[House Hearing, 115 Congress]
[From the U.S. Government Publishing Office]
THE DENVER REPLACEMENT MEDICAL CENTER: LIGHT AT THE END OF THE TUNNEL?
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HEARING
before the
COMMITTEE ON VETERANS' AFFAIRS
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED FIFTEENTH CONGRESS
SECOND SESSION
__________
WEDNESDAY, JANUARY 17, 2018
__________
Serial No. 115-44
__________
Printed for the use of the Committee on Veterans' Affairs
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Available via the World Wide Web: http://www.fdsys.gov
________
U.S. GOVERNMENT PUBLISHING OFFICE
35-372 WASHINGTON: 2019
COMMITTEE ON VETERANS' AFFAIRS
DAVID P. ROE, Tennessee, Chairman
GUS M. BILIRAKIS, Florida, Vice- TIM WALZ, Minnesota, Ranking
Chairman Member
MIKE COFFMAN, Colorado MARK TAKANO, California
BRAD R. WENSTRUP, Ohio JULIA BROWNLEY, California
AMATA COLEMAN RADEWAGEN, American ANN M. KUSTER, New Hampshire
Samoa BETO O'ROURKE, Texas
MIKE BOST, Illinois KATHLEEN RICE, New York
BRUCE POLIQUIN, Maine J. LUIS CORREA, California
NEAL DUNN, Florida KILILI SABLAN, Northern Mariana
JODEY ARRINGTON, Texas Islands
JOHN RUTHERFORD, Florida ELIZABETH ESTY, Connecticut
CLAY HIGGINS, Louisiana SCOTT PETERS, California
JACK BERGMAN, Michigan
JIM BANKS, Indiana
JENNIFFER GONZALEZ-COLON, Puerto
Rico
Jon Towers, Staff Director
Ray Kelley, Democratic Staff Director
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C O N T E N T S
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Wednesday, January 17, 2018
Page
The Denver Replacement Medical Center: Light At The End Of The
Tunnel?........................................................ 1
OPENING STATEMENTS
Honorable David P. Roe, Chairman................................. 1
Honorable Timothy J. Walz, Ranking Member........................ 3
WITNESSES
Ms. Stella Fiotes, AIA, Acting Principal Executive Director,
Office of Acquisition, Logistics, and Construction, U.S.
Department of Veterans Affairs................................. 4
Prepared Statement........................................... 39
Accompanied by:
Mr. Dennis Milsten, Associate Executive Director, Office of
Construction and Facilities Management, U.S. Department
of Veterans Affairs
Mr. Ralph Gigliotti, FACHE, Network Director, VISN 19,
Veterans Health Administration, U.S. Department of
Veterans Affairs
Mr. Lloyd Caldwell, Director of Military Programs, U.S. Army
Corps of Engineers............................................. 5
Prepared Statement........................................... 41
Mr. Andrew Von Ah, Director, Physical Infrastructure Team, U.S.
Government Accountability Office............................... 7
Prepared Statement........................................... 42
STATEMENTS FOR THE RECORD
Patrick Murray, Associate Director, National Legislative
Service,Veterans Of Foreign Wars Of The United States.......... 48
THE DENVER REPLACEMENT MEDICAL CENTER: LIGHT AT THE END OF THE TUNNEL?
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Wednesday, January 17, 2018
Committee on Veterans' Affairs,
U. S. House of Representatives,
Washington, D.C.
The Committee met, pursuant to notice, at 10:00 a.m., in
Room 334, Cannon House Office Building, Hon. David P. Roe
[Chairman of the Committee] presiding.
Present: Representatives Roe, Bilirakis, Coffman, Wenstrup,
Radewagen, Bost, Poliquin, Arrington, Higgins, Bergman,
Gonzalez-Colon, Walz, Takano, Brownley, Kuster, Rice, Sablan,
Esty, and Peters.
OPENING STATEMENT OF DAVID P. ROE, CHAIRMAN
The Chairman. Good morning and welcome to the one-half inch
Washington blizzard this morning. Everybody trudged through the
one-half inch of snow to get here this morning. The meeting
will come to order. I want to welcome everyone to today's
hearing, which is the seventh this Committee has held examining
the construction of the new Rocky Mountain Regional Medical
Center in Aurora, Colorado.
