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Denver International Airport Project Management

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Question:

Discuss about the Denver International Airport Project Management.
 
 

Answer:

Introduction:

The study includes the description of the project which is the construction of international airport in the Denver. Though there already exists an airport in Denver because the current circumstances the city right now needs a new or modified airport to fulfill the needs.

A project can be referred to a time bounded and temporary task with pre-determined scope and goals. A project can be undertaken by anyone, from small private corporate to the big government department or even by a country. Handling of projects needs a vast quantity of skills methodologies and tools (Alnasseri, Osborne and Steel 2013). The proper use of these things for making the project success is called project management. In this study different aspects of project management will be examined in terms of constructing Denver International Airport.

The most populous municipality and capital of Colorado, state of U.S., is known as Denver. The location of the city is east of the Front Range of the Rocky Mountains, Western edge of the High Plains in the valley of the South Platte River (Flydenver.com, 2016).

The Denver International Airport or DIA will be a public airport which will be under the ownership of City and County of Denver Department of Aviation.

 

Project Concept and Strategy:

Reasons behind Construction of Airport in Denver:

The following descriptions support the need of new airport in Denver.

Expected hike in traffic: As report made by the Denver’s Regional Council of Government, Denver’s Stapleton Airport was not capable of handling the traffic that is expected to arrive by the year of 2000. The airport can be made to bear the traffic up to 2005 but not more than that. There were two choices in the hand of the government of Denver such as constructing new airport or modifying it (Ashford, Coutu and Beasley 2013). The Denver's Regional Council of Government was in huge pressure of being so far away from the major cities, five hundred miles. The city needed an airport badly that can handle all the traffic sufficiently and efficiently so that Denver does not the loose valuable business. The airport ranked fifth in the list of the busiest airport in the country with thirty million passengers. It was calculated that by the year 2000 the airport would be handing sixty-six million passengers.

Causing delay: The delay caused by the Denver Stapleton Airport harm all the airports. In addition with that, this delays causes loss of one hundred million dollars to the airline organizations (Zografos, Madas and Salouras 2013). The delays are caused by mainly bad weather and in result cancellation of flights, rerouting, overtime pay to staffs and many other issues occur.

The poor condition of the airport: Because of the existence of poor services and condition of the airport, it was on the list of top ten worst air traffic bottlenecks in U.S. The low clouds were a huge issue for the airplanes as it can delay up to thirty to sixty minutes. Stapleton airport consists of two runways, north, and south (Ashford, Coutu and Beasley 2013). The runways are parallel and close to each other. In bad weather conditions, the airport authorities have to use those two runways as one.

Project Scope:

The scope of the project was as following.

  • Having an airfield configuration which will be better than the Stapleton. The airfield will be capable of better security and three airplanes to land at the same time (Khadilkar and Balakrishnan 2013).
  • The efficiency of the operations in the regional space can be improved.
  • Minimizing the passenger walking distance as much as possible (Ashford, Coutu and Beasley 2013).
  • Because of that, a more sufficient terminal layout will be implemented.
  • More efficient international facilities will be included in the airport.
  • Eliminating the risks that the project is continuously facing.
 

Project define and planning:

Risk Management:

The risk assessment has been conducted on the basis of following four phases.

Risk Identification: The risk in the projects can be divided into three dimensions such as cost, human resources, and weather. The cost of the project is continuously increasing that is hampering the estimated budget of the project repeatedly. The wrong cost estimation is one of the most severe risk that is related to the project (Baxter, Wild and Sabatini 2014). However the terminal area and the first runway was completed with five million dollars and almost two million dollars under budget, the total cost of the project was more than what was estimated. The estimated cost for the project was 1.2 billion, and it became five billion December 1994 (Wilke, Majumdar and Ochieng 2014).

Another risk in the project is human resources. Denver got affected by the economic recession more than any of the cities in the nation. Recruiting the proper and qualified labor was a huge issue that the HR department was facing. By the end of 1992 more than six thousand workers were required to carry out the project. On the other hand, there were only five hundred workers were in the team (Khadilkar and Balakrishnan 2016).

Last but not the least, the impact of bad weather has a huge part in the risk assessment. It is the greatest risk that the team is facing.

