Issue Identification The primary issue to consider as Gene Di Fonso is whether BAE should cancel, modify or continue with the contract for installing the baggage-handling system at the Denver International Airport (DIA) amidst the severe deterioration in communication and rising hostility. Furthermore, BAE must consider what additional resources would be required if the company chooses to negotiate with the City for the support to finish the system and whether the size and complexity of the system, given its departure from conventional technology, should be reduced. All the while, BAE is recognized worldwide for baggage-handling systems, and therefore the company’s decision must maintain BAE’s strong reputation in the industry and its shareholder value over the long-term.
Environment and Root Causes Problems for BAE with regards to the implementation of a state-of-the art baggage handling system at DIA are a direct result from problems that originally stemmed from the DIA project. From the beginning, the DIA project was subjected to political and economic commotion. Original project stakeholders made commitments with regards to project completion and project budget, which in the future no longer became feasible. These forced new political stakeholders to commit, undesirably to a project plagued with increasing pressures while balancing administrative, social and political imperatives. Consequently a thorough and effective master plan never materialized. The DIA project was not well defined and organized. The project organization consisted of too many players; Consultants, the City of Denver and the Public who had differing ideas and preferred objectives with regards to the project. In addition, given that the DIA project was a build-design project where construction for the airport began concurrently with its design, the DIA project team failed to establish