The road to completing this hospital has been extremely
long and bumpy. The groundbreaking ceremony was held in 2009.
All told, the price tag is at least $2 billion. This situation
must never happen again. But the finish line is near. Mr.
Coffman, Mr. Congressman Perlmutter, and myself toured the
medical center last week to see personally about this. Today we
are here to discuss how near and take a close look at the
facility that has been produced.
The construction debacle changed the way VA builds
hospitals. In 2015 Congress mandated that another expert agency
take over management of all VA super construction projects,
which is everything over $100 million. That agency is the Army
Corps of Engineers. All available evidence suggests this was
the right decision. In just over two years, the Army Corps has
guided the project from less than 60 percent complete and mired
in contractor disputes to 98 percent complete. VA has accepted
all but one of the buildings, the diagnostic and treatment
center. But the end of construction is merely the beginning of
VA's activation effort.
Activation is never easy and unfortunately in this
hospital's activation the team must continue to correct design
and construction errors. The design of this facility began over
ten years ago. It has already been well established how
architectural novel and extravagance drove up this construction
cost. In addition to that, so much time has elapsed that the
practice of medicine, building codes, and intended uses for the
spaces have changed. It is deeply troubling that this new
Aurora Medical Center doubles the square footage of the
existing Denver Medical Center, but includes the same number of
beds and actually reduces primary care capacity.
There are also hundreds of errors individually but small
which add up to a significant problem that must be corrected.
Things like sink in an operating room, surfaces that can't be
cleaned, inadequate air conditioning systems, voltage problems,
and an entire data center that must be rearranged. There are
also mistakes to be fixed at the end of the construction job,
but I have to wonder whether the clinicians who will treat
veterans in this facility have ever scrutinized its
specifications.
Even after the new medical center opens, VA must continue
operating the old medical center because presently some of the
primary care doctors and the PTSD residential rehabilitation
facility have nowhere else to go. When Congress authorized this
project and continued to authorize it through all its
struggles, having two major VA hospitals six miles apart was
never part of the deal. The local leadership expressed their
commitment to closing down the old facility as soon as possible
and recouping as much money for the taxpayers from the assets
as they can. This Committee is going to make sure that that
happens.
H.R. 4243, the VA Asset and Infrastructure Review Act,
which we reported out of Committee in November, would give the
VA the tools it needs to expedite building a new PTSD rehab
facility on the Aurora campus and cut through bureaucratic
hurdles to dispose of the Denver campus. And I can tell you
after visiting out there last week, this particular facility is
a poster child for why we need VA asset review. If any of you
all had any doubt about that, please make the trip to Denver
and look. And it will absolutely reassure, it will make, give
you peace, it did me, to know that we need to do this.
Now is the time to add up what has been gained and lost in
this experience. VA added a state of the art spinal cord injury
treatment center. And I do want to mention, this truly is a
state of the art. That was one of the most impressive parts of
my trip, was this new spinal cord treatment center. It is
going, there could not be a better one, I think, in the world
maybe. And I know that the PVA, the Disabled Veterans, looked
at this, helped design it, which I thought was really smart.
And I want to commend the VA for this. And I think once it is
implemented it will be really a state of the art facility for
our injured veterans.
Also the new imaging capabilities, amenities for patients,
and a modern facility for the burgeoning veteran population's
decades into the future.
On the other side of the ledger, VA lost a significant
amount of primary care space and must continue correcting
defects potentially up to the day the doors open. And of
course, successive groups of VA managers have spent a mind-
boggling amount of taxpayer money. That being said, I now yield
to Ranking Member Walz for his opening comments.
