Veterans Affairs officials clashed with House subcommittee members Tuesday in Denver over whether the department needs help to complete the hospital under construction in Aurora and other large-scale projects.
The VA is under fire for construction delays, cost overruns and litigation related to the Aurora site. The project is more than $470 million over budget, costing more than $1 billion, said U.S. Rep. Mike Coffman, R-Aurora.
The contractor predicted Tuesday the hospital won’t be ready for patients until February 2017.
Coffman has introduced legislation to require a project manager from the Army Corps of Engineers and to otherwise streamline the Department of Veterans Affairs’ construction process.
Coffman said at the field hearing at the state Capitol that the VA lacks the leadership and competency for complex construction projects and that the corps has a better track record.
VA officials said they don’t need another layer of oversight. It won’t help, and it could hurt, said Stella Fiotes, executive director of the VA’s Office of Construction and Facilities Management.
Tuesday’s hearing was held by the VA Subcommittee on Oversight & Investigations.
“You’ve got problems at every project,” Coffman told the VA’s head of construction, Glenn Hagg- strom.
The Government Accounting Office reported last year that VA projects in Las Vegas, Orlando, Fla., and New Orleans also have had problems, with an average cost increase of $366 million per project and schedule delays averaging 35 months.
Coffman said VA design decisions at the medical center being built to replace the Denver VA Medical Center at Colorado Boulevard and East Ninth Avenue have caused the cost overruns. Delayed payments and cost disagreements have triggered contractors’ complaints with the Civilian Board of Contract Appeals, the federal forum for resolution of these disputes.
The prime contractor, Kiewit-Turner, a joint venture, told The Denver Post on Tuesday that project designs arrived late and exceeded what could be covered by the original contract amount of $604 million, despite constant warnings and alerts that radical redesigns would be required to stay on budget.
The hospital probably won’t open until February 2017, said Kiewit Corp. executive vice president Scott Cassels, despite the fact that work is continuing.
“We haven’t lost sight of why we’re building this hospital,” Cassels said.
Until the board can resolve the contract dispute, he said, Kiewit-Turner is asking the VA to keep the cash flowing until it’s determined whether the VA or Kiewit-Turner is held accountable for the cost disparities. So far, Kiewit-Turner has paid the overruns.
“This project has not stopped,” said Kiewit-Turner partner Chris Jahrling. “There is this massive conflict, but we are digging into our pockets. It’s quite uncomfortable.”
Haggstrom said the VA medical center
is now 44 percent complete.
An initial completion date of April 2015 has been extended to May 2015, he said, but the department is concerned that contractor Kiewit-Turner continues to fall behind its proposed schedule.
The VA received a final appropriation of $800 million for the total project. The contract amount of $604 million for the final stand-alone design at the University of Colorado Denver Anschutz Medical Campus has been revised to a maximum of $630 million to reflect approved contract modifications, Haggstrom said.
“The VA has the resources to complete this project,” he said.
As of March, Haggstrom said, the contractor had filed 23 complaints with the Civilian Board of Contract Appeals seeking relief for about $13 million it claims it is owed for more construction changes. The VA hasn’t received any documentation for many of the requested change orders, he said.
Kiewit-Turner officials strongly dispute this.
“You’re the only people defending the debacle that is happening,” U.S. Rep. Jeff Miller, R-Fla., chairman of the House Committee on Veterans Affairs, told Haggstrom. “You’re the only people who have confidence in what is going on.”
GAO representative Lorelei St. James testified at the hearing the VA did not involve the construction contractor in the design process early on. And the VA had a slow change-order process, which had been contributing to construction delays.
Haggstrom said the VA secretary established a Construction Review Council in 2012 to serve as a single point of oversight and accountability and accepted GAO recommendations.
“The VA has changed the way it conducts business significantly,” Haggstrom told the subcommittee.
The subcommittee also heard from veterans groups and trade groups supportive of Coffman’s bill, House Resolution 3593, the VA Construction Assistance Act.
Electa Draper: 303-954-1276, edraper@denverpost.com or twitter.com/electadraper
