Watchdog Report Blames VA Leaders for Aurora Hospital Project Budget Woes
Minutes before the Sept. 28 deadline, Veterans Affairs officials partially complied with a congressional subpoena seeking internal documents about cost overruns at the replacement hospital in Aurora, Colo. Project costs for the hospital are now at $1.68 billion.
VA officials turned over only 18 of the 71 requested transcripts and implored congressional leaders not to make public the interviews with VA project leaders, fearing future investigations would be hampered. VA Deputy Secretary Sloan Gibson said the remaining transcripts would be released on a gradual basis.
The hospital’s price tag is nearly triple the original estimate of $604 million and well above the $800 million approved by Congress. The project is more than two years behind schedule and won’t be finished until January 2018, at the earliest.
Rep. Mike Coffman (R-Colo.) said in a statement, “The slow walk of the [report’s] release is completely illegal and deeply offensive” to taxpayers and veterans. The hospital is in his district.
Rep. Jeff Miller (R-Fla.), chairman of the House Committee on Veterans’ Affairs, recently asked the Justice Dept. to investigate whether VA officials perjured themselves in testimony to Congress about the project. “Numerous VA officials repeatedly misled Congress regarding … the biggest construction failure in VA history,” Miller said in a Sept. 27 statement.
Congressional anger spiked after the VA Inspector General’s report, released on Sept. 21, harshly criticized VA leadership of the Aurora project. The blown budget is “primarily the result of poor business decisions, inexperience with the type of contract used and mismanagement by VA senior leaders,” the report said. VA officials did not respond to requests for comment.
The 82-page IG report also criticized the VA for several “significant missed opportunities,” including ignoring ongoing warnings that costs were exceeding the budget; not reconciling “widely divergent cost estimates” between the design team and joint-venture contractor, Kiewit-Turner (K-T); lax oversight of the joint-venture design team and rejecting cost-reduction strategies proposed by the contractor.
The report cites the VA for not adequately staffing the project and bringing K-T on board too late “to provide effective input to the design.” K-T officials declined to comment on the report.
The report partially blamed ballooning costs on a design that placed aesthetics above practicality, including the use of underground parking so as not to block mountain views, elaborate landscaping between buildings and a 1,100-ft-long concourse that acts like a spine to connect hospital buildings. The plan allows more daylight into work spaces, but costs for the narrow concourse rose to more than $120 million in 2015 from $81.4 million in 2011.
The report also said the sprawling campus design could have been more efficient, comparing it to the more compact, “stacked” buildings on the VA’s campus in North Las Vegas, which, at 1.3 million sq ft—compared to Aurora’s 1.2 million sq ft—cost $620 million to build.
Andy Boian, a spokesman for the joint-venture design team (JVT), said in a statement, “The JVT disagrees completely [with the report]. The fact is, many health-care projects today employ strategies to maximize patient access to daylight and the outdoors.” Many of those “cost escalators” were already part of the design when the contractor came aboard, he said. The JVT is made up of SOM; S.A Miro Inc.; Cator, Ruma & Associates and TreanorHL.
Construction of the VA’s new Orlando, Fla., hospital also ran well over budget and schedule. VA officials dedicated that facility last November, roughly three years later than its 2012 completion target. Originally estimated at $665 million, the final cost came in at $878 million, Miller says.
Last October, after the VA asked Congress for additional funds to complete the Aurora project, leaders handed oversight to the Army Corps of Engineers. Corps spokeswoman Eileen Williamson says the job is now 77% complete, with about 40 Corps personnel on site to guide the multiple building teams. “We are still targeting January 2018 for completion,” she says.