COMMISSION 
AGENDA MEMORANDUM                        Item No.          9c 
BRIEFING ITEM                             Date of Meeting      February 26, 2019 
DATE:     February 15, 2018 
TO:        Stephen P. Metruck, Executive Director 
FROM:    Jeffrey Brown, Director AV Facilities and Capital Program 
Wendy Reiter, Director, Aviation Security 
Wayne Grotheer, Director, Aviation Project Management 
SUBJECT:  Baggage Optimization Project Phase 1 and Phase 2 Update (CIP #C800612) 
EXECUTIVE SUMMARY 
Baggage Optimization is an airport-wide project that improves customer service for both
airlines and passengers. This is a long-term, 3-phase project that won't be completed until
2025. This project was initially cost  estimated and scheduled in 2013. Phase 1 is un der
construction, within budget, and will be substantially complete in early 2020. 
Phase 2 is now fully designed so estimated costs can be compared to projections from 2013.
Since that time market conditions have changed for four reasons. Baggage equipment prices
have raised, tariffs have been imposed which drove up steel prices, airline customer reviewers
have added scope, and a hot construction market has escalated labor and material costs at a 
rate faster than general inflation. A sensitivity analysis using 100% Phase 2 design documents
and 70% Phase 3 design documents indicates the increase in overall project cost ranges
between $40 and $80 million atop the original estimated cost of $445 million. The project
budget is currently sufficient to cover Phase 2 costs, but will likely require a budget increase
prior to Phase 3 construction in 2022. The current budget will carry the project 4 years into the
prior approved year capital plan of finance. The soonest that staff would be able to reevaluate
overall cost ranges is mid-2022 when the latest costs and local construction economy can be
assessed. 
Port staff are meeting with contractors to gather more market information and to increase the
number of bidders to reduce market condition impacts on construction costs. Following bid
results in the third quarter of 2019, staff will return for authorization of additional funds. Port
executive management believes that in this hot construction market it is wise to adjust our
practice for mega-projects from projecting exact construction costs at 30% design to awaiting
actual bids prior to authorizing construction funds. 

SUMMARY OF PROJECT OBJECTIVE AND BENEFITS 
The Baggage Optimization project replaces six individual baggage screening systems with a
centralized system that optimizes operation of the checked baggage system at Seattle-Tacoma

Template revised April 12, 2018.

COMMISSION AGENDA  Briefing Item No. _9c___                              Page 2 of 6 
Meeting Date: February 26, 2019 
International Airport. The purpose of this project is to optimize the baggage system to achieve
the maximum outbound baggage capacity within the current airport footprint. The project
increases screening capacity for greater baggage volumes, increases flexibility to allow bags to
be checked in from any ticket counter and be conveyed to serve any gate, meets  the
established minimum-connect-time goal, and increases energy efficiency.  Additional benefits
include increased reliability, redundancy, and security. Meeting travelers' baggage needs will
significantly contribute to increased customer service, and address growing passenger demands
of the region. The project is currently scoped to accommodate 60 million annual passengers
(MAP). 
The project is being bid and constructed in three separate phases. Phase 1 is currently on
budget but has recently experienced schedule setbacks of an estimated three to six months.
The biggest risks to future phases of the project are Phase 1 schedule delays and baggage
handling market conditions affecting Phase 2 and 3 bids. 
PROJECT UPDATE 
Phase One 
Notice to Proceed was issued to the Phase 1 prime contractor, PCL Construction Services Inc.,
on May 26, 2017. Construction is currently underway, including the following activities and
accomplishments: 
(1)   Conveyor Factory Acceptance Retest has been successfully completed. 
(2)   All  conveyor  equipment  has  been  delivered  to  Seattle  and  stored  at  provided
warehouse location. 
(3)   Structural steel has been installed at the Central Terminal to create additional
building space on ramp level. 
(4)   Conveyor installation is scheduled to be complete in May. 
(5)   Construction on utilities and infrastructure continues. 
(6)   Network hardware equipment for baggage handling system has been purchased and
delivered. 
Upcoming critical elements include  conveyor installation, computer programming,  and 
completion of the new baggage system control room. 
On-going stakeholder coordination continues to be essential, particularly with other projects,
Aviation Maintenance, and airport tenants. 
The contractor has increased work shifts from five to six days per week. As of the latest
December pay application, 103,726 work hours have been reported and work completed is
estimated to be 73 percent. 


