Item No.: 10d_Attach
Date of Meeting: September 12, 2023

DESIGN AGREEMENT
BETWEEN
THE DEPARTMENT OF THE ARMY
AND
THE PORT OF SEATTLE
FOR
DESIGN
FOR THE
SEATTLE HARBOR NAVIGATION IMPROVEMENT PROJECT
THIS AGREEMENT is entered into this ___ day of _________________, ______, by
and between the Department of the Army (hereinafter the “Government”), represented by the
District Commander for Seattle District (hereinafter the “District Commander”) and the Port of
Seattle (hereinafter the “Non-Federal Sponsor”), represented by the Executive Director.
WITNESSETH, THAT:
WHEREAS, Federal funds were provided in Further Consolidated Appropriations
Act, 2020, Public Law 116-94 to initiate design of deep draft navigation improvements for
Seattle Harbor, Seattle, Washington;
WHEREAS, the locally preferred plan (LPP) for Seattle Harbor Navigation
Improvement Project (hereinafter the “Project”, as defined in Article I.A. of this Agreement)
was approved by the Assistant Secretary of the Army (Civil Works) on December 11, 2017;
WHEREAS, Section 101 of the Water Resources Development Act of 1986, as amended
(33 U.S.C. 2211), specifies the cost-sharing requirements applicable to construction of the
Project, and Section 105(c) of the Water Resources Development Act of 1986 (33 U.S.C.
2215(c)), provides that the costs of design shall be shared in the same percentages as
construction of the Project;
WHEREAS, based on the Project’s primary purpose of commercial navigation, the
parties agree that the Non-Federal Sponsor shall contribute 50 percent of the NED Plan design
costs under this Agreement;
WHEREAS, the Non-Federal Sponsor is responsible for 100 percent of costs in excess of
that required for design of the national economic development plan (hereinafter the “NED Plan”,
as defined in Article I.B.); and
WHEREAS, the Government and Non-Federal Sponsor have the full authority and
capability to perform in accordance with the terms of this Agreement.

NOW, THEREFORE, the parties agree as follows:

