Vancouver International Airport expansion

THE EXPANSION OF FACILITIES at the Vancouver International Airport (YVR) had been under consideration since the mid-1970s. The parallel runway was initially planned in the 1960s and the terminal expansion was developed into the master plan in 1981. Transport Canada (TC) initially developed concepts for an expanded terminal facility and third runway on Sea Island. With the creation of the Vancouver International Airport Authority in 1992, a new impetus was given to the expansion plans. A business plan was drawn up, and the immediate expansion of the airport by constructing a new international terminal building (ITB) and parallel runway became the focal point.

British Columbia's rich aboriginal heritage is the key art focus of the new international terminal building.

The Airport Authority engaged the project management firm of Pacific Liaicon and Associates Inc. (PLA), which, together with Airport Authority personnel, formed the project management team that subsequently engaged several specialist consultants to update and enhance previous studies. The outcome of this work, a six-volume Project Definition Report (PDR), defined the proposed project with a complete conceptual design, detailed scope for an accurate estimate of project cost including “hard” and “soft” costs, and the project schedule. It also presented the financial plan in addition to project management policies and procedures. The PDR was the basis for the highly successful management of the YVR expansion project.

Implementing a project team approach proved to be one of the most important aspects of managing the project. The project management team reported to the president of the Airport Authority and through him to the capital projects subcommittee of the board of directors. Made up of members of the airport engineering, operations, environment departments and PLA, the project management team also consulted with a management advisory group comprised of Airport Authority senior operating executives.

The international terminal building and parallel runway project, long-awaited improvements to the YVR, were approved in January 1993 with a budget of $355 million. The objectives were to have the ITB fully operational by 1 June 1996 and the new parallel runway operational by 2 November 1996. These milestones were met. In fact the ITB was made operational in two phases. Transborder operations commenced on 1 May 1996 and international operations commenced on 1 June 1996, just in time to meet the anticipated 1996 summer traffic.

Special Methods, Unique Challenges

Faced with unusual challenges throughout the project, the project team used consultants and original methods and materials to overcome the challenges and meet their objectives.

Constructability Reviews. As design progressed, knowledgeable contractors and the project team performed constructability reviews to optimize design from a cost standpoint. Recommendations emanating from this process were then incorporated into the design.

Design Management. Typically in large projects, “design control,” final costs and schedule are impacted to a great degree. The active involvement of the project team during all stages of the ongoing design was a critical factor in overall cost control. Design and budget audits carried out at pre-agreed stages of the detail design process ensured continued compliance with the Airport Authority's objectives on design, budget and schedule.

Geotechnical. Constructing a major structure such as these airport facilities on the Fraser River Delta required special geological treatments. To mitigate the long-term differential settlement prevalent at this location, soils densification and preload was incorporated into the design of both the ITB and the parallel runway.

Preload Materials Management. Earth works presented high cost and schedule risks on this project. To help minimize the costs, the project team developed a preload management plan that called for a well-defined phasing of the preload. The phasing allowed for reuse of material from one preload area to another. The total volume of preload placed was 4.5 million cubic meters, but with this innovative approach, only 2 million cubic meters of material had to be imported. Without preload management, an additional 2.5 million cubic meters of imported material would have been necessary.

A further refinement of the materials management plan required importing a locally available sand called “Sechelt,” which was suitable for use as a component of the concrete paving mix, thereby saving substantial dollars in terms of supply while reducing the cost of disposing of surplus preload material. When conditions permitted, surplus excavated native material was also used as preload to further limit the requirement for much more costly import material.

Architectural Theme. British Columbia has a rich aboriginal heritage. It was decided early in the project that this aboriginal heritage would be the key cultural art focus of the new ITB. This resulted in two major theme areas—the Haida Gwaii and the Musqueam exhibit. Both of these theme areas have won wide acclaim with the First Nations, passengers and the art community. Vancouver International Airport is now considered to have one of the more important aboriginal art collections in British Columbia.

Management of Retail Space. Planning and managing of leased retail space was the responsibility of a team of retail leasing experts. Retail leasing included solicitation of proposals, selection of tenants, assigning locations, negotiating services and expediting their fit-out in time for ITB startup.

Control Tower. A related project, the new control tower, was under the management of TC and Public Works Canada (PWC). The control tower was situated on a separate site within the ITB footprint on the south end of the site. Close coordination between the Airport Authority team and the TC/PWC team enabled both projects to proceed smoothly.