OPENING STATEMENT OF TIMOTHY J. WALZ, RANKING MEMBER
Mr. Walz. Well thank you, Chairman Roe, and thank you all
for being with us. We were just discussing earlier that I am
entering my twelfth year in Congress and have the most amount
of time here along with Chairman Roe. This project was approved
before we got here. It has been here my entire congressional
career. I mentioned it is older than my son Gus, who is 11. So
again, with all due seriousness on this, we know, and again
knowing what went wrong here, and the number of hearings we
held here, some of them in prime time, over this issue, our
responsibility of those of us sitting here now is about the
lessons learned. And I would argue under Chairman Roe's
leadership, and Mr. Coffman, and others, the way we have
approached this has changed. The hand of Congress exercising
its oversight authority has been much more present. It has been
much more forceful. And for that, Mr. Chairman, I thank you.
This is about fixing problems, not just complaining that they
were there. And so I am grateful.
We have been waiting over 15 years for this replacement
hospital. Now it finally appears Colorado veterans will have
the state of the art facility that they deserve. We are all
intimately familiar, as I said, with the history of project
schedule overruns. It is important we apply these lessons we
have learned from this project and apply them to the Army
Corps' model for project management to future VA super
construction projects.
Now that the facility will turned over to VA this month for
activation, VA needs to ensure it is able to adhere to the
activation schedule so veterans can start receiving care at
their new facility later this summer. Today I hope we get
assurances from VA that the staff and resources are there to
open on time. I want VA to ensure it is working closely with
the Army Corps to complete construction. My greatest concern is
whether VA has the infrastructure in place to meet the needs of
veterans in Colorado and its neighboring states. We know the
veterans receiving their care at the Denver Medical Center
experience some of the longest wait times in the country. Due
to the significant cost overruns for this project, the much
needed PTS residential treatment facility was not constructed
and additional funds will be needed to build this facility on
the Aurora campus. Seven primary care teams will continue to
operate out of the existing Denver facility, along with the
community living center for the next three years.
Solutions are needed to address these significant
infrastructure and capacity needs so that veterans do not
continue to wait for their care. I hope the VA has come to
prepared to discuss solutions today, prepared to work with
Congress, the State of Colorado, and the City of Denver to
address those needs.
Thank you, Chairman Roe, for your leadership, and I yield
back.
The Chairman. I thank the gentleman for yielding. Now I
would like to welcome our panel who are seated at the witness
table. On our panel we have Ms. Stella Fiotes, Acting Principal
Executive Director of the VA Office of Acquisition, Logistics,
and Construction. She is accompanied today by Mr. Dennis
Milsten, Director of Operations for the VA Office of
Construction and Facilities Management. Ms. Fiotes is also
accompanied by Mr. Ralph Gigliotti. And I would like to mention
that when I picked up my rental car in Denver, this young man
who rented me my car said, ``I think you are going to see my
dad tomorrow.'' That would be Mr. Gigliotti, which tells you it
is a very small world, Director of Veterans Integrated Service
Network 19, which covers Colorado and neighboring states. We
also have Mr. Lloyd Caldwell, the Director of Military Programs
for the United States Army Corps of Engineers, and thank you
for being here. And finally we have Mr. Andrew Von Ah, Director
of Physical Infrastructure for the Government Accountability
Office. I will ask your witnesses to raise your right hand.
[Witnesses sworn.]
The Chairman. Thank you. And let the record reflect that
all witnesses have answered in the affirmative. Ms. Fiotes, you
are recognized now for five minutes for your testimony.
STATEMENT OF STELLA FIOTES
Ms. Fiotes. Thank you. Good morning, Mr. Chairman, and
Members of the Committee. Thank you for the opportunity to
update this Committee on the status of the construction of the
new Rocky Mountain Regional VA Medical Center in Aurora. I am
accompanied today by Mr. Dennis Milsten and Mr. Ralph
Gigliotti.
We are pleased that this facility will enable us to serve
over 390,000 Colorado veterans and their families as we work to
ensure that local veterans receive the VA services that they
have earned and deserve. Upon opening, the Rocky Mountain
Regional VA Medical Center will provide the same robust range
of tertiary health care services that currently are available
at the Denver VA Medical Center, with the addition of
mammography and PET CT to its imaging services. The exception
is the Post Traumatic Stress Disorder residential
rehabilitation treatment program and seven patient aligned care
teams that are currently slated to remain in the old facility.
