Minutes Exhibit E
Port Commission Regular Meeting   1
...,......of December ,8. 2015 .

PORT OF SEATTLE '
MEMORANDUM

COMMISSION AGENDA              Item N0.      4f
ACTION ITEM             Date of Meeting   February 9, 2016

DATE:   February 2, 2016

T0:     Ted Fick, Chief Executive Ofcer

FROM:  Ralph Graves, Managing Director Capital Development Division
David Brush, IAF Program Leader
George England, NSTAR Program Leader
SUBJECT: International Arrivals Facility (IAF) December 8, 2015, Authorization
v             Correction (CIPS #C800583 and #C800556)

ACTION REQUESTED
Request Commission approval of a technical correction to the action request of agenda
item 60 of December 8, 2015, that does not alter the authorization amounts or the projects
for which authorization was granted, to read as follows: Request Commission
authorization for the Chief Executive Ofcer to take the following actions to advance two
signicant capital projects at Seattle-Tacoma International Airport, as described in
Attachments A and B, by (1) increasingproject authorizations, and executing contract
amendments and change orders for the International Arrivals Facility Program in the
amount of $275.5 million and for the North Satellite Renovation & North Satellite Transit
Station Lobbies Project in the amount of $98.1 million for a total of $373.6 million
additional authorization for the two projects; (2) executing a contract for project specic
construction audit services for the term of each project; and (3) amending the previous
Commission authorization for the IAF validation contract not-to-exceed amount to
include sales tax for the estimated amount of $570,000

BACKGROUND

On December 8, 2015, the Commission approved a combined action request to advance
two signicant capital projects at Seattle-Tacoma International Airport; the International
Satellite Renovation & North Satellite Transit Station
_
Arrivals Facility and the North
Lobbies Project. Following Commission approval of this request, it was noted that the
request restricted the authorization to specic contractors and limited funding the
program as intended and as described in the presentation. The proposed corrected
authorization does not alter the authorization amounts, nor the projects or purposes for
which the authorizations were sought and as described to the Commission during
presentation on December 8.

PORT OF SEATTLE
MEMORANDUM
i
COMMISSION AGENDA              Item No.      60
ACTION ITEM
Date of Meeting   December 8, 2015


DATE:   December 2, 2015

TO:     Ted Fick, Chief Executive Officer
FROM:  Ralph Graves, Managing Director Capital Development D' ion '
'

,                David Brush, IAF Program Leader
George England, NSTAR Program Leader
SUBJECT: International Arrivals Facility (IAF) Guarantee
'7;"2;
Development Period Authorization
(ch #C8005 83)
North Satellite Renovation & North '- .
I
Project (NSAT)
(CIP #C800556)

ACTION REQUESTED
Request Commission authorizati it
actions to advance two signic      ;roj.ects at Seattle-Tacoma International Airport
(Sea-Tao), the details ofwhich   esij'bed
1n Attachments A and B for:
"it"
1)   Increasmg pr0}ec an omz,ations and execute contract amendments and change
4  orders to; CWMn the amount of $275.5 million for the IAF and Hensel
Phelps Ge e  eeniractor/Construction Management (GC/CM)
in the amount of
$98.1 milton'rthe NSAT, for a total of $3 73.6 million additional authorization
.,
_
ects.
'ontract for project specic construction audit services for the term of


INTRODUCTION

Sea-Tao is experiencing record growth driven both by one of the fastest growing regional
economies, the draw of the Seattle Tacoma metropolitan area, and by domestic and
international airline service successes. This has resulted in a shortage of aircraft gates and
existing facilities that cannot accommodate the demands of customers and passengers.
Additionally, both the North Satellite and the South Satellite, which houses the existing
Federal Inspection Services (FIS) for processing arriving international passengers, were

PORT OF SEATTLE
MEMORANDUM

CONINIISSION AGENDA               Item No.    6c_attach_a
ACTION ITEM
Date of Meeting   December 8, 2015

Attachment A

:Subj ect: International Arrivals Facility (IAF) Guaranteed Maximum Price (GMP
Development Period Authorization .     r
...
(CIP #C800583)

