Report Faults VA Management For Construction Cost Overruns At LA VA Hospital

AURORA, CO (AP) — Huge cost overruns and long delays at new VA hospitals in Louisiana, Colorado and Florida were caused by multiple design changes, mismanaged contracts or poor budget controls, according to Army Corps of Engineers reports released Thursday.

         High costs at a fourth veterans facility in Las Vegas were the result of a decision to change the plan from an outpatient clinic to a full hospital, the reports said.

         Under fire for ballooning expenses and long delays, the Veterans Affairs Department asked the Corps of Engineers to review its overall construction practices as well as the four new hospitals. The Corps warned that the VA needs to make fundamental changes in the way it handles construction or it will suffer similar overruns and delays on future projects.

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         The Corps said the VA has conflicting lines of authority and its priorities, expectations and accountability standards don't mesh. It also said the VA needs more disciplined leadership.

         The half-finished Colorado medical center, under construction outside Denver, is the VA's most embarrassing problem. It's now expected to cost up to $1.73 billion, nearly triple the earlier estimates.

         Congress wants the VA to fire the executives responsible for the Denver failures. The VA says it's investigating what went wrong.

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         Congress also wants the VA to turn over large construction projects to the Corps of Engineers in the future.

         A look at the Corps' findings:


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         The VA is building a medical center in New Orleans to replace one heavily damaged by Hurricane Katrina in 2005. Cost estimates rose from $625 million in 2009 to $995 million today.

         The VA first planned to build and operate the new hospital jointly with Louisiana State University, but it switched to a stand-alone veterans facility.

         The VA also ran into environmental problems on the construction site that were costly to resolve.

         The Corps of Engineers said the VA used an ill-informed process that designed the hospital to meet the perceived need, not to fit a budget. Budget controls weren't always followed because of complex and conflicting lines of authority in the VA, the report said.

         Planners also used some design standards dating to the 1970s, the Corps said.




         The VA repeatedly changed the design and square footage of a new medical center in the Denver suburb of Aurora, the Corps said.

         The VA also used a complicated contract process that department officials didn't understand, and they adopted it too late in the process, leading to disputes and conflicting cost estimates, the report said.

         A panel of judges ruled last year the VA had breached its contract with the builder by not delivering a plan that could be built within the budget.

         Construction stopped for a time, but it has continued at a slower pace under a series of stop-gap funding measures.

         VA Deputy Secretary Sloan Gibson, who visited the construction site Thursday, said his department accepts the findings and is making changes.

         The VA is asking Congress for an additional $625 million to finish a scaled-back version, on top of the $1 billion authorized to date. Gibson said he was optimistic a funding deal will be reached before the project hits its current spending cap at the end of the month.

         The Corps of Engineers also said the VA didn't have enough construction management staffers in Denver to handle a project of this scale, and they were overwhelmed trying to meet deadlines.




         The cost of a new medical center in Orlando rose in part because the VA issued multiple contracts for the foundation, structure, fittings and finish and because the electrical design was flawed, the Corps said.

         Elaborate finishes and architectural features drove up construction costs and will increase operating and maintenance costs in the future, the report said.

         The report didn't include cost figures, but officials have said the price more than doubled from $254 million to around $600 million.




         The VA originally planned to partner with the Defense Department to build a huge outpatient clinic at Nellis Air Force Base outside Las Vegas, but security restrictions made that impractical. After the VA decided to build a stand-alone clinic in North Las Vegas, it changed the plan to a full medical center. But the VA didn't have specific targets on the square footage, the Corps said.

         The report generally praised the VA's management of the Nevada project.


         – by AP Reporter Dan Elliott




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