The price of Denver's new VA medical center will climb to more than $1 billion because of cost overruns driven by VA's flawed design, the general contractor has said in a legal challenge. Kiewit-Turner wants the right to walk away from the partially completed hospital if VA doesn't produce a design that matches the contractor's $600 million bid, according to a complaint filed with the Civilian Board of Contract Appeals in July. The construction partnership says it cannot absorb the $400 million in cost overruns it blames on VA as the plot thickens and the long-awaited project falls further behind schedule.
"This is stunning," says U.S. Rep. Mike Coffman, R-Colo., a Army and Marine Corps veteran who represents the Aurora-area district where the replacement hospital is being built. "I'm embarrassed by what has occurred."
VA has reshuffled its Denver construction management team and there are rumors the hospital won't be completed until 2016, a year later than the agency has predicted. VA won't comment on the problems or the impasse, citing the pending litigation.
Kiewit-Turner also isn't commenting, beyond a prepared statement that says it will continue working on the hospital while the dispute is litigated.
Veterans, meanwhile, worry that the cost overruns and legal dispute will indefinitely delay completion of the project, which has suffered nonstop setbacks since VA first agreed in the late 1990s to build a 182-bed hospital and spinal cord injury center at the former Fitzsimons Army Medical Center site.
"Veterans are the part of the picture that's getting lost," says Ralph Bozella, chairman of The American Legion's National Veterans Affairs & Rehabilitation Commission and immediate past president of the United Veterans Committee of Colorado. "I was in the hospital in 2010, and I was put in a room with three other men. It was a trip back to the 1950s."
VA had two groundbreakings at the new hospital site – the most recent in November 2011 after veterans threatened to stage a protest over the stalled project. Construction finally began in January 2012, and the new hospital is roughly 25 percent complete. "Nearly every hospital in the Denver metro area has completed major construction projects since we started talking about this and for some reason we're still messing around," said American Legion Past National Commander Tom Bock, who drives by the construction site every day. "My biggest concern is Congress will say to hell with it and pull the funding."
Coffman shares that concern, especially if Kiewit-Turner's allegation of $400 million in cost overruns is borne out by the evidence. "There's no question about it – I worry," Coffman says. "And I feel my job is to see that it is built (while) being respectful to the taxpayers in doing so."
There's ample reason for pessimism. In the last decade, the University of Colorado and Children's Hospital Colorado have each built new medical campuses at the Fitzsimons site, and the state has constructed a new nursing home for veterans there. Meanwhile, VA walked away from an offer of free Fitzsimons land and lost DoD as a partner in the new hospital because of indecision and delays.
In addition, Coffman says VA appears to be ignoring Congress' growing frustration with its construction program. "The fact is, VA has a pattern of mismanaging large projects, of being way over budget and way behind schedule," says Coffman, chairman of the House VA Subcommittee on Oversight and Investigations, which is closely monitoring VA's major-construction program. "I think (VA) feels that they're immune from everything."
Initially estimated at $328 million, the project is now expected to come in somewhere north of $800 million.
Environmental obstacles contributed to the cost increase and delay. Soon after excavation began for an underground parking garage, the contractor encountered a high water table that sent VA back to the drawing board. Bock says VA should not have been surprised to hit water. "Everybody knew the water table was high out there," Bock says. "It's just an excuse."
"Any civil engineer worth their salt would do an analysis of the ground and understand the challenges before they moved any dirt," Coffman adds.
Businesses are suffering as a result of the problems. Subcontractors, including veteran-owned businesses working on the new hospital, are not getting paid. "I worry that some of these subcontractors are out so much money and are so deep into this project that they're not going to survive this process," Coffman says.
A January memo from a VA contracting officer to the project's architects warned that the design for the new hospital exceeded Kiewit-Turner's construction contract by $200 million. VA did not acknowledge the memo.
"They were in denial of the existence of the letter, even when I gave them all a copy of it at (a) July 1 meeting," Coffman says. "And that's certainly (something) my subcommittee is going to look into."
Despite all the construction problems, there's no question that eastern Colorado desperately needs a new hospital. The current facility opened adjacent to what was then the University of Colorado Medical Center in Denver in 1951. It has been overcrowded and out-of-date for years and maintenance costs are high. In 2004, the CARES Commission listed Denver among the top three locations in need of new VA medical centers.
VA's own statistics are telling. Since 2000, the number of veterans using VA health care in the region has increased by 99 percent, says Lynette A. Rolf, director of the VA Eastern Colorado Health Care System. That's the third-largest increase among VA hospitals that handle the most complex cases.
The new hospital and spinal cord injury unit aims to serve several states, including Nebraska, Wyoming, Montana and Kansas. Private rooms will reduce infection risk and allow families and caregivers to stay with patients. The new medical center will have more exam rooms, enabling VA to see more patients, Rolf adds.
The question for Colorado veterans remains simple: when?
"The hospital has already been delayed 10 years, in our opinion," Bozella says. "Veterans have not asked for a Taj Mahal. All we've asked for is a functional hospital. Just get it done for the veterans."