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Audit Details Problem-Plagued Hospital

Friday, September 23, 2016

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Department of Veterans Affairs leaders have been accused of “gross mismanagement” when it comes to federal oversight of a $1.7 billion VA hospital in Aurora, CO, according to a new audit.

That’s the word from the VA’s Inspector General in an 82-page report dated Wednesday (Sept. 21), less than two weeks after lawmakers issued a subpoena seeking access to thousands of pages of documents related to the project, which has cost taxpayers nearly triple initial estimates.  

VA hospital
Department of Veterans Affairs

The audit found the VA lacked familiarity with the type of construction contract involved and assigned far too few engineers and project managers on the 11-building, 184-bed medical center.

The audit found the VA lacked familiarity with the type of construction contract involved and assigned far too few engineers and project managers on the 11-building, 184-bed medical center.

The review identified major points of failure that encompass a series of questionable business decisions by VA senior officials concerning planning and design, construction, acquisition, and change order issues. 

The project, which was designed to replace existing aging facilities in Denver, is now expected for completion in 2018—nearly 6 years after initial estimates and almost 20 years after the VA identified the need to replace and expand its Denver facility.

The design team—a joint venture of Skidmore Owings & Merrill, S.A. Miro, Cator Ruma and H+L Architects—has been under contract since January 2006. The contractor, joint venture Kiewit-Turner, was first hired in 2011.

Former Construction Head Called Out

The audit called out the former senior VA official who was in charge of nationwide construction at the time, Glenn Haggstrom.

Despite knowing that the Denver project was moving toward significantly exceeding the budget, Haggstrom failed to notify lawmakers about the project’s problems during testimony given before Congress in May 2013 and April 2014, the audit said.

VA official seal
Official seal

The billion-dollar Department of Veterans Affairs hospital project in Denver has enraged lawmakers, who have called on the VA to fire those responsible.

Following the Inspector General’s report, lawmakers say they will recommend perjury charges against Haggstrom.

“To this day, the department’s handling of the replacement Denver VA medical center continues to be a case study in government waste, incompetence and secrecy,” U.S. Rep. Jeff Miller (R-FL), the chairman of the House Committee on Veterans Affairs, said in a statement.

Retired Amidst Probe

Haggstrom retired on March 24, 2015—the day after he was questioned under oath as a part of the probe, reports said.

Miller observed at the time: “[A]ny reasonable person would conclude that he should have been fired years ago.”

Miller said Haggstrom “may have tried to do a good job at VA, he certainly did not succeed.”

“What’s most disappointing about this situation, however, is that Haggstrom left on his own terms—with a lifetime pension.”

The VA has not fired or criminally charged anyone involved in the cost overruns, but notes that transfers and demotions have taken place. The department has found “that responsibility for decisions that resulted in delays and cost overruns for the Denver replacement facility rested with executives” who have departed from the VA.

Getting Back on Track

“We know that errors were made in the construction of the Denver replacement facility,” VA Deputy Secretary Sloan Gibson said in a recent statement.

Gibson has visited the replacement facility site at least 10 times in the past year and a half.

“We have owned those challenges and taken action to get the project back on track. We know that earning back the trust of Veterans in Colorado and across the nation means constructing a facility they will be proud of and making sure that these errors do not occur again.”

Sloan Gibson
Official photo

VA Deputy Secretary Sloan Gibson has apologized to veterans and to American taxpayers for the delays and the added costs associated with the Denver hospital project.

Further, the department has partnered with the Army Corps of Engineers to manage the remainder of the project.

In a statement, Michael J. Missal, Inspector General for the VA, said the “lessons learned from the Denver replacement medical center can be applied to future construction projects to prevent similar problems.”

Compromised Investigation?

U.S. Rep. Mike Coffman (R-CO) told ABC News he was “frustrated and disappointed” with the audit.

“I'm trying to get to the bottom of this. And I think quite frankly the Veterans Affairs (Department) doesn't seem to care," he said.

"This was an internal investigation and I think it was compromised" because it ignored possible criminal conduct, Coffman said.


Tagged categories: Construction; Ethics; Government; Government contracts; Health Care/Hospitals; Personnel

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