VA to relinquish control of Denver hospital construction

AP News
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Posted: Apr 02, 2015 8:07 PM
VA to relinquish control of Denver hospital construction

AURORA, Colo. (AP) — The U.S. Army Corps of Engineers will take over construction management at the new Denver veterans hospital amid an internal investigation into how the project ran $1 billion over budget, the Veterans Affairs Department said Thursday.

VA Deputy Secretary Sloan Gibson said he hopes the hospital can open in 2017 and repeated his earlier estimate that another $830 million is needed to finish the work. Gibson spoke with reporters at the construction site in the Denver suburb of Aurora after meeting with contractors.

The hospital is now expected to cost $1.73 billion. Rep. Mike Coffman, R-Colo., has said VA officials told Congress as recently as last year that the hospital would cost $630 million and open in May 2015.

Gibson said the design was finalized too late and the contractor wasn't brought into the process early enough. "I apologize to veterans, and I apologize to American taxpayers for the delay and the added cost," he said.

Veterans hospitals in New Orleans, Las Vegas and Orlando, Florida, have also encountered overruns and delays. The VA has been under intensifying pressure from Congress to explain what went wrong and fire those responsible.

The House Committee on Veterans Affairs has scheduled a hearing about the Denver hospital for April 15 in Washington, D.C.

Gibson said he understands lawmakers' frustration that the department's top construction executive, Glenn Haggstrom, retired last week amid the VA's investigation. Coffman and Rep. Jeff Miller, chairman of the House Committee on Veterans Affairs, have said Haggstrom should have been fired.

Gibson said Haggstrom had a legal right to retire. He said Haggstrom submitted his retirement documents March 24, one day after he was questioned under oath as part of the internal inquiry.

Haggstrom has no listed phone number and could not be reached for comment.

Gibson dismissed Coffman's proposal to funnel the department's multimillion-dollar employee bonus budget into construction, calling it "a lousy idea." It would mean janitors, cemetery workers and other VA employees, many of them veterans, wouldn't get bonuses, not just executives, he said.

Coffman's spokesman, Tyler Sandberg, said Gibson's reaction was predictable. "Of course. It's his bonus money," Sandberg said.

Sandberg said the VA still hasn't provided specifics about the problems or how it will discipline those responsible. "It sounds like they're fiddling while Rome burns," he said.

Rep. Ed Perlmutter, D-Colo., said he was encouraged by Gibson's comments. Perlmutter said it will be difficult to persuade Congress to come up with the money, but he is confident it could be done.

Gibson said that by the time he learned of the cost overruns, the contractor had gone to a federal appeals board alleging the VA had breached its contract. Gibson said he thought it best to wait till the board ruled before taking any action.

The board ruled the VA hadn't produced a design that could be built within budget. Work halted until the VA negotiated an interim contract with the builders.

The 184-bed medical center will replace an old, crowded facility in Denver.

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