SYNOPSIS
5?:
The Port contracted a Design~Build team to design and construcvamew IAF at Sea-Tac
using, for the rst time, Progressive Design BuilgAPDB) as the delivery method. On
November 17,2015 the TAP Design-Builder cemeted1Ehe project validation work
contracted for during the rst 120-day phase of EEEEesE n-Build Contract During that
Validation Period, the DesignBuilder reviewed eihstfng- conditions, tested program
assumptions, quantied risks and developed;tgee key deliverables: the Early Schematic
Design that evolved from numerous conceoens studied by the Design-Builder while
working to nd one that best satised theejifrotect requirements as set forth1n the Project
Denition Document (PDD), a Targets}.g???'e-(for design and construction) and a Target
Schedule  In order to advance'ifhe project to the next phase, staff is requesting
authorization to execute the Ppsteyahaation Amendment and one or more Early Work
Amendments to allow de51gratin;prellrmnary construction work contemplated during the
GMP Development PenodDeeember 2015 to 4Q16) to proceed In order to secure
exibility as to when speweniesrgn services and preliminary work are authorized, Port
staff is requestinggthefgughority to execute these amendments as well as subsequent
change orders to:allogv individual elements of the scope identied in this memo to
proceed, all mthlfi'ttherevised budget limit Design work will proceed immediately, but
construptgnvv'brlwdl not proCeed until March 6, 2016 as permitted under the terms of
n   We MII vote provision ofthe Signatory Lease and Operating Agreement
(SEIA HDE This amendment would increase the current $245M authorization by
$27;aw5M,f'dr a total of $300M, provide an eighteen-month extension and amend the
previous Commission Authorization for the IAF validation contract not-to-exceed to
include sales tax for the estimated amount pf $570,000.

Staff also requests authorization to execute a contract for construction auditing services
as provided in the DesignBuild Agreement between the Port and Clark/$0M.

COMMISSION AGENDA
Ted Fick,- Chief Executive Ofcer
December 2, 2015
Page 3 of 7 '

PROJECT DETAILS
Scope of Work

This authorization will permit design to commence immediately and will provide that
preliminary construction work can proceed once the terms of the M11 provision of the
SLOA III are met.

Once the GMP has been negotiated, staff will return f01 Commission authorization to
execute the third (and nal) phase of the LAB DeSIgn~Bu11d Contract. 

Schedule
1
I
I?35,131
$3.3
Validation Period complete                     November T332013
%
Finalize Target Budget and'Target Schedule          Igl    :3
GMP Development Period start                 1%ecembe  '2016
,

Begin Design activities             Decenli1;_er 9 2016
Begin Construction activities                     (per tegrms of SLOAHI)
Establish GMP '3'  6 (Estimated)
_ 4Ql
'1
FINANCIAL IMPLICATIONS -     ,3
g e _
BudgetMutItorization Summary            $1Capital     Expense  Total Project
Original Budget                                           $608.4M                 $4,600,000
Previous Authorizations
'
$0    $275.5M*
$300,000,000         to      $300M
































'                   11'
Budget Status angoi"i  n
I'
cost estima
Ethe IAF,
-_ The            5.3}      as currently dened, is $608.4 million.  The project
estimate is in: d    the 20152019 capital plan and the plan of nance within CIP
Z
#CSgQS-     s. project was originally approved by the airlines with the signing of
SLL11ft III @3111 a budget of $300 million It should be noted that the $300 million cost
gufeaidenhed in early 2013, was based on 0% design  As the planning and
1
=
progr     work progressed and the overall scope of the project was better understood,
_1 mg
the costs have increased primarily due to an additional 75,000 square feet of space
required by CBP1n the FIS, rened denition of vertical circulation at the sterile corridor
and the width ofthe bridge, and addition of enabling projects required to be undertaken in
order to execute the IAF program within the constraints of the existing airport facilities
and operations.





9m;

COMMISSION AGENDA
'Ted Fick, ChiefExecutive Ofcer
"
DeCember 2, 2015
Page 5 of 7

operations, facilitate passenger movement, and provide' a higher level of service for
international passengers. .

Additionally, in the course of delivering the project, the IAF team and the Port's Ofce
of Social Responsibility will work together collaboratively to establish small business
participation opportunities, in accordance with small business Resolution No. 3618.