Parkade. Although the new parkade was included in early plans for the airport expansion, it was put on hold because funding for the parkade was uncertain. However, late in the ITB/parallel runway project, the Airport Authority determined that with the major portion of the contingency no longer required for the main project, that the parkade could be funded, and the engineering department was given the “green light” to proceed.

At that point, however, there was little time left to complete the parkade at the same time as the ITB. Design-build was chosen as the most appropriate approach under the circumstances and requests for proposals for the parkade were issued. Ledcor was selected as the design-build contractor.

Excellent cooperation with Airport Authority operations, the project team and the parkade project manager helped to make the parkade project go extremely well. Two-thirds of the parking spaces were completed in time for the international terminal building opening, with a minimum level of inconvenience to the traveling public. Due to innovative phasing and construction methods employed by the design-build team, the overall project was completed five months ahead of schedule, which resulted in a $500,000 gain in revenues to the Airport Authority.

Jurisdictional Approvals. Another major challenge to the project team was securing approval of the airport design from several jurisdictions, each having separate and specific requirements. These included U.S. Customs, Immigration and Agriculture (specific space and systems requirements); Canada Customs, Immigration and Agriculture (specific space and systems requirements); security and emergency planning (specific airport requirements); Transport Canada (licensing requirements for aircraft operation and runway standards, airfield lighting and general airfield design); Labour Canada (complying with federal codes); and other code review inspection and jurisdiction issues.

Managing Project Scope

Fixing the Scope. All stakeholders in the project were consulted over a six-month period to clearly define the specific needs of each group. Dialogue and negotiations then took place, resulting in concrete scope objectives for all systems within the project.

Specialist consultants were engaged to define in detail the planned facilities and to produce very tight but realistic “bankable” capital cost estimates. Suppliers and contractors were selected for their specific expertise in assisting with the refining of scope and in confirming unit pricing for the estimates.

The Project Definition Report established the scope for the YVR expansion project. This scope was based on the broad requirements for the ITB, runway and parkade, and broken down into major systems such as structural steel, civil works, geotechnical works and individual components.

In addition to defining “physical scope,” a great deal of effort was put into identifying “soft scope items” and installations that would have an impact on project execution. As an example, in order to prepare the site for the new runway, an old abandoned barn had to be removed. Unfortunately, this barn was a nesting site for a number of barn owls. The Airport Authority was therefore required to build a number of “mini-barns” in the adjacent conservation area to provide new homes for the owls.

Controlling the Scope. The project team closely monitored design to minimize the “scope creep” that often takes place as design progresses. Consultants were required to design only within the cost of the scope established in the PDR. Once detailed designs were completed, a rigorous project change request procedure requiring justification and sign-off by the project director was used to scrutinize all change requests. Only those changes dictated by functional necessity or safety were approved. During construction, all fieldwork orders and change orders had to be justified and required approval by the project director. As such, no “wish list” scope changes were allowed.

The Vancouver International Airport project constructed a new international terminal building to meet the additional 5.9 million annual passengers projected to use the terminal by 2010.

Although stakeholders received ample opportunity to provide input during the early design stage, inevitably late design change requests were brought forward. After careful screening, only the essential change requests were considered for adoption into the design. In seeking approval for changes stakeholders had to follow the same procedure established for other late changes: the originator had to formally request the change, justify it and provide a capital cost estimate. The request was then approved or rejected at the executive level.

This procedure allowed the project team to incorporate late requests for essential functional and safety requirements into the design. Near the end of the project, when it became obvious that an underrun was imminent, the team incorporated significant enhancements, but continued to discourage frivolous requests.

Managing the Schedule

As part of the PDR, the project team defined the timelines for the major activities. The opening date had zero tolerance in that the ITB had to be in operation prior to commencement of the busy summer season. Input on the timelines was solicited from consultants, contractors and vendors.

The culmination of this work was the project master plan schedule, which identified major project milestones that were strictly adhered to as the control points for engineering, procurement and construction.

Detailed schedules were refined as more information became available through the course of the project. The overall master plan schedule, however, was fixed at the outset and all reporting referenced to actual progress against the original plan.

All schedules were developed to meet four key criteria:

■ Compliance with all interim milestone dates

■ Compliance with the expectations of the Airport Authority's completion dates

■ Tendering and awarding of equipment and construction contracts, well in advance of their requirements

■ Compliance with cash flow projections.

Once contracts were awarded, contractors were required to develop a detailed working schedule for their contract, identifying their key milestone dates or control points within the schedule parameters set down in the PDR.

