Legislator Complains about VA’s Construction Delays and Lack of Transparency with Congress

by U.S. Medicine

April 9, 2012

By Stephen Spotswood

WASHINGTON — As more medical services are moved to veterans at VA’s outpatient clinics, the need for increased space in those facilities has become critical. For some communities, however, the realities of real estate and construction is that the process is plagued by delays.

Furthermore, according to some legislators, VA does not do a thorough job of keeping Congress up to date on those delays or on the changing amount of resources being funneled to projects.

At a recent hearing, the VA House Oversight Subcommittee used work on an expansion to the VA clinic in Savannah, GA, as an example of nationwide problems.

“Savannah is a case study for the rest of the country,” said committee chair Rep. Bill Johnson (R-OH). “We have evidence of similar dubious practices taking place at other locations, and our intent is to have VA fix the problems and conduct necessary oversight at all of its construction sites.

The “dubious practices” Johnson cited refer to VA’s FY 2009 budget request, which included an authorization for space in Savannah to expand the services of its community-based outpatient clinic (CBOC). VA issued a request to purchase land for a 38,900-square-foot satellite outpatient clinic at a cost of a little more than $3 million.

After numerous delays, VA is now moving forward on a 55,000-square-foot space — a change in its construction plan that was not officially presented to Congress. How this will impact the cost is unknown, but, whatever the increase, VA plans to absorb it into the FY 2014 budget.

According to Robert Neary, VA’s acting director of the Office of Facilities Construction and Management, obstacles in Savannah were unusual, resulting in abnormally long delays.

After extensive negotiations, owners of the site initially selected were unwilling to sell the property to the government. In addition, the original design firm that VA hired was not performing up to standards, requiring contracting with a second firm.

In the middle of the process, VA also determined that the number of veterans likely to use the facility was growing from the original projections. While the total number of veterans using the Savannah facility will decrease over time, that decrease will not be as much as originally predicted.

The amount of specialty and ambulatory care provided by the clinic is projected to increase by 92% in the next decade. This includes enhanced mental-health services, the addition of optometry, audiology and radiology services, new physical security requirements and the need to support and implement VA’s new Patient Aligned Care Teams (PACT) initiative at all sites.

This required a rethinking of the space and the resulting expansion from 38,900 square feet to 55,000, according to Neary.

“Our current process has been to notify committees when we are planning to enter into a lease that exceeds what was authorized by 10%,” he told the committee. “And our practice has been to do that after we receive market-based pricing. We’re waiting for price proposals to be received from competition.”

Systemic Problems

While this may appear to be a mild miscommunication between VA and Congress, Johnson argued that these kinds of delays and deviations between proposed projects and the end products make it a much larger problem.

“Notwithstanding the lack of communication with Congress, the VA also stumbled through its acquisition process, using an incomplete and careless appraisal process that, according to many involved in commercial real estate, lacks common sense,” Johnson said. “And this is not an isolated incident.”

A similar scenario occurred with a Green Bay, WI, clinic, Johnson charged. The FY 2009 budget request was for 70,600 square feet — a figure that was presented to Congress as recently as the FY 2012 budget submission. However, a document from June 2009 shows that VA is looking for 161,525 square feet (228% larger than estimated).

Such a major increase without telling Congress is a serious problem, Johnson said, adding that to know of the increase for years without informing legislative overseers is even more concerning.

Without keeping Congress abreast of changing construction plans, there is no opportunity for up-to-date oversight to help VA avoid making poor real estate and construction choices, he said.

For example, VA has paid $100,000 for an option to buy the land in Savannah. According to VA, its general counsel has informed the agency that it has the authority to do so, though Johnson questioned that.

“VA needs specific authority to purchase an option,” Johnson said. “There’s a difference between purchasing an option and purchasing property.”

If VA ends up not buying the land, the $100,000 is forfeited.

The cost-benefit analyses that VA sends to Congress need to be much more detailed, Johnson added. Looking at similar analyses from other government agencies concerning construction projects, he found VA’s significantly lacking in detail — resembling more an executive summary than an in-depth report.

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