On the southeast corner of Anschutz Medical Research Center is a half-finished Veterans Affairs hospital that, when completed, will be a state-of-the-art medical center designed to meet the needs of our veterans.
Unfortunately, the Aurora VA hospital is hundreds of millions over budget and is already years behind schedule due to incomprehensible incompetence by the VA. The general contractor, Kiewit-Turner Construction (KT), sued the VA for its mismanagement of the design process in coming up with a $1 billion design on a $600 million budget.
Earlier this month, the Civilian Board of Contract Appeals agreed with KT and ruled that it had the right to stop performance due to the VA's material breach of contract. Tragically, as of last Tuesday, KT has exercised its right to walk away from the project and all construction activity has stopped, leaving 1,400 workers without jobs right before Christmas. We need to get those workers back on the job and the hospital back on track.
KT has put forward several demands before it will renegotiate another contract. The demands include reimbursement for the approximately $100 million it has spent out of pocket to keep the project going; bringing in the U.S. Army Corps of Engineers to take over management of the project; and a new contract that adheres to federal reimbursement standards.
In a meeting earlier this week, Deputy VA Secretary Sloan Gibson informed the Colorado delegation that the VA would agree to all three of KT's demands. The VA's goal is to immediately negotiate a 60-day temporary "bridge contract" with KT and restart work as soon as possible, while, at the same time, bringing the Army Corps in to negotiate a contract with KT and finish the job.
After paying KT the money already owed, the VA will have approximately $100 million left that is dedicated to the Aurora construction project — not enough to cover the cost of completing the project. The challenge is that a federal construction contract cannot be signed without appropriated funds sufficient enough to support it.
We have three possibilities to come up with the approximately $400 million shortfall. The first is that the VA can search through its own budget for unexpended appropriations in what is known as "reprogramming." However, in our meeting with the VA, it doubted it could find anything close to $400 million in its budget to fully fund the project.
The second possibility is the Judgment Fund, which is managed by the U.S. Department of Justice. This fund is used to pay court-ordered claims or settlements with agencies of the federal government. However, there are problematic aspects to this case, as the federal board found the VA is in breach of its contract but did not award financial damages in the case, potentially making the Judgment Fund unusable to fill the financial shortfall.
The third possibility is getting more money approved by Congress, but that may not be possible until later next year. I will seek additional funds if necessary and my case to Congress is that we can't erase the costly mistakes of the VA, but the leadership of the Army Corps will do everything possible to bring down the cost and speed up the construction of the hospital.
The VA's incompetence has done serious damage to this hospital project. It has harmed our veterans, who have been waiting over a decade for this state-of-the-art facility. It has harmed the workers who now have no job in the middle of the holiday season. And, it has harmed the taxpayers of this nation who must now come up with hundreds of millions of dollars to fix the VA's costly mistakes.
We cannot abandon this hospital. We owe it to our veterans, the taxpayers, and to the 1,400 construction workers to get this job done.
U.S. Rep. Mike Coffman is chairman of the Oversight and Investigations Subcommittee for House Veterans Affairs and is a U.S. Marine Corps combat veteran.
Rep. Mike Coffman
The Denver Post
December 14, 2014