VA projects $10.8 million over budget, years behind schedule

Two construction projects at the Oklahoma City VA Medical Center are $10.8 million overbudget, several years behind schedule and were once in violation of federal law due to engineering mismanagement and bitter disagreements between contractors, according to a federal report released Friday.

The VA inspector general report — the second in recent months to uncover problems at the hospital — reviewed construction of a new surgical intensive care unit, or SICU, and expansion of an operating room. The projects were conceived a dozen years ago but remain incomplete and indefinitely stalled.

Poor workmanship has wasted money, greatly delayed the projects and created safety concerns, according to the report. Unfinished construction on the hospital’s roof has been exposed to the elements and will have to be redone. Other problems “call into question the structural integrity of portions of the eighth floor.”

“The report today from the VA Office of the Inspector General is deeply troubling and disappointing, but not surprising,” said U.S. Sen. Jim Inhofe. “It is sadly yet

another example of how poor leadership and a lack of accountability resulted in wasteful spending and a poor quality of care for our veterans.”

Two VA employees were fired as a result of the construction boondoggle, two more resigned before they could be fired and a fifth person retired while facing disciplinary action, according to Wade Vlosich, the hospital’s director since 2016, who requested the inspector general investigation.

“Many of the people who were involved in this no longer work here,” he said.

Shoddy work

As early as 2006, local VA officials began considering plans to create a new SICU and then expand the operating room into the former SICU space. The difficulty, at first, was keeping the project cost under $10 million. Doing so would allow the project to move ahead without congressional approval.

Between 2008 and 2013, the two projects were designed and redesigned to keep their cost under $10 million each. In November of 2013, the SICU work was awarded to Arkansas-based TL Services with a scheduled completion date of April 2015. The company was tasked with creating a new floor atop the seven-story hospital to house the SICU. The projected cost was $9.9 million.

Meanwhile, the hospital’s managers pitched the operating room project to the VA hierarchy in 2011, though it couldn’t be completed until the SICU project was done. Management, who believed the project would take years to be approved, were surprised when $8.1 million was approved for the operating room work that same year. Fearful of losing the money, they moved ahead on the two projects simultaneously.

The SICU project was fraught with failures and shoddy work, the federal report found. Blueprints called for rectangular columns but TL Services instead used round columns that were too wide, threatening structural integrity. The stairs, which also did not fit design plans, cracked soon after they were installed. The roof leaked, causing mold and water damage to the walls. It, too, did not fit design specifications, according to the report.

Vic Pongonis, chief operating officer at TL Services, said Friday that “TLS vehemently denies that there were workmanship deficiencies attributable to TLS, or that TLS’s performance on this project was unsatisfactory or inadequate in any way.”

When investigators found “miscellaneous structural steel beams and pieces of steel” strewn atop a roof, “the project engineer was not sure where the beams belonged (and) expressed concerns that the beams should have been incorporated somewhere in the project,” according to the investigators’ report.

Desperate to avoid crossing the $10 million threshold for VA construction projects — and facing the congressional oversight that follows — hospital management claimed components of the SICU project were instead part of the operating room project, a violation of the federal AntiDeficiency Act, the report found.

As TL Services repeatedly extended its deadline for completion of the SICU project from April 2015 to November 2015 and then January 2016, its employees began clashing with those working on the operating room project nearby. In July 2016, TL Services requested an additional $1.8 million to complete the overdue project, according to the report. The VA halted both projects and requested $3.8 million from TL Services for incomplete work. The two sides have been locked in a legal stalemate ever since.

Meanwhile, both projects sit idle. The SICU project atop the hospital has deteriorated as it has been battered by weather. An investigation found the hospital’s roof had little to no fire protection or weatherproofing, according to the report, and “massive amounts of water” ran down the walls, Vlosich said Friday. Those issues have been addressed but much of the work has been wasted.

“Because of the poor workmanship, we have to tear down part of what’s already been constructed on the eighth floor, the new SICU unit, and rebuild it back up,” Vlosich said.

Asking Congress

To do so, the VA has asked Congress for permission to spend $10.8 million more on the construction. Two projects once expected to cost about $18 million are now estimated to cost nearly $30 million. Though the SICU project is only about 60 or 65 percent complete and indefinitely stalled, TL Services has been paid 93 percent of its cut, the inspector general report determined. That’s because a progress report filed in 2016 falsely claimed the project was 90 percent complete.

The SICU and operating room projects suffered from a severe lack of oversight, the report found. The hospital’s chief engineer never attended a safety inspection. The project engineer, who is not named in the report, was repeatedly given excellent performance reviews, even as he or she oversaw two large, failing projects.

Vlosich says he is changing that. He walks around construction sites daily and tracks the projects’ progress in monthly meetings. Inhofe, a strong supporter of the VA director, applauded Vlosich for firing those responsible for the construction failures.

“We’ve firmed up a lot of our construction processes here,” Vlosich said Friday. “We’ve got projects moving. So, we’re excited about the changes we’re making here at our facility.”

If Congress approves the VA’s request, the projects can restart. A project engineer has been assigned and is ready to work, Vlosich said. The operating room portion will be completed first, because it is nearly complete. Then, more than a dozen years after it was first imagined, the eighth-floor SICU can be built.