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
| Aug 11, 2010
ASHRAE introduces building energy label prototype
Most of us know the fuel efficiency of our cars, but what about our buildings? ASHRAE is working to change that, moving one step closer today to introducing its building energy labeling program with release of a prototype label at its 2009 Annual Conference in Louisville, Ky.
| Aug 11, 2010
10 tips for mitigating influenza in buildings
Adopting simple, common-sense measures and proper maintenance protocols can help mitigate the spread of influenza in buildings. In addition, there are system upgrades that can be performed to further mitigate risks. Trane Commercial Systems offers 10 tips to consider during the cold and flu season.
| Aug 11, 2010
McCarthy, Skanska among nation's largest healthcare contractors, according to BD+C's Giants 300 report
A ranking of the Top 50 Healthcare Contractors based on Building Design+Construction's 2009 Giants 300 survey. For more Giants 300 rankings, visit http://www.BDCnetwork.com/Giants
| Aug 11, 2010
AECOM, Arup, Gensler most active in commercial building design, according to BD+C's Giants 300 report
A ranking of the Top 100 Commercial Design Firms based on Building Design+Construction's 2009 Giants 300 survey. For more Giants 300 rankings, visit http://www.BDCnetwork.com/Giants
| Aug 11, 2010
Payette completes Penn State Hershey Cancer Institute
Payette, a leading architectural design firm specializing in complex buildings for medical and scientific research, academic teaching, and healthcare, announced today the Penn State Hershey Cancer Institute ribbon-cutting and dedication ceremony was held on June 26, 2009. The new 176,000 square foot Cancer Institute is located on the Penn State Milton S. Hershey Medical Center Campus in University Park, Pa.
| Aug 11, 2010
Perkins+Will master plans Vedanta University teaching hospital in India
Working together with the Anil Agarwal Foundation, Perkins+Will developed the master plan for the Medical Precinct of a new teaching hospital in a remote section of Puri, Orissa, India. The hospital is part of an ambitious plan to develop this rural area into a global center of education and healthcare that would be on par with Harvard, Stanford, and Oxford.
| Aug 11, 2010
Turner Building Cost Index dips nearly 4% in second quarter 2009
Turner Construction Company announced that the second quarter 2009 Turner Building Cost Index, which measures nonresidential building construction costs in the U.S., has decreased 3.35% from the first quarter 2009 and is 8.92% lower than its peak in the second quarter of 2008. The Turner Building Cost Index number for second quarter 2009 is 837.