ARTICLE I - DEFINITIONS
A. The term “Project” means the LPP, which includes that plan for deep draft navigation
improvements that will contribute to the economic efficiency of commercial navigation in
Seattle Harbor by deepening the existing navigation channels to an authorized depth of -57
feet MLLW and widening the approach reach to 700 feet, as generally described in the Chief
of Engineer’s Report, Seattle Harbor Navigation Improvement Project, Seattle,
Washington, dated June 7, 2018 and approved by the Chief of Engineers on June 7, 2018
(hereinafter the “Decision Document”), and includes the Project features associated with the
portions of berths at Terminal 5 that overlap the Federal channel which are considered local
service facilities (LSF) and are 100% non-Federal expense, but extends solely to the deepening
of the existing West Waterway navigation channel and excludes the remainder of the
recommended plan that has not been remediated of the contaminated sediments located therein
under the oversight of the Environmental Protection Agency as of the date of this Design
Agreement.
B. The term “NED Plan” means the national economic development plan, which
includes deepening the existing navigation channels of Seattle Harbor to an authorized
project depth of -56 feet MLLW and widening the approach reach to 700 feet, as generally
described in the Decision Document.
C. The term “Design” means performance of detailed pre-construction engineering
and design, up through preparation of plans and specifications for the initial construction
contract for deepening of the West Waterway navigation channel only for the Project.
D. The term “design costs” means the sum of all costs incurred by the Government and
Non-Federal Sponsor in accordance with the terms of this Agreement that are directly related to
Design of the Project. Subject to the provisions of this Agreement, the term shall include, but is
not necessarily limited to: the Government’s costs for engineering and design, including real
estate, economic, and environmental analyses, a safety assurance review, if required, and
supervision and administration; the Non-Federal Sponsor’s creditable costs for in-kind
contributions, if any; the Non-Federal Sponsor’s costs for any design work allocated by the
Government to the LPP incremental design costs; and the Government’s costs of review and
oversight of any design work undertaken by the Non-Federal Sponsor. The term does not include
any costs for dispute resolution; participation by the Government and Non-Federal Sponsor in the
Design Coordination Team to discuss significant issues and actions; audits; betterments; or the
Non-Federal Sponsor’s cost of negotiating this Agreement.
E. The term “NED Plan design costs” means that portion of design costs, as determined
by the Government, that would have been incurred by the Government and Non-Federal Sponsor
had the NED Plan been designed.
F. The term “LPP incremental design costs” means that portion of design costs, as
determined by the Government, that are in excess of the NED Plan design costs.
G. The term “LSF incremental design costs” means that portion of design costs
associated with the portions of berths at Terminal 5 that overlap the Federal channel which are
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considered local service facilities, as determined by the Government, that are in excess of the
NED Plan design costs.
H. The term “HTRW” means hazardous, toxic, and radioactive wastes, which includes
any material listed as a “hazardous substance” (42 U.S.C. 9601(14)) regulated under the
Comprehensive Environmental Response, Compensation, and Liability Act (hereinafter
“CERCLA”) (42 U.S.C. 9601-9675) and any other regulated material in accordance with
applicable laws and regulations.
I. The term "in-kind contributions" means those creditable materials or services provided
by the Non-Federal Sponsor for the NED Plan that are identified as being integral to Design of
the Project by the Division Commander for the Northwestern Division (hereinafter the
“Division Commander”). To be integral to Design of the Project, the material or service must be
part of the work that the Government would otherwise have undertaken for design of the NED
Plan. In-kind contributions also include any investigations performed by the Non-Federal
Sponsor for the NED Plan to identify the existence and extent of any HTRW as required for
Design of the Project.
J. The term “betterment” means a difference in the Design of the Project that results from
the application of standards that the Government determines exceed those that the Government
would otherwise apply to the Design of the Project.
K. The term “fiscal year” means one year beginning on October 1st and ending on
September 30th of the following year.
ARTICLE II - OBLIGATIONS OF THE GOVERNMENT AND
THE NON-FEDERAL SPONSOR
A. In accordance with Federal laws, regulations, and policies, the Government shall
conduct the Design using funds appropriated by the Congress and funds provided by the NonFederal Sponsor. In carrying out its obligations under this Agreement, the Non-Federal Sponsor
shall comply with all requirements of applicable Federal laws and implementing regulations,
including but not limited to, if applicable, Section 601 of the Civil Rights Act of 1964, as
amended (42 U.S.C. 2000d), and Department of Defense Directive 5500.11 issued pursuant
thereto; the Age Discrimination Act of 1975 (42 U.S.C. 6102); and the Rehabilitation Act of
1973, as amended (29 U.S.C. 794), and Army Regulation 600-7 issued pursuant thereto.
B. The Non-Federal Sponsor shall contribute 50 percent of the NED Plan design costs in
accordance with the provisions of this paragraph. In addition, the Non-Federal Sponsor is
responsible for 100 percent of the LPP incremental design costs, and is responsible for 100
percent of the LSF incremental design costs.
1. The Non-Federal Sponsor shall be responsible for undertaking any
investigations that the Government determines are required for Design of the Project to identify
the existence and extent of any HTRW.
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2. After considering the estimated amount of credit for in-kind contributions, if
any, that will be afforded in accordance with paragraph C. of this Article, the Government shall
provide the Non-Federal Sponsor with a written estimate of the amount of funds required from
the Non-Federal Sponsor for the initial fiscal year of the Design to meet its cost share for the
NED Plan design costs. In addition, the Government shall determine the funds required from the
Non-Federal Sponsor to cover the LPP incremental design costs that will be incurred by the
Government, as well as to cover the LSF incremental design costs that will be incurred by the
Government. No later than 60 calendar days after such notification, the Non-Federal Sponsor
shall provide the full amount of such funds to the Government in accordance with Article III.C.
3. No later than August 1st prior to each subsequent fiscal year of the Design, the
Government shall provide the Non-Federal Sponsor with a written estimate of the amount of
funds required from the Non-Federal Sponsor during that fiscal year to meet its cost share. No
later than September 1st prior to that fiscal year, the Non-Federal Sponsor shall provide the full
amount of such required funds to the Government in accordance with Article III.C.
C. The Government shall include in NED Plan design costs and credit towards the NonFederal Sponsor’s share of such costs, the cost of in-kind contributions performed by the NonFederal Sponsor that are determined by the Government to be integral to design of the NED
Plan. Creditable in-kind contributions may include costs for engineering, design, and
supervision and administration, but shall not include any costs associated with betterments. Such
costs shall be subject to audit in accordance with Article VII to determine reasonableness,
allocability, and allowability, and crediting shall be in accordance with the following procedures,
requirements, and limitations:
1. As in-kind contributions are completed and no later than 60 calendar days after
such completion, the Non-Federal Sponsor shall provide the Government appropriate
documentation for the Government to determine the costs that are creditable to the Non-Federal
Sponsor’s share of design costs. Failure to provide such documentation in a timely manner may
result in denial of credit. Appropriate documentation includes invoices and certification of
specific payments to contractors, suppliers, and the Non-Federal Sponsor’s employees.
2. No credit shall be afforded for the following: interest charges, or any
adjustment to reflect changes in price levels between the time the in-kind contributions are
completed and credit is afforded; the value of in-kind contributions obtained at no cost to the
Non-Federal Sponsor; any items provided or performed prior to the effective date of this
Agreement unless covered by an In-Kind Memorandum of Understanding; any items not
identified as integral in the integral determination report; or costs that exceed the Government’s
estimate of the cost for such in-kind contributions.
3. No reimbursement will be provided for any in-kind contributions that exceed
the Non-Federal Sponsor’s share of the design costs under this Agreement.
D. To the extent practicable and in accordance with Federal laws, regulations, and
policies, the Government shall afford the Non-Federal Sponsor the opportunity to review and
comment on contract solicitations prior to the Government’s issuance of such solicitations;
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proposed contract modifications, including change orders; and contract claims prior to resolution
thereof. Ultimately, the contents of solicitations, award of contracts, execution of contract
modifications, and resolution of contract claims shall be exclusively within the control of the
Government.
E. The Non-Federal Sponsor shall not use Federal program funds to meet any of its
obligations under this Agreement unless the Federal agency providing the funds verifies in
writing that the funds are authorized to be used for the Project. Federal program funds are those
funds provided by a Federal agency, plus any non-Federal contribution required as a matching
share therefor.
F. In addition to the ongoing, regular discussions between the parties regarding Design
delivery, the Government and the Non-Federal Sponsor may establish a Design Coordination
Team to discuss significant issues or actions. Neither the Government’s nor the Non-Federal
Sponsor’s costs for participation on the Design Coordination Team shall be included in the
design costs. The Non-Federal Sponsor’s costs for participation on the Design Coordination
Team shall be paid solely by the Non-Federal Sponsor without reimbursement or credit.
G. The Non-Federal Sponsor may request in writing that the Government include
betterments in the Design of the Project. Each request shall be subject to review and written
approval by the Division Commander. If the Government agrees to such request, the NonFederal Sponsor, in accordance with Article III.F., must provide funds to cover the difference in
the costs for design of such work, as determined by the Government, in advance of the
Government performing the work.
H. If the Government and Non-Federal Sponsor enter into a Project Partnership
Agreement for construction of the Project, the Government shall include the design costs in the
calculation of construction costs for the Project in accordance with the terms and conditions of
the Project Partnership Agreement.