Risk quantification:

Risk quantification

Risk response: In terms of risk that are associated with cost or funding, this risk can be passed on as there is no time to build up a team that will analyze and provide the solution to the risk. But corrective measures can be taken to reduce the impact of the risk through analyzing each aspect of the tasks that are to be undertaken (Alnasseri, Osborne and Steel 2013).

After acknowledging the risk that is associated with human resources, it has to be understood by the organization that the risk can be influenced anyhow as it is an international matter and have to pass on the risk.

In terms of bad weather risks, the team will be putting up all the efforts and resources while the weather is good so that the impact of bad weather can be avoided (Spring, Selviaridis and Zografos 2016).

Risk monitoring: The risk can be monitored through proper reporting. The lower level employees will provide the report on their work progress to the higher authority.

Controlling Changes in the Project:

For controlling the project manager will be responsible for maintaining all the information about the change in a document, either paper or electronic. Then the changelog will be updated. The priority of change request must be assessed (Simaiakis et al. 2014). The changes will be carried out on the basis of the same criteria.  Through the proper gathering of information regarding the impacts of the changes the decision on accepting or rejecting change will be done.

Reasons behind Accepting Change Request as a Part of the Plan:

The prime reason is that the change is a vital part of the projects. The change can bring either progress of the airport construction project or can hamper it (Khadilkar and Balakrishnan 2016). Forecasting all the changes that can be faced during the project makes the manager understand what should be incorporated in the project from the beginning and what not.

Change of Scope in DIA Project:

The scope of the DIA project has been changed for six times during its lifetime. The scope of the projects has been changed, and it caused the delay in the project delivery. The effects of the change of scope have been a bad impact on the project from all the aspects. It affected mostly in the cost that was allocated for the project at first (Alnasseri, Osborne and Steel 2013). The fund was raised from 1.2 billion to 5 billion. The effect of the scope change on the project does not include only bad outcomes. The quality of the ultimate project outcome has been enhanced greatly.

Project Structure:

Project Organization Structure of DIA

Figure 1: Project Organization Structure of DIA

(Source: Created by Author)

Work Breakdown Structure of DIA Project

Figure 1: Work Breakdown Structure of DIA Project

(Source: Created by Author)

Communication and Stakeholder Management:

Mishap in Project Communication:

The first communication mishap occurred due to the wrong estimation of the project. The city council and mayor were concerned about the fact that the project did not express that it worth two billion dollars (Khadilkar and Balakrishnan 2014). As a result, the authorities formed a blue-ribbon commission for examining the matter behind the hike in the cost. The hike in cost which was forty eight million dollars occurred due to the new design of the roofs. This cost estimation was done through the financial examination of the terminal (Baxter, Wild and Sabatini 2014). It also pushed the project toward more delay. Because of that efficiency of the project management team was questioned. The PMT also failed.

Another huge mishap in communication happened due to improper identification and assessment of scope. The scope of the project changed continuously, and it affected both the cost and time of the project.

Error in Communication

Effect

Wrong estimation of cost

Affected the project team and project development

Identification of  Scope

Increased time and cost

Reason behind Opposing the Expansion of the Front Range Airport:

Because of the lawsuit by United Airlines and environmental groups, the construction of hub in the Front Range Airport could not be given (Simaiakis and Balakrishnan 2015). The intention of UPS behind building a hub at the Front Range Airport was that if the Front Range Airport became cargo-only facility, then UPS would get the advantage of concentrating only on the Denver airport for the runway access (Bennell, Mesgarpour and Potts 2013). Though the Front Range and Denver airport are in the same control pattern, the effort of the UPS could be decreased to the minimum level. As there was a chance of losing business, UPS did not intend to establish a regional hub at Denver International Airport. This could have resulted in the loss of major developmental project which could be used for attracting other businesses. For creating a regional hub expansion of the runway and building control tower is required. For both the projects, federal funds were required and United Airlines refused to provide permission to the project (Chang 2013).