Commitment to the milestone dates remained a fundamental requirement throughout schedule development. Schedules were aggressive but realistic, and contingency planning was included in their development to preclude being caught off guard by unforeseen events. The contracting and procurement strategy used on the project was also based on the results of this planning activity.

Having committed to their schedules, all contractors were monitored closely to confirm progress as planned. If variances were observed, remedial action was taken to regain lost time as quickly as possible. The structural steel contract is an example.

Experience has shown that structural steel, being one of the earliest components, is invariably the Achilles' heel of most projects. Accordingly, the structural steel design/tender/award was expedited and a contract awarded well in advance of the tender and award for the general construction works. The steel contract also required that the contractor have a minimum of 50 percent of the steel fabricated before commencing work on site. Despite this forced early start, production fell behind schedule, but by working with the project team to increase their level of effort, the structural steel contractor was able to get back on track.

Managing Cost

The detailed project budget was developed starting from the approved project estimate in the PDR. Discrete cost elements were identified and assigned budgets so that they could be tracked throughout the job.

Contingency. Although the project team suggested that the project budget was adequate, the lending institutions insisted on the inclusion of a contingency. A contingency amount was therefore recommended, approved and treated as a corporate contingency. The project team's goal continued to completion of the project within the funding provided for in the base budget.

So successful was cost control that, with over a year and half left until project completion, it became obvious that the major portion of the contingency would not be necessary. At that point, control of these funds was turned over to the Airport Authority board.

Detailed monthly reviews of the commitments, expenditures and estimated costs to complete were compiled to assess cash flow and estimated final project costs. In the event that there was any indication of a potential overrun, corrective action, including redesign, was immediately implemented. Conversely, if it became apparent that funds to complete for any cost code were no longer required, they were reallocated to an in-budget contingency to prevent any unnecessary spending against that particular forecast-to-complete amount. All changes to contracts for services, supply or construction were to be totally justified and approved at the director level.

The effective management of schedule also impacts project costs. The YVR expansion project maintained schedule and costs by carefully injecting funds to maintain schedule throughout the project rather than force the consequences inherent in catching up in the final weeks and months of a project.

Cost control, while partially effected by scope control, is also a function of effective procurement. As much as possible, bulk materials, contracts and all major equipment were procured on a competitive basis to assure the Airport Authority of the best overall value.

Managing Project Quality

In order to meet the Airport Authority's overall project objectives, these activities were used to establish a detailed quality plan:

■ Highly qualified design and specialist consultants were engaged to provide appropriate advice, specifications and design. All consultants were required to provide their services with a view to satisfying the overall project objectives.

■ All code requirements relevant to the quality objectives were identified.

■ Project team members and consultants visited other airports, such as Denver, to learn from their experience and incorporate this into the YVR design.

■ Stakeholders such as the airlines, customs (U.S., Canada), operations were continually consulted to ensure their detailed expectations and requirements were identified.

■ Continual design audits assured compliance to requirements and expectations.

■ Stakeholders such as airlines and customs were continually involved in and approved the design and construction to assure their satisfaction.

Managing Human Resources

The project management team was made up of individuals selected by the project director and included senior Airport Authority operations and maintenance personnel, project management specialists and consultants. Each group on this very diverse team represented a different area of expertise. The glue that bound them was their passionate commitment to making the project a success. Everyone on the team had a personal stake in ensuring their part of the project did not let the others down.

Partnering was used on the construction site. The two major contractors on site, PLC Constructors Canada Inc. and Peter Kiewit Sons Co. Ltd., participated in partnering sessions with the project management team and the consultants. Partnering helped to keep personnel at all levels in every organization focused on working together to achieve the project's goals.

Another key element in achieving onschedule and on-budget completion was that the entire site was established from the outset as an “open site.” Building trades, union workers and nonunion workers worked side by side on the project without incident.

Although the contractors were directly responsible for providing the necessary trades for the work, the project team worked closely with the contractors to evaluate the potential for delays and to recommend measures to get back on track. These measures included the implementation of overtime or the addition of tradespeople.

The project team established from the beginning that safety was paramount on the project. Everyone onsite was required to work to the Airport Authority's project safety program and to the approved safety programs of their respective employers. The safety statistics at the end of the project prove the success of this approach.

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Managing Internal Communications

The system setup for internal communications was made up of weekly coordination meetings between the project management team and the consultants; weekly construction coordination meetings between the project management team, consultants and each contractor; biweekly coordination meetings for the project management team members to identify issues and set responsibilities for resolution; bimonthly meetings with the capital projects subcommittee of the board of directors to bring them up to date on progress, issues and concerns, and costs; and project documentation with wide distribution.

