Colorado VA hospital cost soars to $1.73 billion, angering lawmakers

Colorado VA hospital cost soars to $1.73 billion, angering lawmakers
The new Veterans Administration hospital under construction in the Denver suburb of Aurora, Colo., in April 2014. (RJ Sangosti / Associated Press)

Colorado's congressional delegation said Wednesday that it will push to find funding to complete a proposed Veterans Administration hospital in Aurora whose price tag has climbed to $1.73 billion, about three times the cost since ground was broken for the facility just six years ago.

The joint statement, which crosses Democratic and Republican lines and includes lawmakers from both the Senate and the House of Representatives, follows a conference call among legislators and VA officials with the new cost estimate, resulting in a shortfall of $930 million.


"The VA couldn't lead starving troops to a chow hall when it comes to managing a construction project. The VA's mismanagement of this project is beyond belief and brings into question the competence of their leadership at every level," Rep. Mike Coffman (R-Colo.) said in a prepared statement.

"As much as I'm angered by the mismanagement of this project, as a combat veteran I know that we have an obligation to see that this hospital is completed and that everything that can be done will be done to bring down the cost, that those responsible for these cost overruns are held accountable, and that the necessary reforms are put in place to make sure that this never happens again," Coffman said Wednesday.

The immediate question is the $930 million needed to complete the facility, which is between 45% to 50% done, Tyler Sandberg, deputy chief of staff to Coffman, told the Los Angeles Times. He noted that the agency paid $360 million last year in bonuses and that was a good place to start looking for additional funds.



March 19, 4:57 p.m.: An earlier version of this story said the amount of bonuses paid by the agency was $630 million.


Veterans officials on Tuesday briefed the delegation, according to the agency and several congressional aides. During that call, the latest price tag of $1.73 billion surfaced.

That estimated total cost "is based on information developed by the Army Corps of Engineers," the VA said in a prepared statement emailed to reporters Wednesday. To meet the higher cost, the agency said it would need to get congressional authorization of an additional $930 million to complete the project.

The VA cited problems with the project, including a dispute with the former prime contractor and the need to get a new study from the Army Corps of Engineers for a revised estimate.

"The estimate includes the cost of construction, contingencies, and Army Corps of Engineers costs, as well as VA's cost to close out the original contract and continue construction until the Army Corps of Engineers assumes construction management duties this summer," the agency said.

The explanation did little to mollify the lawmakers.

"The VA's recent cost projections reflect the utter mismanagement of the project from the start," Sen. Michael Bennet, a Democrat, stated. "After insisting to the congressional delegation and the veterans community that the project was within its budget for years, the VA's latest projections are yet another affront to both taxpayers and our veterans community."

But what to do next is a different sort of problem since construction of the building is well underway.


"We are committed to fulfilling this promise to Colorado's veterans, and I have faith the Colorado delegation and veterans community will continue to work together and with the other regional stakeholders to ensure completion of this regional hospital," Bennet said. "The delegation will continue to demand greater accountability and transparency at the VA."

The new hospital has been plagued with problems since its inception. It was designed to replace the aging Denver VA facility, dating from World War II.

The new facility was supposed to include a 182-bed hospital with expanded inpatient and outpatient services, a community living center, a spinal cord injury/diagnostic unit and research facilities, according to the VA.

It was designed to cost $328 million but that price quickly jumped to about $600 million when ground was broken in 2009 for what became a stand-alone center. By spring of 2013, the prime contractor, Kiewit-Turner, was complaining that the VA had yet to deliver a workable plan that fell within that budget.

A year later, the whole dispute ended up in federal court, with the construction company predicting that the final cost would be more than $1 billion.

In December, the U.S. Civilian Board of Contract Appeals, a government adjudication agency, in Denver ruled that the VA had breached its contract with the construction giant. The board backed the contractor and ruled that the project "does not have sufficient funds to pay for construction of the entire project as currently designed."

The project was turned over the Army Corps of Engineers, which will manage it beginning this summer, provided, of course, that the money continues to flow.

"The breathtaking amount of money needed to complete the new Denver VA facility demonstrates two things," said Rep. Diana DeGette (D-Denver). "First and most immediately, Colorado leaders — especially our congressional delegation — must band together to make sure this project is completed so that our veterans can access the facilities and treatment they have earned.

"Second, the VA should never again be involved with major construction projects," DeGette said.

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