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
| Jun 20, 2014
Sterling Bay pulled on board for Chicago Old Main Post Office project
Sterling Bay Cos. and Bill Davies' International Property Developers North America partner up for a $500 million restoration of Chicago's Old Main Post Office
| Jun 18, 2014
Design tips for Alzheimer care facilities
A new white paper from the Alzheimer’s Foundation of America and Perkins Eastman details best design practices for residential care settings for individuals living with Alzheimer’s disease.
| Jun 18, 2014
Arup uses 3D printing to fabricate one-of-a-kind structural steel components
The firm's research shows that 3D printing has the potential to reduce costs, cut waste, and slash the carbon footprint of the construction sector.
| Jun 16, 2014
6 U.S. cities at the forefront of innovation districts
A new Brookings Institution study records the emergence of “competitive places that are also cool spaces.”
| Jun 12, 2014
Austrian university develops 'inflatable' concrete dome method
Constructing a concrete dome is a costly process, but this may change soon. A team from the Vienna University of Technology has developed a method that allows concrete domes to form with the use of air and steel cables instead of expensive, timber supporting structures.
| Jun 11, 2014
5 ways Herman Miller's new office concept rethinks the traditional workplace
Today's technologies allow us to work anywhere. So why come to an office at all? Herman Miller has an answer.
| Jun 9, 2014
Green Building Initiative launches Green Globes for Sustainable Interiors program
The new program focuses exclusively on the sustainable design and construction of interior spaces in nonresidential buildings and can be pursued by both building owners and individual lessees of commercial spaces.
Smart Buildings | Jun 8, 2014
Big Data: How one city took control of its facility assets with data
Over the past few years, Buffalo has developed a cutting-edge facility management program to ensure it's utilizing its facilities and operations as efficiently, effectively, and sustainably as possible.
| Jun 4, 2014
Emerging trends in healthcare development: neighborhood care, mixed-use models on the rise
In urban and even suburban markets, real estate is about the "live, work, play," with close proximity to mass transit and other amenities, like retail stores. Healthcare organizations are following suit.
| Jun 2, 2014
Parking structures group launches LEED-type program for parking garages
The Green Parking Council, an affiliate of the International Parking Institute, has launched the Green Garage Certification program, the parking industry equivalent of LEED certification.
