Big government at work: Cost for Sea-Tac Airport project soars from $608 million to almost a BILLION

Can you imagine how many private contractors would go out of business if they couldn’t estimate construction costs properly and had overruns of over 50 percent on originally estimated costs? Course they have to make a profit – government bureaucrats don’t have to worry about details like that.

The Port of Seattle operates Sea-Tac International Airport. They are building a new International Arrivals Facility as the current one is 44 years old and needs updating. From the Port’s press release in August 2017:

“National and local leaders came to the Port of Seattle today to celebrate the official groundbreaking for a new International Arrivals Facility (IAF) at Seattle-Tacoma International Airport. The new facility will dramatically improve the experience for international travelers and better meet the region’s demand for business and tourism-related international service.

Scheduled to open in late 2019, the new 450,000-square-foot, multi-level facility will be built to the east of the current Concourse A.

The current 44-year-old facility no longer meets demand. Originally designed to serve just 1,200 passengers per hour, it now serves an average of over 2,000 passengers per hour during peak periods. The new IAF will increase passenger capacity to 2,600 passengers per hour, while improving the customer experience by nearly doubling the number of gates capable of serving international wide-body aircraft and more than doubling the Passport Check positions and kiosks.

The current budget for the IAF is $766 million. Funding for the project will come from a combination of airport generated revenues, passenger facility charges (PFCs) and revenue bonds. As with virtually all airport projects, no Port of Seattle levy taxes will be used to fund the project.”

The Port issued a press release on Sept. 11 indicating the new project cost and schedule:

“An independent review panel convened by the Port of Seattle Commission identified the scope and complexity of the program and the “supercharged” local construction market as the primary reasons for higher budget estimates for the new IAF at Sea-Tac.

The Executive Review Panel (ERP) provide their report to commissioners today, finding that the negotiated Guaranteed Maximum Price (GMP) of $773 million for construction and May 31, 2020, completed construction schedule are both “reasonable and achievable.” The IAF will open to passengers in August 2020, following extensive systems and user testing by the Port, airlines, and federal agencies.

The final cost to the Port, including $76 million in sales tax and additional Port costs, will be $968 million.

The Commission-directed review found the program’s final budget estimate of $773.9 million in construction elements and total program cost of $968.4 million is reasonable for the scope of the projects in this over-heated construction market. The panel also found the schedule to be achievable if the parties approach the work with a sense of urgency. The panel cited the following components for the cost increase and schedule changes: increased scope, tight construction market, complexity of program, and need for improved Port/Contractor relationship and clearer decision structures.”

The Seattle Times notes that the original budget for this project was $608 million. And now it’s at $968 million and scheduled to open eight months later.

One of the review panel members is quoted as saying, “There are reasons to have confidence and that these projections are good projections.”

The article also notes how the leadership of each side of the project have been changed to allow a “fresh start.”

I have confidence that the project costs will go even higher. That’s how big government works.


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Dr. Eowyn
2 years ago

I just don’t know how and how long these bloated government projects can continue. One economist thinks the U.S. is already bankrupt:

2 years ago

Globalists Clintons, Bushes and the Obama clans, have caused America to become a poor nation, our soul was sold to China. In spite of the left’s roadblocks, we have been improving and I expect when the eight years of Trump come to pass America will be resurrected. Seattle as the rest of the country has no money to embark in a huge project that will run into a much larger budget, the cost will be passed on to he taxpayers for the rest of their life’s, as they now pay for the homeless, the drug addicts and the rest of… Read more »

Eric Thompson
Eric Thompson
2 years ago

Not to blatantly expose my tin foil hat, but I’d be interested in having a close look at the construction site. There may be some very expensive construction occurring out of view, e.g., underground. I can’t imagine the deep state would let a major construction job at a major airport go to waste. Think “Denver.” That airport is spooky. Anyone who doesn’t know what I’m referring to, I’m sure you can find vids all over the internet about it. Ventura even covered in his Conspiracy show on TruTV several years ago. Something blatantly sick is going on there, and Sea-Tac… Read more »

2 years ago

The norm is to have contractors compete for firm-fixed-price contracts. If they can’t meet the terms and conditions they are in default. This sounds like another “cost-reimbursement” contract. It will definitely come in over price and late. It is probably a “brother-in-law” job. Either that or they are too stupid to know better. This is a typical (not an an experimental) project. Fixed-price provides the most bang for the buck and puts the risk on the contractor. If they were really safeguarding the taxpayer’s money they would have done that. Of course we know that that’s a laugh. That whole… Read more »