PORT OF SEATTLE 
MEMORANDUM 
COMMISSION AGENDA               Item No.       4f 
ACTION ITEM 
Date of Meeting      May 24, 2016 
DATE:    May 18, 2016 
TO:      Ted Fick, Chief Executive Officer 
FROM:   Ralph Graves, Senior Director, Capital Development 
Mike Tasker, Senior Manager, Aviation Facilities & Infrastructure 
Dwight Rives, Director, Port Construction Services 
SUBJECT:  Air Cargo 4 HVAC Upgrade Project at Seattle-Tacoma International Airport 
(WP 105074; CIP #C800017) 
Amount of This Request:         $310,000   Source of Funds:   Airport Development
Fund 
Est. Total Project Cost:           $308,276 
Est. State and Local Taxes:         $19,046 
ACTION REQUESTED 
Request Commission ratification of the Air Cargo 4 HVAC Upgrade, Work Project (WP)
105074, as an authorized project with a budget total of $310,000. 
SYNOPSIS 
The Air Cargo 4 HVAC Project had a cost overrun from $290,000 to $308,276. This amount
exceeds the project budget of $290,000  and the $300,000 threshold for Commission
authorization. This is primarily due to two factors: 
1.  The Aviation Facilities and Infrastructure (F&I) engineer who was originally managing
this project departed the Port. Due to a misunderstanding over who would assume project
management duties, budget and actual cost for design, bidding and construction were not
subsequently monitored at the project level.
2.  Port Construction Service (PCS)  budget was adjusted to account for additional
construction costs required to complete the project, but the sales tax on the small works
contract utilized to perform the project was not accounted for when tracking total project
cost.
In order to prevent this issue in the future, F&I and PCS will coordinate a formal project handoff
and reassign project roles and responsibilities. We will also account for sales tax on construction
contracts in our project budgets and cost tracking. 

Template revised May 30, 2013.

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
May 18, 2016 
Page 2 of 3 
BACKGROUND 
In September 2015, staff undertook a small capital project to provide new HVAC units for the
Air Cargo 4 Building. The building is used mostly by Port Aviation Maintenance, although there
are other Port offices located there. The existing units were failing and the second floor was
particularly uncomfortable. 
Project roles were defined as follows: F&I would act as sponsor, perform the engineering design,
and manage the project. PCS would execute the small works contract, provide construction
management services, and utilize Port crews to remove ceilings and perform selective demolition
in the work areas. The project budget was established at $275,000 (i.e., $260,000 for PCS and
$15,000 for F&I). Of the total PCS project budget, $200,000 was designated for an outside
mechanical contractor to install the new units. The remaining $60,000 was designated for a PCS
Construction Manager (PCS CM) to provide construction management services, and for the PCS
crew to perform selective demolition.
The lowest qualified bid for the small works contract came in at $197,700 not including
Washington State sales tax (WSST). PCS crews worked well with the Mechanical Contractor,
and there were no significant problems with the contract. A change order was required for 
natural gas regulators and for an electrical disconnect, not specified in the original design, for
$2,787, bringing the new contract total to $200,487 without WSST. 
During the construction phase, the F&I engineer that was originally managing this project was
hired away from the Port. PCS and F&I each assumed that the other would assume the project
management role. As a result, budget and the actual costs for design, bidding and construction
were not monitored at the project level.
During permit inspection, the Building Department directed PCS to seal off some openings that
might allow dangerous spread of exhaust fumes from the garage area of the building.  At the
time PCS started the repairs, not all costs had been identified, and it appeared that PCS costs
would be within the existing budget. The PCS CM felt it was in the best interest of the project to
start on these required repairs, with the intent of tracking the costs, and requesting additional
funds if necessary. 
At this time, PCS was informed by the CPO Contract Administrator for the small works
mechanical contract (SW-0318452) that Project 105074 was showing as over budget. Analysis
by the PCS CM and the CPO Contract Administrator determined that previous costs showing in
PeopleSoft from earlier phases of the project, along with the unaccounted sales tax, increased the
total project cost to $308,276. This amount exceeds the authorized project budget of $290,000
and the $300,000 threshold for Commission authorization. 
The current cost summary for Work Project 105074 is as follows: 
Design and bid work prior to PCS starting the project: $38,430.96 

Revised March 28, 2016  pjw

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
May 18, 2016 
Page 3 of 3 
Current estimated PCS costs including tax on contract and stated overruns: $269,844.95 
Total projected actual project costs: $308,275.91 
FINANCIAL IMPLICATIONS 
Budget/Authorization Summary              Capital     Expense   Total Project 
Original Budget                       $290,000          $0     $290,000 
Previous Authorizations                       $0          $0          $0 
Current request for authorization              $310,000          $0      $310,000 
Total Authorizations, including this request      $310,000          $0      $310,000 
Remaining budget to be authorized           $310,000          $0     $310,000 
Total Estimated Project Cost               $308,276          $0     $308,276 
Project Cost Breakdown                         This Request   Total Project 
Project Specific Small Works Contract SW-0318452         $219,533.26   $219,533.26 
PCS provided work under WP 105074                 $50,311.69    $50,311.69 
F&I design & bid cost prior to PCS starting project           $38,430.96    $38,430.96 
Total                                          $308,275.91    $308,275.91 
Small Works Contract Information 
Contract Award Date                                 November 11, 2015 
Original Period of Performance                November 11, 2015  January 30, 2016 
Previous Contract Extensions                              106 Working Days 
Contract Extension this authorization                                   0 Days 
Current Contract Completion Date                              May 15, 2016 
Original Contract Amount                                   $197,700.00 
Previous Change Orders Executed                                $2,787.00 
Current Contract Amount                                   $200,487.00 
Sales Tax                                                $19,046.26 
Total Contract                                              $219,533.26 
This work project rolls up under the Aviation Small Jobs CIP (C800017). The funding source is
the Airport Development Fund. 
ATTACHMENTS TO THIS REQUEST 
None. 
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS 
None. 

Revised March 28, 2016  pjw