ALTERNATIVES AND IlVIPLICATIONS CONSIDERED



M11 ballot rejection. Thisis the recommended alternative
PROS:
0  Advances this critically needed project from the
first (iffthree 
contract phases
to the second contract phase, the GMP Development Period
0  Maintains pr0ject momentum      Pa

o  Permits the IAF team to develop the prejergt'defmitron to the next level of cost
certainty from 0% design to GMP with dhremgnBuild partner
CONS '


"
not the recommended alternative
P_____ROS:
O
C_ONS: _
o  Delays curre"    etitile and curtails current project momentum
"SQ                                                     ,
0  Strains the:   ort's       __ ability to sustain international service in a manner
consiste vgzj  'the Port's Century Agenda
hereasesrnal project cost due to escalating labor and material costs.
.- Raslcs the loss of some key members of the Design-Builder3 team who would

,   e y be deployed to other active projects
Altel'lfag";3 Applove authorization to fund an amendment allowing the Design-
Builderito proceed with design only This
Is not the recommended alternative.
PROS.     '
.
o  Permits the IAF team to develop the project definition to the next level of cost
certainty from 0% design to GM? with our Design-Build partner.
0  Provides opportunity for additional airline/airport debate.
CONS:
o  Delays current schedule and curtails current project momentum.

COMMISSION AGENDA
Ted Fick, ChiefExecutiVe Ofcer
December 2, 2015
Page 7 of 7

0  July 23, 2013  International Arrivals Facility Project & Program Support; and
Price Factor Design-build Methodology authorization.
July 9, 2013 SeaTao Airport International Arrivals Facility Brieng.
'
July 9, 2013 Alternative Public Works Contracting Brieng
April 9, 2013 Sea-Tao Airport International Arrivals Facility Brieng.
June 26, 2012 Brieng on Airport Terminal Development Challenges at Seattle
Tacoma International Airport.
June 14, 2011 International Air Service Growth and Future Facility bri'iifing.
0  February 2, 2010 Brieng on South Satellite Passenger Growth and Fcility
Considerations, Delta's Proposed Airline Lounge and Other g'P ssible Euture
Pp_
'         all
Aviation Projects















My;

COMMISSION AGENDA 
Ted F10k Chief Executive Ofcer
December 8 2015
Page 2 of 10

On March 17, 2015, the Commission previously authorized the use of Port Crews for preliminary
construction and during the NSAT building expansion. Port crews may also perform pertions of the
work now being requested.

Based on the completion of 60% design and reconciliation of the estimated cost, the preliminary NSAT
project cost estimate has increased by $79.5 million from $421.7 million establishedin March 2015 to
$5012 million, a growth of 19% The growthin the estimated cost and initial value engmeerng cost
reductions are detailed below. Though value engineering efforts continue, there are"insufcient
reduCtions to achieve the original project budget However, the project team is notT ommending the
budget be increased until bid results for the preliminary work are receivedin :13;me216to validate
whether actual market conditions, subcontractor pricing, and labor or subei 11 aetor shortages have
escalated as currently estimated. These data will be essential to nalizing'; es rmated cost of the
project Staff currently forecasts the estimated cost of the project to rangeab  ea11.41470000,000 and
$490000,000 as of the date of this memo and will update the Commigsmngm March 2016 after actual
preliminary work bid results and market conditions have been analyzed and the design has progressed
further toward completion.                                 1%?
~
.
erjPlan (SAMP) and will not be

' BACKGROUND
which increased the
in August 2014, the Commission approved a budgetof3$405532,944             p10}ect scope
to expand the building by ve additional airo'ga gates to a total of twenty gates, and the use of a
General Contractor/Construction Magager'xcon'aeter for the North Satellite construction.  in March
"ET '
2015, the Commission approved the or t deget of $421,682,944 with the addition of $14,400,000
for expansion of the baggage handlingisy egrsmtlim the expanded portion of the building and transfer
of the previously authorized Sa     :ransit System tunnel leak repair project Commission also
authorized use of $4,900,000 othe   _ATbudgetin March 2015 for preparatory work for construction
ofces, relocating loading bridges, a, ynamic display system for the north loop of the satellite train -
"4.1.1.
system, and reimbursement'tr""PpgdivSound Energy for a natural gas connection to the satellite.

