The Dept. of Veterans Affairs is seeking congressional approval for a plan to get moving on $1.4 billion in major construction projects that have been stalled because of differences in funding projects at VA and at the Army Corps of Engineers—which is handling design and construction for VA at those delayed projects.

More broadly, VA also is studying what to do about its hundreds of vacant or underused facilities.

Projects have been held up because the VA and the Corps are trying to work through very difficult processes and interpretation of appropriation rules.

Dr. David Shulkin, confirmed in February as the VA’s new secretary, told reporters in a May 31 White House briefing that 11 VA projects have been held up because the VA and the Corps “still are trying to work through very difficult processes and interpretation of appropriation rules.”

Shulkin, a physician by training, added, “We’re waiting for congressional approval on a joint proposal to move forward, which would allow these projects to move ahead.”

VA said in a June 5 response to ENR questions that its request was to the Appropriations Committees and relates to multi-phase projects. It added, "This request was necessary due to differences in the way VA's projects and [Army Corps] projects are funded." 

The projects include six in California—in Alameda, Long Beach, Livermore, San Diego, San Franciso and West Los Angeles. 

Also on the list are: phase one of a new bed tower in Tampa, Fla.; phase one of a new medical facility in Louisville; a plan to correct seismic deficiences and expand clinical space in Reno, Nev.; a new community living center in Canandaigua, N.Y.; and a new building plus seismic corrections at American Lake, Wash.

The legislation that provided VA’s fiscal 2016 appropriations stated that $649 million in funds for major projects would not be released until VA reached an agreement with what the measure said was “an appropriate [non-VA] federal entity” to be the “design and/or construction agent” for major projects whose total cost is $100 million or more.

Jimmy Christianson, Associated General Contractors of America's regulatory counsel, says that having the Corps take the lead on a new VA project is a relatively clear process but how to treat multi-phase projects that are in the midst of construction is unclear.

For example, he says, “If the Army Corps takes over for the fourth phase, are they then responsible for what happened in phase one through three as well?....Are they accountable? Is that what Congress’s intent was? Or was it [for] taking over new facilities that haven’t been built?”

The congressional directive to bring in another agency to oversee large VA projects came in the wake of a major cost overrun and delay at a new VA hospital project in Aurora, Colo. That project was budgeted at $800 million, but had increased to about $1.7 billion as of last September. The Corps said last October that the project was about 80% complete as of that time.

In the wide-ranging briefing at the White House, Shulkin addressed other VA faciities and construction issues. He said, “VA is taking way too long to make construction awards,” and has built up large amounts of appropriated, but not-yet-spent, funds. He said VA’s unobligated balances total $2.6 billion for major projects—those valued at more than $10 million—and $971 million in smaller projects.

Hundreds of vacant buildings

Shulkin, who had been VA’s undersecretary for health for 18 months before assuming his new post, also said the department has launched a “national realignment strategy” to deal with its 400 vacant and 735 underutilized buildings. He said maintaining those facilities costs $25 million a year.

Jordan Howard, associate director of AGC's federal and heavy construction division, says that the number of veterans will be increasing and peak in the middle of the next decade. Howard says, “So the VA has to do a lot in order to address this issue with their facilities, or the problem’s just going to get worse.”

He adds, “There’s a few things out there they can do," such as using public-private partnerships to finance new hospital projects. Howard notes that Canada’s health system has used P3s to build hospitals in areas such as Ontario and Quebec. “They’ve had significant success there,” he says.

Shulkin said a VA assessment report determined ihat it would take $18 billion to bring all of the department's deteriorated facilities up to par, including needed structural, seismic, electrical and mechanical upgrades.

But Shulkin acknowledged that VA won’t be seeking $18 billion from Congress for facilities, acknowledging that the amount “is not a realistic number for us to be able to get to invest” in buildings.

Shulkin said, “We need different types of strategic partnerships to be able to bring the type of facilities that we need to veterans, and that means working with local government, with academic affiliates, other federal agencies, and private sector partnerships.”

The Trump administration has indicated that VA hospitals will be one of the types of projects that will see new investment from its promised $1-trillion, 10-year infrastructure initiative.

Story updated on June 5 with more details from VA. Story changed on Oct. 12, 2017, to correct duplicated word.