BERLIN BRANDENBURG AIRPORT
Procurement of Berlin Brandenburg Airport
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BERLIN BRANDENBURG AIRPORT
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Abstract
The Berlin Brandenburg Airport has been introduced and a detailed description of when
the idea was conceived. A more detailed analysis of the three challenges linked with public
sector procurement is managed. Of the three problems are written strategies that act as a
management tool. The business needs in the BER were not well understood because the
choices made by the superior executives are final. The procurement manager needs to
understand all the business needs in the right quantity and quality for better infrastructure. The
buyer has to enter into negotiations about price, time of delivery from the supplier. Lastly, an
explanation of the three supply chains risks environmental risk, financial risks and market risk
and how they are managed.
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Introduction
The idea of building Berlin Brandenburg-Airport was conceived in 1992 to replace
Berlin's civil aviation infrastructure. The project went to be discussed on the best location and
agreement between the local and national politicians reached a deal to construct an airport. In
1997 a tendering process was initiated, and two companies expressed interest and HochTief
Company was chosen. A case filed against them led to the overturning of the winning bidder by
regional administrative court hence making commencement of the construction of the Berlin
airport. The public is still optimistic about the project, and they were in full support despite the
issues the project was undergoing.
A public enterprise named Flughafen Berlin Brandenburg went on an obtained clearance
to go ahead and construct the Berlin’s new airport. FBB was approved to go ahead with
construction of the following activities;
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A new terminal building,
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Development of four car parks,
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Refurbishment and structure of the BER runway system,
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An area of 16 hectares to be reserved for airport's commercial district,
Modifications of the road system
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Construction of an underground train station to link the airport with the BER to
Berlin's local public transportation system ("Case Studies: Berlin-Brandenburg
Airport, Germany", 2016).
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Construction began in 2006 but 2007 - 2008 the financial crisis hit hard the economy affecting
the rate at which work was completed. The financial crisis left effects that changed the
expected completion of the project in 2011. In 2012 a grand opening was arranged and
publicized, but failure to meet the expected certification requirements and non-compliance
with the city standard led to cancellation (Ahmet Yasar, 2020).
The project has been met by a series of challenges like the bankruptcy of the company
concerned with planning, construction failures, mismanagement, political wrangling, and
incompetence of some managers like the engineer. Cancellation of the grand opening was a big
deal for the media joked much about the issue since then the project has not been completed.
Berlin Brandenburg Airport is however expected to be opened in October 2020 (Schultheis,
2018). The new state of the international art airport was mainly build to unite Germany’s and
offer a high tech global destination. Its failure to be complete in time has cost the taxpayer
public more money allocated for BER project construction.
Input from Stakeholders, Policies and the governance structure in the Procurement
process
The public sector procurement managers are tied to a specific procurement framework
they must work with. The managers are expected to foster a high degree of moral uprightness
in the ministry he/she represents. The old way of utilizing traditional supply chain is in the past
and countries are embracing the public procurement framework. Public sector procurement
departments are the most-high spending in a given economy and demand ethical responsibility
(Hunsaker, 2009). One key reason for high expenditure in the public sector procurement
department is since the local state, and the federal government have to purchase public
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services ranging from health, education, infrastructure services. Despite the spending power of
the public sector procurement, the managers in-charge must work with the amount budgeted
on the different departments. All procurement activities must also work within a wellestablished procurement policy. Public managers have to work towards reducing costs through
effective negotiations with suppliers to get the best deal.
The first step in a procurement process is first to identify what is needed and for what
purpose. It includes quantifying and attaching pictures to the manufacturer to ensure no
mistakes. The ones responsible for carrying out this task are the procurement managers who
mostly spearhead all the procurement activities and provide all policies and procurement
frameworks adhere. The procurement manager has to create lists of all products needed by the
department and ensure they are quoted right. The FBB failed to procure the right infrastructure
services to Berlin Brandenburg Airport, leading to delay in the completion of the project. It has
taken to nearly ten years to complete the BER project which has been coupled by ordering the
wrong lighting bulbs, faulty cables, and automation systems weren’t working, and ordering
different products like plastic dowels (Bowlby, 2019). All these mistakes made it impossible for
the grand opening ceremony to happen due to certification. To manage this issue, the
procurement manager should link with the airport chief engineer when identifying the
items/needs of the new infrastructure. It ensures the right product is chosen and the quantity
needed.