We are working, however, on options that will allow their
relocation off the existing campus as quickly as possible to
allow for ultimate closure and disposition of the old facility.
The Rocky Mountain facility is also proud to be the latest
spinal cord injury and disorder center within the VA system.
This center will serve populations in Colorado, Utah, Wyoming,
and parts of Nebraska and South Dakota. The SCI center will
include both an outpatient clinic and inpatient unit, offering
comprehensive multidisciplinary care for patients with spinal
cord injury, multiple sclerosis, and amyotrophic lateral
sclerosis.
Lastly, the new facility will provide a much more up to
date and positive veteran and family experience. This includes
private rooms for patients with their bathrooms as well as
space for family members to stay overnight, an intensive care
unit with an 800-square foot waiting room suite, and all
interventional services such as surgery and radiology to be
located adjacent to pre-operative and post-operative beds to
improve the coordination of care and efficiency of service
delivery.
I am pleased to tell you that the construction contract
with Kiewit-Turner is 98 percent complete and 11 of the 12
structures have been turned over for activation. VA and the
United States Army Corps of Engineers are currently working
through contract completion items and actively working with the
contractor to bring this contract to an end as swiftly as
possible. Activation activities are ongoing and the facility
will open to serve local veterans in August 2018.
The current activation schedule has the majority of
installation, calibration, and testing of newly procured
equipment being completed in May. This will enable the Denver
Medical Center staff to complete over 40,000 staff hours of
education, training, and orientation in late July. VA's current
activation budget of $341 million provides sufficient funding
to service the opening of this facility.
During the Corps' construction management of the project,
the contractor proposed to concentrate labor on completing and
turning over the campus to VA building by building rather than
a longer process of delivering it in full by the contract
completion date of January 2018, which saved a substantial
amount in KT overhead costs. KT is the contractor.
Additionally, the Corps will not incur the estimated staffing
costs they budgeted for the project and will be returning
approximately $10 million of unused funds to VA.
VA has worked diligently to improve the management and
oversight of our major construction program by partnering with
the Corps and incorporating lessons learned to ensure that the
challenges faced on this project will not happen again. I'm
here to tell you that VA today is doing business very
differently than in the past. We are rethinking everything
about how we will modernize our infrastructure to find ways to
deliver much needed facilities smarter, faster, and at
significantly less cost. Just one example is a recent project
in Omaha, Nebraska where we have partnered with private donors
and entities to deliver an ambulatory care center for our
veterans in half the time and 30 percent cheaper than our
traditional way of doing business. We are also looking at the
next major projects to see how we can find smarter solutions,
speed their delivery for veterans' use, and lessen the cost to
taxpayers.
In closing, VA is thankful for the work this and other
Congressional Committees have done to help VA navigate the
challenges this project has posed and for securing the funding
necessary for its planned completion. VA remains committed to
ensuring the project provides a facility where veterans will
receive the best 21st Century health care in a manner where the
department, Congress, veteran's service organizations, and
local stakeholders work together for the benefit of our
Nation's veterans.
Mr. Chairman, this concludes my statement. Thank you for
the opportunity to testify before the Committee. My colleagues
and I would be pleased to answer questions from you and Members
of the Committee.
[The prepared statement of Stella Fiotes appears in the
Appendix]
The Chairman. Thank you for your testimony. Mr. Caldwell,
you are now recognized for five minutes.
STATEMENT OF LLOYD CALDWELL
Mr. Caldwell. Mr. Chairman and Members of the Committee,
thank you for the opportunity to appear before you on behalf of
Lieutenant General Todd Semonite, the Chief of Engineers. I
provide leadership for the execution of the U.S. Army Corps of
Engineers engineering and construction programs in support of
the Department of Defense and other agencies of the Federal
government.
Today we have been asked by the Committee to testify on the
subject of the Denver replacement medical center in Aurora,
including the Corps' accounting of construction costs known to
date and ancillary construction activities. In addition, I will
provide information pertaining to the Corps' lessons learned.
