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Veterans Affairs Facility in CO Proves Again How Abysmal the Agency is at Construction Work

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A decision by the Civilian Board of Contract Appeals has halted construction on an over-budget, behind schedule Veterans Affairs facility near Denver, Colorado and brought to light a pattern of mismanagement by the agency.   Not unlike botched VA projects in Florida and Louisiana, the cost of constructing the facility in Aurora has spiraled out of control due to poor planning.  Now, the lead builder has been let go.

Among the VA’s harshest critics has been congressman Mike Coffman.  The former marine and current chairman of the Oversight and Investigations Subcommittee for House Veterans Affairs led a meeting between members of Congress and the agency after the early December decision.  The VA agreed to refund Kiewit-Turner $107 million it had spent out of pocket on the project, turn control of the project over to the Army Corps of Engineers, and negotiate a new contract.  Coffman hopes the two sides can enter a 60-day temporary contract so that workers can be back on the jobsite:

“I’m hoping that they [Kiewit-Turner] recognize that there’s 1,400 people out of work and that they have some responsibility for those people. That they’re going to be reimbursed over $100 million, and that there is funding at least for the next 60 days.  Come back to work.”

Kiewit-Turner agreed to build the facility in 2010, entering an agreement which allowed the company to begin work before designs had been finalized.  The original agreement paid Kiewit-Turner roughly $600,000 and required the contractor to stay on budget.  Upon completion, the facility was supposed to serve 83,000 veterans and feature research and clinical wings.

By 2013 Kiewit-Turner asked the VA contracting officer if it had the right to suspend work on the project, warning it would cost over $1 billion to realize the eventual design.  This month’s Civilian Board of Contract Appeals decision allows the builder out of the project and forces a scenario in which a more cost effective plan can be created.  

Speaking to Fox 31 Denver, Coffman pointed out that the VA’s track record with major construction projects suggests drastic changes must be made:

“The Veterans Administration’s core mission is to provide for the health care and other benefits that the men and women who have served our country in the military have earned. The VA is clearly not a construction entity and they need to get out of the business so that we can better meet the needs of our veterans by getting these facilities built. The mismanagement of the Aurora construction project is not an isolated problem, every major construction project that the VA is currently working on is dramatically over budget and behind schedule.”

Rep. Jeff Miller (R., Fla.), Chairman of the House Committee on Veterans’ Affairs, also questioned the VA’s ability to handle the complexities of major construction project:

“Without dramatic leadership changes throughout VA’s Office of Acquisition, Logistics and Construction, I have no confidence the department’s ability to manage large construction projects will improve.”

The VA has long denied Building Trades union requests to involve their membership and contracting while employing veterans who are transitioning from military to civilian life through the Helmets to Hardhats program. This approach, union leaders say, would ensure a quality component on VA projects while addressing the pressing matter of veteran unemployment.

In an op-ed for the Denver Post Coffman laid out three options for securing enough funding to finish the project responsibly:

The first is that the VA can search through its own budget for unexpended appropriations in what is known as “reprogramming.” However, in our meeting with the VA, it doubted it could find anything close to $400 million in its budget to fully fund the project.

The second possibility is the Judgment Fund, which is managed by the U.S. Department of Justice. This fund is used to pay court-ordered claims or settlements with agencies of the federal government. However, there are problematic aspects to this case, as the federal board found the VA is in breach of its contract but did not award financial damages in the case, potentially making the Judgment Fund unusable to fill the financial shortfall.

The third possibility is getting more money approved by Congress, but that may not be possible until later next year. I will seek additional funds if necessary and my case to Congress is that we can’t erase the costly mistakes of the VA, but the leadership of the Army Corps will do everything possible to bring down the cost and speed up the construction of the hospital.


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