COMMISSION 
AGENDA MEMORANDUM                Item No.       6b 
ACTION ITEM                   Date of Meeting     July 25, 2017 
DATE:    July 17, 2017 
TO:     Dave Soike, Interim Executive Director 
FROM:   Michael Ehl, Director, Airport Operations 
Wayne Grotheer, Director, Aviation Project Management 
SUBJECT:  Service Tunnel Renewal/Replacement (CIP #C102112) 
Amount of this request:          $6,000,000 
Total estimated project cost:      $39,505,000 
ACTION REQUESTED 
Request Commission authorization for the Executive Director to authorize an additional
$6,000,000 and execute a construction contract with the low responsive and responsible bidder
for the Service Tunnel Renewal/Replacement project at Seattle-Tacoma International Airport,
notwithstanding the low bid exceeded the engineers estimate by more than 10 percent, for a
total project authorization of $39,505,000. 
EXECUTIVE SUMMARY 
The Service Tunnel renewal effort will seismically reinforce the tunnel and loading dock areas to
meet the building code structural standards for withstanding a 475-year interval earthquake 
(design quake). The Service Tunnel Renewal/Replacement project was bid on April 11, 2017,
and received two bids on May 23, 2017. The low responsive bidder, James D. Fowler Co.,
submitted a bid for $23,963,900, 22.47% above the Engineer's estimate of $19,567,000. This
exceeds the engineers estimate by more than 10 percent and represents a bid irregularity
requiring Commission action prior to contract execution. The second and remaining bid
submitted was $25,665,000, 31.1% above the Engineer's Estimate and within 7.1% of the low
bid. Staff has analyzed the low bid and believes it is competitively priced to current market
conditions for a project of this type, size and complexity. Staff is requesting a budget increase of
$6,000,000 to execute a contract for and to cover additional taxes and contingencies for a new
total project cost of $39,505,000. 
JUSTIFICATION 
The Service Tunnel and Central Loading Dock structures are essential Port facilities. These
structures support critical portions of the Departures Drive and the entire Arrivals Drive in the

Template revised September 22, 2016.

COMMISSION AGENDA  Action Item No. _6b___                    Page 2 of 6 
Meeting Date: July 25, 2017 
terminal area. The activities and infrastructure these structures support are essential to airport
operations. They include the employee busing operation, all of the loading dock activities
supporting terminal retailers and restaurants, access to the Central Mechanical Plant, and most
utilities serving the central terminal. While these structures met the seismic code in force when
they were constructed nearly 50 years ago, they do not meet the current code requirement for
preservation of life/safety or collapse during a design quake. This seismic retrofit effort will
reinforce the tunnel and loading dock areas to meet the current building code structural
standards for a 475-year interval earthquake (design quake) for existing structures. 
DETAILS 
To generate interest within the contracting community for this project, staff conducted a preadvertisement
and pre-bid information sessions with a site tour that were well attended. The
ten general contracting firms who ordered plan sets attended all three efforts. Despite this
strong initial interest from the contracting community, the project only received two bids. 
Post bid commentary from some of these plan holders indicated that they: anticipated having
too much competition, were short staffed, and were having difficulty getting subcontractors to
respond. Bidders and non-bidders alike indicated the restrictive job workspace and phasing
requirements caused bidders to drop out. The phasing complexity required to maintain 24/7
operations requires multiple small zones of work that reduces productivity and contributed to a
higher bid price. Maintaining essential operations to the loading dock  and central plant
precluded closing down the service tunnel and completing all the work at once. 
The low responsive bidder has forecast 21.5% small business enterprise (SBE) participation level
on a 20% project goal, and has met the 14% certified SBE goal. 
Scope of Work 
The project will construct seismic reinforcement walls, reinforce portions of the tunnel roof,
and increase the spacing between the tunnel and adjacent structures, allowing for vastly
improved structural performance during a major quake. 
Schedule 
Activity 
Construction start                      Quarter 3, 2017 
In-use date                          Quarter 4, 2019 
Cost Breakdown                         This Request       Total Project 
Design                                       $0         $4,565,075 
Construction                              $6,000,000        $34,939,925 
Total                                      $6,000,000         $39,505,000 

Template revised September 22, 2016; format updates October 19, 2016.

COMMISSION AGENDA  Action Item No. _6b___                    Page 3 of 6 
Meeting Date: July 25, 2017 
ALTERNATIVES AND IMPLICATIONS CONSIDERED 
Alternative 1  Delay project for an indefinite period, anticipating more favorable bidding
conditions in the future 
Cost Implications: $0 Port assumes risk of price going up or down, and liability in seismic event 
Pros: 
(1)   There is a possibility that construction costs might go down during a future recession,
leading to more competitive bidding environment and a lower project cost. 
(2)   Other adjacent projects are constructed in the interim, leading to a less congested
work zone. 
Cons: 
(1)   In the short term prices are likely to continue rising. 
(2)   The risk of postponing a project intended to address a known public safety seismic
hazard for an indeterminate amount of time, and the liability that entails. 
(3)   The risk to the project's design should the seismic code change again. 
(4)   Long term, the construction market is likely to remain fluid, making accurately
predicting a good buying opportunity a risk. 
This is not the recommended alternative. 
Alternative 2  Re-bid the project 
Cost Implications: Potential 5-10% cost impact due to continued hot construction market 
Pros: 
(1)   There is a possibility the Port could receive a lower bid. 
(2)   Allows construction to move forward with a relatively minor delay. 
Cons: 
(1)   The probability of the Port receiving a bid lower than the current low bidder given the
current bidding environment is very low. 
(2)   The timing of work on this project is critical due to adjacent projects and operational
requirements. Seasonal airport activity could result in a one-year delay to substantial
completion of the project if the project were re-bid. 
This is not the recommended alternative. 
Alternative 3  Close Tunnel or reduce phasing requirements 
Cost Implication  Potential to receive lower bids that could be within or at current budget 
Pros: 
(1) Reduced cost of construction to eliminate budget increase 
Con: 

Template revised September 22, 2016; format updates October 19, 2016.