Template revised September 22, 2016.

COMMISSION AGENDA  Briefing Item No. _9c___                              Page 3 of 6 
Meeting Date: February 26, 2019 
Contracting requirements (status as of January 2019) 
Program                 Requirement/Goal       To-Date 
Small Business Enterprise (SBE)       15% of total contract      14.12% 
Small Contractors & Suppliers (SCS)   5% of SBE                 9.76% 
Apprenticeship                      15% of total hours         21.43% 
Phase Two 
The Port of Seattle and the Design Consultant continue to develop bid documents for Phase 2 
that includes the previously approved scope increase to bring the new baggage system to a
capacity of 60 MAP. The project is currently in the permit phase awaiting the Airport Building
Department and Fire Department review and permit approval. 
Critical upcoming activities include obtaining the airport building permit and preparing bid
documents. We expect to request Commission authorization for Phase 2 construction in April
2019 and to advertise in Q2 2019, pending an anticipated completion of Phase 1 in Q4 2019. 
This timing will allow fastest possible completion of the overall 3-phase project. 
SCHEDULE AND BUDGET 
Schedule: Phase One 
Based on the most current contractor schedule, Phase 1 is 104 days behind schedule. Holding
this schedule would place Phase 1 Substantial Completion in 2019 Quarter 4. The contractor
delay can be attributed to late conveyor submittals and lagging equipment fabrication, along
with further delay caused by a failed factory acceptance test.  While the contractor schedule
shows the project 104 days behind schedule, the Port project team feels that the project is six 
months behind schedule due to the contractor delays. 
While the current delay to the project is likely unrecoverable, the project team is working to
eliminate further delay. To address the performance and schedule concerns, the team has
implemented the following: 
Three additional design review meetings were held to help the contractor understand
the project requirements. 
Port staff was sent to Denver to meet with both the contractor and designer in order to
speed up critical submittal reviews. 
Multiple letters have been issued documenting the delay caused by the contractor. 
The project team now meets on-site with the contractor's executives quarterly to
discuss ways to mitigate the schedule delays. Actions resulting from these meetings: 
o  Baggage handling system (BHS) installation foremen were swapped with other
projects to help speed production, 
o  Night shift hours were adjusted to provide for more Port oversight, 
o  The contractor added a field engineer to assist with field layout, 
o  BHS subcontractor field staff were increased to speed installation and improve
quality, 

Template revised September 22, 2016.

COMMISSION AGENDA  Briefing Item No. _9c___                              Page 4 of 6 
Meeting Date: February 26, 2019 
o  Three additional BHS installation crews were added (total of five) to mitigate
submittal and fabrication delays, 
o  Work days were extended from Monday through Friday to include Saturday, and 
o  BHS manufacturer added a crew to help with conveyor installation quality
control. 
To avoid further delay resulting from another failed factory acceptance test, the team
required the contractor to provide a recovery schedule showing weekly milestones
leading up to the re-test. Beginning September 19, a Port representative along with a
member of the design consulting firm traveled  weekly to the BHS contractor
headquarters in Michigan to verify successful completion of the designated milestones.
This extra attention allowed all the required tests to be demonstrated ahead of the
official factory acceptance test and greatly contributed to a successful retest. 
Laydown area to store uninstalled conveyor had become a point of contention. The Port
secured and provided warehouse space to the contractor to free the area of stored
conveyor and speed installation at the site. This has resulted in a more organized and
efficient work area. 
Schedule: Phase Two 
Phase 2 design efforts started on October 31, 2017, 100-percent design documents were
received August 2018 and are currently being reviewed by the Airport Building Department.
Planned Phase 2 construction advertisement in Q1 2019 was contingent upon on-time Phase 1
completion and will now be delayed for three to six months to avoid overlapping of Phase 1 and
2 work. The South Satellite portion of Phase 2 is dependent on the International Arrivals Facility
project being operational in order to demolish the baggage system in the South Satellite tunnel
and begin construction. The overall project is now scheduled for Phase 3 (the final phase) to
obtain substantial completion in Q3 2025 (based upon a contractor delay of 6 months to Phase
1). 
Phase 1 Substantial Completion (based on       2020 Quarter 1 
estimated 6-month Contractor delay) 
Phase 2 Substantial Completion                 2023 Quarter 1 
Phase 3 Substantial Completion                 2025 Quarter 3 
Budget 
Overall Project Budget: 
Total Project Budget                                     $445,050,000 
Total TSA Contribution                                    $94,043,296 
Total Commission Authorization to Date                 $136,312,200 
Amount Spent to Date (as of 12/03/18)                   $64,621,053 
TSA Reimbursement to Date (as of 12/03/18)             $30,899,397 
Phase 1 Budget: 

Template revised September 22, 2016.

