Photo Courtesy of Kiewit Turner
VA aims to finish the Aurora project in 2017, four years later than original date.

It has been nearly 60 years since the U.S. Army Corps of Engineers last worked on constructing a major veterans' hospital, but the agency may be coming back to that line of work.

For months, the Dept. of Veterans Affairs has been hit by strong Capitol Hill criticism for poor management of big hospital projects. Now, the VA is considering the possibility of transferring that part of its construction program to the Corps, says VA Deputy Secretary Sloan D. Gibson.

Gibson, testifying at a House Veterans Affairs Committee hearing on Jan. 21, said he's "perfectly willing" for the VA to examine shifting its major hospital construction portfolio to the Corps. The decision on whether to make such a dramatic change has not yet been made, however.

Gibson, a former Army officer and former USO CEO, said, "All I'm after is what's best for veterans, what's the right thing for taxpayers. If that means turning over major hospital construction to the Corps of Engineers, I think that's fine, but that's a big decision. Let's make it an informed decision."

The tipping point has been a troubled Denver-area replacement hospital project. Its construction began in 2010 and was to be finished in 2013, said Dennis Milsten, an associate executive director in VA's office of construction and facilities management. Its total cost was estimated at $800 million, including $604 million for construction.

But the Aurora, Colo., job fell far off track. Milsten said the target completion date is now 2017. Further, its cost has soared to $1 billion, says committee Chairman Jeff Miller (R-Fla.), who called it "a veritable money pit."

"It is a mess," said Gibson, VA's No. 2 official since last year. "One of the biggest problems we ran into ... is we tried to push to a firm target price before we had everything locked in," adding, "We rushed to get there. We were anxious. We were impatient."

The project's construction team, a Kiewit-Turner joint venture, stopped work on the project on Dec. 10, one day after a federal appeals board ruled that VA had breached its contract with the firms. In August, Kiewit-Turner submitted a request to exit the project, claiming VA owed the team as much as $100 million for work and materials.

On Dec. 22, VA and Kiewit-Turner signed an interim agreement to allow work to proceed on the job. That pact included a provision allowing Corps officials to be on-site in Aurora to provide technical and management advice, Gibson said.

To finish the hospital, the Corps is reviewing the project and aiming to formulate final plans and a long-term agreement. Lloyd Caldwell, the Corps' director of military programs, told the committee, "We are confident that we can bring the project to a successful completion." Tom Janssen, a spokesman for Kiewit-Turner, said via email, "We felt it was important to bring in the [Corps] to help finish this important project."