In the darkest days of the Denver construction ordeal, veterans began to wonder if someone inside VA was deliberately trying to sabotage the new hospital project. VA had run out of money after ignoring warnings that the sprawling new medical center was hundreds of millions of dollars over budget. The prime contractor had walked off the job. Congress had run out of patience.
“I believe there’s some career employee sitting in the bowels of VA who said, ‘Not on my watch,’ and was pulling a string here and pushing a button there to stop the project,” says American Legion Past National Commander Tom Bock, one of many Legionnaires who tirelessly pushed for the new medical center.
“I was being interviewed during the summer of 2015 and I said, ‘I’ve been to Ketchikan, Alaska, and I’ve seen the bridge to nowhere. This may be the hospital to nowhere,’” says Ralph Bozella, chairman of the Legion’s Veterans Affairs & Rehabilitation Commission.
To the relief of Colorado’s 400,000 veterans, the new Rocky Mountain Regional Medical Center in Aurora was close enough to completion for VA to host a ribbon-cutting at the campus in July. “This is a story of people not giving up, of keeping the faith in good times and during those dark times when things were not going so well,” Bozella said during his speech at the ceremony.
It’s a bittersweet victory in the long battle to replace the 70-year-old hospital east of downtown Denver that VA outgrew decades ago. The new hospital lacks the PTSD treatment center and nursing home that were eliminated when Congress insisted on cuts as the cost of the new facility ballooned from approximately $600 million in 2009 to $1.7 billion today. Both will remain at the old hospital until VA comes up with money to build the new facilities. Seven primary-care treatment teams that serve an estimated 8,500 patients will also remain at the old hospital because there’s not enough room to house them at the new 1.2 million-square-foot hospital complex.
The Spinal Cord Injury and Illness Center – a hallmark of the new medical center – has 30 beds instead of the 50 originally promised. There are unresolved claims from contractors involved in the project, and VA still owes the U.S. Treasury $20 million of the $100 million judgment awarded to contractor Kiewit-Turner, according to congressional sources. Veterans are also concerned that patients will have a difficult time navigating between the dozen buildings spread along the quarter-mile corridor that defines the new VA medical center.
This might indeed have been the hospital to nowhere if Legionnaires hadn’t fought for it and Congress hadn’t forced VA out of the driver’s seat three years ago. And the Denver experience permanently changed the way VA will build hospitals, never to oversee major constructions again.
“I don’t think this project would have been completed without the Army Corps of Engineers stepping in,” says U.S. Rep. Mike Coffman, R-Colo., whose district has included the Aurora construction site since 2013. “The lesson here is (for VA) to stick to their core mission of serving our nation’s veterans, not construction. Because of my legislation, VA will never again manage the construction of another hospital, and that is something I am proud of.”
Veterans support that plan. “The Corps of Engineers builds hospitals for the Army and the Navy, so it was good to have them there,” says Steve Rylant, past president of the United Veterans Committee of Colorado and a member of American Legion Post 15 in Loveland.
“Congressman Coffman was right,” Bock adds. “Get the Army Corps of Engineers in here. Define your need, and get the professionals to build it for you.”
VA acknowledges that the Denver replacement hospital project went off the rails. “No one is defending the problems ... that occurred over many years under multiple administrations,” says Paul Sherbo, a VA spokesman. “VA has taken responsibility for those, learned from them and retooled its construction operations in response. This new facility is a chance at a fresh start for our veterans as well as our thousands of dedicated employees.”
However, Congress isn’t convinced that VA has addressed all of the problems that made Denver “the largest construction failure in VA history,” Coffman says. “Those responsible for this project have yet to be held accountable, and I will continue to push for transparency and accountability as the hospital opens.”
Eight different VA secretaries and four different presidents held office during the 23 years from inception to near-completion of the new Denver hospital. But some top VA construction officials were involved for almost the entire project.
The Denver medical center is the last of four VA hospital-construction projects launched in the 2000s to deal with aging veterans from earlier wars and a surge of post-9/11 veterans. By 2013, the four hospitals were an average of $33 million over budget and 36 months behind schedule. None busted the budget like Denver, which ended up being five years late and $1 billion over budget.
Even that obscures the long and difficult battle Legionnaires fought to get a new medical center to serve veterans in Colorado and surrounding states. Bock first suggested VA build a replacement hospital at the former Fitzsimons Army Medical Center site in Aurora while he was serving on an advisory committee helping decide the future of the decommissioned military hospital. But VA couldn’t make a decision. The agency rejected an offer of free land at Fitzsimons. That was followed by various proposals that alternated between a stand-alone VA hospital and health-care facilities shared with the University of Colorado Hospital, which had been VA’s neighbor in Denver.
