The document summarizes the failed automated baggage handling system project at Denver International Airport. It began in 1987 with a $4.9 billion budget. Problems arose from the start in 1991 with only 3 bidders for the airport-wide system. BAE Automated Systems was awarded the $175.6 million contract in 1992 but the opening was postponed 4 times from 1993-1994 due to electric power, software, and mechanical issues. Testing in 1994 was a catastrophe and it wasn't until February 1995 that the airport finally opened, but the baggage system remained a failure. It wasn't until 2005 that a fully manual system was adopted. The failure occurred due to changes from the original plan, flawed business processes, and

1. Denver International Airport
Automated Baggage Handling System
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1

2. Agenda
A story of failure
Model of Project escalation
A Process Model of Escalation
Conclusion
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3. A story of failure…
1987:
- $4.9 billion
- 53 sq. miles
- 5 runaways
1991:
- Airport-wide
BHS till 1993
- 16 companies
invited to bid
- Only 3 offers
1992:
- Proposal to
BAE Automated
Systems
- $175.6 m.
contract
1993-94:
- Opening
postponed 4 times
- Electric power,
software,
mechanical
problems
04/1994:
- Catastrophic
system test in
public
28/02/1995:
- Final
Opening
08/2005:
- Adoption of
fully manual
system
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Advanced MIS- Miltiadous Eleni

4. Model of Project Escalation
Project
Escalation
Project Factors
- An investment
- False resource
availability estimation
Social Factors
- Responsibility for
failure
- Norms of Consistency
and hero effect
- Job Insecurity
Organizational
Factors
- Organizational Culture
- Administrative Inertia
Psychological
Factors
- High personal
responsibility
- Confidence about the
completion based on
BAE’s prior success
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Advanced MIS- Miltiadous Eleni

5. Process Model of Escalation
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Escalation Catalysts: Transition Trigger:
Request for bids BAE Approach
Numerous Problems Feasibility of
Seen as remediable project
doubted
Disastrous 1st test BAE Malfunction
System testing
disappointing
Project
Framing
Drift
Unsuccessful
Incremental
Adaptation
Rationalized
Continuation
De-
Escalation
Initiation

6. Conclusion
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Failure caused by:
• A series of changes in the
original plan
• Flawed business processes behind the project
• Insistence on believing in the realization of the
project despite all the signs of failure

7. Advanced MIS- Miltiadous Eleni 7