Critical Factors
*A change in the project specifications after the freeze date was agreed up on in the contract. These changes created a domino effect of problems. This was in violation of the contract with BAE which stated there would be a number of freeze dates for mechanical design, software design, and permanent power.
*A lack of efficient and effective communication between the city, project management team, and consultants. This manifests itself in basic issues like vendors blocking roadways for other vendors, the city canceling orders for electrical filtering components that were critical path, and too many unilateral decision made because “no one was in charge”.
*A late start with respect to deciding the type of technology to be used for the baggage handling system. BAE didn’t even bid on the project because the scope and the timeline were not feasible. The city, under the guidance of Chief Airport Engineer Slinger arranged the deal that included penalty and time clauses for both the city and the vendor.
*The City of Denver did not listen to the requested and needed amount of time to actually construct the baggage handling system. The City had a deadline to meet and did not want to hear about any more delays. In spite of this, the vendors wrote contracts that attempted to cover their bases to ensure these deadlines would be met. In the end, extenuating circumstances conspired to prevent these dates from being met.
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*BAE lost control of their project to the PMT that had no experience in airport construction, baggage handling system technologies, and the introduction of the new technologies. PMT forced BAE to modify their management structure and project approach to fit the PMT needs. BAE had a track record of success using their own management structures. This modification created confusion, inefficiency, and ultimately failure.
*2 major changes in personnel. The resignation of the head of the DIA project in May 1992 and the death of Chief Airport Engineer Slinger in October 1992. Slinger’s replacement was not able to make decisions without going thru a lengthy process for approval. Slinger managed through the force of his charisma and willingness to take risks and make decisions. His replacement understood the principals but didn’t have the bulldozer personality that was necessary for the heroics to get the project completed. Her superiors knew this and retraced the autonomy that was prevalent with Slinger. Without this autonomy and personality, missing deadlines was rampant.
*The City’s lack of help for BAE to continue to have their unrestricted access and were unable to makeup from the delays. The City just did not give BAE what they were told they would have in general. The city was in violation of their agreements.
*Poor relationship with management. This was evident throughout the project. The initiative started as a political position, gained momentum, and ended in another political dilemma. At the time of this case study, relations between the city, the vendor, and the federal government were rapidly moving towards litigation. There are few instances of attorneys successfully delivering on complex engineering-oriented projects.
*Human Capital Restrictions – The project needs the best experts to get this thing completed. The restriction of using Denver based contractors in situations should be eliminated.
*Finance – These guys expected to being servicing the bond debt based on a specific timeline. Since the airport is not open, there is not a revenue stream to support the payment requirements. Re-financing might help take some of the pressure away.
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*The lackluster economy of the late 80s, the gulf war impact on the airlines, and Continental’s chapter 11 collaborated to create additional concerns for the city that distracted them from their mission to manage and deliver the airport.
*They city decided long after construction began to implement an airport-wide baggage handling system. Their only smart decision was to contract with BAE to revise the scale of the project they already started with United. Their major mistakes were waiting too long to reach this decision, then tying the hands of BAE once they agreed. The types of technology required for a system this large should have been made much earlier in the facility design process. Delaying this decision resulted in several instances of rebuilding facilities to support more weight, provide more ventilation, and larger payload handling.
*This was a build/design project. The idea of making design decisions after construction was underway is an recipe for catastrophe in a project of this magnitude. The city’s insistence that this be held to a tight schedule yet allowing multiple design changes was unfortunate. There were too many players, lots of pressure, and the whole project was run by committee with differing agendas. The project administrators had to balance administrative, political, and social imperatives.
*the City’s requirements that a percentage of the project be done by local and minority talent hamstrung BAE to deliver. They were forced to hire subcontractors resulting in longer times and higher costs.
*The change tracking system took over three years to implement due to the need to make differing technologies play well together and the low priority placed on this by the vendors.
*The city invited reporters to preview the first test of the baggage handling system without notifying the vendor. This became a public relations nightmare and added public resentment to the list of problems facing the delivery team.
Alternative Solutions
Human Resources
Because the project has reached a critical state, the project team must recognize the need to bring in the best human capital to be able to complete the project. Thus, it is crucial that the associate director, program manager, city leaders, contract compliance personnel, and DIA coordinator review the current mandate of using local providers.
