22, 2014 
Page 5 of 5 

ALTERNATIVES AND IMPLICATIONS CONSIDERED 
Alternative 1 - Approve the Settlement  This alternative resolves all outstanding claims
against the Port on project placed into service over two years ago. It likewise frees Port project
and construction management staff to focus forward on the more than $1 billion of impending
critical projects. The settlement will be paid fully from project savings and does not require
authorization of additional funds. It likewise avoids the expenditure of substantial amounts in
additional attorney, consultant and dispute resolution costs.  This is the recommended
alternative. 
Alternative 2 - Reject the Settlement  This alternative will not resolve any of the nearly
$24 million in remaining claims on the project. Those claims will need to be resolved in
arbitration, with all of the risks attendant in such a proceeding. Intensive discovery and
arbitration hearings will likely extend over the next 12 months. The Port will be required to
spend substantial additional amounts for attorneys and consultants in defense of the claims. Port
staff will likewise be required to spend significant amounts of time assisting in the defense,
participating in discovery and appearing at trial. This is not the recommended alternative. 
ATTACHMENTS TO THIS REQUEST 
None. 
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS 
July 26, 2011, Item 6e, Extension to Contract Completion Date 
May 22, 2012, Final Monthly Staff Briefing on the Consolidated Rental Car Facility Program. 
December 10, 2013, Item 5f, Change Order No. 1348 - Electrical Cumulative Impact