AIRPORT PROJECT COSTS: UP, UP, UP BAGGAGE SYSTEM IS $92 MILLION OVER BUDGET AND 2 YEARS BEHIND SCHEDULE
Tack on another $34 million.
The cost of a Sea-Tac Airport project - a new baggage conveyor belt system designed to meet post-9/11 security requirements - has skyrocketed from about $139 million to $231 million because of fallout from a dispute between the Port of Seattle and a subcontractor.
The port blamed the project's complexity for the rising costs and delays, which it says were exacerbated by missteps by Tavares, Fla.-based G&T Conveyor Co. G&T says the port is at fault because of its shoddy design, poor construction management and constant stream of changes.
On Tuesday, port staff members will ask the five-member board of elected commissioners to authorize $34 million more to fix the problems plaguing the construction of its baggage system - just over a year after the commission approved an additional $24 million for the same purpose.
Port of Seattle Commission President John Creighton referred questions to port staffers Monday. The last time staff asked the commission for more money for the project it passed unanimously with little to no public comment.
That request came nine months after the commission authorized an additional $25 million to pay for changes requested by the airlines and the federal government.
Federal grants are expected to reimburse the port for $113 million of the now-$231 million project, the port must cover the remaining $118 million.
The port said it and its contractor, Turner Construction Co., signed a "non-disparagement agreement" last summer to settle with G&T so it could hire another subcontractor to finish G&T's $25 million part of the project faster.
But changes to the baggage system's configuration, including accommodating Alaska Air Group's new kiosk check-in system, have more than doubled the price tag of that work to $58 million. The project, which was supposed to be finished by late 2006, is now due to wrap up by fall 2008.
G&T said the fault lies with the port and its bumbling attempts to offload the costs of the more than 200 change notices and construction bulletins it issued for just G&T's part of the baggage system.
"They are poor managers of projects, to say the least, and they find themselves in trouble all the time but continue to shed blame or divert blame," said Mike Malkowski, the president and chief executive of the Five Star Airport Alliance, G&T's parent company.
"It is hurting the general public, which is paying a high price for mismanagement of projects, and companies such as ours, which are also paying a very high price."
Some of the issues G&T raised - the port's ambiguous estimates and inept tracking of project costs and change-order impacts - were identified in a port-commissioned, independent auditor's report released in May.
The port, however, said G&T's inability to stay on schedule is the root of the problem. G&T, which has expanded rapidly to build similar systems at airports across the country, has successfully completed other jobs for the airport.
"We didn't feel they were making adequate progress," port project manager Larry Lanier said. "We couldn't get the info from them that we wanted, and then we decided that we may never get the work done" if they didn't hire another company to finish it.
It would have been easier to stay on track, G&T director of project management Tim Berndt said, if the port had not given it a shoddy design - which required major changes beginning more than five months after the bid was awarded in August 2004.
The port, Berndt said, had bid out the project when it was only 60 percent designed, but promised to send over a detailed list of changes within two months of awarding the contract.
Typically, Berndt said, when changes are made to a project, they are highlighted on the project's drawings and annotated in the specifications.
That was not the case with the port, he said, which continued to make major changes late in the process.
Lanier, when asked how many changes were made during the project, said, "It could be dozens or hundreds - I really don't know."
Lanier said the changes improved the flexibility and functionality of the labyrinthine baggage system, which is designed to comply with post-9/11 Transportation Security Administration rules that airports must screen 100 percent of checked baggage for explosives.
But the installation of 11 miles of conveyor belts in the bowels of Sea-Tac to carry bags from the ticket counters to planes is a headache, mainly because the airport has to keep functioning throughout the process.
Though the port spent more than $20 million to design the baggage system, major holes remained when G&T began work, Berndt said.
One example: The port had not calculated whether the baggage well - the level beneath ticketing that is unseen by passengers - could support the weight of all the equipment G&T had to install. It couldn't, the subcontractor said.
"We were told to remove the stuff we had already put in because they had to reinforce the bagwell with structural steel," Berndt said.
G&T said it priced out all the port's changes and said they couldn't make them for less than $9.8 million, not including what Alaska had agreed to pay for its part of the system. The port balked, went to Alaska to see whether the projects - initially separate - could be combined, and settled with G&T for a multimillion-dollar sum both declined to name. A year later, the cost for the combined project has more than doubled to $58 million.
Vanderlande Industries, the new subcontractor for the two miles of belt that G&T was responsible for, is also having contract troubles. The port says Vanderlande can't access the places it needs to work on, resulting in further delays.
P-I reporter Kristen Millares Young
can be reached at 206-448-8142