While the Corps has the lead in construction execution of
the Denver hospital, the VA remains responsible for project
requirements, resourcing, and facility transition to full
operations. In December of 2014, the VA and the Corps entered
into an Economy Act agreement to allow the Corps to assess the
Denver hospital project. Subsequent modifications to that
agreement and a new agreement provided the Corps the funding
and the authority to transition the project's construction
agent responsibility to the Corps. During construction the
Corps and the VA have collaborated well, and have collaborated
with the staff of the House Veterans Affairs Committee to
provide transparency of the completion status, ongoing
activities, changes, and expenditures associated with the
project. Additionally, VA and the Corps have provided quarterly
briefings to the Committee staff on the project's completion
status.
Our contract provided a target value for completion of the
project of $570.75 million, including in addition to that, we
have a contingency for unforeseen conditions which we held in
the amount of a little over $14 million, for a total estimated
construction value of $585 million. With the construction now
98 percent complete, our current estimate anticipates that upon
final completion we will have expended about $555 million for
the construction, resulting in about $30 million being returned
to the VA. Additionally we anticipate returning $10 million
from the government and contract oversight and audit costs that
we had estimated. This will result in a total of approximately
$40 million being returned to the VA from the original $625
million which was provided to the Corps for the project. The
construction is on schedule for substantial completion of all
buildings this month.
There will remain ancillary construction activities for the
project which fall in two categories. One is punch list items
and the other is modifications to address current medical
facility requirements. Punch list requirements are routine with
any construction requirement. They involve typically minor work
remaining for construction or completion that the contractor
must finalize to be in full compliance with the contract. These
punch list items should not delay the occupancy and use of the
facility.
The second category typically involves emergent
requirements which are necessary to ensure the new facility
complies with current codes and practices that may have evolved
over the course of construction. These emergent requirements
will be a contract action separate from the Kiewit-Turner
contract. We anticipate completing these requirements using the
same government team currently on the project but with a new
contract. We are currently targeting to have this work
completed by the summer of 2018. We made the decision to
address these emergent medical requirements by a new contract
since this course of action requires clarity and transparency
to completion of the project and ensures finality in completion
of the larger contract. The decision allows the current
contract to concentrate on completing their contract
requirements.
As part of our process, we review our project execution to
identify lessons learned. While this project is not complete we
have been recording lessons learned. One significant lesson
learned is the value of consistent senior executive review of
the project. The senior executive review group for this project
is comprised of senior leaders from the VA, the contractor, and
the Corps. This group met regularly on the project to provide
guidance. This commitment at the senior levels of all
stakeholders helped to ensure that the entire team remained
focused on the success of the project and achieving our
collective goals. At the completion of the project the final
package of lessons learned will be formally documented and
published.
We are pleased to be nearing completion of the project and
believe that the completion of the hospital will be a great
source of value to the veterans in the region. Mr. Chairman,
this concludes my statement. Thank you for allowing me to be
here today to discuss the work and I'll be happy to answer any
questions.
[The prepared statement of Lloyd Caldwell appears in the
Appendix]
The Chairman. Thank you, Mr. Caldwell. Mr. Von Ah, you are
now recognized for five minutes.
STATEMENT OF ANDREW VON AH
Mr. Von Ah. Chairman Roe, Ranking Member Walz, and Members
of the Committee, thank you for the opportunity to discuss our
March 2017 report on VA major construction projects which
reviewed the Denver Medical Center project among others. We
have previously reported and testified on VA's struggles in
managing the Denver project. The project's substantial cost
increases and schedule delays are well known to this Committee
and the audience here today.
While the Army Corps of Engineers has an agreement with VA
to oversee completion of major construction of the Denver
project, which is scheduled to finish this month, VA is
responsible for activation, which is the process of bringing a
facility into full operation. Activation is scheduled to
continue through this summer. My remarks today are based on our
2017 report, which highlighted several opportunities for
improvement in VA's management of these projects, particularly
with respect to activation, and follow up on our
recommendations from July 2017 to January of 2018.
In our 2017 report we made two recommendations related to
activation of the VA facility, rather the Denver facility, that
VA, one, deliver a reliable activation cost estimate for the
Denver project; and two, clarify policies on integrating
construction and activation activities. VA agreed with these
recommendations and has been taking steps to implement them.
