PORT OF SEATTLE 
MEMORANDUM 
COMMISSION AGENDA               Item No.      4e 
ACTION ITEM 
Date of Meeting    September 27, 2016 
DATE:    September 19, 2016 
TO:      Ted Fick, Chief Executive Officer 
FROM:   Ralph Graves, Senior Director, Capital Development 
Janice Zahn, Assistant Engineering Director, Construction Services 
SUBJECT:  Fishermen's Terminal Building C-15 HVAC Improvement Change Order 20 
Cost Credit to the Port:    $180,000 
ACTION REQUESTED 
Request Commission authorization to execute Change Order 20 to Contract MC-0317415,
Fishermen's Terminal Building C-15 HVAC Improvements, for a cost credit to the Port of
$180,000 and an increase to the project duration of 427 calendar days. 
SYNOPSIS 
On October 25, 2013, the Port executed a construction contract with Kassel & Associates, Inc.
for the project in the amount of $2,967,000.00 and a contract completion date of June 22, 2014.
The contract duration was previously increased by 57 calendar days via executed change orders
for a new completion date of August 18, 2014. Actual Substantial Completion was not achieved
for the project until October 19, 2015, a project delay of 427 calendar days. 
The majority of the project delay was caused by faulty equipment supplied by the manufacturer.
It was discovered in the fall of 2014 that the equipment had a design defect impairing its ability
to heat the building adequately. Diagnosing the problem, designing a repair, and implementing
the repair procedure was a time consuming process and was not entirely completed until late
August 2015. The remainder of the schedule delay was due to the Contractor not supplying all
required close out documentation in a timely manner. 
During Level 2 Dispute Resolution Process, the Port negotiated a final settlement for impacts to
the Port due to Contractor-caused project schedule delays. Issuance of this Change Order, with a
cost credit to the Port in the amount of $180,000 on the $3 million contract and an increase to the
contract duration of 427 calendar days, will settle all outstanding claims with the Contractor. No
funding is associated with this authorization request. 


Template revised May 30, 2013.

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
September 19, 2016 
Page 2 of 4 

BACKGROUND 
Building C-15 at Fishermen's Terminal was constructed in 1987. Building occupants include
four restaurants  Chinooks and Little Chinooks (Anthony's Home Port), the Bay Caf, and the
Highliner Public House  leased offices, and various retail businesses. This project helps
maintain the long-term revenue generating capability of the building and reduces overall energy
consumption by replacing outdated and worn out equipment with energy efficient equipment and
controls. 
The previous HVAC system for the C15 Building consisted of 19 "rooftop" units ranging in size
from 2.5 tons to 25 tons of cooling capacity. The newly installed system consists of 12 primary
heat pumps, 3 make-up air units, and 3 smaller wall-mounted heat pumps. The primary heat
pumps are high efficiency and range in size from 6 tons to 31 tons of cooling capacity. This
project also installed a fully integrated digital controls system that allows the entire HVAC
system to be monitored from a single computer located at the facility. This system can also be
accessed remotely and has the capability to send email notifications if there is a malfunction in
the system. 
Due to the building's structural design and limited space available in the two mechanical wells, 
each heat pump had to be custom designed and fabricated so it would fit in the available space 
and not overload the building. Unfortunately, the manufacturer's original custom design for the
supplied equipment was flawed and the units did not provide adequate heating to supply the
building. Correcting this deficiency accounted for the majority of the Project schedule delay.
Due to this Contractor-caused delay, the Port incurred additional costs for which it negotiated a
settlement with the Contractor. 
The negotiation process to achieve the final settlement with the Contractor was protracted and
difficult.  The General Contractor and primary subcontractor were both small businesses. A
third small business went into receivership during the dispute resolution processes. Many Port
Departments were included in the process and worked together to reach this final settlement
including Construction Management, Seaport Project Management, Engineering Design,
Maritime Real Estate Management, Small Business Programs, Legal, and the Office of the CEO. 
PROJECT JUSTIFICATION AND DETAILS 
This project installed a new energy efficient HVAC System and fully integrated digital controls
system at the C-15 Building at Fishermen's Terminal to replace an aging system that had 
outlived its useful life. With the exception of the units that serve the four restaurants, the Port is
responsible for the maintenance and repair of the HVAC system. Replacing the system serves to
protect and maintain the long-term revenue stream of the building. 
Project Objectives 
Replace the existing HVAC system with an energy efficient system. 
Replace the two existing HVAC control systems.

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
September 19, 2016 
Page 3 of 4 

Maximize tenant comfort and flexibility in future tenant space adjustments. 
Minimize construction impacts to existing tenants. 
Replace the existing HVAC system with the most cost-effective solution taking into 
account full lifecycle costs (initial cost of equipment, maintenance, energy efficiency,
longevity, etc.). 
Create a design for this replacement that allows for easy access for system maintenance
and replacement in the future. 
Project Schedule 
Contract Executed: October 25th, 2013 
Substantial Completion Issued: October 19th, 2015 
Final Project Duration: 726 Calendar Days 
FINANCIAL IMPLICATIONS 
Contract Cost Breakdown           Total 
Original Contract Amount                $2,967,000.00 
Current Executed Change Order Amount        $281,349.86 
Current Contract Amount                $3,248,349.86 
Final Change Order Amount with CO 20        $101,349.86 
Final Contract Amount with CO 20          $3,068,349.86 
Final Remaining Contract Contingency         $143,537.14 

STRATEGIES AND OBJECTIVES 
This project supports the Port's Century Agenda strategy to be the greenest most energy efficient
port in North America and to promote small business growth and workforce development by: 
Replacing an old worn out HVAC system with a new more energy efficient one. 
Installing a new digital controls system to run the system as efficiently as possible. 
Investing in and preserving a valuable Port asset that provides retail, office, and
commercial space to many small businesses. 
Fulfilling lease commitments and obligations to Port tenants including two providing
maritime training services and one providing industrial hygiene training services for the
local workforce. 
ALTERNATIVES AND IMPLICATIONS CONSIDERED 
Alternative 1  Do not authorize the issuance of the Change Order. If this Change Order is not
authorized the Dispute Resolution Process will continue, further delaying Project close out,
increasing Port costs to continue negotiations, and creating risk of potential litigation.
This is not the recommended alternative.

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
September 19, 2016 
Page 4 of 4 

Alternative 2  Authorize the issuance of this Change Order for a deductive amount of $180,000
and 427 calendar days, which compensates the Port for impacts incurred during the period of
project schedule delay. If executed, this will be the final Change Order on this Project and settles
all outstanding claims with the Contractor to close out the Contract. 
This is the recommended alternative. 
ATTACHMENTS TO THIS REQUEST 
None 
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS 
October 8, 2013  The Commission authorized additional project funding in the amount
of $900,000 bringing the total project authorization to $4,887,000. 
September 10, 2013  Presented additional funding request in the amount of $900,000
to the Commission to bring the total project authorization to $4,887,000. 
May 14, 2013  The Commission authorized advertisement for construction, execution
of a construction contract, and funding of the construction phase in the amount of
$3,130,000 to complete the project, bringing total project authorization to $3,987,000. 
May 11, 2010  The Commission authorized the design funding of $807,000, bringing
total project authorization to $857,000. 
November 30, 2009  The Commission was briefed on the project status.