VA Says Aurora Hospital Costs Have Soared to $1.73B
Costs for the Dept. of Veterans Affairs replacement hospital in Aurora, Colo., have ballooned to $1.73 billion, more than five times the project’s original cost and twice the spending cap set for it by Congress. VA Deputy Secretary Sloan Gibson delivered the bad news about revised cost estimates to congressional leaders in March 17 phone call.
The new price tag, up sharply up from the $800 million claimed by the VA in early March, comes from the U.S. Army Corps of Engineers, which is advising VA on the project. USACE will assume full management of the project this summer. The project was originally estimated at $328 million.
“The [new] 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,” the VA said in a statement after the call.
Congressional reaction was swift and predictably harsh. “One thing is certain: Congress will not authorize another dime until VA gets its construction affairs in order,” said Rep. Jeff Miller, chairman, House Committee on Veterans’ Affairs. “The department owns this mess, and it’s not fair to force taxpayers to bail out the bungling bureaucrats who created it.”
U.S. Rep. Mike Coffman (R-Colo.) dubbed the announcement “sticker shock” and said, “It is going to be a heavy lift to get this through Congress.”
U.S. Rep. Ed Perlmutter (D-Colo.), told The Denver Post: “The number took my breath away.”
Miller said in an email statement that he will insist the VA “get its construction affairs in order,” including providing Congress with a list of options to complete the project in a way that doesn’t interrupt current services to veterans and devise a “deficit-neutral plan” to pay for the options.
He will also ask the VA to fire the people responsible for mishandling the Aurora project. “Right now it’s incumbent upon Congress, taxpayers and Colorado veterans to keep the pressure on VA to take this project seriously—something the department has failed to do from the beginning,” Miller wrote.
The VA’s budget announcement came after officials recently agreed to “reprogram” an additional $43.3 million to keep the project going through the end of May. That amount is on top of the $56 million that the VA had already shifted to the project this year.
Project insiders say costs will exceed the $880-million congressional cap sometime this April.
The troubled project was first shuttered in December after Kiewit-Turner, the joint-venture contractor, won an contract appeals board decision to stop work until the VA reimbursed K-T nearly $100 million for unpaid work and materials. Work is likely to be stopped again if Congress does not extend funding beyond the $880 million cap.
Kiewit-Turner issued a cautious statement shortly after the new budget announcement: “The U.S. Army Corp of Engineers budget estimate for the Denver VA Hospital is a vital step in moving this important project forward for Colorado-area veterans,” said Tom Janssen, spokesperson for Kiewit-Turner. “We will continue to work closely with the U.S. Army Corp of Engineers and the U.S. Dept. of Veterans Affairs to ensure this project is completed. We are confident that VA and Congress will work together to secure the necessary funds needed to finish the important project.”
The job, initially targeted for completion this April, is now years behind schedule and only half finished.