House passes VA bill reducing agency's construction authority

Dive Brief:

  • The U.S. House of Representatives has approved a much-anticipated bill that increases oversight and management of Department of Veterans Affairs projects costing more than $100 million. The bill will now go to the Senate for a vote.
  • The bill turns over management of such VA projects to the Army Corps of Engineers or other federal agencies and requires the VA to keep Congress up to date on their progress. The bill also tightens the purse strings on VA projects with a 60-day notice requirement for planning and design funding.
  • The bill was the result of concerns regarding mismanagement and cost overruns that have plagued the new VA hospital in Aurora, CO, which will now cost $1.7 billion  three times the original contract price  and is scheduled to open in 2018  four years behind schedule. Investigators blamed the hospital’s problems on design changes and the VA's decision to use a complicated contract process.

Dive Insight:

Chairman of the House Veterans Affairs Committee Rep. Jeff Miller, told The Denver Post that the bill would "help rein in the incompetence that permeates VA's construction efforts" while improving accountability and efficiency.

The bill also authorizes expansion of a Tampa, FL, VA hospital and provides $561.4 million for five other projects, including the renovation of a hospital in Canandaigua, NY. The House also approved a bill that would help identify and improve the VA's worst performing hospitals.

Last November, the U.S. Army Corps of Engineers awarded construction joint venture Kiewit-Turner, the original contractor on the Aurora hospital, $571 million so they could complete their work. This came after a September deal, in which Congress agreed to pay for the rest of the hospital’s construction, with the condition that the Army Corps of Engineers manage any large VA construction project.

On other beleaguered, high-profile projects in the last few months, some analysts have pegged the various contract and procurement methods used as the source of their troubles.

Santa Clara County, CA, officials have attributed some of the problems on the behind-schedule and over-budget Valley Medical Center to the design-bid-build contract with Turner Construction. County project heads terminated Turner last year citing mismanagement but brought them back a few weeks ago "for the sake of the project."

This position is similar to the theory some transportation officials have floated in trying to explain the cost overruns and delays on the Boston Green Line rail extension that culminated with White-Skanska-Kiewit being removed as general contractor and the entire project being placed in limbo.

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Filed Under: Commercial Building Legal/Regulation