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Jul
2013
29

UPDATE: Disastrous Aurora, CO Veterans Affairs Project Could Lose Major Contractor

--Denver Post

-Denver Post



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Over the last month we have been reporting on the mishaps during construction of a new Veterans Affairs (VA) hospital in Aurora, Colorado. It is behind schedule and wildly over budget and has become the new posterchild for the VA’s refusal to use union labor and veteran hiring mandates.  Now, adding to the mess is a July 8th complaint by contractor Kiewit-Turner JV claiming they want out of the project.  

In the complaint, Kiewit-Turner JV blames multiple design changes and project mismanagement for the nearly $200 million in cost overruns.  Kiewit-Turner JV was part of the original design team:

Throughout the design phase of the project, the VA’s design documents were frequently issued late and less complete than promised,”

In a written response, the VA said that the contractor can not relieve themselves of their duties and that the VA did not violate their contract.  Contracting officer Thaddeus Willoughby wrote,

“I deny further that Kiewit-Turner is relieved from its contractual obligations and its duty to continue performance and construct the project” as agreed,

The project, which has been being planned since the 1990’s, will replace the aging VA facility in Denver.  Throughout its history the project has seen multiple setbacks and is currently on course to be completed by 2016 at the earliest.  Despite their formal complaint and threat to quit, Kiewit-Turner JV has said they will continue on with construction.

The VA and Kiewit-Turner have pointed fingers at the joint-venture design team of H+L, SOM LLP, CRA and S.A. Miro. The VA claimed in a January letter that the design was 34% over budget.

Designers countered that the hospital could be built for the original $604 million. But Kiewit-Turner objected, saying the new designs were more complex and included “fewer cost reductions than expected, significantly increased the scope of work and made the budget problem worse rather than better.”

Pricing issues include ongoing change orders, higher-than-anticipated subcontractor bids and escalating materials costs.

As we noted in our early July piece, from the early stages of planning many Colorado officials called for a Project Labor Agreement to be used on the VA facility.  The VA has experienced repeated failures building new facilities and most have been blamed on mismanagement.  A few examples are the VA in Butler, PA — now up in the air after the original prime contractor came under investigation from the federal government — and a Florida VA that is on the verge of tanking completely.

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