AURORA | The Aurora VA hospital next to the Anschutz Medical Campus has nearly doubled in cost from its first estimate and ballooned to more than $1 billion, according to testimony from VA officials.
VA Deputy Secretary Sloan Gibson confirmed during a House Veterans’ Affairs Committee hearing Wednesday that costs for the Aurora hospital had exceeded an $800 million spending cap and are now estimated at $1.1 billion.
The hospital is half finished.
“Aurora has had the most egregious overruns in terms of cost and delay,” testified David Wise, the director of physical infrastructure issues for the Government Accountability Office, at the hearing.
Wise was answering questions about a GAO report released in 2013 that surveyed four VA regional hospital projects in the U.S. That report found Aurora’s VA hospital cost increase of 144 percent was the largest of any at $472 million, with that number now expected to grow.
Mike Coffman, R-Aurora, asked Wise what made the VA’s management of hospital projects different from how other federal projects are managed.
Wise said the VA did not include medical equipment planners in its early planning stages.
“When we discussed our questions and issues with the naval facilities and the Army Corps of Engineers, this was an important item to them,” Wise said. He said it was important to have a parallel and symbiotic relationship between people building a facility and people responsible for the equipment needed in a facility in order to avoid change-orders.
Wise added that the VA’s slowness in addressing change-orders related to the construction process was also unprecedented.
“We saw change orders where sometimes it had taken up to a year to implement them,” he said. He said that resulted in delayed payments to subcontractors, causing further internal strife.
Coffman, who has proposed legislation to completely strip the VA of its authority to manage its own construction projects and permanently transfer that authority to the Army Corps of Engineers, asked Wise about the Army Corps’ track record with building similar projects on time and on budget.
Wise said the Army Corps has a positive track record but that they have not built projects the size of the Aurora hospital, which will measure 1.1 million square feet when completed.
Rep. Beto O’Rourke, D-Texas, asked if the VA not partnering with the Anschutz Medical Campus contributed to the problems.
“That was definitely a factor. The original design was based on a shared facility,” Wise said. He said the VA going it alone on construction and design of the site contributed to an increase in change-orders and issues with contractors.
Many committee members questioned whether the VA was fit to even be in the hospital-building business.
“It’s the lack of management that’s caused further delays and further expense. That’s the deeply troubling aspect of the problem,” said Rep. Ryan Costello, R-PA.
Costello and other committee members said Gibson should allow the Army Corps to take over and manage not just Aurora’s but construction projects nationwide.
“Whether we do our own hospitals in the future or not … I’m perfectly willing for us to look into that,” Gibson replied. “I’m looking at what’s best for veterans and best for taxpayers.”
When asked how long it would take for the VA to come up with a longterm contract with Kiewit for the Aurora hospital, Gibson said something should be in place later this year. He pointed to an Army Corps analysis being conducted at the hospital site that will determine what caused construction costs to balloon to over $1 billion.
“They will have a plan presented and approved during month of February,” Gibson said. “During that time, they will go through careful close work with Kiewit supported by the VA to determine the schedule, to determine the scope of work, and to determine that a design has been locked down.”
Leaders of the Veterans of Foreign Wars and the American Legion also testified at the hearing about the state of the VA’s healthcare system.
Roscoe Butler, deputy director for healthcare in the National Veteran Affairs and Rehabilitation division of the American Legion, said he supported legislation passed last year that allow veterans to go to any hospital within 40 miles of their home to get healthcare, but that the VA needs to maintain a separate healthcare system tailored to veterans’ needs.
“We don’t support shutting down the VA system and turning it into a voucher system,” he said. “The VA system is for American veterans. We should maintain the system, and continue to build what it already has.”
Raymond Kelley, the VFW’s national legislative director, agreed. He said 60 percent of VFW members wanted to stay in the VA system when polled.
Kelley added that the VA needs large metro-area hospitals like the one being built in Aurora to meet the demands of a growing veteran population nationwide.
“We need to start looking at public-private partnerships,” he said as one solution for getting VA hospitals built faster.
Mark Takano, D-California, questioned whether the committee could’ve done more to prevent the cost overruns and delays.
“Where was Congress’ role in oversight?” he asked.