BAE Business Case Study
Susan Pacheco April 17, 2013
Table of Contents
Part 1: Executive Summary
Part 2: Main Issue
Part 3: Systemic Issues
Leadership & Project Management issues
Political Pressure to Fast-Track Project
City Involvement (Delays)
BAE Conditions on Contract Signing (April 1992)
Part 4: Environmental & Root cause Analysis
Economic & Political Considerations
Success with United Airlines
Part 5: Alternatives and/or Options:
Part 6: Recommendations and Implementation
Recommendations Implementation Plan:
Part 7: Monitor and Control:
Part 8: Conclusion:
Part 9: References, Exhibits and Appendixes
Part 1: Executive Summary
In order to address the immediate issue of the letter received by the City Mayor holding us responsible for the delay of the new baggage system by charging BAE a penalty of $12k/day backdated to October 29, 1993 and also requesting a charge back for the $50M tug-and-cart baggage backup system, immediate action and priority needs to be given to address this accusation.
A prompt analysis of our project plan and missed milestones with reasons and factual data is critical in defending our position. We need to prove where certain milestones outside our control were missed and the domino effect it created and where dependencies to our commitments were broken and by whom. There were many points at which we voiced our concerns on the project delays and access issues that further hindered our ability to perform but no one took responsibility or acknowledged the delay. In addition, the Build-Design approach has in itself created many hurdles and time delays outside our control as well as created unfavourable working conditions that were unsustainable for our teams.
Our current situation is a mere symptom of a lack of a proper project management structure and qualified personnel at DIA. Also lack of sponsorship by the city Mayor has created silos and a negative effect on the project flow. The build-design approach is one of the biggest issues but with proper management it can be overcome.
Based on BAE’s experience and successful past projects, we can confidently recommend a new structure that has worked in past projects. Given that history I feel we need to propose a drastic change to DIA’s Project Management team and propose a new structure which includes a new Project Manager to oversee the entire project team, appointment of additional team members (see Appendix 1) and new hires with the right skill sets. See Appendix 2 to see RACI Matrix proposal.
The proposal is to continue with the new airport wide baggage system implementation only under the condition that DIA restructure their project management team and obtains sponsorship from the City Mayor and Aviation Director. A team approach must be understood by all parties involved as there are too many moving parts and it is impossible to expect BAE to independently manage all moving parts for what is out of our control especially with a Build-Design plan. This new platform will allow BAE and DIA’s members to educate, make timely critical decisions, identify risks and critical milestones and hold members accountable for their respective roles.
Assuming our proposal is accepted, the overall expected timing from initial contact to identifying risks under the new team structure is 9 weeks. With this plan, a backup system would not be required, thereby avoiding this $50M additional cost.
The seriousness of this accusation would put BAE at permanent financial risk if not bankruptcy. Promptness and priority in handling this situation is critical. Beyond the financial impact, there is also the...
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