Importance of Stakeholder Involvement:

Individuals are bad at characterizing, especially in the subtle element, what they need. In any case, individuals are genuinely great at showing what they think they need and after that when a choice is exhibited to them what they like and don't care for about it (Ramamoorthy and Hunter 2013). At the end of the day, we have to work with our partners to distinguish what they think they need, produce something which mirrors that understanding, get input from our partners, and afterward, overhaul our answer for mirroring our enhanced comprehension (Grabher and Thiel 2015). The suggestion is we have to work in a more transformative and communitarian way in case we're to give arrangements which mirror our partner's real needs, and to do that we should work intently and consistently with partners. Customary ways to deal with programming improvement which depends on characterizing a point by point prerequisites determination right on time in the task alluded to as "large necessities in advance (BRUF)" techniques, end up being extremely hazardous practically speaking (Ofori 2015). Customary undertaking groups, even the "fruitful" ones, commonly create not as much as perfect results when they endeavor to deliver an answer which mirrors the determination.

Stakeholder

Stakeholder's Interest

City Council of Denver

New airport for facilitating journey

Project management team

Creating the project successfully

People of Denver

Having an airport with full facilities

Airlines

To expand business and stop losing money because of delays

Table 1: Stakeholder and Their Interest

(Source: Bennell, Mesgarpour and Potts 2013)

Risk Management:

Single Greatest Risk:

Change of scope is one of the greatest risks that the project is facing for a long time. Because that the estimation of the project has been forced to increase tremendously. From 1991 to present the project has seen a tremendous amount of changes in the project scope. Often the cargo operations are proposed to shift to the Front Range Airport and sometimes the baggage system handling is proposed to install in the airport (Burnett et al. 2013). In June 1992 a contract was signed for new trephine service from the U.S. West Communication Services. It cost the project 24.4 million which was estimated first. In March 1993 again changed some aspects of the project. They decided to install and test new equipment in the airport which pushed the deadline for October 30 to December 18. Thirteen to sixteen months were needed for the construction of the new railway tracks (Narciso and Piera 2015). This decision again changed the duration of the project. The change of scope for the project has been a great factor that has changed the core aspects of the project. The change of scope did not only harm the project, but it has provided a great quality to the project (Chang 2013). There may be some faces of the change of scope in the project but through this change of scope, the project has been able to include better equipment and services.

DIA Project Risk Handling:

The project risk handling has been a done in the project through analysis of risk. No risk prioritization or handling techniques have been assessed in the project. The risk analysis is always effective to recognize the risks and the impacts of them (Liu et al. 2014). However, without the proper risk management, it is of no use. The risk assessment has already been discussed in the study before with proper description.

 

Contracting Services

Necessity of Signed Agreement

The Economic recession of the country hit the DIA constriction badly where grading of the terminal and the first runway was completed under $5 million budget. At the initial stages, only 500 employees were hired in this construction process, but as per the growing needs and demands, the organization anticipated that more than 6000 workers are needed which increase the overhead cost. Then Denver has generated a financial report where more than 9% bonds will mature in the year 2023 (Chang 2013). So the investor mentioned that this organization is running ahead of their schedule with below budget. Therefore, a tentative agreement is very needed to maintain a smooth and reliable construction process.

Contractors Involved In DIA Project

In March 1991, United Airlines and Denver reached a formal agreement where the number of gates is increased by 50% with 2000 reservation jobs (Kim 2013). Two companies play a significant role and help the organization to provide a systematic structure to the construction process. DIA authorities select an engineering and airport planning organization known as Greiner Engineering (Echeverri 2012). Then they contact with one other construction firm which is known as Morrison Knudsen Engineering. Both of these organizations contribute to schedule the co-ordination, control the cost, management of the information and administration of the working operation. Involvements of these contractors help to increase the airport facilities to serve the customers at its best price (Liu, Fellows and Chan 2014).

Systematic Bid Process

At the initial stages, the authorities were failed to maintain a systematic structure in their construction process. Most of the bonds made by this airport authority are under budget and the maturity time is overscheduled. In addition, the hiring of employees has no proper selection process. As a result, operations and maintenance of this airport are at stake (Fonseca, Casanovas and Ferran 2014).

At first, the organization needs a formal contract to be signed by legal authorities who can help to maintain airport operations including baggage handling system and cargo facilities to ease the transport facilities (Liou 2014). For this, it is very necessary to maintain a healthy relationship with the outside contractors by providing them authentic information regarding their operations (Grabher and Thiel 2015). Moreover, an improved airfield configuration must be set up to operate their air flights in all the bad weather conditions by reducing the taxiway congestion. This improved operation will help to sustain customer loyalty as well as can draw more and more consumers towards their air services.