Another challenge faced by public sector procurement is getting the right supplier who
won't fail you when it comes to the delivery of quality products. Some suppliers are corn people
who exploit others for their benefit. The supply of low-quality products to be used in building
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the new Berlin Airport has led wastage of time and resources in both short and long-term. For
instance, the wrong cables installed had to be removed and replaced with the right ones at an
expense. The procurement manager who approved the purchase request failed to reduce cost
and enhance efficiency. If a manager fails to achieve a minimum cost reduction on the business
needs, then the project is bound to delay or fail because they work under a set budget. Having
the right supplier can also prove to be challenging to meet your needs making it hard to
maintain adequate supply chain performance. As a procurement manager, it essential to build
relationships that are long-lasting with your suppliers. Another way to solve the issue of supply,
the procurement manager can have a back-up supplier of the same product. Doing a
background check on the supplier is critical, and also linking with friends can help get the right
supplier to meet your business needs.
Moreover, outsourcing other organizations and grant them a portion of the
procurement tasks is costly. Although sometimes they don't deliver as required and as a
procurement manager, you're unable to maintain high-quality services and products. At BER,
those that were in-charge at gave out 30 to 40 sub-contracts to small companies whom they
thought would supply services and products at lower prices (Bowlby, 2019). The move cost the
BER a lot because the products provided were of low quality leading to weak structures. The
presence of ‘controlling system’ at the top that wanted to change the size and content of the
new Berlin Airport brought a lot of confusion.
The board members were politicians who had no prior experience of managing a project
of this magnitude (Frank, 2019). The politicians used to ignore issues raised on what was
happening at the cite. It is crucial to allow the procurement process to take place, especially if it
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is a must for the companies to be sub-contracted. Outsourcing too much is not a good idea
because one also becomes dependable. For one, you leave your internal team with little to do.
What BER should have done is to change to the e-procurement system that allows all
procurement activities to be centralized (Croom and Brandon-Jones, 2005). This move will
enable them to strike the right balance, which reduces the need to sub-contract other
companies.
The business needs a well understood due to the delivery of wrong products would not
have happened. The FBB Company mandated to run the BER airport did not understand what
the business needs were, although one cannot distinguish it was out of ignorance or what. They
choose to buy wrong bulbs, cables which mean it was out of ignorance, or they planned a
conspiracy to defraud public money in the procurement process. The different departments
working towards the BER project have to submit their project needs to the procurement
manager or financial controller who reviews the purchase request. If approved, it's turned to
purchase order. Many Company's both public and private rely on the e-procurement software
that makes the procurement process much more manageable (Cherian, Munuswamy and Jasim,
2020). After the presentation of the needs via purchase request, it is essential if it is not
approved, you have to go through all the specifications to make sure there is no error.
Attaching photos of the product help identify the product will help a lot.
The BER Company at the time did not have the Vendor catalogue, which shows al list of
suppliers, unlike when only two companies showed interest in the construct the new airport.
Given there was a vendor catalogue, it grants the managers or supervisory board options to
choose from rather than concentrating on two companies. Having a vendor catalogue saves the
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managers a lot of time trying to locate qualified suppliers (Chakraborty, 2015). Upon choosing
the supplier, one can develop a business relationship and get to negotiate the best prices. The
move to agree on the costs of the different products and services, delivery times, product
specifications and quantity will save the procurement team a lot of time on their future
procurement activities.
