Wasting Millions at the Veterans Administration
The Veterans Administration is in the midst of a large-scale building boom from coast to coast. The problem is that they don’t know what they’re doing. A number of the massive construction projects are not only behind schedule but hundreds of millions over budget.
The Government Accountability Office, the investigative and auditing arm of Congress, studied VA hospital construction projects in Denver, Las Vegas, New Orleans and Orlando, finding the average construction delay was 35 months and the average cost overrun was $366 million.
In New Orleans, local station wwltv.com reports that the new VA hospital is 14 months behind schedule and $370 million over budget. The original estimate was $625 million with a completion date of December 2014.
However, the new hospital’s cost is approaching a cool billion dollars and the anticipated opening is slated for February 2016.
Looking for any excuse for the delays and the higher cost, the VA’s story (and they’re sticking to it) is that it was all Hurricane Katrina’s fault. Of course the hurricane, which hit the city in 2005, was to blame. Their convoluted story is that their original plan was to share a hospital with LSU’s new University Medical Center. Instead, the VA decided to operate its hospital as a stand-alone facility.
Then we have the construction of a new VA hospital in Aurora, Colorado. The hospital, which will serve veterans in multiple states, will replace an aging regional center in Denver. The project has ballooned over time from an original proposal for a $200 million joint venture with University of Colorado hospital, opening as early as 2008.
The latest cost estimate is pegged at $800 million with a disputed opening date. The VA says that the facility will open in the spring of 2015 while the builder says that it will be more like June 2016. Meanwhile, The VA and builder, Kiewit-Turner, are still debating tens of millions of dollars in change orders requested from construction completed so far.
U.S. Rep. Mike Coffman (R-CO) said, “I don’t have any confidence that it will be on time. And I have every confidence it will be over budget. There’s a pattern of mismanagement of projects by the VA.”
Coffman, chairman of the House Veterans’ Affairs subcommittee on oversight and investigations, added, “Not only is VA building facilities over budget and late, but it is also failing to pay the contractors for their work in a timely manner.”
The longest delay was in Las Vegas, where a hospital now expected to be done in June is taking more than 10 years to complete, 74 months behind schedule. Its price, now estimated at $585 million, is 80 percent over the initial estimate.
The VA hospital in Orlando was scheduled for completion in June 2013. That would put it 39 months behind schedule and 143 percent over cost. Most of the delays at the Orlando medical center result from disputes over changes.
Raymond Kelley of Veterans of Foreign Wars made some interesting observations that on their face seem logical. He advocates putting an architect in charge at the start of many medical construction projects, working with a construction contractor. Early agreement on design would reduce errors and give earlier warning about modifications that might be needed, he said.
Having medical equipment planners involved early in the process — something already done by the military and some other federal agencies — would reduce what he called inevitable delays to accommodate equipment.
The VA seems to be listening. The VA insists that the delays and cost increases reflect its changing needs in each of the markets, as well as unforeseen construction obstacles. It plans to add medical equipment planners on each project to work with architects, and then with contractors, to reduce inevitable delays.
Unfortunately, their change in building procedures has come at an estimated waste of $1.5 billion in taxpayer money!