by Bill Maddick
VETERAN’ S CORNER
THE NEW VA HOSPITAL
If no news is good news then it’ s probably a good thing that we haven’ t heard anything on the progress of the new VA hospital lately. That is a bit remarkable since the general contractor just successfully sued to get out of the contract only fifteen months ago( The court upheld charges against the VA). Yet, the initial proposal to upgrade veteran’ s health care included a joint effort with CU Health Sciences Center that didn’ t contain any plans for a new hospital. So what is happening with these conflicting developments? And why has it not been making the news lately?
Back in 2002, Anthony Principi, then Secretary of the Veterans Administration, was advocating for a joint effort between the VA and the private sector. His idea was to pool resources and reduce cost( at the time, it was estimated that a new VA hospital would cost between $ 250- 300 million). But the pooling idea raised a lot of open ended questions. Would veteran care ultimately fall under control of the CU system? What would be the division of services between CU and the VA system if a facility were shared? Who would be a government employee and who would be university employee at the hospital? Many Veteran Service Organizations( VSOs) remained staunchly opposed to such a plan, rightfully pointing out that the VA is a world leader in veteran issues such as PTSD, prosthetics and homeless outreach.
So, the pooling idea never did come together, and the stand alone hospital advocates prevailed. Then Representative, Joel Hefley( R- CO), introduced a bill titled The New Fitzsimons Regional Federal Medical Center Act of 2003 in the House of Representatives. It passed on December 6, 2003, and it authorized the VA to build its new hospital. A thirty one acre site was selected on the old Fitzsimmons medical campus--where the CU Health Science Center is now located. A design team was chosen and Kiewit Turner was chosen as the general contractor for the estimated $ 582.8 million contract. On August 22, 2009 they broke ground with Eric Shinseki, Secretary of Veterans Affairs and Representative Ed Purlmutter, among others, in attendance. The estimated finish date was 2014. But by December 2014, workers were walking off the job and Kiewit Turner would be suing the VA for breach of contract, and winning their case.
There were a couple of contributing factors which led to the litigation. One was that the VA didn’ t specify any price when it let the contract to the designer, and the other was that the VA decided to use a new and untried construction method known as IDC to build the hospital. So what it came down to was Kiewit Turner was holding the bag on a $ 582 million contract while the designers kept submitting changes( 1400 according to court documents), and they also had to absorb the costs of delays due to the implementation of a new construction management system. By November of 2011, Kiewit Turner executives knew they could not meet the budget. In a hastily
called meeting, two days before Veterans Day, they presented their observations to the VA. An agreement was negotiated and hand written, which specified that Kiewit Turner would build the hospital for $ 604 million and the VA would provide the design to get them there. Work continued.
By July 2013 however, Kiewit Turner found it necessary to sue for breach of contract. By then, an engineering consulting group estimated that the new cost, with all the VA changes included, would be $ 785 million. That was considerably more than the $ 582 million Kiewit Turner first agreed to, and $ 181 million more than their hand written agreement only twenty months previous. By then, the Government Accountability Office had initiated an audit, and both Representative Mike Coffman and Senator Michael Bennett had asked the Office of Inspector General to investigate( both requests were denied). Again, Kiewit Turner was left holding the bag($ 100 million worth), but this time they would press charges and win. The U. S. Board of Contract Appeals ultimately ruled against the VA in December 2014 saying, in part, that the VA did not act with“ standards of good faith and fair dealings required by law.” Work ceased.
Immediately, Messrs Coffman and Bennett implored both parties to use the ruling as a base upon which to build a new agreement and“ find a way forward.” The VA claimed it was still committed to providing a new hospital and Kiewit Turner claimed that they would be willing to allow the U. S. Corps of Engineers to assume management of the project. Work was interrupted for only several days before the Corps of Engineers was put in charge of the project and a series of bridge loans and stop-gap legislation was enacted which authorized Kiewit Turner to continue the project. Finally, in September of 2015, Congress included funding for the new hospital in the annual federal budget and authorized the Corps of Engineers to write a new contract. The price tag now was at $ 1.7 billion with a scheduled opening of January 2018.
That is why we haven’ t been hearing anything more about the new VA hospital lately. Supposedly, the project is finally progressing as it should, or so we want to believe. The good-old-boy network of the VA who thought that price tag of the hospital was a secondary consideration to providing care to veterans( Rep. Perlmutter referred to it as“ calcified bureaucracy”), and laws have been enacted that will prevent the VA from ever attempting to build a hospital again. Even after fourteen years of delays, budget increases and a law suit, those of us who have been waiting for our new hospital will remain, at best, guardedly optimistic. Being veterans, we’ ve become conditioned to the old axiom that you should never believe anything that you hear anymore, and only half of what you see. January 2018 is twenty two months away, after all, and anything could happen between now and then.
www. thunderroadscolorado. com April 2016 Thunder Roads Magazine ® Colorado 29