Unsatisfied with Brasfield & Gorrie’s response to a recent threat of contract termination—known as a cure notice—the U.S. Dept. of Veterans Affairs (VA) ratcheted up the heat on Jan. 31 by issuing a show cause notice to the contractor over its performance on a nearly $300-million hospital project in Orlando.

Photo by Scott Judy
The Dept. of Veterans Affairs has issued a Show Cause notice to hospital contractor Brasfield & Gorrie. The contractor has until Feb. 11 to respond or face termination from the project.

Neither the VA nor Brasfield & Gorrie would respond to ENR’s questions about the dispute, but instead offered statements.

The agency’s statement explained: “VA’s contracting officer has carefully reviewed the response to the (second) cure notice provided by B&G and determined that it was unacceptable because B&G failed to describe how it will address or cure the deficiencies cited in the notice.”

In response, B&G spokeswoman Tracey Sibley offered this statement: “Brasfield & Gorrie does not agree with the conclusions asserted in the VA’s recent show cause (notice) and will respond as requested within the next few days. Brasfield & Gorrie’s primary goal has always been to complete this project as quickly as possible.”

The VA stated that the contractor has until Feb. 11 to respond.

As ENR reported previously, the VA issued a second cure notice in early January. The agency would not make the notice publicly available, as it did for the first one, which was issued last June. But spokeswoman Josephine Schuda described the VA’s current concerns about the project, including Brasfield & Gorrie's “failure to diligently pursue work, have sufficient workforce on-site to meet the extended contract completion date of summer 2013 and deficiency in the quality of work.”

The show cause notice is the next step in the agency’s process of determining whether Brasfield & Gorrie is in default.

According to the VA’s statement: “The show cause notice provides B&G an opportunity to present any facts bearing on the question of whether its failure to perform arose from causes beyond its control and without fault or negligence on the contractor’s part. The VA’s contracting officer will review the response from B&G on the show cause notice to determine whether or not the contractor is in default.”

U.S. Rep. Jeff Miller (R), who chairs the House Committee on Veterans Affairs, has called the project a "multimillion-dollar debacle" for its cost and schedule overruns. Miller convened a congressional field hearing in Orlando last August to get some answers, but came away mostly frustrated.

The agency awarded B&G a $260.3 million contract to build the 1.2-million-sq-ft, 134-bed facility in September 2010, with completion originally set for October 2012. The VA now says the Brasfield & Gorrie contract is valued at nearly $299.9 million, and that the extended contract completion date is Aug. 8, 2013.

During last year’s congressional hearing, the completion date remained in dispute. VA officials told congressional representatives that the project was roughly 60% complete and called a summer 2013 completion "achievable." But B&G CEO Jim Gorrie told the Florida politicians that the project was only about 45% complete, and said it would take a "ton of effort" to finish by November 2013. At that time, Gorrie added that the firm’s estimated completion date was November 2014.

At this point, terminating Brasfield & Gorrie would scuttle any possibility of completing the project by August, however. According to the VA’s assessment of “standard procurement timelines,” termination would likely delay the project by at least six months.