Denver International Airport’s Great Hall renovation project may exceed $2 billion, and auditors are worried the city could face even higher costs due to potential overspending on future construction.

During a review last year, city auditors made 10 recommendations to airport officials after determining that DIA lacked sufficient management and oversight of its three-phased Great Hall construction project.

The follow-up report, published on Jan. 2, said the airport still is not following procurement procedures, proper document decision-making processes, or requiring contractors to submit documentation of actual costs.

“This deficiency in oversight, particularly concerning multi-tiered subcontracting, limits the city’s assurance of quality construction and reasonable costs and creates a heightened risk of overpayments due to insufficient monitoring of contract compliance,” Denver Auditor O’Brien said in a news release.

Of the 10 recommendations made by O’Brien’s office in 2023, DIA officials fully implemented two, partially implemented one, and did not agree to implement the remaining seven, the audit said. 

“Although the airport has made significant progress in implementing the recommendations it agreed to, it did not fully address all the risks associated with our original findings,” O’Brien said.

In response to a request for comment from The Denver Gazette, airport officials emailed this statement: “We appreciate the auditor’s follow-up report from the audit of April 2023 and look forward to working with the auditor and his team as we continually improve our processes. The airport remains confident that it has adequate controls in place to ensure proper oversight of its projects.”

The airport’s Great Hall project began in 2018 to help prepare the airport for future needs and increase the capacity of the Jeppesen Terminal to accommodate 100 million passengers. The airport anticipates that passenger volume in the near future.

Just over a year later, the airport and Great Hall Partners, the project’s original builders, went through a very messy, public breakup that cost the airport time and millions of dollars after disagreeing over soaring costs and weak concrete erupted.

Airport officials expedited the procurement process to hire Hensel Phelps Construction Co. as the new contractor for the re-envisioned three-phase construction project, which resumed in early 2020. According to the city auditor’s follow-up report, the airport now expects work on the Great Hall to finish in 2028 at a cost of $2.1 billion.

The final phase of the project, known as the Great Hall Completion, is now underway. Denver City Council approved the completion phase, also known as “Phase Three,” in January 2022.

Subsequent to the 2023 audit, two projects were designated as “fast-tracked.” Auditors who reviewed those projects said that one continued to lack essential supporting documentation, “indicating that the recommended improvements have not been effectively implemented.”

Auditors pointed out that the continued absence of documentation increases the risk of noncompliance with city requirements and airport standards.

The audit said another unresolved finding is the airport has yet to require contractors to submit invoices and timesheets necessary for reconciling with project allowances, impeding the airport’s ability to ensure costs are reasonable and allowable.

“It is critical that Denver International Airport manage its construction work costs for a project of this size and scope,” O’Brien said. “With so much work yet to complete, the airport needs better oversight to prevent spending more than what is necessary.”

The Denver Department of Aviation oversees the airport’s management and operation and has been designated an “enterprise” as defined by the Colorado Constitution. According to the airport’s website’s governance page, it receives no direct general fund tax support from Denver taxpayers and may issue revenue bonds and other financial obligations in the city’s name.

The airport is one of the most significant economic engines for the state of Colorado, generating more than $33 billion in economic impact for the region each year, as reported in 2020 Aviation Economic Impact Study prepared by the Colorado Division of Aeronautics.

O’Brien said given the importance and public interest in airport renovations, if risks continue to be identified, future audits may be conducted “to ensure the city takes appropriate corrective action.”