In 2007, reports started filling newspapers and websites about the poor treatment of wounded veterans in aging federal hospitals, including those being built and run by the U.S. Dept. of Veterans Affairs. The U.S. Army Corps of Engineers and designer HDR shared the national determination to get things right in veterans’ healthcare when in 2012 they began work on a replacement for an Army hospital at Fort Bliss in El Paso, Texas.

Good intentions, apparently, are no guarantee of success, for the five-building, 1.1-million-sq-ft Fort Bliss replacement project now stands more than two years past its planned completion date of November 2016 and about $400 million over the core construction contract’s original price. Final completion is now foreseen next July, with occupancy in 2020.

A report by the U.S. Dept. of Defense Inspector General, released June 6, enumerates hundreds of needed design changes, despite extensive review of the design at different stages of completion. It also accuses the Corps of failing to properly track all changes and recommends that the matter be studied to see if specific individuals should be held accountable (the Corps agreed to review for accountability). In a statement, the Corps said the original completion date was April 2017, that the project was very complex and the best care for service members was a goal. “We are still determining the best course of action” in light of the report findings, the statement said.

The Fort Bliss project joins the veterans hospital in Aurora, Colo.—where the Corps replaced the VA as manager—as agonizing misfires on multibuilding veterans-care campuses. At both, the final price busted the billion-dollar mark.

The El Paso facility will replace the existing William Beaumont Army Medical Center. To prepare, the Army Corps in August 2012 conducted a design-bid-build process and sought a firm fixed price from a contractor at 100% design. It was awarded to a joint venture of Clark Construction and McCarthy Construction in January 2013 for $648.9 million. Other contracts added to overall costs.

Then the changes started. Up until March 2018, there were 978 change requests (132 were cancelled). A single request for equitable adjustment by the contractor added 306 calendar days to the contract.
 

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Bankruptcy and Fatality

Trouble hit from several other directions. According to the inspector general, in February 2014 the foundation pier-drilling subcontractor went bankrupt, adding 90 days to expected occupancy. A year later, an accident killed a worker and the monthlong stand-down for the subsequent investigation pushed back the occupancy date to October 2017. In November 2015, the project team held a partnering workshop to promote good relations among stakeholders to help prevent further costs and delays. Later that fall, the inspector general report says, the chief executives of the joint-venture contractor told the project team that “design interpretation issue were the responsibility of the government” and were hampering the contractor’s work. In January 2016, representatives of the Corps, the contractor and the designer of record met in Dallas and decided to replace their respective on-site project leaders.

Also in 2016, a Corps committee made recommendations for extra controls needed on megaprojects, but by then the cost-and-schedule cake in El Paso already had been baked. That August, Clark-McCarthy sought 21 months of compensable delays related to steel erection, concrete reinforcing and design coordination issues. The Army had to go back to Congress for more funding, and the final $245 million drove the project’s total authorized cost to $1.2 billion.

Much of the extra costs trace back to what the inspector general describes as design errors and omissions, which the inspector general evaluated. One of the biggest caused a $9.8-million, 65-calendar-days claim for the “government’s direction that certain structural steel beams and columns be refabricated to correct errors in the design” and “to cease delivery of steel to the site,” according to the inspector general. Where the design errors originated isn’t stated.

The inspector general’s report makes no criticism of HDR or Clark-McCarthy. A spokeswoman for HDR said she is not aware of any claim or conflict involving the company’s work on the project. Clark-McCarthy referred questions to the Corps.

The lasting effect may be to undermine confidence in the Corps’ ability to manage public works of this scale. At a Washington, D.C., hearing last year of a Congressional military construction subcommittee, Sen. Jerry Moran (R-Kan.) told Peter Potochney, acting assistant secretary of defense, that trouble on the Fort Bliss hospital and other projects “raise questions to me about the ability of the Army Corps to effectively manage major construction projects.”