Congressional scrutiny is intensifying for Veterans Affairs Department hospital projects that are costing more and taking longer to build than originally planned.
The VA responded to congressional requests for information last week with a request of its own: an additional $830 million that would bring a Denver-area project's total cost to $1.73 billion, more than five times its original $328 million estimate.
“The estimate includes the cost of construction, contingencies, and Army Corps of Engineers costs, as well as VA's cost to close out the original contract and continue construction until the Army Corps of Engineers assumes construction management duties this summer,” VA Deputy Secretary Sloan Gibson wrote in a letter to Sen. Johnny Isakson (R-Ga.), chairman of the Senate Veterans Affairs' Committee. “I would like to reiterate—the situation in Denver is unacceptable to veterans, taxpayers and department leadership.”
Isakson and the committee's ranking Democrat, Sen. Richard Blumenthal of Connecticut, called this news “appalling” and noted how area veterans deserve “the state-of-the-art facility” promised years ago.
“The American public, particularly our nation's veterans, deserve to know who is responsible and what will be done to remedy these serious issues,” Isakson and Blumenthal said in a release. “We expect a full report on what future actions the VA will take to prevent a repeat of this disastrous construction project.”
Colorado's congressional delegation responded with a bipartisan statement of its own that expressed outrage at the costs, but support for completing the project. Rep. Doug Lamborn, a Colorado Springs Republican who visited the hospital construction site on March 13, was among those who offered comments.
“This is a critical facility that our Colorado veterans have earned and need, so I remain committed to ensure we bring the project to completion,” Lamborn said in the statement. “However, the previous mismanagement and lack of construction supervision within the VA clearly requires additional congressional oversight to ensure better accountability and determine the best way forward regarding the VA's ability to build hospitals.”
The 182-bed project covers more than 1.1 million square feet on a 31-acre Aurora, Colo., site and includes inpatient buildings, outpatient clinics, research facilities, and visitor and staff parking garages. It is being built as a joint venture between Kiewit Building Group and Turner Construction Co.
"Kiewit-Turner is focused on moving this important project forward for Colorado-area veterans," Tom Janssen, a spokesman for the contractor, said. "That has always been our priority. The recently released budget estimate for the Denver VA Hospital is a vital step. We are confident that VA and Congress will work together to secure the necessary funds to finish this important project."
Congressional calls for action follow a Government Accountability Office report (PDF) in January that detailed how hospital projects in Aurora, Las Vegas, New Orleans and Orlando, Fla., were costing between 66% and 144% above initial estimates and were between 14 and 86 months behind schedule.
The original estimate for the Colorado project is from June 2004, and the project was originally scheduled to open February 2014, according to the January GAO report.
The Aurora and New Orleans projects had originally been envisioned to be shared facilities with local universities but were revised to be stand-alone medical centers, adding considerably to their cost and construction time, the report noted.
Revisions were only part of the problem at Aurora. Asbestos needed to be removed and faulty wiring replaced at an existing building on the site, a “buried swimming pool” needed to be removed, and the discovery of an underground spring required continual pumping of water away from the site.
The report also cited how, in an attempt to lower costs and speed the project along, managers decided to use integrated-project-delivery methods.
In IPD, referred to as “integrated design and construction” in the report, designers and building contractors work side by side from the beginning of the project to avoid conflicts and the need for revisions. The GAO said IPD was not implemented soon enough to realize its benefits and the building contractor hadn't been hired until designs were completed.
The Aurora hospital is being built on the sprawling Anschutz Medical Campus. The Orlando VA Medical Center is being built at a similar development, the Lake Nona Medical City complex. The Florida project is coming under similar fire.
The GAO notes that the Florida project's cost has grown from an initial estimate of $245 million to $616 million. It was supposed to open in April 2010, but that has been pushed back. A primary-care clinic opened last month and “the campus activation process is expected to continue through the summer, with the emergency department and hospital as the last functions expected to open,” according to a release. An Orlando VA Medical Center spokeswoman said the hospital will open in “2016 or earlier.”
The GAO reported that the site of the Orlando VA Medical Center changed three times between 2004 and 2010. Its first location was deemed too small. Before the VA could close the deal on a second location, the landowner sold half the property to another buyer and the site was again determined to be too small for the VA's purposes, according to the GAO report.