Managing Project Risk

The international terminal building and runway project had self-imposed constraints on budget and schedule dictated by the need to open before the summer rush of 1996. Management of risk was therefore essential in completing the project on time and on budget. Based on the extensive past experience of members of the project team, the following risk areas were identified as the most significant for achieving successful completion:

Structural Steel Delivery and Erection. Structural steel delivery and erection is not only the most critical but in general is also the most problematic area of major construction projects in Canada. Reasons for this originate at the steel mills and in the management of the schedule from design and fabrication to erection.

The project team expedited the award and early commitment of the ITB design consultant in order to award the structural steel contract at an early date. Expediting these processes provided the structural steel contractor with sufficient time to detail design, fabricate and erect the 10,000 tons of structural steel required for the ITB. As a result of the early commitment and excellent management of the process by a senior partner of the firm, the structural steel went up according to schedule.

Material Handling Strategy. The second major risk factor was the material handling strategy for the preload and the ultimate use of a portion of the material for concrete paving. The quantities required were enormous (4 million cubic meters of preload sand alone). By repeated re-use of the preload material, the Airport Authority was able to maximize the benefits and minimize the cost. In addition to the imported sand, selective use of stockpiled native material (surplus from excavation) was also used, where practical, to further reduce cost and expedite the preloading process.

The project team was also able to manage this risk by specifying the type of sand to be imported, which allowed for competitive pricing and incorporation into the concrete mix designs for the apron and runway. This strategy substantially reduced the materials handling requirements and cost, and allowed the runway construction to complete a year earlier than originally planned.

Environmental Risks. The intense civil works posed a threat to the Fraser River estuary. Preload materials were transported by barge through the estuary to a barge unloading facility constructed for the project. In addition, excavations could have disrupted drainage on Sea Island. The risk was mitigated successfully by advanced planning. Constant monitoring by the Environment Department and cooperative efforts by all concerned, including the contractors and the project team, also mitigated the risks whenever a situation arose.

Functionality Risk. The project team adopted the policy that no unproven components or technology would be used on the ITB and parallel runway project. If there were any doubts, site visits to other installations and reference checks were made to confirm the choice of equipment. The result of this approach was that all systems at the ITB started up on time, with minimal problems.

Managing Project Procurement

All construction and supply contracts were administered from the onsite project office by the project team. This project team handled the daily correspondence, document distribution, invoice review and approvals, schedule monitoring, weekly contractor meetings and minutes of meetings with respect to all construction contracts. A designated contract coordinator was assigned to handle each contract, and dealt with all correspondence between the Airport Authority, the contractor and consultants and controlled all aspects of the work of that specific contract.

The project team undertook a rigorous program of prequalifying, proposal calls/tendering and negotiation. In all cases, the criterion was to purchase the best equipment and services at the lowest competitive price. The best opportunity for minimizing cost, without sacrificing quality, is during this phase of the project. During purchase negotiations, payment terms are also deferred as much as possible to minimize interest costs during construction.

The consultant issued design changes by way of revised drawing packages and contemplated change orders. The changes to the work were price checked and approved prior to issuing the change order and the work starting. Work was coded to monitor costs to the appropriate budget item(s) when the change order was issued to the contractor.

At the start of the project, the Airport Authority's lenders insisted on two major construction contracts; one for the ITB and another for the runway. The directive was that total responsibility could be assigned to these major contractors. This directive envisioned that not only the labor component but also the equipment and material supply be made part of these two main contracts.

Based on their past experience, the project team stood firm on its contract strategy and with board approval managed to convince the lending agencies of the benefits of pre-ordering steel, vertical movement, baggage handling and bridge equipment, all on a competitive basis. These contracts were then assigned to the ITB general contractor for coordination and scheduling. Remaining contracts were then split up into cost-effective packages.

“THE YVR PROJECTS were not only executed on time and below budget, they met or exceeded all customer requirements,” said David Emerson, president and CEO of Vancouver International Airport Authority. “The success and expansion at the Vancouver International Airport has set a new benchmark for cost-effective efficient design and construction of airport facilities.” ■

Henry Wakabayashi, president of Pacific Liaicon and Associates Inc., served as project director for the Vancouver International Airport expansion. Bob Cowan, who is now the vice president of engineering for the Airport Authority, was the deputy project director.

PM Network • September 1998