Mismanagment of Veterans Hospitals Costs $1.5 Billion
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The Fiscal Times
April 22, 2014

The Department of Veterans Affairs’ largest construction projects continue to suffer from massive cost overruns exceeding $1.5 billion--with some medical facilities still years from completion.

Due to management issues and poor planning, the Government Accountability Office says the VA’s four largest projects have each cost an additional $366 million and are, on average, 35 months behind schedule.

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The GAO’s physical infrastructure issues expert, Lorelei St. James, testified before a House subcommittee in Denver on Tuesday, the site of the most over-budgeted and delayed facility.

The VA Medical Center in Denver has soared over budget by more than $470 million. With an original price tag of $604 million, the facility, which has yet to be fully built, is now in the billions. To make matters worse, the project has brought on several lawsuits from contractors who claim the VA has not paid them for their work.

That facility isn’t expected to be completed until May 2015, though some contractors expressed doubt that they would even meet that deadline.

Similarly, a $665 million facility in Orlando has leaped over budget by $150 million. It was originally supposed to be completed in April 2010, but now auditors say it likely won’t be done until next March. Some lawmakers, however, aren’t convinced that the VA will meet its newly revised deadline.

“The Cubs are going to win the World Series before that hospital is finished in Orlando,” Rep. Phil Roe, (R-TN) told a House subcommittee last month.

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Two other medical center construction projects in Las Vegas and New Orleans have also suffered from delays and cost overruns.

Though the GAO said the VA had indeed taken steps to address and improve its management issues, it will take years to assess how effective they will be.

VA implemented our recommendations; however, the impact of these actions may take time to show improvements, especially for ongoing construction projects, depending on several issues, including the relationship between VA and the contractor,” St James said in testimony.

Still, lawmakers skeptical of the VA’s improvements have introduced legislation that would provide external oversight to the agency and its construction efforts.

Rep. Mike Coffman (R-CO) sponsored a bipartisan measure that tasks the Army Corps of Engineers with supervising the troubled projects.

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Washington Correspondent Brianna Ehley, based in D.C., covers Congress, government agencies and spending issues, health care, and tax and economic policy for The Fiscal Times.