After negotiations and striking a deal a purchase order is created, signed and granted or
send to a vendor as you wait for delivery of goods and services. The PO outlines order
specifications, terms and conditions, price and color. The buyer and vendor enter into a
contract binding when the supplier approves and signs upon receiving the purchase order
(Tadelis, 2017). The procurement processes carried out at BER airport did not follow the public
procurement framework and policies in place. The FBB Company may or may not have
inspected the delivered goods and services, and the procurement manager could have
returned, i.e. the presence of wrong lighting bulbs at BER site after realizing while checking
delivered products. One can only conclude those were the right orders as per the purchase
order or the managers took a bribe to accept the deal after receiving low-quality products. The
managers have to check damaged products that require replacement and also check if the
outcomes of a high standard. For instance, if the purchased automated machines at BER which
were not functional, they should have been returned instead of installing them for use.
The last step in the procurement process is that the manager will reconcile three crucial
documents to guarantee a transparent, accurate transaction. They include; purchase order,
packaging slips and vendors invoices. This method of three-way matching was applied at BER;
that's why those that embezzlement the companies funds were taken to court. The technique
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helps seal all loopholes of that could have resulted in the loss of funds. Approval of the invoice
an all payment receipts are kept in files. Recording and maintaining the books of accounts is
critical. It includes all completed purchases and any other procurement service.
The supply chain risks to be discussed include environmental risk, financial risk, and
market risk. Environmental risk as a result of the construction of the new airport is evident in
the surrounding area. For example, due to the discharges and emissions has affected the air
and soil composition. To manage the issue, the FBB Company has put measures and reduced
number of pollutants. Financial risk results from a change in exchange rates, budget overruns
affecting the amount budgeted for the project, and it can either have a positive or negative
impact. Suppliers can go bankrupt, change of ownership etc. and that requires you to keep
vigilant to avoid surprises in future procurement deals (Wang, Jie and Abareshi, 2015).
To manage these risk managers have to monitor all suppliers to prevent performance
issues like in BER when products supplied were of low-quality cables were provided. It
prompted the procurement to spend extra cash to order quality cables to produce the desired
design. Lastly, market risk is when a company relies mostly on outsourced goods and services.
For instance, the FBB sub-contracted various companies to work towards the establishment of
New Berlin airport. It is a risky venture because FBB will rely on these companies, and if they fail
to deliver, then you will fail to deliver your mandate. It isn't right to put your company at the
mercy of others. Managing market risk it is important to ascertain the impact of the subcontracting before deciding. It is also vital to ensure you meet the compliance regulations to
avoid being in the risk of a legal risk.
Recommendations to the Supervising Board
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For an effective procurement process in large capital projects, there is need of support
from relevant stakeholders in the organization tasked constructing the airport. The executives,
employees, government, supervising managers and supervisory board members should rally
behind the procurement team to ensure goods and services are delivered. I would recommend
the following actions to be undertaken to ensure better management of the procurement
process.

The procurement managers should ensure they inspect the requirement lists coming from
the different departments and ensure the goods and services are of the right quality and
desired colors. It is also important for the individuals in the different department to link
with the project engineer especially when ordering a new item that requires certain
specifications before presenting the requisition to the procurement managers.

When Identifying list of suppliers it is important to involve key stakeholders and may be
some key departmental heads and come up with the best among them all.
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When negotiating the contracts with suppliers it is important for the procurement officers
to be accompanied by chief financial officers and any other interested party. By doing
this it will increase the transparency levels within the departments.
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Another key area to cross check is when delivery of the requested goods and services.
The items should be audited after receiving them at the procurement department stores to
ensure the right quality, quantity and other minor characteristics are in check. If item does
not align with the specifications upon order they are shipped back to supplier to amend.
Conclusion
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In the Berlin Brandenburg Airport procurement process was major contributor to the failure
of the airport project. The manner in which goods and services were ordered and delivered no one
cared about the quality and also if the machines were functioning. The procurement managers were
not allowed to do their job but instead the top political leaders at the board had formed a ‘strong
system’ hard to break through. Today procurement has become a long-term strategic function in a
project or organization. It is the core heart of the business and the right qualified guys should be
hired for the job. The case study helps uncover the strength an effective procurement process and
illustrates an example of a failed procurement process. What I have learned is that a well-designed
and a structured procurement process will bring success to the project irrespective of the size of
the business, company or mega projects.
Bibliography
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