 

Progress Monitoring and Control

Schedule Variations in DIA Project

Conversion of 1.2 billion projects to 5 billion projects by developing a new project is one of the most unfavorable decisions made by DIA.  Opening day was delayed to March 1994 due to the problems of fire and security system. After that, the airport was ready to open, but due to ineffective baggage handling system, this opening was also delayed (Fonseca, Casanovas and Ferran 2014). A baggage handling system was hired as a backup. However, in this underutilized airport growth was declined day by day due to the absence of proper runways and terminals. All these delays lead to significant losses for the airport organization.

Precautions

It is the sole responsibility of the project manager to provide best-fitted solutions to meet the project schedule perfectly (Kim, Proal and Feron 2013). This can be achieved by making a proper plan which is discussed in the following section

Layout the plans: The airport layout plan related to the land use and airspace to approve utility, efficiency, funding, and safety (Fonseca, Casanovas and Ferran 2014).

Maximize the funding resources: Relevant funding resources are needed to meet the critical aspects of the project successfully. In order to meet the schedules perfectly, maximization of funding resources is very necessary to expand and renovate the project (Echeverri 2012).

Define the project parameters: Project parameters should be documented properly to ensure the fact that new construction process does not interfere with the aircraft operations (Fonseca, Casanovas and Ferran 2014).

With all the above planning, it is also very necessary to maintain a positive relationship with the federal contractors. These contractors should be selected on the basis of experience and qualification. This will help to drive efficiencies in the air services with best quality experience and price (Echeverri 2012). In this way, the organization can successfully achieve their target schedule by maintaining optimal functions and operations.

Project Closeout:

Major Areas of the Project:

The strong aspects of the project management were intended to concentrate more on the operational issues rather than the aesthetic values (Kim, Feron and Clarke 2013). The project was concentrated on every part of the project with same severity. Installing automatic baggage system and making the airfield better was one of the best decisions that were taken in the project.

Cause of Failure of DIA Project:

The prime cause that the project was not a success is that the delay in the project that has been affected the project badly. The integration of new system may have provided the quality, but it also made the employees frustrated (Kim et al. 2013). The authorities could have completed project then integrated the required services. The project scope was not up to the mark.

Lessons Learned:

From the project, the lesson that can be learned is that never starting a project without proper risk and change assessment and scope. The planning of the project was too complex to carry out. DIA was trying to develop the project in a very short time after the change of scope, every time. The project was not using any change management document. In result, the time of the tasks was not modified.

Conclusion:

From the above study, it can be concluded that the initiation project plan is a very crucial factor in any project. It is right that Denver needed an airport badly but making it right is also important. Scope change management should have been done by the authorities. Signing proper contracts is also important. In 1989 the construction began without signing contracts with the Continental and United, which delayed the project to 1991.As opposed to being separate substances, the stuff framework, and the physical building spoke to a solitary coordinated framework. Sharing the physical space and administrations, for example, the electrical supply the planners of the physical building and the fashioners of the things framework expected to fill in as one incorporated group. While the underestimation of intricacy, absence of arranging, incapable correspondences and poor administration oversight drove the disappointment, the venture endured numerous different challenges that exacerbated the issues. Some of those issues were unavoidable; however, others were likely an aftereffect of the timetable weight the venture was working under.

 

References:

Alnasseri, N., Osborne, A. and Steel, G., 2013. Managing and Controlling Airport Construction Projects: A Strategic Management Framework for Operators. Journal of Advanced Management Science Vol, 1(3).

Ashford, N., Coutu, P. and Beasley, J., 2013. Airport operations.

Baxter, G., Wild, G. and Sabatini, R., 2014. A sustainable approach to airport design and operations: Case study of Munich airport. In PRCC 2014 Engineers Australia Convention (pp. 227-237). Engineers Australia.

Bennell, J.A., Mesgarpour, M. and Potts, C.N., 2013. Airport runway scheduling. Annals of Operations Research, 204(1), pp.249–270.

Burnett, P., Chang, D., Gregory, C., Friedman, A., Montemayor, J. and Prestwood, D., 2013. Monitoring the Effects of the Dallas/Fort Worth Regional Airport on Land Use and Travel Behavior. Volume II, Land Use and Travel Behavior. Council for Advanced Transportation Studies.