First with respect to activation cost estimates, we found
in 2017 that VA had minimal documentation supporting its
estimate of the cost of activation for the Denver project,
which we therefore found to be unreliable. The most recent
estimate we received for the Denver facility is $341 million.
With minimal documentation, we recommended that VA develop and
document an activation cost estimate for the project that is
reliable and conforms to best practices as described in GAO's
Cost Estimating and Assessment Guide. The lack of a reliable
estimate can make it difficult for VA to manage its budget and
also poses difficulties for Congress which relies on it to make
appropriations decisions.
In July 2017 VA provided us with new documentation on its
estimate. We analyzed this information and found that it did
not meet best practices. Of the four characteristics of a
reliable cost estimate, Denver's activation estimate partially
met two and only minimally met two others. Specifically we
found that it's unclear how VA is developing a good picture of
the estimate's sensitivity to risk. A sensitivity analysis is
important so decision-makers have an idea of how close to the
point estimate they can expect the project to be. VA has
provided comments on our assessment concurring with some of it
and identifying additional information for us to consider.
While VA has made improvements in its documentation of the
estimate since our report, such as documenting discussions with
management and including more detailed information, we still
cannot find that the current estimate meets the characteristics
of a reliable estimate.VA officials also indicated they are
taking steps, such as developing training and providing GAO's
Cost Estimating Guide to staff in an effort to improve
activation estimates going forward.
With respect to the activation schedule, we found in 2017
that VA's policies were not clear or consistent on how to link
construction and activation schedules to form an integrated
master schedule for the entire project. For the Denver project,
in part because of the lack of clarity and consistency in
policy, we found that certain activities and milestones in
these schedules were not aligned with each other. For example,
we found three different dates for the same milestone in the
existing schedules in March of 2017.
In response to our recommendation VA has clarified its
policy documents, which we have reviewed and verified, and
reinforced that all projects develop and maintain an integrated
master schedule that includes and links all construction and
activation activities. Moreover, VA officials indicated that
they have worked with the Corps to resolve inconsistencies in
linking construction and activation activities for the Denver
Medical Center. This and other actions VA is taking with
respect to cost estimating, as well as tracking change orders,
if fully implemented should improve VA's ability to manage its
projects going forward.
Mr. Chairman, this concludes my oral statement. I'd be
happy to address any questions you or Members of the Committee
may have. Thank you.
[The prepared statement of Andrew Von Ah appears in the
Appendix]
The Chairman. Thank you for your testimony. And I will now
recognize myself to begin the questioning. And I want to start
by saying that I think there is a dedicated group of, there are
a dedicated group of people in Denver, Colorado who are mission
focused on getting this hospital open and providing this
incredible new facility for our veterans out there. We met
with, Mr. Coffman and I met with, and Mr. Perlmutter, with the
Chief of Staff, with the Chief of Nursing, with the VISN
Director, with the Chief of Surgery, Chief of Nursing. And just
to give you an idea of how these folks are already thinking,
this building is laid out a little different than any hospital
I have ever seen. It is 1,100 feet long. So I would recommend,
Mr. Coffman, that you donate some Nikes, or New Balance, I am
sorry, from your district for people to walk in. And just to
give you an idea that the Chief of Nursing and the physicians
and the nurses had already started thinking, we are going to
have to use, our Code Blue is going to have to be different
because it is so far to get from one end of it to another. They
will have to have a different way to do Code Blue. So they are
already thinking ahead about how they provide quality care for
our veterans.
When you look at the facility, and I just want to go over
this very quickly before I ask any questions, when this
facility was laid out, what we got was this, a facility that is
1.2 million square feet as opposed to 600,000 square feet of
the previous facility. We got four more ICU beds. We got less,
nine less medical beds, the same rehab beds, less psychiatric
beds, of which we need more of and a facility, a psychiatric
facility that is going to have to be modified because of design
errors that are there. They did add the spinal cord injury,
which I have already talked about. PTSD, which we know is a
critical part of the VA's mission, was not even included in
this. The VA had to buy an additional building for
administrative offices. In this 1.2 million square feet there
were no administrative offices, or at least none that I saw.
