Checked-In: BHS Procurement at SAN Terminal 1: A Turner Case Study

The Turner and FlatironDragados team are working to enhance the air traveler experience.

The New T1 at San Diego International Airport will replace the current Terminal 1 with a modern and efficient facility that will enhance the traveler experience. The project also includes airfield and transportation improvements to make it easier to get to and from the airport.

The New T1 will have upgraded amenities – including 30 gates, Baggage Handling Systems (BHS), more security checkpoints, and gate area seating to provide a seamless and comfortable traveler experience. Restaurants and shops will offer travelers a taste of San Diego and have an opportunity to purchase items for their trip. Additionally, Terminal 1 and Terminal 2 will be connected post security eliminating passengers from having to go in and out of security for connecting flights. The project is being delivered by the Turner and FlatironDragados team.

Project Challenge

As part of the New Terminal 1 program at San Diego International Airport, Turner was tasked with delivering a new, TSA-compliant baggage handling system integrated into a highly constrained terminal footprint.

In early 2021, as design began, Turner’s BHS team—led by Mike Kessler, Special Systems Senior Manager—developed preliminary internal budget projections ranging from $105 million to $130 million. However, when Turner issued a standardized pricing request to the four largest baggage handling system contractors in the U.S., returned estimates that created a significant budget gap.

Turner leadership challenged the team to reduce the cost by 10% while maintaining system performance, resiliency, and future expansion capabilities. Compounding the challenge:

·       Supply chain volatility was driving escalations.

·       The system had to be integrated within a dense structural and MEP environment.

·       Construction needed to align with the Terminal 1 opening in September 2025.

·       The airport required a highly reliable system with in-line screening, RFID tracking, and built-in redundancy.

The challenge was clear: traditional procurement methods would likely lock in inflated pricing, introduce change orders, and jeopardize schedule certainty.

Solution

STRATEGIC, COLLABORATIVE PROCUREMENT

Kessler implemented a strategy to engage all four major baggage handling contractors early and keep them involved during design development. The team:

·       Distributed a standardized equipment spreadsheet to ensure apples-to-apples pricing.

·       Held dedicated Industry Day sessions with each contractor.

·       Encouraged open dialogue around sequencing, access, laydown space, and operational constraints.

·       Allowed contractors to provide constructability feedback while design was still flexible.

By treating contractors as partners during preconstruction, Turner reduced ambiguity and eliminated unnecessary risk contingencies before pricing was finalized.

As the RFP date approached, Turner refined the design and identified key Add/Alternates to future-proof the system. The revised target budget was set at $105 million, reflecting accurate market intelligence.

EXECUTION STRATEGY: ALIGNMENT FROM DESIGN THROUGH COMMISSIONING

The collaborative culture established during procurement carried through construction and testing. The team adopted a shared objective:

“Zero punch list. Zero change orders.”

Turner coordinated closely with system designers and contractors using:

·       3D BIM coordination and clash detection

·       In-person field walks to proactively identify conflicts

·       Bi-weekly coordination meetings

·       Real-time commissioning dashboards

To manage nearly four miles of conveyor during testing, the team broke commissioning into detailed daily and weekly production targets—maintaining transparency and accountability at every phase.

Results

MILLIONS IN COST SAVINGS

When bids were received, there was consensus of a budget approximating:

·       $85 million base bid

·       $10 million in Add/Alternates

·       Final contract value: $95 million

This represented:

·       $45 million in savings from an original $140 million market projection

·       $10 million below Turner’s revised $105 million target budget

Turner’s procurement strategy directly transformed a potentially over-budget package into a cost-controlled, value-driven contract.

ON-TIME, ON-BUDGET DELIVERY

The baggage handling system was:

·       Delivered on time

·       Delivered on budget

·       Activated with zero impact to the Terminal 1 opening on September 23, 2025

The system achieved:

·       99.7% tracking accuracy during TSA Integrated System Acceptance Testing

·       Successful processing of 800 bags during full-system sortation testing with near-perfect accuracy

Importantly, the few change orders that did occur were driven by external building systems—not the baggage handling scope itself. Approximately 85% of identified obstructions were unrelated to the BHS installation, demonstrating the strength of Turner’s coordination and scope definition.

Through Turner’s structured, collaborative engagement strategy, the SAN Terminal 1 BHS project became a model for disciplined procurement and execution:

·       Significant cost reduction in a volatile market

·       Near elimination of BHS-driven change orders

·       Schedule certainty for a high-visibility terminal opening

·       Delivery of a resilient, future-ready system

Turner’s approach demonstrated that “on-time engagement” with trade partners—bringing expertise in when it matters most—can drive measurable financial savings while ensuring operational excellence.