By Sandra Basu
WASHINGTON — Despite continuing criticism over cost overruns and lengthy delays in building four new VA medical centers, a VA official told lawmakers that “the way the Office of Construction and Facility Management is doing business today has changed significantly” since those projects were first undertaken.
“The recommendations made from previous reports have resulted in positive changes and are being applied to the entire program including the next two proposed major medical replacement projects located in Louisville, Kentucky and Omaha, Nebraska,” said Glenn Haggstrom, VA Principal Executive Director for the Office of Acquisition, Logistics and Construction.
Haggstrom made his comments at a hearing held by the House Committee on Veterans’ Affairs — “Building VA’s future confronting persistent challenges in VA’s major construction and lease programs” — where lawmakers called for better oversight of VA’s construction and leasing programs.
In April 2013, a GAO report found that cost increases for construction underway for VA medical facilities in Las Vegas, Orlando, New Orleans and Denver ranged from 59% to 144%, representing a total cost increase of nearly $1.5 billion and an average increase of approximately $366 million per project. The schedule delays for these projects ranged from 14 to 74 months with an average delay of 35 months.
At the recent hearing, Linda Halliday, VA assistant inspector general for audits and evaluations, told lawmakers that an October 2013 VA IG investigation found that VA has not effectively executed construction and lease projects to ensure they are completed timely and within budget.
The report noted that, as of August 2013, only four of seven healthcare center leases the IG reviewed had been awarded and that no healthcare centers had been built, despite VA’s target completion date of June 2012, she said.
Haggstrom responded that VA is in the process of addressing recommendations outlined in the October 2013 OIG report and explained that VA already has implemented recommendations from the April 2013 GAO report.
Orlando Medical Center
Lawmakers expressed concerns, pointing to the new VA medical center in Orlando as an example. The facility has been under construction for several years and has been hit by several design errors and changes along the way.
“What is the problem? Why is it that we cannot complete the Orlando project?” Rep. Corrine Brown (D-FL) asked Haggstrom.
Rep. David Roe (R-TN) said he shared Brown’s frustrations.“We’ve been building major projects since the pyramids. There is nothing magic about building this,” he added.
According to VA, the construction project is now 85% complete. Haggstrom told lawmakers in written testimony that the prime contractor is now projecting a completion date of September 2014, which is a slippage from the April 2014 date the contractor provided to VA in response to the Show Cause letter VA issued in January 2013. The project was originally slated for completion in October 2012.
“We agree with you. The project has taken too long,” Haggstrom told lawmakers, adding that contractor performance has been an issue.
“When you go down there and you look at the project, there are inherent problems with scheduling, the number of workers on the job to do this, the quality of the workmanship. And it goes on and on and on. Currently VA is taking every opportunity to exercise our rights to ensure that the contractor moves forward,” he said.
The delays in completing the medical center were the subjects of a previous hearing in August 2012 where the contractor Brasfield & Gorrie and VA disagreed on the completion date of the facility. The contractor also complained to the committee that VA kept providing design changes, which it said was slowing progress down. The contractor was not at the recent hearing to respond to VA’s assertions.
Roe wanted to know if VA had metrics in place to prevent future medical center construction from facing delays and cost overruns. Halliday said she thought VA did have the metrics in place, but that there are other factors that come into play.
When it came to the Orlando medical facility, Halliday said that many of the problems were “a direct result of the performance of the primary contractor.” Counselor to the Inspector General Maureen Regan added that some of the subcontractors working on the Orlando project complained that they were not paid for their work and then walked off the job. Regan said that what she has learned so far is that some of them were not direct subcontractors of Brasfield & Gorrie, but were “subs of subs of subs.”
“We do want to look at that issue. A lot of them didn’t get paid and went under,” she said.
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