At the completion of'the 3:  gesign phasein October 2014, thirteen (13) additional scope items were
rmer renement and evaluation during 60% design and the revised 60%
.4_.;~
w" stimated at $501.2 million. The possibility existed that added costs might be
fpotentialesign allowance or othei project contingencies of the estimate during 60%
w
he"       impact of these scope additions on the budget has been continually
ideiied as  isk111 the Q4 2014 and 2015 NorthSTAR Quarterly Updates to the Commission. With
;-_-
the corn leti,_011 of the 60% design, the current project cost estimate wouldmeiease the budget by $79. 5
million oie19%.This revised estimate has been reconciled by the Port with the designer's and the
General Contractor/Construct1on Manager'3 independent estimates.  The result has been a more
.
accurate, but highei estimated cost to accomplish the p10]'.ect

The most signicant contributing factor to the increased current budget estimate, representing about half
of the $79.5 million increase, is the thirteen added scope items now estimated at $35.4 million, up $5.4

COMMISSION AGENDA
Ted Pick, ChiefExecutive Ofcer
December 8, 2015
Page 4 of 10

options due to the~ duration of this project and the General Contractor/Construction Manager contract
with Hensel Phelps.

Staff requests the preconstruction services being provided by Hansel Phelps continue until the Phase 1
construction of the building is underway, currently forecast to begin July 2016.  Signicantly more
.hours have been spent on preconstruction services than originally anticipated due to delays incurred
concluding the 60% design and additional effort required f01 reconciling the        '
cost 0
_.
conducting value engineering efforts and optimizing the construction phasing plan 1An ad itional cost
V
of $1,200,000 is estimated for these preconstruction services. The cost for the and s and additional

budget

Project Objectives
1:   Extend the length of NSAT by approximately two hundred Y'fortygfeetto improve customer
hi-
service and accommodate additional aircraft and passengers.      a;
o  Seismically strengthen NSAT and expand the existing};3infrastructure

0  Balance and integrate NSAT functional areas iidgureents (concessions, holdrooms,
1357i
amenities, airline operations and airline serwcesthrong-ga reiiovation and expansion of the 
NSAT's terminal area to achieve acceptable levels of service
o  Align near term and forecasted airport-Widegigate use and capacity by providing a total of 20,
contact gates at NSAT             thee-:-
.-1
0  Optimize gate door contact points, load1nbr1dgpsand aircraft parking positions, including fuel
hydrants and other support utilities.    fglgMg .
6  Meet or exceed current sustainabi {goals     of the Century Agenda with potential LEED
certication            21;:3}
o  Create a "frictionless" and stresSie'eapassenger experience Within NSAT
Create an exciting and attr' "                       "1                      _ve fae'i'lity integrating hold-rooms diverse amenities and numerous
Concessions          "'1',
0,   Maintain and p1omega a Morthwest sense  of place through the  design of architecture and
connected technoldgies 


lecongure fuel pits relocate gate infrastructure, re-route site utilities, construct access stairs for
unii boarded aircraft, mass excavation, shoring, concrete panels and drill shaft foundations,
p'lfchase and install a section of fixed loading bridge, selective demolition, construct a
Waterproof enclosure the north end of the building, and purchase the structural steel, vertical
circulation components, major electrical and mechanical equipment, fuel hydrants, curtainwall
system and other long-lead items for the entire pro;ect.

COMMISSION AGENDA 
Ted Fick, Chief Executive Ofcer
December 8, 2015
Page 6 of 10

Revised budget                    $415,882,944
Previous Authorizations
Current re uest for authorization
Total Authorizations, including this request --$157,718,800   $3,500,000 
Remaining budget to be authorized         $258,164,144    $2,300,000
Total Estimated Project Cost             $415,882,944    $5,800,000

Note: The estimated cost of the project is currently forecasted at $470-490 million. 51116 nal est
project cost will be determined after the Port and Contractor negotiate the final M  um Ntlgwable
Construction Cost (MACC) based on actual bid results.               $-

