The U.S. Department of Veterans Affairs (VA) allowed several hospital building projects to spiral out of control, according to a series of reports from the Army Corps of Engineers (USACE).
The Army Corps studied VA oversight of hospital projects in Louisiana, Colorado, Florida and Nevada. Its conclusion: Mismanaged contracts and poor budget controls led to the cost overruns. Among the biggest problems have been overlapping areas of authority that led to disagreements regarding project management, multiple changes to plans after work already began, and an overall lack of leadership on each project.
The VA hospital being planned in Denver is a specific example of cost overruns: It was more than $500 million over budget as of last year. The facility will eventually cost more than $1.7 billion to complete--triple its original cost estimates, according to the Associated Press.
Altogether, the four hospital projects being managed by the VA are expected to run at least $1.5 billion over budget. At the same time, the VA system is struggling with providing timely appointments and care to veterans, as well as approving claims to be able to enter the VA system.
The Army Corps recommended that the VA make fundamental changes in the way it handles construction projects. The VA concurred.
"VA has instituted a process to assure that any change to the scope and/or budget of major construction projects are justified and approved as required to safely and effectively deliver health care before any resources are committed to executing the requirement change," Deputy VA Director Sloan Gibson said in a statement. "As USACE highlights, this fundamental change in culture and process will better allow VA to deliver projects on time and within budget."
To learn more:
- read the reports (.pdf) and Gibson's statement via the VA's blog
- check out the Associated Press article