ARTICLE III - PROVISION OF NON-FEDERAL COST SHARE
A. As of the effective date of this Agreement, design costs are projected to be
$3,473,924, with NED Plan design costs projected to be $3,340,000, and LPP and LSF
incremental design costs projected to be $133,924. The Government’s share of the NED Plan
design costs are projected to be $1,670,000, and the Non-Federal Sponsor’s share of such costs
are projected to be $1,670,000, which includes creditable in-kind contributions projected to be
$1,670,000, and the amount of funds required to meet its cost share projected to be $133,924.
The LPP incremental design costs are projected to be $100,400, which includes the amount of
funds to cover the LPP incremental design costs that will be initially incurred by the Government
projected to be $45,567. The LSF incremental design costs are projected to be $33,524, which
includes the amount of funds to cover the LSF incremental design costs that will be initially
incurred by the Government projected to be $15,215. Costs for betterments are projected to be
$0. These amounts are estimates subject to adjustment by the Government, after consultation
with the Non-Federal Sponsor, and are not to be construed as the total financial responsibilities
of the Government and the Non-Federal Sponsor.
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B. The Government shall provide the Non-Federal Sponsor with monthly reports setting
forth the estimated design costs, NED Plan design costs, LPP incremental design costs, LSF
incremental design costs, and the Government’s and Non-Federal Sponsor’s estimated shares of
such costs; costs incurred by the Government, using both Federal and Non-Federal Sponsor
funds, to date; the amount of funds provided by the Non-Federal Sponsor to date; the estimated
amount of any creditable in-kind contributions; and the estimated remaining cost of the Design.
C. The Non-Federal Sponsor shall provide to the Government required funds by
delivering a check payable to “FAO, USAED, Seattle (G3)” to the District Commander, or
verifying to the satisfaction of the Government that the Non-Federal Sponsor has deposited such
required funds in an escrow or other account acceptable to the Government, with interest
accruing to the Non-Federal Sponsor, or by providing an Electronic Funds Transfer of such
required funds in accordance with procedures established by the Government.
D. The Government shall draw from the funds provided by the Non-Federal Sponsor to
cover the non-Federal share of the design costs as those costs are incurred. If the Government
determines at any time that additional funds are needed from the Non-Federal Sponsor to cover
the Non-Federal Sponsor’s required share of the design costs, the Government shall provide the
Non-Federal Sponsor with written notice of the amount of additional funds required. Within 60
calendar days of such notice, the Non-Federal Sponsor shall provide the Government with the
full amount of such additional funds.
E. Upon completion of the Design and resolution of all relevant claims and appeals, the
Government shall conduct a final accounting and furnish the Non-Federal Sponsor with the
written results of such final accounting. Should the final accounting determine that additional
funds are required from the Non-Federal Sponsor, the Non-Federal Sponsor, within 60 calendar
days of written notice from the Government, shall provide the Government with the full amount
of such additional funds by delivering a check payable to “FAO, USAED, Seattle (G3)” to the
District Commander, or by providing an Electronic Funds Transfer of such funds in accordance
with procedures established by the Government. Should the final accounting determine that the
Non-Federal Sponsor has provided funds in excess of its required amount, the Government shall
refund the excess amount, subject to the availability of funds or if requested by the Non-Federal
Sponsor, apply the excess amount towards the non-Federal share of the cost of construction of
the Project in the event a Project Partnership Agreement is executed for the Project. Such final
accounting does not limit the Non-Federal Sponsor's responsibility to pay its share of design
costs, including contract claims or any other liability that may become known after the final
accounting.
F. If the Government agrees to include betterments on the Non-Federal Sponsor’s behalf,
the Government shall provide written notice to the Non-Federal Sponsor of the amount of funds
required to cover such costs. No later than 30 calendar days after receipt of such written notice,
the Non-Federal Sponsor shall make the full amount of such required funds available to the
Government through either payment method specified in Article III.E. If at any time the
Government determines that additional funds are required to cover any such costs, as applicable,
the Non-Federal Sponsor shall provide those funds within 30 calendar days from receipt of
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written notice from the Government. If the Government determines that funds provided by the
Non-Federal Sponsor exceed the amount required for the Government to complete such work,
the Government shall refund any remaining unobligated amount.