COMMISSION AGENDA  Action Item No. _6b___                    Page 4 of 6 
Meeting Date: July 25, 2017 
(1) Severely impacts operations (shuts down terminal loading dock which impacts retail
and dining throughout the terminal, employee buses move to the Arrivals Drive,
blocks access to the central plant, limits emergency vehicle access) 
(2) Delays project redesigning and rebidding 
(3) Increases cost of design 
This is not the recommended alternative. 
Alternative 4  Accept the current low bid. 
Cost Implications: $6,000,000 additional authorization is required 
Pros: 
(1)   Construction can begin almost immediately, allowing staff to address this seismic
issue. 
(2)   There has only been a minor disruption to the project schedule, which should be
recoverable. 
(3)   The low bidder has been judged responsive and responsible, and exceeded the 20%
small business goal set for the project. 
Cons: 
(1)   The low bid exceeded the estimate of probable cost by $4,396,900, which, along with
added taxes and contingencies, amounts to a $6,000,000 cost increase to the project. 
This is the recommended alternative. 
FINANCIAL IMPLICATIONS 
Cost Estimate/Authorization Summary          Capital      Expense        Total 
COST ESTIMATE 
Original estimate                      $27,586,000      $314,000   $27,900,000 
Previous changes  net                   5,605,000           0     5,605,000 
Current change                       6,000,000          0     6,000,000 
Revised estimate                     39,191,000      314,000    39,505,000 
AUTHORIZATION 
Previous authorizations                  33,191,000      314,000    33,505,000 
Current request for authorization            6,000,000           0     6,000,000 
Total authorizations, including this request     39,191,000       314,000    39,505,000 
Remaining amount to be authorized             $0         $0         $0 
Annual Budget Status and Source of Funds 
The Service Tunnel Renewal/Replace project (CIP #C102112) was included in the 2017-2021
capital budget and plan of finance with a budget of $27,586,000. The budget increase is an

Template revised September 22, 2016; format updates October 19, 2016.

COMMISSION AGENDA  Action Item No. _6b___                    Page 5 of 6 
Meeting Date: July 25, 2017 
adjustment to the preliminary cost estimate driven by increased inflation, clarification of and
additions to project scope, and mitigation costs associated with minimizing operational impact.
The budget increase will be transferred from the Aeronautical Allowance CIP (C800753),
resulting in no net change to the airport capital budget. The funding source for this project will
be the Airport Development Fund (ADF) and future revenue bonds, to be issued in 2017. The
airlines approved this project through a majority-in-interest (MII) vote in 2014, with a budget of
$27.6 million. The current cost estimate would require another MII vote; however, the Port
elected to use the management reserve allowance per the signatory lease and operating
agreement (SLOA) to cover the increase. The airlines were briefed on the project and the Port's
plan to use management reserve at the March 2, 2017, airport airline affairs committee
meeting. The airlines will be updated at the next Airport Airline Affairs Committee meeting. 
Financial Analysis and Summary 
Project cost for analysis         $39,505,000 
Business Unit (BU)            Roadways 
Effect on business performance   NOI after depreciation will increase 
(NOI after depreciation) 
IRR/NPV (if relevant)           N/A 
CPE Impact                $0.07 in 2020 
Future Revenues and Expenses (Total cost of ownership) 
The existing service tunnel structure does not meet current seismic code. The Service Tunnel
and Central Loading Dock will remain essential to the operation of the airport for decades. The
completion of this project will help to expand the useful life of these facilities for 20 to 50 years.
We do not anticipate a significant change in operating and maintenance costs for these facilities
as a result of this project. 
ATTACHMENTS TO THIS REQUEST 
None. 
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS 
March 28, 2017  Commission authorization for the Chief Executive Officer to (1) authorize
an additional $28,939,925 for construction of the Service Tunnel Renewal/Replacement
project at Seattle-Tacoma International Airport for a total project authorization of
$33,505,000, (2) advertise and execute a major public works construction contract, (3)
enter into a project labor agreement covering this project, and (4) utilize Port crews and
small works contracts to complete the work. 
August 5, 2014  The Commission authorized the Chief Executive Officer to execute a
professional services agreement for the design development of the Service Tunnel
Renewal/Replacement project at Seattle-Tacoma International Airport in the amount of
$4,565,075 of an estimated total project cost of $27,900,000. 

Template revised September 22, 2016; format updates October 19, 2016.

COMMISSION AGENDA  Action Item No. _6b___                    Page 6 of 6 
Meeting Date: July 25, 2017 
April 1, 2014  Commission was briefed on the Service Tunnel Renewal/Replacement
Project. 
March 27, 2007  Commission authorized the Chief Executive Officer to 1) purchase
materials, 2) perform environmental evaluations, 3) perform studies and preliminary
engineering, 4) advertise, execute and award small works contracts, 5) and execute and
award outside professional services agreements for the Parking Garage/Service Tunnel
Pre-Design project at Seattle-Tacoma International Airport for a total authorization of
$966,500. Project resulted in a detailed needs assessment for both the garage and
service tunnel, but no construction, and has since been expensed. 















Template revised September 22, 2016; format updates October 19, 2016.