VA building projects riddled with mistakes and cost overruns

AURORA, Colo. There are hospital doors at the half-built Veterans Affairs medical center outside Denver that were supposed to cost $100 each but ended up running $1,400. Theres a$100-million-and-still-rising price tag for an atrium and concourse with curving blond-wood walls and towering glass windows. And entire rooms that had to be refashioned because requests for medical equipment changed at the last minute and in other cases the equipment didnt fit. No one had bothered to measure.

Not even completed yet, this $1.7billion facility is already among the most expensive hospitals in the world, and its just one of several VA hospital projects that are greatly over budget and behind schedule, according to the Government Accountability Office, the investigative arm of Congress.

Everything that could have gone wrong did. Its just an astounding price tag, said David Wise, who wrote in a GAO report about the Aurora project and VA construction problems in Orlando, Las Vegas and New Orleans.

The hospital construction woes are the latest in a long line of troubles that the Department of Veterans Affairs faces, from accusations of retaliation against whistleblowers to a backlog of compensation benefits to reports that wait times for appointments in some parts of the country still havent improved. Wait times range from 30 days to more than six months.

Last May, President Obama accepted the resignation of VA Secretary Eric K. Shinseki in the wake of a coverup of months-long hospital wait times for veterans seeking treatment for everything from cancer to post-traumatic stress disorder. Obama and Robert McDonald, Shinsekis replacement, have vowed to restore trust in the agency.

At a hearing of the House Veterans Affairs Committee on Wednesday, one of nine held on the Colorado hospital cost overruns and delays, members will discuss whether they should allocate an additional $830million to finish the project.

The GAO report, written by Wise in 2013, highlighted the failure of VA in Orlando to hire specialists in medical-equipment construction who could have ensured that the rooms would accommodate MRI machines and other crucial equipment. Multiple revisions to lists of medical equipment meant plans kept changing, to the tune of $14million, according to the GAO report.

Think of it like this youre building a kitchen, Wise said. But you dont check how big your stove or refrigerator is. You measure too late. And nothing fits, so you have to hack up a whole another piece of wall. Thats very expensive and time-consuming.

The combination of extravagant planning divorced from financial reality and bungled execution has bedeviled several recent VA projects, the GAO found.

In Orlando, VA shifted the location of the proposed hospital project three times, inflating the cost by more than $350million and delaying it at least three years.

In Las Vegas, the department added ambitious changes to a medical center after construction had begun, increasing the price by more than $260million. And in New Orleans, where VA wanted to replace a hospital devastated by Hurricane Katrina, disputes with local government and repeatedly revamped plans for building and facilities operation added more than $370million to the bill.

VA has disagreed with the findings of the GAO report, saying it was unfair to compare initial budgets with later revisions.

VA as builder

All this raises a question among congressional leaders: Why is VA, already overburdened with providing health care and benefits to former troops, in the construction business?

The responsibility for real estate and development across the federal government usually falls to the General Services Administration, which specializes in setting up federal buildings. The Defense Department looks to the Army Corps of Engineers and the Naval Facilities Engineering Command to build its hospitals and other facilities.

VAs role in building hospitals is a legacy of ambitious leasing and construction programs the agency undertook to help soldiers exposed to mustard gas and other chemicals in World War I or wounded in World War II.

Today, experts such as Phil Carter, a senior fellow at the Center for a New American Security, say VAs management of the medical projects amounts to malpractice.

The VA cant afford to experiment and learn on the job how to do construction, Carter said. Every time they change their mind, the bill to the taxpayer is running, not to mention the lost opportunity to provide health care to veterans who need it.

Rep. Mike Coffman (R-Colo.), whose district includes Aurora, has called for banning VA from managing a major construction project again. The VA couldnt lead starving troops to a chow hall when it comes to managing a construction project, he said. They need to get out of the construction business.

In a statement last week, the agency said, VA has taken lessons learned from this project in Denver and applied many of them to our construction projects moving forward. Deputy Secretary Sloan Gibson has vowed to get the Aurora facility opened in 2017.

Efforts to build the Aurora hospital have dragged on since the late 1990s. It is to be a state-of-the-art medical campus with 10 buildings, three parking garages, a research and treatment center fpr spinal-cord injury, and a 30-bed nursing home and rehabilitation center. It would provide care for one of the countrys largest concentrations of veterans nearly half a million in Colorado alone.

But the price tag has soared more than $1billion over budget. It will cost significantly more than the Dallas Cowboys stadium, which at $1.2 billion is one of themost expensive construction projects in recent years. The 182-bed Aurora hospital costs about $9.5million per bed experts in hospital construction say the price tag should be $2 million, at most. The bill is enough is to give $17million to every family in Colorado who lost a member in the wars in Iraq and Afghanistan, according to calculations by 9News in Denver.

The cost is so high because VA did not produce a design that could be built for an estimated $604million but instead one that would run more than $1billion, Wise said.

Warnings of cost overruns

Internal VA e-mails dating to 2010 show that VA contracting officials were ignored when they warned their supervisors about mounting cost overruns.

I must beg you once again that we re-think our strategies in New Orleans and Denver, Adelino R. Gorospe Jr., a contract specialist with the VA Office of Construction and Facilities Management, said in an e-mail on Sept. 1, 2011. Without a change in strategy, my estimate would be around half a billion dollars in total cost overrun: $500Million! Thats how risky this type of contract is. Another reality check! Where in this economy are you going to find the money?

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