The Kiewit-Turner joint venture building a massive new U.S. Dept. of Veterans Affairs hospital in Aurora, Colo., says it wants out of the $604-million job. In a complaint filed with a federal appeals board in July, the contractor blames multiple design changes and project mismanagement for an additional $200 million in projected cost overruns.
The figure is beyond a $200-million escalation targeted by the team in January, bringing the current construction cost to more than $1 billion. The construction cap was set originally at $610 million.
Kiewit-Turner will continue work for now but said in its July complaint filing that it is "contractually entitled to suspend performance immediately."
The complaint calls for an extensive redesign or for the VA to seek more money from Congress.
"Throughout the design phase of the project, the VA's design documents were frequently issued late and less complete than promised," the Kiewit-Turner complaint says.
The contractor claims the project was over budget even before construction began and alleges ongoing delays by the VA in approving change orders. Kiewit-Turner says nearly all of the original $604-million budget was obligated at the outset, before any change orders were initiated.
The VA's response, written by contracting officer Thaddeus Willoughby, says the contractor cannot quit the project and that the agency has not violated the contract. "I deny further that Kiewit-Turner is relieved from its contractual obligations and its duty to continue performance and construct the project" as agreed, he wrote.
Willoughby's response further notes that Kiewit-Turner was involved in the original design.
Both entities have refused to comment beyond the complaint, filed on July 8 with the Civilian Board of Contract Appeals.
The VA and Kiewit-Turner have pointed fingers at the joint-venture design team of H+L, SOM LLP, CRA and S.A. Miro. The VA claimed in a January letter that the design was 34% over budget.
Designers countered that the hospital could be built for the original $604 million. But Kiewit-Turner objected, saying the new designs were more complex and included "fewer cost reductions than expected, significantly increased the scope of work and made the budget problem worse rather than better."
Pricing issues include ongoing change orders, higher-than-anticipated subcontractor bids and escalating materials costs.
The project's extensive timeline tells a story of political wrangling, planning snafus and multiple design changes.
The original 1990s plan was to replace Denver's aging VA hospital with a shared-services model on the Fitzsimons medical campus in Aurora. The plan called for the VA facility to occupy the top floors of the new University of Colorado hospital, with veterans sharing diagnostic, surgical and outpatient services with other patients.
The anticipated total cost was $185 million to $200 million.
But veterans' groups objected to the shared-facility plan and lobbied for a stand-alone hospital campus on the same site.
In 2010, Congress authorized $800 million for the entire project, including land and design costs. Funding issues and design work based on the new plan delayed the start of construction until April 2012. The original completion date was set for 2015, but that will be delayed until at least 2016.