PORT OF SEATTLE 
MEMORANDUM 
COMMISSION AGENDA               Item No.      6e 
ACTION ITEM 
Date of Meeting      June 23, 2015 
DATE:    June 16, 2015 
TO:      Ted Fick, Chief Executive Officer 
FROM:  Mike Burke, Director, Seaport Lease & Asset Management 
Janice Zahn, Assistant Director Engineering, Construction
Curtis Stahlecker, Capital Project Manager 
SUBJECT: Change Order #001 Terminal 18 Crane Removal (Expense WP U00099)
Amount of This Request:      $335,000   Source of Funds:  Seaport General Fund 
Est. Total Project Cost:       $1,835,000 
ACTION REQUESTED 
Request Commission authorization for the Chief Executive Officer to (1) increase the project
budget by $335,000 for the removal of Cranes No. 51, 52, and 53 at Terminal 18 and (2) issue a
change order on contract MC-0317968 to add 365 calendar days to the contract duration and
$173,400. The total amount of this request is $335,000 for a total project cost $1,835,000.
SYNOPSIS 
SSA Marine (SSA), the tenant at Terminal 18 (T-18), has requested that the Port of Seattleowned
Cranes No. 51, 52, and 53, non-preferential cranes under the lease, be removed from the
terminal as soon as possible. These Ishikawajima-Harima Heavy Industries, Ltd. (IHI) cranes
are not desirable to either SSA or the Port for container handling needs and the tenant requested
they be removed to make room on the terminal for future operations.
On September 11, 2012, the Commission authorized the surplus and disposal of these cranes.
The Port made two unsuccessful attempts to sell the cranes and subsequently construction
documents were prepared to demolish and remove the cranes. The project was advertised, bids
were received for the removal of the cranes, and the contract was awarded to the lowest
responsible bidder.
The contractor had completed all required preconstruction activities and was ready to mobilize
for physical work on-site by December 2014, pending Port issuance of the notice to proceed.
However, due to the deteriorating contract negotiations between the terminal operators (PMA)
and International Longshore and Warehouse Union (ILWU) along with the heavy congestion on
the terminal, proceeding with the crane removal contract would have further impeded the
movement of cargo on the terminal and in the harbor. As a result, the notice to proceed was not

Template revised May 30, 2013.

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer
June 23, 2015
Page 2 of 5
issued to the contractor. The Port evaluated various options  and ultimately decided to suspend
the contract work on January 23, 2015 to allow the contractor to utilize its equipment for other
projects while the labor issues were being resolved. The contract between PMA and ILWU was
tentatively accepted in late February and ratified in May 2015.
Once the PMA/ILWU contract was ratified in May 2015 and terminal congestion wasreduced, 
Port staff worked with the contractor to develop an approach for removing the cranes and
maintaining ongoing commercial operations at the terminal.
BACKGROUND 
Following the September 2012 authorization declaring the cranes surplus, Port staff made two
unsuccessful attempts to market the cranes for sale. The decision was then reached to prepare
construction documents to demolish and remove the cranes from T-18. The project was initially
scheduled to bid in May 2014. However, these cranes were included in other lease negotiations
(potential relocation of a tenant from T-5 to T-18), and the crane removal project was
temporarily placed on hold. After the negotiations concluded, the project was restarted and bid
in mid-August 2014.
The contract to remove the cranes was awarded to the low bidder, Axis Crane, at the end of
September 2014 for the low bid sum of $1,083,200 (note that Axis Crane is the same contractor
that performed the demolition of Crane 36 in 2009). The contractor's proposed demolition
method is similar to the 2009 project. Potential ILWU unrest subsequent to contract execution,
and increased congestion on the terminal caused the Port to delay issuing notice to proceed with
crane demolition. As a result, the Port and Axis Crane agreed in January 2015 to a plan that was 
structured to extend the contract duration and suspend work until such time that the labor issues
were settled between all parties and the impacts could be evaluated. The Port retained the right to
terminate for convenience if unfavorable circumstances beyond either the Port's or the
Contractor's control arose.
With contract in place between PMA and ILWU and reduced cargo congestion, staff can finalize
and execute the agreed upon plan. In addition to the 365 calendar days of extension to the
contract duration, the Change Order includes $173,400 to compensate the Contractor for the
costs related to this delay.
PROJECT JUSTIFICATION AND DETAILS 
Cranes No. 51, 52, and 53 are located at Terminal 18 and were purchased in 1984 from IHI.
They are essentially identical and have a capacity of 40 Long Tons with 50-foot gauge. The
cranes are no longer needed by our tenant and we have been requested to remove them from the
terminal as soon as possible. The Port has no other terminal location or lessor with a need for
this type of crane and would like to move forward with plans for removal.
Project Objectives 
Remove Cranes No. 51, 52, and 53 from T-18.

