THE PORT EVERGLADES DEPARTMENT RECOMMENDS APPROVAL.
This action supports the Broward County Board of County Commissioners' ("Board") Value of "Ensuring economic opportunities for Broward's diverse population and businesses" and the Goal to "Increase the economic strength and impact of revenue-generating County enterprises balancing economic, environmental, and community needs."
Since 2003, FMT Aircraft Gate Support Systems AB ("FMT-AB") has been the sole supplier of passenger loading bridges ("PLBs") and mobile elevated gangways ("MEGs") currently in use at the nine cruise terminals at Port Everglades. On June 26, 2014 (Item No. 53), the Board approved the sole source standardization of FMT-AB for the purchase and installation of PLBs for use at cruise terminals, including those bridges designated as MEGs, as well as parts, repairs, and modifications to current and future PLBs and MEGs for the Port Everglades Department. Based on that sole source standardization, on March 31, 2017, the Director of Purchasing approved an agreement with FMT-AB to purchase two MEGs to replace the former MEGs that were originally installed at Cruise Terminal 18 in 2008. On September 21, 2017, the Director of Purchasing approved a separate agreement with FMT-AB to purchase two additional MEGs to install at Cruise Terminal 25 as part of the major renovation of that cruise terminal to accommodate the new CELEBRITY EDGE and other Celebrity Cruise Line ships. Each of the MEGs were custom-designed by FMT-AB to meet the unique operational requirements for each cruise terminal.
The MEGs for Cruise Terminal 18 were delivered to Port Everglades fully assembled by FMT-AB on July 9, 2018, and placed in service on July 18, 2018. Components for the MEGs for Cruise Terminal 25 were delivered to Port Everglades by FMT-AB beginning on October 16, 2018, however many of the components were unfinished or missing, requiring Port staff to work with FMT-AB, Royal Caribbean Cruises Ltd. (RCL), Moss Construction Inc. (the managing General Contractor for the Cruise Terminal 25 renovation project), and multiple subcontractors to assemble and place one of the MEGs into service prior to the arrival of the CELEBRITY EDGE at Port Everglades on November 19, 2018.
On February 21, 2019, FMT-AB filed for bankruptcy in the Country of Sweden, which is the location of its headquarters. The bankruptcy filing affected not only Port Everglades, but also FMT-AB projects at PortMiami and Port Canaveral. Since the bankruptcy filing, County staff has worked with the bankruptcy receiver to address a series of outstanding issues associated with both sets of MEGs, including development of a settlement agreement that would provide assurance of the completion of the work, provide a warranty required by the original agreements with FMT-AB, and address outstanding County costs to date. The proposed Settlement Agreement (see Exhibit 1) is favorable to the Port Everglades Department because it provides for the original designer, manufacturer, and installer of the MEGs to substantially complete the installation and commissioning, address any punch list items, and provide warranty service for a two year period. FMT-AB designed the MEGs to serve a variety of ships whose entry and exit points vary. The MEGs require an FMT-AB developed proprietary software program to operate. The proprietary software provides automatic operation for adjustments to account for tidal variations, ship loading, and wind impacts, while providing passengers a safe and smooth transition from terminal to ship. Installation of the software program and associated adjustments by FMT to the MEGs will be provided as part of the remaining work under the proposed Settlement Agreement.
The Settlement Agreement provides the Port Everglades Department the most cost-effective method of completing and commissioning the MEGs and preserving the FMT warranties. The alternative would be to contract with a variety of companies with limited abilities and have each of them perform their part of the work, which will require additional engineering and technical services. The length of time needed for multiple parties to coordinate efforts, go through the learning curve, and complete the work is neither cost effective nor time efficient. Since the Settlement Agreement only covers the four MEGs at Cruise Terminals 18 and 25, staff is currently developing a competitive solicitation for future parts and maintenance services for the remaining PLBs currently in use at Port Everglades.
The terms of the proposed Settlement Agreement include:
- Payment to Broward County the sum of $2,505,988.51 for additional costs and expenses associated with the final assembly of the Cruise Terminal 25 MEGs, as well as separate payments to two local vendors for services rendered directly to FMT-AB in conjunction with FMT-AB’s scope (Ships & Turbines LLC, d/b/a Centrifugal Rebabbitting, in the amount of $206,561.38, and International Consulting Engineers in the amount of $159,320.67). The total amount of additional costs and expenses incurred by the County was $3,780,455. This settlement captures over 65% of the total additional costs incurred by the County. RCL has acknowledged that they benefited from the additional expenses incurred by the County to have a MEG ready at Cruise Terminal 25 before the arrival of the CELEBRITY EDGE, and has committed to meet with the Port Everglades staff to discuss and negotiate options to cost share the remaining balance of the additional expenses paid by the County for the Cruise Terminal 25 MEGs ($1,274,466).
- All remaining punch list items, programming, commissioning, testing, and warranty services (two years) for the MEGs at Cruise Terminal 18 and Cruise Terminal 25 required by the terms and conditions of the two original contracts will be fulfilled.
- The warranty terms of the two original contracts will be fully supported.
- An Irrevocable Letter of Credit in the amount of $2,200,000 will be established by FMT and remain in place through the term of all applicable warranty periods (December 1, 2021 or any applicable extensions) as financial security to the County for all remaining FMT performance and payment obligations. The Letter of Credit will replace the existing surety bonds.
The Settlement Agreement has been reviewed and approved as to form by the Office of the County Attorney. |