Project Cost Breakdomz

. 
_
Budget Status andSource ofFunds
This project is included in the 2016  2020 capital budget andsplail of nance with a budget of $415.8
million. The possible budget increase, if approveg would be transferred om the Aeronautical
Allowance CIP (C800404) resulting in no net ihgfnigjiggdthe Aviation Division capital program. The
_ project Will be funded with a combination of@39th Deadhelopment Fund, revenue bonds and Passenger
ii"
Facility Charge revenues (PFCS).

be briefed in the second or third?- 
'majorityhiinterest (MII) pro'i'"*t apgro'val process outlined in the Signatory. Lease and Operating ~
Agreement (SLOA) may be {111231me the Port submitting a ballot to the airlines seeking approval of
the increaSed project budg  Under SLOA, the Port as an option may elect to use Management Reserve
"~11 argdval process.  The requested authorization for the Preliminary Work
,

COMMISSION AGENDA
Ted Pick, Chief Executive OfCer
December 8, 2015
' Page 8 of 10

the project objectives, the Port Century Agenda goals, and the Airport's Environmental Strategy. Port
staff has engaged AAG in developing the environmental aspects'and process. Each scope item has been
evaluated individually based upon the total cost of ownership for the expected life of the facility. The
specic scope features include:

0  Energy conservation for building infrastructure.

0  Water conservation for the facility including rainwater harvesting for use in the buildi

0  Construction and operations waste minimization.

0  Incorporation of new technology. 

0  Exceed current building codes.






ALTERNATIVES AND IMPLICATIONS CONSiERED
'1'"???f'
Alternate 1- Current Schedule: Proceed with ein'ientexpansion/design project scepe and phasing with
.
or without AAG concurrence. ThisIs the
recomlmened alternative.
reear,  "new
PROS          x r?" "K 


6  Savings will be achiev


CONS:

a  Project currenteosilestnnate exceeds approved $421 million budget and1s forecasted to range
between$47e000500 and $490000,000
0  Project eurren cost estimate is greate1 than 10% above the budget approvedin the M11, requiring
" 036 or use of SLOA management reserve


(.5

Altern  e52 Defel
pI'OJect budget and Preliminary Work Package authorization until January 2016 
PROS:                                           ,
0  Provides additional time to further reconcile the budget cost estimate before seeking
authorization, and provides time for 'AAG concurrence if not already obtained.

'
COMMISSION AGENDA
- Ted Pick, Chief Executive Ofcer
December 8, 2015
Page 10 of 10

August 5, 2014 ~ Commission authorized an estimated $191,323,143 to expand the NSAT by 8
additional gates, an additional $15,717,800 for design completion, and use of the General
Contractor/Construction Manager alternative public works contracting procedure for NSAT
expansion construction procurement.
July 22, 2014 - NSAT Expansion Brieng.
00000                                                                                                       1
'9'
April 16, 2014 Seatt1e~Tacoma International Airport Capital Program Brieng 
January 14, 2014 NorthSTAR Piogram status update and initial NSAT Expansionhue
September 24,2013 NorthSTARProgram status update.           1:11
1135"__1_ :. 
Project; and (2) authorize the use of Port crews 
June 25, 2013 NorthSTAR Program status update
May 28, 2013, Commission authorized the execution of separate 36  fee agreements for
I
Coustruction Management Services and Commissioning Services,ofgap'prommate values of $10
.494?
million and $15 million. '\
April 9, 2013- The Commission authorized the ChiefExecutiVe Ofcer to enter into a pro;ect
labor agreement covering the NorthSTAR program--'s majorssconstructron pIOJects
March 26,2013 N01thSTAR Program status updafee
' 'i'VerticalDecember 11,2012 The Commission was briefed of;    Conveyance Modernization
"57:12)"
Project Aero Phases 1 and 2 and the possibilitzgof adding the specied elevators and escalators to
the NorthSTAR program           141%
1
July 24, 2012- Commission authorizedris$89006000 for the design of the NorthSTAR NSAT _
Renovation and NSTS Lobbies proje ".
June 26, 2012 - The Port C        a" briefed on the NorthSTAR program by Wayne
Grotheer, Director Aviation Proj    anagement Group.
aTithorized the execution of consultant contracts for design and                                                                  April 10, 2012- The Commig'sTe
- a'm managementservices, and the completion of site surveys
,1


W1