Airport cancels the contract with the developer on Tuesday after construction delays and budget issues. 

Some big news came out of Denver International Airport on Tuesday when it was announced that it'd terminated its contract with the developer group, Great Hall Partners. The termination will be effective on November 12, 2019. Great Hall LLC was hired to complete the Great Hall redevelopment project at the airport which was started in 2018. This move comes after an earlier threat to end the contract by the City of Denver and DIA in July; the project has seen some delays and other obstacles since it kicked off last year.

The airport has seen increasing growth in passenger traffic, in fact, just this past February it was ranked as the fifth busiest in the nation. In March, DIA came in first place in Skytrax World Airports Awards as the best airport in North America and the seventh greatest airport in the world.

The increase in business for DIA has maxed out the infrastructure of the facility and the 25-year-old airport needs developments and improvements. The Great Hall project was part of a $1.8 billion renovation contract aimed at improving security and other areas of the airport that was estimated to take four years to complete. The project faced challenges from the start, including expanding costs, issues with concrete being used, and a fire that broke out in a construction area in June.

The contract was canceled under a "for convivence clause," which allows for it to be terminated without the airport or city having to give one specific reason.

Courtesy of DIA (Facebook)

In an official press release regarding the termination, it was announced that the developers will be given a termination payment and three months to wrap up current operations and that the airport will move on with the project as planned. From the press release:

“After eight months of negotiation and mediation regarding the construction delays and schedule, DEN feels this partnership is no longer in the best interest for our airport and community. As a result, we have terminated the contract and will be approaching the project in a more traditional manner going forward, which will allow DEN to regain control of the project.”

DEN estimates that they will stay within the original $770 million budgeted for the project. Construction is set to resume early next year once Great Hall Partners has cleared out and a new contractor is selected.

“In addition to the termination payment, DEN will pay to complete the project with a new contractor. The design and construction cost of the project will remain within the original budgeted amount of $770 million including contingency. DEN will own all design work and construction performed to date and well as purchased but not yet installed materials.

Most importantly, DEN is taking the responsible and appropriate steps to protect the future of the airport, our community, and our economy. While we have encountered some bumps along the way, we still believe in this project and know it is necessary for the future growth and success of DEN.”

Airport CEO Kim Day said in a news conference that there was no one specific issue with the partnership that led to the airports move to terminate the contract. "There are no 'ah-ha' moments," she said. "It was just the buildup of things."

Great Hall Partners was unhappy with the decision and issued a statement:

“We are disappointed with DEN’s decision and strongly disagree with their characterizations of how we have arrived at this point.  We categorically reject their allegations around safety and change directives.  As a firm, we have among the best track records in the world for adhering to the highest standards for safety.  Indeed, the concerns we raised over concrete that was weaker than initially represented by DEN, were an important part of our safety analysis.  In fact, the project contractor has a “recordable incident rate” of almost half of the national rate and has a zero “lost time injury rate.” 

Unfortunately, until this point, confidentiality provisions in our contract prevented us from rebutting over the last several weeks a stream of unfounded complaints and allegations.  The reality is that the Project’s time and cost overruns are a direct result of the discovery of weak concrete in some areas of the Terminal, which DEN did not disclose to GHP at the outset of the Project, and more than 20 large-scale, badly timed and unnecessary change directives issued by DEN to the design they had previously approved.  

As DEN itself said in its press conference today, our Company has extensive global experience in successfully delivering major projects such as this on time and on budget.  We would have preferred to work with DEN to bring this important project to successful fruition and believed with thoughtful intervention that this was still possible.  We wish the people of Denver well and are committed to a professional and smooth withdrawal.”

We will be keeping our ears open for news on this story and will keep you updated when a new contractor is announced. Hopefully, this will not cause further delays to passengers and visitors to the airport. We are all ready for the renovations to be complete and look forward to seeing it when it is all done.

What do you think about the move to terminate the current contractors and move on with a new company? Let us know in the comments.