The mismanagement of a Veterans Affairs (VA) Hospital currently being built near Orlando, Florida has left workers and contractors out to dry in the Sunshine State. What’s worse, many of these problems could have been avoided if the government-funded project had been built under a Project Labor Agreement (PLA) or any kind of arrangement with legitimate oversight. Now, workers like Charles Conner and several hundred others are out of work:
“All these politicians and VA officials keep throwing around statements like: ‘This is unacceptable!’ ‘We have to make better progress!’ Blah, blah, blah, but nothing happens,” said Charles Conner, an electrician once employed on the $656 million government project.
U.S. Rep. John Mica, a long time proponent of the project and even longer-time opponent of quality labor practices, was disheartened when he found out about the mismanagement in May:
“I’m not pleased with what I’ve heard,” Mica said. “We have a whole host of issues that may end up in litigation, and the parties are further apart now.”
Yet Mica, fellow Republicans and the VA system in general routinely reject PLAs despite their ability to prevent the very predicament this hospital is now in.
When hired, Charles Connor was told he would have 20 months of steady work. The project was supposed to be complete in October 2012 but is now likely to take until spring of 2014. That is if contractors agree to finish it:
“They can talk all they want about the problems, but they still get paid,” said Conner, a 59-year-old military veteran from Orlando, about those at the top of the construction ladder. “The rest of us, who didn’t create the mess, sit home and lose money.”
Since Conner was laid off, the electrician estimates he has lost more than $40,000 in wages. Multiply that by the 700 other workers who aren’t on the job site, and that’s nearly $3 million in lost wages for Central Florida’s struggling construction industry.
It’s not just the workers who are feeling the effects of bureaucratic mismanagement. Contractors, such as Quinco, are being held up by electrical changes to the architectural plans which are causing costs to rise and the company to layoff subcontractors until everything is settled:
“The combination of the VA’s slow approvals on change orders, hundreds of changes to the electrical drawings and suspension of construction in many areas of the project gave me no choice,” Deese said of the layoffs.
“I told them I was sorry, that I wished I could do more, but I can’t control the bureaucracy,” he said. “I told them it was a burden to me, too.”
Contractors who are unfit for this scale of work get in over their heads when they are granted contracts because of either non-union bias or their ability to underbid more qualified firms who pay their workers properly. Two such contractors on this VA job are members of the unscrupulous non-union construction lobby, the Associated Builders and Contractors (ABC). These contractors, Brasfield & Gorrie and the aforemention Quinco, love to assail PLAs and the worker protections and stoppage avoidance that come with them, but situations like this undermine their argument.
Of the nearly 100 subcontractors working on the VA Medical Center, Quinco’s contract is the largest, according to George Paulson, on-site project executive for B&G. Quinco’s original contract started at $45 million.
However, because of the extent of the electrical changes, that amount has almost doubled.
Deese has submitted about 300 change orders for the additional work and the associated extra costs. “Fewer than 10 have been approved for the full amount,” he said. Most haven’t been approved at all.
The ones partially approved made matters worse, he said. “I’ll submit a change order for, say, $2 million, and the will VA approve it for $100,000, and we don’t know if we can afford to start.”
Rep. Mica is pressing the House Committee on Veterans’ Affairs to get the job moving, but out of control costs and organizational inefficiency have left many of the companies tapped out of funds:
“This is the largest job our firm has ever taken on. No one anticipated that the VA wouldn’t pay. It’s destroying my balance sheet,” Deese said.
“For the first time in 20 years of running my business, one client has put a stranglehold on my operations,” Deese said. “We’re $11.4 million in the hole. That’s crippling.”