Terminal 1 procurement review underway; assembly actions targeted in April as crane agreements with Matson remain under negotiation

Municipal staff and the program manager said the Terminal 1 construction procurement is in active review and that the administration will seek Assembly actions in April so the project can meet a May 7 limited notice-to-proceed date.

Kim Pearson, municipal manager, told the Assembly Enterprise and Utility Oversight Committee that the municipality has passed the RFP deadline and received bids but remains in the evaluation phase and is constrained by “Title 7” confidentiality rules on bidder information. Pearson said the compressed timetable is intended to preserve the May 7 limited notice-to-proceed deadline in the revised construction schedule.

Eric Adams, program manager for Jacobs, described the procurement scoring and contract structure: the solicitation combined qualifications and cost with 40 points allotted to technical qualifications and 60 points to cost. “The contract is made of two parts, which is a lump sum part and allowances,” Adams said, explaining that allowances cover uncertain items (for example, standby time for beluga whale-related work or contaminated soils) that would otherwise trigger change orders if exceeded.

Adams said the evaluation committee expects to complete proposal review next week and that the administration’s goal is to have all required Assembly actions on Terminal 1 completed no later than April 16. Staff said they plan to introduce items on April 8, including an Assembly ordinance (AO) to increase bonding authority; that AO will require public notice and a hearing, which informs the April scheduling.

Adams also reviewed contract incentives to protect schedule: the procurement includes liquidated damages tied to two major completion milestones. Adams said the first liquidated-damages phase is a payment “of $18,500,000 coming back to the city” for failure to complete the first scope in time, and the second phase includes a daily penalty of up to $85,000 per day for failure to complete the second scope of work on schedule.

On finance, staff previewed a follow-up item to marry the existing port bonding authority with a plan of finance for terminals 1 and 2. Staff recalled that AO 2024-11s previously authorized $453 million in bonding authority and said the administration will propose matching plan-of-finance documentation and additional budget authority to cover Terminal 1 and the planned Terminal 2 design work; staff said a final request would be presented after procurement items are ready.

The committee also received an update on two agreements with Matson: a crane purchase agreement and a crane use agreement. Staff said negotiations continue to limit municipal exposure if contractor delays cause Matson damages and to preserve municipal optionality for limited noncommercial uses (for example, Department of Defense, Department of Homeland Security, or FEMA operations) and for defined transient uses. Staff said the current negotiating goals include the municipality’s option to acquire cranes at cost if delays or other issues make purchase preferable.

Pearson and staff emphasized that specifics of the crane agreements and certain damage obligations remain subject to redline reviews as part of the open RFP process; they said final language will be shared when the procurement review concludes. Staff also noted that dredging related to the project will be a 24-hour activity starting mid-April and that the contractor is expected on site in mid-April.

Assembly members asked procedural questions about timing and special meetings. Staff said the administration will ask that terminal-related items be introduced by April 8 so the Assembly can meet no later than April 16 (or at a special meeting in that week) and allow sufficient time for contract signature and municipal processing before the May 7 limited notice to proceed.

No formal Assembly votes or contract awards were taken at the briefing; staff said they will return with final documents and any requested executive-session materials once the evaluation process permits public release.