Denver International Airport

Initially, Denver planned to open its new international airport with a conventional tug-and-cart baggage systems. Later, however, the city decided to go with a sophisticated automated system, despite the risk that the system might not be up and running by the airport's October 1993 opening date. During development and construction of the system, significant software and hardware problems arose. These problems, along with major modifications to the system, delayed the opening date from October 1993 to February 1995. At the same time, the cost of the baggage handling system has soared from $195 million to more than $290 million, which will largely be passed on to the airlines serving the airport. In addition to providing a chronology of the events involved in the construction of the system, this fact sheet (1) assesses the contract award process, including any special considerations for disadvantaged businesses, and (2) lists major concerns raised about the project and their resolution.

GAO found that: (1) the city of Denver initially planned to open DIA with a conventional baggage system in order to meet the scheduled October 1993 opening date, but later decided to accept the risk associated with building an automated baggage system; (2) significant problems occurred with the construction of the baggage system, delaying DIA opening until February 1995 and costing an additional $95 million; (3) the city of Denver awarded 37 prime contracts, totalling $776 million, based on the contractors' ability to perform the work, price, and agreement to hire disadvantaged businesses; (4) the prime contractors exceeded the city's goals for hiring disadvantaged businesses between fiscal years 1990 and 1994; and (5) although most of the concerns regarding DIA have been resolved, remaining concerns include the ability to fund a rail system from downtown Denver to DIA and ongoing investigations about information disclosure to bondholders.