And primary care rooms, where we examine patients, went from 60
to 34. So we actually lost primary care, which is where our
care is being given. It actually may be and our PAC teams are
going to have to stay at the old facility, with an aging
boiler. So we are going to have to keep the facility open. It
will not be three years. It will be more like five years, I can
tell you, before you can design and build other facilities.
That is the minimum amount of time you are going to have to
keep it open. And if it does stay open, there is an estimate
that there would be $350 million worth of work that would have
to be done to a campus that you are going to get rid of. Now
that, none of this makes a lot of sense.
So I bring that up just to sort of give you a CliffsNotes
version of where we are. And Ms. Fiotes, I appreciate you and
Mr. Milsten coming out to Colorado to tour the new medical
center with us. And how do you assess what is good and what is
problematic about the Aurora facility's design? And what do you
attribute, and to what do you attribute the problems?
Ms. Fiotes. Thank you for the question, Congressman. I
think that the design, we can all agree, was probably more
complex than it needed to be. The design was prepared a long
time ago. Requirements have evolved over time and that probably
is part of the reason that the capacities are smaller right
now, including in the primary care, patient aligned care teams,
which were not in existence when the building was originally
designed. They were introduced later and because of the
additional space that they take have actually reduced the
capacity of the new clinical space in comparison to the old
facility.
So going forward we have learned much from this design that
we would not replicate in any future designs. I believe a more
compact design would have resulted in a more efficient,
functional hospital and probably at a lesser cost.
The Chairman. Thank you. Mr. Gigliotti, does the new
facility meet all of your needs and your employees' needs?
Mr. Gigliotti. The new facility is short, as you stated, on
primary care space. So there will be seven primary care teams
that will be left behind at the current facility. We are
actively identifying, working with a brand new Loveland,
Colorado community based outpatient clinic that opens up this
April. We're looking at expanding the footprint in Aurora for a
community based outpatient clinic that we already have there.
And then we're looking at adding another community based
outpatient clinic in the metro area. We're also working closely
with the Veterans Benefits Office. We have comp and pen in our
CBOCs in Colorado Springs and Golden, and we're looking to work
with them to take comp and pen out of those clinics so that we
can have more room for PAC teams so that those seven teams can
go into the community and that we could dispose of the building
quickly.
The Chairman. Well my time is expired. But I do, would like
to say that if we do the asset review, you will be able to take
those assets, and there are, they are going to be a lot when
you add that VA property, and reinvest that back into VA. I
think that makes a lot of sense. Mr. Walz, you are recognized.
Mr. Walz. Well, thank you. And I would like to reiterate, I
agree with the Chairman on the asset review piece and I think
it does give us opportunities. There's obviously some
differences of how we get there. But this is a highlight of why
that should be.
I would say, Mr. Caldwell, to you, we were looking back, as
early as 2010 I think Chairman Miller, myself, and some of us
who were here at that time, Chairman Roe, were advocating that
your involvement was needed. That you are construction people
as opposed to VA. So I am grateful you are there. But once your
original construction with K-T is complete, as we heard there
is final contracts with another contractor to, just those
remaining items such as code upgrades. Will this impact the
cost of construction and the schedule for opening the facility?
Mr. Caldwell. So there is obviously a cost associated with
that new contract. I can, we are in the process of developing
that cost estimate. I can tell you we think it's in the order
of, let's say, between $5 million and $10 million for that
contract. But it will not delay the opening of the facility.
The plan is to have that contract awarded within the next
couple of months, have them working in April, and have them
completing by the end of June or early July. So we believe it
will support the opening of the hospital.
Mr. Walz. Very good. Thank you. And I would like to take a
minute now, I am going to ask the next question based on some
things in the Denver Post. If any of us needs a reminder of the
importance of a free and professional press in this country,
the service that was done to our veterans and to taxpayers of
Colorado, and to this country, by the folks at the Denver Post,
I would like to highlight Daniel Brenner and Mark Matthews'
work in that. We followed that here, and those are things that
came up, and the partnership in helping us get that has been
incredibly important. And this week they indicated trying to,
and they are right to ask these questions, the hiring of staff
at the medical center, and do you have sufficient staff for the
medical center to open? Are there challenges with the tight
labor market? And give us the timeframe on that of making sure
that those FTEs are in place when we go?
