Last December, the Civilian Board of Contract Appeals, a tribunal within the General Services Administration, found that the Department of Veterans Affairs (VA) was in material breach of a contract with Kiewit-Turner—a joint venture between Kiewit Building Group and Turner Construction—on the massive Denver VA Medical Center project in Aurora, Colo.
That project was already years behind schedule and hundreds of millions of dollars over budget. Upon that ruling, Kiewit-Turner—which has been on this project since 2010, when it broke ground—stopped work on that project, which at the time was somewhere between 40% and 60% complete, according to the Denver Business Journal. Work resumed just before Christmas only after VA and Kiewit-Turner signed a $234 million bridge-loan agreement.
The Board stated in its decision that the VA had repeatedly failed to provide a design for the hospital that could be built for the original agreed-upon price of $604 million. The VA, according to the Board, also disregarded cost-cutting suggestions and warnings that the project’s ambitions would greatly exceed its budget.
In fact, in the spring of 2013, The Government Accountability Office (GAO) had issued a report that found the Aurora project and three other VA projects were all drastically over budget and behind schedule.
The 182-bed medical center was supposed to be completed early this year. Kiewit-Turner, in June 2013, estimated that the construction cost would actually be $1.085 billion. (At that time, Glenn Haggstrom, who managed VA’s construction projects, continued to insist the hospital could be brought in for its original budget.)
The VA’s Deputy Secretary Sloan Gibson admitted in July that his agency could not produce a line-by-line accounting that would explain the overspending.
In March, Colorado’s congressional delegation requested that the Senate Veterans Affairs committee conduct a field visit to the medical center, which was planned to serve 82,700 vets. The fear was that work would stop again without Congressional approval for the appropriation of additional funds.
Now, the project’s completion date has been pushed back to Jan. 23, 2018, and the total cost is now expected to reach at least $1.67 billion. The U.S. Army Corps of Engineers late last month awarded the construction team a $571 million contract to finish the job.
Congress had authorized up to $625 million in additional spending for this project in September, but not without strings attached, according to news reports. That approval stripped the VA of its authority on any future construction project over $100 million, which essentially would prevent the department from getting involved in hospital construction again.
The Army Corps of Engineers will henceforth serve as the VA”s construction agent on several products worth about $3.6 billion.
"We must make sure that this never happens again and fortunately, a key reform was passed along with funding. The VA is out of the hospital building business," stated U.S. Rep. Mike Coffman (R-Aurora). Coffman told Stars and Stripes that he was disappointed that the VA might not release the results of one of its internal investigations into what went wrong until next year.
Related Stories
Healthcare Facilities | Aug 19, 2015
5 brand-building strategies in the outpatient environment
No longer coasting off of reputation, leading organizations are using new ambulatory care centers to re-brand for the future of healthcare, writes CannonDesign's Jocelyn Stroupe.
Healthcare Facilities | Aug 18, 2015
Transforming the patient-clinician experience in retail healthcare: 5 'flips' to consider
Flip the Clinic is a Robert Wood Johnson Foundation project invented to transform the patient-clinician experience. In their language, “flips” are actionable ideas for change, writes Gensler's Tama Duffy Day.
Giants 400 | Aug 6, 2015
GIANTS 300 REPORT: Top 75 Healthcare Construction Firms
Turner, McCarthy, and Skanska top Building Design+Construction's 2015 ranking of the largest healthcare contractors and construction management firms in the U.S.
Giants 400 | Aug 6, 2015
GIANTS 300 REPORT: Top 80 Healthcare Engineering Firms
AECOM, Jacobs, and Burns & McDonnell top Building Design+Construction's 2015 ranking of the largest healthcare engineering and engineering/architecture firms in the U.S.
Giants 400 | Aug 6, 2015
GIANTS 300 REPORT: Top 115 Healthcare Architecture Firms
HDR, Stantec, and Perkins+Will top Building Design+Construction's 2015 ranking of the largest healthcare architecture and architecture/engineering firms in the U.S.
Giants 400 | Aug 6, 2015
HEALTHCARE AEC GIANTS: Hospital and medical office construction facing a slow but steady recovery
Construction of hospitals and medical offices is expected to shake off its lethargy in 2015 and recover modestly over the next several years, according to BD+C's 2015 Giants 300 report.
Contractors | Jul 29, 2015
Consensus Construction Forecast: Double-digit growth expected for commercial sector in 2015, 2016
Despite the adverse weather conditions that curtailed design and construction activity in the first quarter of the year, the overall construction market has performed extremely well to date, according to AIA's latest Consensus Construction Forecast.
Healthcare Facilities | Jul 23, 2015
David Adjaye unveils design for pediatric cancer treatment center in Rwanda
The metallic, geometric façade is based on the region’s traditional Imigongo art.
Healthcare Facilities | Jul 22, 2015
Best of healthcare design: 8 projects win AIA National Healthcare Design Awards
Montalba Architects' prototype mobile dental unit and Westlake Reed Leskosky's modern addition to the Cleveland Clinic Brunswick Family Health Center highlight the winning projects.
Healthcare Facilities | Jul 8, 2015
From Subway to Walgreens, healthcare campuses embrace retail chains in the name of patient convenience
Most retail in healthcare discussions today are focused on integrating ambulatory care into traditional retail settings. Another trend that is not as well noted is the migration of retailers onto acute care campuses, writes CBRE Healthcare's Craig Beam.