VA Averts New Shutdown of Colorado Hospital Project

Posted by on Mon, Mar 16, 2015 @ 09:03 AM

By Mark Shaw

 A looming end-of-March shutdown of the nearly $900-million Dept. of Veterans Affairs hospital construction project in Aurora, Colo., has been avoided—for now.

 VA officials have agreed to “reprogram” an additional $43.3 million to keep the project going through the end of May. That amount is on top of the $56 million that the VA recently shifted to the project.

 It would have been the second work stoppage within four months on the troubled replacement hospital. The job was shuttered in December after Kiewit-Turner, the joint-venture contractor, won an contract appeals board decision to stop work until the VA reimbursed K-T nearly $100 million for unpaid work and materials.

 The new funding raises VA’s stake in the hospital to $899 million, up from the $800 million estimated last year. Insiders say that the project eventually will balloon to more than $1 billion. That’s $400 million above its original budget.

 The job, initially targeted for completion this April, is now years behind schedule and only about 50% finished.

 VA Secretary Robert McDonald told Congress in a March 12 letter that the stopgap money would be transferred from three other VA projects: the seismic retrofit of a nursing facility and community living center in Seattle; a mental health facility, also in Seattle; and a Pittsburgh medical center.

 The shift in funds will not affect the completion of those projects, McDonald said. “This shift is essential to support VA’s interim contract with Kiewit-Turner to ensure the Denver replcement medical center project continues in the near term,” he said.

 McDonald also wrote that the Army Corps of Engineers, which is now advising the VA on the project, is working on “the final estimated cost” and will send that to Congress when it’s available.

 Congress originally set an $880-million spending cap for the project. That cap will be reached in April.  McDonald’s letter to the House and Senate veterans affairs committees in came in response to a March 10 letter that the panels' chairmen and top Democrats sent to VA, demanding a coherent plan to fund and finish the project.

 The VA committees' letter said: “To date, you have provided Congress no report on the need for a cap increase, any analysis for the cost overruns or updates on efforts to hold properly accountable those responsible.” The lawmakers also said that hey are chagrined about the lack of accountability on the project.

 It is “the biggest construction failure in VA history,” said House VA Committee Chairman Jeff Miller (R-Fla.).

 Tom Janssen, Kiewit-Turner spokesman, said in a e-mail statement: “Kiewit-Turner remains committed to this important project for Colorado veterans. Work is progressing during this interim phase, and we are working collaboratively with the VA and [Corps of Engineers] on setting a path forward for a final agreement. We are confident that Congress and the VA will address the necessary funding and authority issues.”

Topics: Construction Jobs, Union Advantage, Construction

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