ARTICLE IV - TERMINATION OR SUSPENSION
A. If at any time the Non-Federal Sponsor fails to fulfill its obligations under this
Agreement, the Government may suspend or terminate Design unless the Assistant Secretary of
the Army (Civil Works) determines that continuation of the Design is in the interest of the
United States or is necessary in order to satisfy agreements with any other non-Federal interests
in connection with the Project.
B. If the Government determines at any time that the Federal funds made available for
the Design are not sufficient to complete such work, the Government shall so notify the NonFederal Sponsor in writing within 30 calendar days, and upon exhaustion of such funds, the
Government shall suspend Design until there are sufficient Federal funds appropriated by the
Congress and funds provided by the Non-Federal Sponsor to allow Design to resume.
C. In the event of termination, the parties shall conclude their activities relating to the
Design and conduct an accounting in accordance with Article III.E. To provide for this
eventuality, the Government may reserve a percentage of available funds as a contingency to pay
costs of termination, including any costs of resolution of contract claims and contract
modifications.
D. Any suspension or termination shall not relieve the parties of liability for any
obligation incurred. Any delinquent payment owed by the Non-Federal Sponsor pursuant to this
Agreement shall be charged interest at a rate, to be determined by the Secretary of the Treasury,
equal to 150 per centum of the average bond equivalent rate of the 13-week Treasury bills
auctioned immediately prior to the date on which such payment became delinquent, or auctioned
immediately prior to the beginning of each additional 3 month period if the period of
delinquency exceeds 3 months.