VA eventually settled on a stand-alone hospital and paid $60.4 million for 31 acres at the Fitzsimons site. The trouble had only begun. VA held a symbolic groundbreaking in 2009 but didn’t so much as start foundation excavation until January 2012 – two months after veterans threatened to show up with shovels and start digging unless VA got the project rolling. Along the way, the agency hired a prime contractor – Kiewit-Turner – without having finished designing the new medical center. Costs soared. Construction fell behind schedule. VA failed to deal with repeated warnings that the project was hundreds of millions over budget. It pushed ahead with building designs that called for expensive and unnecessary options, including custom glass, custom walls and wood, and custom floors that have nothing to do with the quality of health care, according to VA’s Inspector General. VA also failed to make more than $400 million in cost-saving changes recommended by contractors in 2013.
The issues came to a head in December 2014, when Kiewit-Turner walked off the job after the U.S. Civilian Board of Contract Appeals ruled that VA breached its contract by trying to make the contractor absorb the agency’s cost overruns. At that point, Kiewit-Turner had used $100 million of its own money to keep the project moving because VA had run out of money.
By the summer of 2015, Congress appeared ready to abandon the Denver replacement hospital. Colorado veterans staged a demonstration just west of the troubled construction site and, with the help of the state’s delegation, persuaded Congress to keep the project alive.
Bozella credits former VA Secretary Robert McDonald and Deputy Secretary Sloan Gibson for taking responsibility for the problem-plagued construction project they inherited, and for helping persuade reluctant lawmakers to put up the additional $600 million to finish the new Denver hospital over the finish line. McDonald sent Gibson to Denver to meet with veterans in January 2015.
“The first thing he did was apologize to us,” Bozella says. “He told us, ‘VA owns this project. And VA owns this problem.’ Sloan Gibson is an unsung hero in this.”
Investigators agree that VA is at fault. A 2016 report by the Inspector General cites poor business decisions, indecisiveness, mismanagement and inexperience of VA’s senior leadership in the Denver disaster – all compounded by VA’s attempts to hide its problems from Congress, including lying to lawmakers about cost overruns.
Contracts for the first two major VA construction projects managed solely by the Army Corps of Engineers were awarded earlier this year. They include an outpatient clinic at the Canandaigua VA Medical Center in Canandaigua, N.Y., and construction of a new inpatient tower and expansion of the polytrauma treatment facilities at the Haley VA in Tampa, Fla.
The Corps is also slated to oversee construction of a new VA medical center in Louisville, Ky. Like Denver, the Louisville project is intended to replace a 1950s-era hospital and has been on the drawing board for years. VA paid nearly $13 million for the Louisville land – $3 million more than the appraised value, according to critics. In addition, VA’s choice of hospital sites is quite unpopular among its future neighbors. The nearby city of Crossgate has sued to stop the project in federal court. Although VA plans to have the design of the new Louisville hospital completed by the end of the year, construction cannot begin until the lawsuit is resolved.
Meanwhile, there’s work to be done in Denver. Even though Congress stripped VA of its authority to oversee large projects – anything that costs more than $100 million – the agency will control construction of the PTSD clinic and nursing home at the new medical center.
Veterans are wary.
“We’re not putting the shovels away,” Rylant says, referring to earlier protests by veteran shovel brigades, “until they get the PTSD clinic built.”
Ken Olsen is a frequent contributor to The American Legion Magazine.
The Denver VA Through Time
1951 A new Veterans Administration medical center opens on the eastern edge of Denver, adjacent to the Colorado General Hospital (now the University of Colorado Hospital) and the University of Colorado Medical School (now part of the University of Colorado Denver and Health Sciences Center). The two health-care institutions soon share physicians, expertise and equipment.
1986 The Denver VA Medical Center completes an extensive three-year remodeling project. Within six months, it is short on space again.
1995 Fitzsimons is slated for closure by the Base Realignment and Closure Commission (BRAC). The University of Colorado receives 227 acres of the 578-acre site for a new hospital and health sciences center (medical, dental, nursing and pharmacy schools) after neighbors and city officials block expansion efforts in eastern Denver. An advisory committee that includes future American Legion National Commander Tom Bock recommends that the Denver VA also build a new hospital at Fitzsimons.
1997 The Colorado American Legion endorses moving the Denver VA Medical Center to Fitzsimons.
1998 The UC Hospital breaks ground for new outpatient and cancer care buildings at Fitzsimons. The Department of Defense commits $10 million for research facilities at Fitzsimons.
1999 Fitzsimons is officially deactivated. VISN 19 Director Terry Batliner and CU Hospital President Dennis Brimhall explore the possibility of joining forces at Fitzsimons to continue 50 years of collaboration and replace VA’s aging Denver medical facilities.
2000 CU Hospital offers land at no cost to the Denver VA Medical Center for new outpatient facilities. It also offers VA and Buckley Air Force Base the opportunity to share inpatient beds, an emergency room, operating rooms, intensive care, laboratories, radiology, MRIs and other expensive facilities. The joint CU/VA/Buckley medical center will save taxpayers an estimated $1.2 billion over 20 years.
