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Commission approves $6.05 million long-lead steel package for proposed Pier 27 cruise terminal
Summary
The Port Commission approved an amendment to Turner Construction's CM/GC contract to advance up to $6,050,000 for structural steel procurement for the proposed cruise terminal core and shell; staff said orders include cancelation options and that about $3.7 million could be advanced prior to fabrication in the event CEQA halted the project.
The Port Commission voted to allow the construction manager/general contractor to order long-lead structural steel for the proposed Pier 27 cruise terminal, authorizing up to $6,050,000 for the trade subcontract bid package as a time-sensitive step to meet an accelerated schedule.
Kim Von Blahn, Port Project Director for the Cruise Terminal Project, told the commission the Phase 1 core-and-shell work is on a compressed timeline tied to a potential event authority date and that placing steel orders now reduced price risk and helped meet delivery schedules. She said the order would include options to cancel fabrication if regulatory approvals or project decisions halted the project and that some of the steel could be reused on other port projects.
Von Blahn said no construction would occur at the site until required regulatory approvals, including environmental review under CEQA, and Port and City approvals were complete. Staff identified funding sources for the early procurement as a combination of port revenue bond proceeds, the FY11-12 Port capital program and proceeds from the sale of the Watermark condominium project subject to a Board of Supervisors release of reserved funds.
Commissioners questioned the financial risk if CEQA or city approvals stopped the project. Staff estimated about $3.7 million could be advanced for steel-related items prior to fabrication and said the purchase and fabrication timing affects the ease of reuse: material purchased and lightly fabricated is easier to reassign than fully fabricated, site-specific steel.
Commissioners also asked about procurement sourcing, local hire and Local Business Enterprise (LBE) goals; for this trade package staff set a 20% local-hire participation target with a goal of no less than 10% of work hours for disadvantaged workers and a 17% LBE goal for certified firms. The commission approved the contract amendment by voice vote (Resolution 11-59).
Staff said the Turner contract amendment is additive to the previously approved CM/GC contract and that Turner's management fees for the additional package were within previously authorized amounts.
Resolution 11-59 was approved by voice vote; staff noted the port may still cancel fabrication if regulatory or project approvals are not obtained.