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer
June 23, 2015
Page 3 of 5
Allow for continued operations at T-18 with minimal disruption.
Scope of Work
The Change Order provides full and final compensation to the Contractor for additional costs
related to the impacts caused by the Port of Seattle for both equipment standby costs and costs
for the extended period of performance and, if necessary, to terminate the contract for
convenience if the work is unable to be performed. The additional project funding is required to
pay for the cost of the change order and sales tax, increased soft costs, and additional
contingency.
Schedule 
Reactivation of the project is a function of the contractors work load and the time extension of
change order. The project is anticipated to restart in September 2015. The following schedule
identifies the key project milestones based upon a September mobilization. With the added
contract days in the change order the new project completion date incompletion date is March
16, 2016.
Mobilize               September 2015 
Begin Cranes Demolition     Beginning of October 2015 
Complete Demolition       End of December 2015 
Demobilize             January 2016 
FINANCIAL IMPLICATIONS 
Budget/Authorization Summary              Capital     Expense   Total Project 
Original Budget                            $0    $1,500,000    $1,500,000 
Previous Authorizations                      $0          $0          $0 
Current request for authorization                  $0      $335,000      $335,000 
Total Authorizations, including this request           $0    $1,835,000    $1,835,000 
Remaining budget to be authorized               $0          $0          $0 
Total Estimated Project Cost                    $0    $1,835,000    $1,835,000 
Project Cost Breakdown                     This Request       Total Project 
Construction                              $240,000         $1,402,000 
Construction Management                      $35,000         $156,000 
Design                                $4,000          $30,000 
Project Management                          $33,000          $77,000
Permitting                                      $0           $37,000 
State & Local Taxes (estimated)                    $23,000          $133,000 
Total                                       $335,000         $1,835,000

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer
June 23, 2015
Page 4 of 5
Budget Status and Source of Funds 
The 2014 Operating Budget included $1,200,000 for the removal of IHI Cranes at T-18. Due to
project delays discussed above, only $113,500 was spent in 2014. When the 2015 Operating
Budget was prepared, it was still anticipated that the project would be largely completed in 2014,
so only $75,000 was included in the 2015 expense budget for removal of these cranes. Of the
total project cost of $1,835,000, approximately $1, 521,500 is expected to be expensed in 2015.
Therefore, proceeding with the project is expected to result in an unfavorable ($1,446,500)
operating expense variance and an associated unfavorable net operating income variance for
2015. The 2016 Operating Budget will reflect the balance of the costs to complete the project. 
This project will be funded from the General Fund.
Financial Analysis and Summary 
CIP Category             N/A 
Project Type              N/A 
Risk adjusted discount rate     N/A 
Key risk factors             Construction risks; container movement requirements that
do not allow for crane demolition/loading operations to
proceed.
Project cost for analysis        N/A 
Business Unit (BU)          Container Operations 
Effect on business performance  Net Operating Income before depreciation (NOI) for 2015
will be reduced by project costs of $1,521,500. As the
2015 Operating Budget only included $75,000 for
completion of the project, an unfavorable NOI variance of
approximately ($1,446,500) is anticipated. 
IRR/NPV             N/A 
Lifecycle Cost and Savings 
As of October 2012 the terminal operator has purchased and installed six new Super Post-
Panamax cranes. The new cranes have the ability to accommodate the larger ships calling on the
Port of Seattle and to handle cargo more efficiently than the IHI cranes. The efficiency gained
by the new cranes combined with the lease obligation the Port has to remove the IHI cranes
maintains the economic strength of the Port of Seattle operations. 
STRATEGIES AND OBJECTIVES 
This project will support the Port's Century Agenda Strategic Objective to grow Seaport annual
container volume to more than 3.5 million TEUs. Currently the IHI cranes are at the southern
end of the dock; with their removal, the terminal's larger cranes will have access to the full
length of the dock improving terminal efficiency and cargo operations.

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer
June 23, 2015
Page 5 of 5
ALTERNATIVES AND IMPLICATIONS CONSIDERED 
Alternative 1) Terminate Contract for convenience and rebid project at a later date 
Pros: 
Minimizes the contract cost exposure to the Port of Seattle by liquidating the cost
liabilities with the current contractor.
Allows for the addition of more specific requirements in the new bid documents.
Cons 
Cranes are still in place (which does not meet the lease obligations) and the Port incurred
approximately $250,000 including the termination costs to the Contractor.
Additional cost will be incurred for re-advertising the project.
Future bids may exceed current contract costs.
Alternative 2) Issue a change order to increase the project budget and schedule to remove
the cranes 
Pros: 
Cranes would be removed and lease obligations met.
Costs to perform the work are known and cost exposure has been capped.
Contractor has completed most of the engineering and preconstruction submittals
expediting the restart.
Cons: 
The costs associated with this alternative are $335,000.
Additional labor harmony issues and/or unknown future conditions may still prevent the
completion of the work.
Alternative 2 is the recommended alternative. 
ATTACHMENTS TO THIS REQUEST 
None
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS 
September 11, 2012, Commission authorized Second Reading of Resolution No. 3666,
declaring certain personal property surplus (Port of Seattle Cranes 51, 52, and 53) for Port of
Seattle purposes and authorizing its sale or disposal.
August 7, 2012, Commission authorized First Reading of Resolution No. 3666, declaring
certain personal property surplus (Port of Seattle Cranes 51, 52, and 53) for Port of Seattle
purposes and authorizing its sale or disposal.
September 26, 1995, Commission authorized raising the legs and extending the booms on the
IHI cranes.
June 14, 1983, Commission authorized the procurement of two additional cranes.
January 12, 1982, Commission authorized the procurement of two cranes.