COMMISSION AGENDA  Briefing Item No. _9c___                              Page 5 of 6 
Meeting Date: February 26, 2019 

Phase 1 Budget                                        $111,000,000 
Phase 1 Estimate at Completion                         $101,000,000 
Phase 2 Budget 
Phase 2- most recent estimate                          $238,000,000 

ADDITIONAL BACKGROUND 
The Baggage Optimization project was scoped in 2012 to accommodate 45 MAP with an
expandable design to accommodate future growth. At the time, growth forecasts were flat and
predicted that 45 MAP would be adequate through 2027. The decision was made to proceed in
building an expandable 45 MAP system with the expectation that an expansion would occur in
the future in time to accommodate growth up to the 60 MAP level. Due to unprecedented
growth at the airport, the 45 MAP threshold was met in 2016, over ten years earlier than
anticipated. In June 2017, the Commission authorized the project to incorporate a capacity
expansion of the Baggage Optimization project in order for the new outbound baggage system
to accommodate 60 MAP. The additional capacity will be incorporated into Phases 2 and 3 and
added 14 months to the overall project schedule and a net budget increase of $126 million.
The $126 million increase is included in the overall budget of $445 million.
ATTACHMENTS TO THIS BRIEFING 
(1)   Presentation slides 
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS 
October 23, 2018  Baggage Optimization Quarter 3 Project Briefing 
June 12, 2018  Baggage Optimization Quarter 2 Project Briefing 
January 9, 2018  Baggage Optimization Quarter 4 Project Briefing 
September 26, 2017  Baggage Optimization Quarter 3 Project Briefing 
June 27, 2017  Commission authorization to (1) authorize additional design and project
management funds to expand the capacity to 60 million annual passengers (MAP); (2) use
Port crews and small works contracts to perform additional construction work; and (3)
amend Service Agreement P-00317641 to add $10,160,000 
October 25, 2016  Baggage Optimization Quarter 4 Project Briefing 
July 12, 2016   Commission authorization to advertise and execute a contract for
construction Phase 1 
June 28, 2016 Baggage Program Briefing 
May 17, 2016  Checked Baggage Optimization Project Briefing 
March 8, 2016  Commission authorization for the Chief Executive Officer to amend the
Baggage Optimization Design Services contract 

Template revised September 22, 2016.

COMMISSION AGENDA  Briefing Item No. _9c___                              Page 6 of 6 
Meeting Date: February 26, 2019 
June 23, 2015  Checked Baggage Optimization Project Briefing 
September 10, 2013  The Commission authorized the execution of an Other Transaction
Agreement (OTA) with TSA for reimbursable costs for design; construction, and to authorize
$15 million to continue from 30% to 100% design; and execute a consultant service
agreement for program management support services 
August 20, 2013  Response to questions from Commissioners asked during August 6, 2013
Commission Meeting 
August 6, 2013  The Commission was briefed on the near-term and long-term challenges
related to handling checked baggage at the Airport 
January 22, 2013  The Commission authorized $5 million for staff to begin design through
30%, and to enter into an agreement to allow reimbursement from the federal government
to the Port for eligible elements of the 30% design effort 
January 8, 2013  Baggage Systems Briefing 
August 14, 2012  Baggage system recapitalization/optimization was noted in the 2013
business plan and capital briefing as a significant capital project not included in 2013-17
capital program 
August 7, 2012  Baggage system recapitalization/optimization was referenced as one of
the drivers for the need to develop an Airport Sustainability Master Plan 
June 26, 2012  The Airport's baggage systems were discussed during a briefing on terminal
development challenges 
May 10, 2012  TSA's interest in a national recapitalization/optimization plan for all
baggage-screening operations was referenced in a design authorization request for the C60-
C61 Baggage Handling System Modifications Project 









Template revised September 22, 2016.