COMMISSION 
AGENDA MEMORANDUM                        Item No.          8d 
ACTION ITEM                            Date of Meeting       April 13, 2021 
DATE:     March 18, 2021 
TO:        Steve Metruck Executive Director 
FROM:    Pete Ramels, General Counsel 
Loren Armstrong, Sr. Port Counsel 
Janice Zahn, Asst. Engineering Director, Construction 
SUBJECT:  Baggage Optimization Phase 1 Water Damage Settlement Agreement 
Amount Payable to the Port:   $1,600,000 
ACTION REQUESTED 
Request Commission authorization for the Executive Director to execute a settlement agreement
to resolve claims and potential claims arising out of two TSA-owned Explosive Detection System
Machines (the "EDS Machines") that were damaged and required replacement during the
Baggage Optimization Phase 1 project ("BOP1"). 
SUMMARY 
The Port asserted pre-litigation claims against PCL, the general contractor on the BOP1 project,
and Red Hawk Fire Protection LLC ("Red Hawk"), one of PCL's subcontractors. PCL and Red Hawk
asserted that they were not contractually responsible for the replacement cost of the two waterdamaged
EDS Machines. 
The parties (and their respective insurers) first mediated on November 4, 2020, and then
continued to negotiate with the mediator's assistance until early March 2021 when the parties
successfully resolved the dispute subject to authorization by the Port Commission. The proposed
settlement involves an aggregate payment to the Port of $1,600,000. The settlement agreement
does not constitute an admission of liability or wrongdoing on the part of any party; rather, the
settlement is recommended to avoid the time, expense, disruption, and uncertainty of litigating
claims. 
This matter was discussed in executive session.
There are no attachments to this memo. 



Template revised September 22, 2016.