PORT OF SEATTLE 
MEMORANDUM 
COMMISSION AGENDA               Item No.      4b 
ACTION ITEM 
Date of Meeting     October 7, 2014 
DATE:    September 17, 2014 
TO:      Ted J. Fick, Chief Executive Officer 
FROM:   Stuart Mathews, General Manager, Aviation Maintenance Department 
SUBJECT:  Vendor Managed Inventory in Support of the Aviation Maintenance Department 

Amount of This Request:  0         Source of Funds: Annual Operating Budget 
Maximum Contract Value: $800,000 
ACTION REQUESTED 
Request Commission authorization for the Chief Executive Officer to execute a contract for two
years, with three one-year extension options, for general maintenance supplies for the Aviation
Maintenance (AVM) department, through the use of on-site vendor managed inventory at the
AVM Distribution Center.
SYNOPSIS 
Currently, the Aviation Maintenance Distribution Center procures, stocks, and distributes as
needed approximately 8,600 items in support of facility and system maintenance at the Airport.
This includes about 500 high-use, low-cost items such as  hardware, personal protective
equipment, first aid, and janitorial supplies. Under this proposal, a competitively selected vendor
would supply, stock, and manage these items in the Aviation Maintenance Distribution Center,
reducing Port-owned on-hand inventories and allowing Port staff to focus on other value-added
work. Examples of high-use, low-cost items included are nuts, bolts, screws, washers, gloves,
masks, coveralls, etc. 
This request would install a vendor managed system that would enable faster service and require
less Port staff time to manage. If authorized, a contract will be executed for the procurement of 
vendor owned and managed inventory that will be located on Port property at the AVM 
Distribution Center.  The vendor will be used to stock and make available these general
maintenance supplies (low-cost, high-usage items) such as listed above. 
The use of vendor managed inventory will streamline the work being done by the AVM 
Distribution Center staff, allowing employees to focus on other value-added work. 
The use of vendor managed inventory will be evaluated after two years to ensure cost
effectiveness. 

Template revised May 30, 2013.

COMMISSION AGENDA 
Ted J. Fick, Chief Executive Officer 
September 17, 2014 
Page 2 of 3 
Small business will be encouraged to bid for this contract. 
BACKGROUND 
The AVM Distribution Center procures stocks and issues approximately 500 high-usage lowcost
hardware, first aid, personal protective equipment, and janitorial supplies. The current on
hand, Portowned, stocked inventory for these items is worth approximately $250,000. 
By allowing a vendor on site to store and provide these items, the Port can realize a savings of
the approximately $250,000 currently invested in the subject inventory and reduce warehouse
actions required to manage this inventory. This  includes the procurement, receiving, and
stowing of these items. 
If this action is approved, the current on-hand inventory will be drawn down through usage and
not replaced reducing the on hand inventory investment by $250,000. 
The vendor would be provided space in the AVM Distribution Center to stock their own
inventory to support AVM requirements. The vendor would procure, receive, and stock these
items rather than Port employees. These items would be readily available for AVM use when
needed. 
While the methods and processes used now are efficient and effective, this action reduces the
numbers of those actions (less procurement, receiving and stowage) while saving Port dollars
through less inventory investment.
JUSTIFICATION 
As mentioned above, this action reduces Port inventory investment by approximately $250,000. 
Additionally, it is anticipated approximately 450 small dollar value procurements, receiving and
stowage actions by AVM clerks a month will be eliminated. AVM clerks would then be 
reassigned to projects relating to the management of current on hand inventories (regular
quantity and location verifications, restocking for greater effectiveness, stowing and issuing
supplies, etc.) located at the AVM Distribution Center and the various AVM maintenance shops. 
FINANCIAL IMPLICATIONS 
Due to the open competition involved among potential vendors, it is not anticipated that unit
pricing for these items will be any higher than what is paid now through multiple sources. Thus,
there is no anticipated impact on the operating budget. Item pricing will be a major factor when
bids are evaluated.
The vendor has the advantage of being the source of supply for these products and we anticipate
this vendors will have increased sales volume and resultant revenue.

COMMISSION AGENDA 
Ted J. Fick, Chief Executive Officer 
September 17, 2014 
Page 3 of 3 
The vendor will be allowed space in the AVM Distribution Center to stock and manage their
inventory. 
ALTERNATIVES AND IMPLICATIONS CONSIDERED 
Alternative 1) Allow vendor managed inventory on a test basis for a two year period. Evaluate
results and cost savings. Not the preferred option because it does not allow opportunities to 
evaluate program effectiveness past two years and may restrict vendor competition and lower
pricing. This is not the recommended alternative. 
Alternative 2) Do not contract. Other internal material management methods will be considered. 
This method will not allow for potential inventory savings. This is not the recommended
alternative. 
Alternative 3) Enter into a contract to allow the use of vendor managed inventory as outlined in
this proposal. Evaluate effectiveness and reassess program within first two years  exercise
options if appropriate. Realize potential cost and investment savings. This is the recommended
alternative. 
ATTACHMENTS TO THE REQUEST 
None. 
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS 
None.