2001 The American Legion and the United Veterans Committee of Colorado, jointly representing more than 400,000 Colorado veterans, unanimously endorse plans for a combined VA/CU hospital with separate outpatient treatment centers.
2002 In August, a consultant hired by VA strongly recommends it join CU Hospital in building a single medical center. Cost to VA is estimated at $288.6 million. In September, CU Hospital tells VA it has a year to make a final decision. VA Secretary Anthony Principi rejects the shared hospital in October, citing cost issues, problems maintaining VA’s identity and insufficient time to work out the issues.
2003 VA, DoD and CU Hospital begin exploring a “two-tower” hospital – where one inpatient tower is owned and operated by the federal government and the other by CU – but the two still share operating rooms, labs, imaging equipment and other expensive resources.
2004 In February, the CARES Commission ranks Denver VA Medical Center as one of three veterans hospitals most in need of replacement and recommends the new VA hospital be built at Fitzsimons, complete with a spinal cord injury and disease treatment center. CU, meanwhile, opens the first phase of its new hospital. In May, Principi endorses a VA hospital at Fitzsimons with separate inpatient buildings for VA and CU Hospital. CU officials and VA officials testify in support of the two-tower hospital before Congress in June. The price is estimated at $320 million. In December, VA turns down the two-tower proposal.
2005 The Denver VA starts looking for other land to purchase at Fitzsimons for a stand-alone hospital and medical center. In October, DoD decides not to join VA in building a new medical center at Fitzsimons because of VA’s delays. Instead, DoD makes a deal for personnel and families stationed at Buckley to receive care from the CU Hospital.
2006 In May, the House Appropriations Committee rejects a request for $621 million to build a free-standing VA medical center at Fitzsimons and warns it is concerned with the escalating costs. In September, the House and Senate pass separate bills authorizing spending $98 million for work on a new Denver VA medical center. Neither appropriates the actual funds that would move the project forward.
2008 VA Secretary James Peake quietly kills a proposal to build a new Denver veterans hospital at the Fitzsimons site with an estimated price tag of $1.1 billion, and starts negotiating to lease floors in a University of Colorado Hospital building that is still on the drawing board. Once the news becomes public, The American Legion and other veterans groups condemn Peake’s plan, and Congress authorizes spending $568.4 million for a new stand-alone hospital at Fitzsimons.
2009 VA conducts a groundbreaking ceremony for a new hospital on a piece of property it has finally purchased at the Fitzsimons site for $56 million.
2011 Frustrated that VA still has not signed a building contract or started construction, veterans organize a shovel brigade and notify VA that they are going to assemble at the new Denver hospital site for either a protest or a celebration. The theme of the November event – Build the Damn Thing – is highlighted by veterans wearing lapel pins depicting a shovel and the letters BTDT. Tom Bock, who designed the pins, accepts donations for them and ultimately raises $3,000 for a new Fisher House at the new VA hospital site. VA responds with a second groundbreaking in November.
2012 A contractor begins excavation work for the new hospital in January. By March, Kiewit-Turner, the joint-venture prime contractor on the Denver VA Medical Center replacement project, warns that the project is likely $100 million over budget.
2013 The Government Accountability Office issues a report noting that new VA hospital construction projects in Denver, Las Vegas, New Orleans and Orlando are all hundreds of millions of dollars over budget and years behind schedule. U.S. Rep. Mike Coffman, R-Colo., proposes legislation transferring construction management from VA to the Army Corps of Engineers.
2014 In early December, the U.S. Civilian Board of Contract Appeals rules that VA breached its contract with Kiewit-Turner. The latter walks away from the hospital project, saying VA owes it $100 million for cost overruns that it had covered from its own funds to keep construction underway. Under pressure from Congress, VA agrees to allow the Corps of Engineers to oversee the project.
2015 VA admits that the hospital project is $1 billion over budget and Glenn Haggstrom, VA’s construction chief, retires – with full benefits and a $64,000 bonus. Throughout the spring and summer, the Legion and other veterans groups push Congress to come up with the additional funds. This includes a veterans rally at the hospital. Congress reluctantly agrees but scraps plans to include a PTSD treatment center and a nursing home.
2016 The VA Office of Inspector General issues a report in September concluding that the problems and cost overruns associated with the Denver VA hospital replacement project “are primarily the result of poor business decisions, inexperience with the type of contract used, and mismanagement by VA senior leaders.” The U.S. House Veterans Affairs Committee subpoenas internal VA documents related to the construction project.
2018 VA holds a ribbon-cutting for the new Rocky Mountain Regional VA Medical Center in Aurora on July 21, as the core hospital project nears completion. By the time VA moves into the medical center, the total cost will top $2 billion – not including the PTSD treatment center and nursing home that were eliminated to save money. The VA MISSION Act, passed in May, raises the limit on minor construction projects the agency can undertake on its own to $20 million, which should enable VA to move forward on the PTSD center and nursing home. No date is set.