Chang, Y.C., 2013. Factors affecting airport access mode choice for elderly air passengers. Transportation Research Part E: Logistics and Transportation Review, 57, pp.105–112.

Echeverri-Carroll, E.L., 2012. The regional economic impact of new airport construction: The case of Austin-Bergstrom International Airport.

Flydenver.com. (2016). Welcome to Denver International Airport | Denver International Airport. [online] Available at: https://www.flydenver.com/ [Accessed 14 Jul. 2016].

Fonseca I Casas, P., Casanovas, J. and Ferran, X., 2014. Passenger flow simulation in a hub airport: An application to the Barcelona International Airport. Simulation Modelling Practice and Theory, 44, pp.78–94.

Grabher, G. and Thiel, J., 2015. Projects, people, professions: Trajectories of learning through a mega-event (the London 2012 case). Geoforum, 65, pp.328-337.

Khadilkar, H. and Balakrishnan, H., 2014. Optimal Control of Airport Operations with Gate Capacity Constraints. European Control Association.

Khadilkar, H. and Balakrishnan, H., 2016. Integrated Control of Airport and Terminal Airspace Operations. IEEE Transactions on Control Systems Technology, 24(1), pp.216–225.

Khadilkar, H. and Balakrishnan, H., 2013. Metrics to Characterize Airport Operational Performance Using Surface Surveillance Data.

Kim, S.H., 2013. Airport Gate Scheduling for Passengers, Aircraft, and Operations. In Tenth USA/Europe Air Traffic Management Research and Development Seminar (ATM2013) Airport.

Kim, S.H., Feron, E. and Clarke, J.-P., 2013. Gate Assignment to Minimize Passenger Transit Time and Aircraft Taxi Time. Journal of Guidance, Control, and Dynamics, 36(2), pp.467–475. Available at: https://arc.aiaa.org/doi/abs/10.2514/1.57022.

Kim, S.H., Feron, E., Clarke, J.P., Marzuoli, A. and Delahaye, D., 2013. Airport gate scheduling for passengers, aircraft, and operation. arXiv preprint arXiv:1301.3535.

Kim, S.H., Proal, A. and Feron, E., 2013. Ramp Operation Model Based on Observation in Hartsfield-Jackson Atlanta Airport. 2013 Aviation Technology, Integration, and Operations Conference, pp.1–8.

Liou, C.S., 2014. Rent-seeking at home, capturing market share abroad: the domestic determinants of the transnationalization of china state construction engineering corporation. World Development, 54, pp.220-231.

Liu, A.M.M., Fellows, R. and Chan, I.Y.S., 2014. Fostering Value Co-creation in Construction: A Case Study of an Airport Project in India. Architecture, Engineering and Construction, p.120.

Liu, Y. et al., 2014. Predictability impacts of airport surface automation. Transportation Research Part C: Emerging Technologies, 44, pp.128–145.

Narciso, M.E. and Piera, M.A., 2015. Robust gate assignment procedures from an airport management perspective. Omega (United Kingdom), 50, pp.82–95.

Ofori, G., 2015. Nature of the construction industry, its needs and its development: A Review of four decades of research. Journal of Construction in Developing Countries, 20(2), p.115.

Ramamoorthy, K. and Hunter, G., 2013. Simulation-Based Airport Capacity Estimation. In 2013 Aviation Technology, Integration, and Operations Conference. pp. 1–14.

Simaiakis, I. and Balakrishnan, H., 2015. A Queuing Model of the Airport Departure Process. Transportation Science, p.trsc.2015.0603.

Simaiakis, I. et al., 2014. Demonstration of reduced airport congestion through pushback rate control. Transportation Research Part A: Policy and Practice, 66(1), pp.251–267.

Spring, M., Selviaridis, K. and Zografos, K., 2016. Coordination in service supply networks: insights from “Airport Collaborative Decision Making”.

Wilke, S., Majumdar, A. and Ochieng, W.Y., 2014. Airport surface operations: A holistic framework for operations modeling and risk management. Safety Science, 63, pp.18–33.

Zografos, K.G., Madas, M.A. and Salouras, Y., 2013. A decision support system for total airport operations management and planning. Journal of Advanced Transportation, 47(2), pp.170–189.

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