ARTICLE V - HOLD AND SAVE
The Non-Federal Sponsor shall hold and save the Government free from all damages
arising from the Design, except for damages due to the fault or negligence of the Government or
its contractors.

ARTICLE VI - DISPUTE RESOLUTION
As a condition precedent to a party bringing any suit for breach of this Agreement, that
party must first notify the other party in writing of the nature of the purported breach and seek in
good faith to resolve the dispute through negotiation. If the parties cannot resolve the dispute
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through negotiation, they may agree to a mutually acceptable method of non-binding alternative
dispute resolution with a qualified third party acceptable to the parties. Each party shall pay an
equal share of any costs for the services provided by such a third party as such costs are incurred.
The existence of a dispute shall not excuse the parties from performance pursuant to this
Agreement.

ARTICLE VII - MAINTENANCE OF RECORDS AND AUDIT
A. The parties shall develop procedures for the maintenance by the Non-Federal Sponsor
of books, records, documents, or other evidence pertaining to costs and expenses for a minimum
of three years after the final accounting. The Non-Federal Sponsor shall assure that such
materials are reasonably available for examination, audit, or reproduction by the Government.
B. The Government may conduct, or arrange for the conduct of, audits of the Design.
Government audits shall be conducted in accordance with applicable Government cost principles
and regulations. The Government’s costs of audits for the Design shall not be included in design
costs.
C. To the extent permitted under applicable Federal laws and regulations, the
Government shall allow the Non-Federal Sponsor to inspect books, records, documents, or other
evidence pertaining to costs and expenses maintained by the Government, or at the Non-Federal
Sponsor’s request, provide to the Non-Federal Sponsor or independent auditors any such
information necessary to enable an audit of the Non-Federal Sponsor’s activities under this
Agreement. The Non-Federal Sponsor shall pay the costs of non-Federal audits without
reimbursement or credit by the Government.

ARTICLE VIII - RELATIONSHIP OF PARTIES
In the exercise of their respective rights and obligations under this Agreement, the
Government and the Non-Federal Sponsor each act in an independent capacity, and neither is to
be considered the officer, agent, or employee of the other. Neither party shall provide, without
the consent of the other party, any contractor with a release that waives or purports to waive any
rights a party may have to seek relief or redress against that contractor.

ARTICLE IX - NOTICES
A. Any notice, request, demand, or other communication required or permitted to be
given under this Agreement shall be deemed to have been duly given if in writing and delivered
personally or mailed by registered or certified mail, with return receipt, as follows:
If to the Non-Federal Sponsor:
[TITLE (NOT the name of the individual)]
THE PORT OF SEATTLE
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[ADDRESS]
If to the Government:
District Commander
U.S. Army Corps of Engineers, Seattle District
ATTN: Project Manager: Seattle Harbor Navigation Improvement Project
CENWS-PMC
Building 1202
4735 E Marginal Way S.
Seattle, WA 98134
B. A party may change the recipient or address to which such communications are to be
directed by giving written notice to the other party in the manner provided in this Article.

ARTICLE X - CONFIDENTIALITY
To the extent permitted by the laws governing each party, the parties agree to maintain
the confidentiality of exchanged information when requested to do so by the providing party.

ARTICLE XI - THIRD PARTY RIGHTS, BENEFITS, OR LIABILITIES
Nothing in this Agreement is intended, nor may be construed, to create any rights, confer
any benefits, or relieve any liability, of any kind whatsoever in any third person not party to this
Agreement.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement, which shall
become effective upon the date it is signed by the District Commander.

DEPARTMENT OF THE ARMY

THE PORT OF SEATTLE

BY: __________________________
Kathryn P. Sanborn
Colonel, U.S. Army
District Commander

BY: __________________________
[TYPED NAME]
[Full Title]

DATE: _______________________

DATE: ________________________

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