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At this point, it would appear that successful completion of the baggage handling system is not only reliant on the specific component itself but several other DIA projects and disciplines such as electrical service. The director and program manager must consider using the necessary experts regardless of the base of origin. Ultimately, the lead decision makers must recognize that completing this project will require the best talent available and eliminate any restrictions on using such resources.
Communication and Operational Process
The overall communication and operational process requires an improved set of rules by which each party will operate. Each discipline is apparently working within a vacuum environment and do not value the project as a whole. The project leaders must establish an operational charter dictating the rules and enforce such.
It appears that the management of the project has occurred from the aspect of individual contractors. Communicating the status of each aspect of this project to a central coordinating team would allow the organization to manage resources from an enterprise project level rather than looking at each contractor as an individual project.
City council also needs to let the PM’s do their jobs. They need to have the same confidence in Gail Edmond as they did in Slinger before he passed away. Their lack of confidence in Gail Edmond is evident and needs to be resolved in one of two ways. The first is that they give Gail Edmond the same respect as they did for Slinger. City council will not hold extra meetings to give Gail Edmond approval for every decision she makes. The second resolution is that a new PM is brought is that city council has confidence in. This resolution can put the project way behind schedule.
Organization Structure
Any shared leadership must be eliminated immediately and the direction of the project must be provided by a specific leader. Furthermore, as part of a communication and operational change, the organization hierarchy should be reviewed. This may involve the creation of a new position such as a relationship coordinator. This individual would be charged with resolving disputes between resources involved in various aspects of the overall project with the specific mission on insuring that resources and disciplines do not compromise the timeline of peer activities within the project. The baggage system team must have complete access to complete their job. Thus, any interruption caused by another discipline should be reported and immediately resolved by the relationship coordinator.
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In addition to implementing a relationship coordinator, a task force charged with facilitating the successful completion of the project may create some synergies throughout the project as a whole. It is unclear as to whether or not each discipline is aware of the complete picture. A task force could provide a mechanism for eliminating redundant activity, scheduling conflicts, and resolve certain deficiencies that are present and delaying advancement and smooth progression.
Finally, at this stage, the project cannot absorb further setbacks as a result of organizational structure or leadership. Thus, implementing personnel redundancies could prove to be a prudent consideration. Key personnel should have a redundant mechanism in place to support any further turnover prior to the completion of the project.
Project Specifications
It is reasonable to assume that all of the specifications for this project should be frozen. However, it appears that certain parties may not be completely aware of these specifications leading to change requests as issues are realized. These project specifications must be immediately reviewed. If further changes are going to be requested, these requests must be received immediately. By scheduling a specification meeting, which will likely last for several consecutive days, the director and program manager will be able to confidently freeze the specifications.
Finance Situation
On a parallel, but separate path, the director and city officials may need to consider re-financing the bond package. The current financing package was established based on a specific timeline. The fact that there is a lack of anticipated cash flow may be causing certain decision makers to engage in activities to get things done quickly rather than done right. Essentially, it appears that moving forward with the right plan will actually lead to completion quicker than moving forward with a fast plan. If indeed decisions are made because of pressure to get things operational therefore leading to a revenue stream to support the debt service, refinancing could relieve this pressure.
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Relationships
All parties must meet immediately. Because the vendor and city are not talking, involving an impartial party to facilitate this meeting would be beneficial. In general, it is crucial for everyone involved to recognize that this situation did not develop overnight, but rather, numerous problems and process issues have lead to the current status. The mission to complete this project and open the airport remains. Thus, the parties must recognize that there are options to moving forward toward completion, address differences, implement process changes, and move forward.
Alternative Baggage Handling System
The state of the art baggage handling system created by BAE has many issues that need to be worked out. Building the backup baggage handling system and using it while the issues are being worked out from the state of the art baggage handling system can allow the airport to open sooner and allow the necessary revenues to begin to pay back the bonds. This alternative will allow BAE to properly diagnose and fix all of the issues that the system is currently experiencing. BAE originally told the City of Denver that a project this size should be completed in about 2.5 years.
