VA's financing woes may hit Texas
Massive cost overruns in Colorado could divert funds from projects in Dallas, Houston, other cities.
The crystalline atrium will soar six stories into the air, its massive windows giving dramatic view to the Rocky Mountains. It will stretch for nearly one-third of a mile, connec ting 12 separate buildings like the spine of some futuristic centipede. America’s most controversial lobby is so over-the- top that Robert McDonald, the secretary of the Department of Veterans Affffffffffffairs, remarked upon seeing it: “Oh, my goodness. The architects went nuts.”
The lobby of the Denver VA hospital, actually situated in Aurora, Colo., is the most visible face of what is undoubtedly one of the worst cases of fifinancial mismanagement in recent governmental history.
Originally pegged at $328 million in 2004, the medical center is now expected to cost a staggering $1.7 billion. The atrium alone will be $ 120 million.
Before the dust settles, the fifinancial pain could be felt not just in Colorado, but in Texas and across the nation.
The VA is scrambling to fifind more than $600 million to fifinish the facility, and under one widely derided scenario it presented to lawmakers it would get the money by delaying and deferring dozens of other con- struction projects throughout the country.
In Texas, such a funding plan would put projects in
Temple, Dallas, Houston and Amarillo in the crosshairs. The Texas projects include a $10 million mental health clinic expansion and $12 million long-term spinal cord unit in Dallas; an $8.9 million surgery suite upgrade including five new operating rooms and a $9 million 17,000-square-foot addition for research space at the Olin E. Teague Veterans Medical Center in Temple; and a $7.8 million rehabilitation and prosthetics facility in Amarillo.
The chances of such an unappetizing solution, however, appear slim as many lawmakers have expressed revulsion at sacrificing badly needed local projects at the altar of Aurora.
“I don’t believe that other programs across the country, including the Clinical Expansion for Mental Health and Spinal Cord Injury programs in Dallas, should be delayed because the VA is incapable of managing their finances,” said U.S. Rep. Pete Sessions, a Dallas Republican, in an email to the American-Statesman.
U.S. Rep. John Carter, a Round Rock Republican who represents the Temple area, echoed that position.
“I will not support the redirecting of funding from other important VA projects, especially those in Central Texas, to subsidize the miscalculations and mishandling of the Denver VA hospital project,” Carter told the Statesman. “Veterans of Central Texas should not be penalized for the incompetence of project managers in Colorado.”
The VA has floated another approach, which also would spread the financial pain in the form of across-the-board cuts to medical services, disability benefits administration, cemetery oversight, information technology and the agency’s inspector general, tasked with investigating wrongdoing among the VA staff.
The VA acknowledged that such cuts rely “on a blunt tool to indiscriminately identify resources,” and that alternative has similarly been opposed by lawmakers who call the plan unfair to veterans.
U.S. Rep. Jeff Miller, the Florida Republican who chairs the House Veterans Affairs Committee, has said he wants the Obama administration to find the money outside the VA budget, arguing that the solution to the Denver mess should not include cutting programs or care for veterans.
A decision on how to fund the remaining balance in Denver must be made by the end of the month — when the current construction funding is expected to run out — to avoid work stoppages in Denver that officials say could add hundreds of millions of dollars to the final price tag.
In the meantime, the Dallas projects have been sent out for design bids, but the beginning of construction remains “pending funding appropriations,” according to officials with the VA region overseeing most of Texas. The Temple projects have been deferred to the 2016 fiscal year, which starts in October.
“Without a finalized plan at this point, we cannot speculate on exact impacts the project timelines may have,” said Jessica Jacobsen, a VA spokeswoman in Dallas. “Nationally, VA is meeting an increase in demand with more of everything available — more hours, more space, more people, more productivity, more accountability, more transparency and more choice. We’ve completed 7 million more appointments this year than last.”
Meanwhile, the department and Congress will seek a palatable solution. “We remain actively engaged with Congress to implement a plan that conveys a sense of urgency on behalf of veterans and allows us to meet our responsibility to be good stewards of taxpayer dollars,” VA national spokesman Mark Ballesteros said.
Too little appropriated
While the Denver hospital fiasco has raised important questions about the VA’s ability to manage large construction projects, veterans groups say it also could obscure and confuse what they say is the very real need for infrastructure improvements across the land.
Even before the full extent of the Denver overrun became known, groups representing disabled veterans were warning that the VA wasn’t asking for enough money to adequately renovate existing facilities or build badly needed new ones.
In July 2014, Joseph Violante, the legislative director of Disabled American Veterans, said at a congressional hearing that over the previous decade, Congress had appropriated about $9 billion less than what a consortium of veteran groups estimated was necessary for construction projects. That lack of infrastructure investment, the groups say, is one of the less visible causes of last year’s national scandal regarding long wait times for appointments.
“The fact that VA has consistently requested less infrastructure funding than actually needed is also well known to those who regularly examine VA’s budget and appropriations requests,” Violante told lawmakers. “This failure to build, maintain and replace VA’s hospitals and clinics limits the space in which veterans can be treated, and, as we have seen, directly impacts the timeliness and quality of care.”
The latest so-called Independent Budget, written by veterans groups including Disabled American Veterans and Veterans of Foreign Wars, says the requested 2016 appropriation for construction programs is about 40 percent less than what it should be.
Garry Augustine, the executive director of the DAV’s Washington, D.C., headquarters, said the VA needs to streamline its building process.
“Instead of having all VA hospitals look different, there should be a standardized way of building hospitals to control costs.” What’s needed, Augustine said, are the treatments and care the hospitals provide, “not necessarily the fancy buildings.”
Broken promises
Fancy buildings are one thing that critics agree the Denver project delivers. The Civilian Board of Contract Appeals ruled the VA failed to rein in the design of the hospital complex even as it promised its contractor the design wouldn’t cost more than $582 million to build, a pledge it repeatedly broke.
The U.S. Government Accountability Office also found the VA failed to bring its contractor into the fold early enough in the design phase to provide some badly needed reality checks.
Had that been done, a GAO report found, the massive lobby, for example, might not have reached such epic proportions. “(H )ad the contractor been involved in the design process, the contractor could have helped VA weigh the aesthetic advantages of curved walls against the lower cost of straight walls,” an April report reads.
VA officials in Colorado have told the Denver Post that the design of the lobby is intended to help veterans suffering from agoraphobia, an anxiety induced by open spaces.
Investigators also found that unexpected asbestos remediation and the discovery of an underground spring at the construction site added to costs.
Yet despite the many failures to control costs, no VA employee has yet been disciplined. Two employees involved in the construction project retired amid an internal investigation.
Denver isn’t the only place VA officials have failed to control construction budgets. A medical center in Orlando, Fla., ballooned from $254 million to $616 million; a facility in New Orleans, La., grew from $625 million to just over $1 billion. Such woes are making additional construction dollars a tough sell in Congress, and some law-