VA struggles with behind-schedule, over-budget construction projects

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Veterans Affairs building projects are late, over budget

Watchdog finds costly hospital construction has run into huge snags

The Veterans Administration says it is doing its best to respond to a scathing report by the Government Accountability Office which slammed the department's oversight of construction projects around the country that are running years behind schedule and a combined $1.5 billion over budget.

In a statement to Fox News, the VA said, “The Department has taken measures to implement recommendations from the Government Accountability Office through several initiatives to improve the scope, cost and schedule information of major construction projects."

VA facilities being built in Orlando, New Orleans, Las Vegas and Aurora, Colorado are running from 59 percent to 144 percent over initial cost estimates, according to the GAO report issued in April.

“Well I think (the word) boondoggle would be pretty generous, it is extraordinary,” says Republican U.S. Rep. Mike Coffman, in whose district the Aurora facility is being built. “We clearly have to get down to the bottom of the problem here and get this hospital built and bring the cost down for it.”

The original plan for the new VA medical center in Aurora had a $200 million price tag and a projected opening as early as 2008. The VA eventually settled on a $328 million cost with a February 2014 opening. By the time of April's GAO report, the project’s cost had risen to $800 million with an April 2015 opening.

“That's not unusual for government projects,” laments Wall Street Journal columnist Al Lewis. “But these are hospitals. We should be able to build a hospital, especially when we have people coming home from war and they've got all kinds of problems, from psychological to missing body parts.”

The project's general contractor, Kiewit-Turner, blames the VA in a complaint filed with the Civilian Board of Contract Appeals. It says the VA has changed the design of the facility numerous times and that those changes have been, "...increasingly complex, included fewer cost reductions than expected, significantly increased the scope of the work, and made the budget problem worse rather than better."

Kiewit-Turner, which says its profit margin has long since disappeared, is now projecting a 2016 opening with a total cost of $1 billion.  It says if the VA doesn’t accept the increase, it wants out.

“It's going through a legal dispute resolution administratively between the contractor and the Veterans Administration," explains Coffman. "They (Kiewit-Turner) say that either there is going to be a realization that the true costs are going to be paid for the facility (or) they want to quit the project."

If the general contractor were allowed to quit, the project could effectively come to a halt.

"So meantime," columnist Lewis points out, "we've got wars winding down all over the world and there are people coming home and I don't think they're being properly serviced by any of these medical centers. What are we telling people in the future about military service when we can't even honor the people who have sacrificed for us like this?"

Coffman, a combat veteran and retired Marine Corps major, echoes those sentiments. "These extraordinary cost overruns I think do represent money that's not being spent on healthcare for our veterans who have earned those benefits. So I think it's really a tragedy for those who have sacrificed so much in defense of this country."

He says the VA should not be allowed to manage future construction projects and thinks the Army Corps of Engineers should be put in charge.