Mr. Gigliotti. So we are on target for the opening this
summer. We have 421 FTE to be hired for the new project. We've
already hired 257. 118 positions still to be hired support the
spinal cord injury center that was referenced earlier. That
will not open until 180 to 200 days after the opening of the
facility and that's in concert with the PVA. They want to make
sure the hospital is up and running and seamless and working
well and then we will open up the spinal cord injury center
approximately six months after that.
So Denver is a difficult labor market. Unemployment rates
are around three percent, which is very low. But we are making
excellent progress. We are confident that we will be able to
meet the staffing needs. But if for any, anything arises that
we are not able to, we have other tools available, contracts
and other types of staffing, until we're able to actually hire.
But we are confident we'll meet the staffing needs to open up
by August.
Mr. Walz. We have had a lot of hearings in here and talked
about some of the burdens to be being able to quickly hire
folks, some of the problems that are there. Are you
experiencing just the usual bureaucratic hurdles, if you will?
Mr. Gigliotti. I would summarize it that way, yes sir.
Mr. Walz. Maybe when we are done with this those are maybe
some lessons learned on what we can do here with what you are
doing to help us with that. This to Mr. Von Ah, what progress
has VA made in addressing GAO's recommendation on activation
cost estimates? Because if there is anything here, we are
pretty browbeat by projected estimates and then coming back to
us over and over and over. And I just want to make sure that it
appears like there could be some pitfalls here that get us into
that same thing.
Mr. Von Ah. Absolutely. Thank you for the question,
Congressman. VA has taken a number of steps. I would
characterize it as early steps in the process of building the
capacity to do good cost estimation for activation. There's
training that's been talked about. They've provided the Cost
Estimating Guide that GAO has developed to their staff in an
effort to get people up to speed on how to do good cost
estimation for activation. So I would say that they are
definitely taking steps in that direction.
As far as the current Denver activation estimate, that's
something that is already done and complete and we don't have
any concerns at this point of whether they're going to not meet
the schedule and costs that they've put forth. But we still
look back at that estimate and say that that wasn't a reliable
estimate from our perspective, based on the lack of a risk and
uncertainty analysis.
Mr. Walz. Thank you. I would like to thank all of you,
though. Over the last 12 to 18 months the communication and the
transparency of helping us get this has really been great and I
am grateful for that. I yield back.
The Chairman. I thank the gentleman for yielding. I now to
Mr. Coffman for five minutes.
Mr. Coffman. Thank you, Mr. Chairman. Mr. Von Ah, when you
look at the activation plan of the VA, I think it was found to
be inadequate by your analysis. And so we have, I led the fight
to strip the VA of their construction management authority. I
wanted $10 million. VA put out $250 million. The number that we
settled down, settled on, was $100 million. I think that is
unfortunate. I think it needs to go down further. But that is
only for the construction management phase. That number, $100
million, does not include activation.
Mr. Von Ah. Right.
Mr. Coffman. So it seems like we have the same sort of
mismanagement problems when it comes to activation that we had
for construction management under VA supervision. Is there any
precedent, I mean, does the Army Corps of Engineers or does GSA
or anybody else do activation as part of the construction
management for an agency, in an agency relationship?
Mr. Von Ah. Right. The scope of our work didn't cover that.
I'm not--
Mr. Coffman. Sure.
Mr. Von Ah [continued]. --sure if that's the case or not.
So we could look into that and get back to you, Mr. Coffman.
Mr. Coffman. Let me go to the Army Corps of Engineers, does
anybody else, when you do other hospitals for other agencies,
like for the Department of Defense, do you do the activation?
Or does the United States Army or the Air Force or whoever you
are doing it for do the activation?
Mr. Caldwell. Mr. Coffman, Congressman Coffman, that
function is typically handled by the medical departments and we
restrict ourselves to that area that we have expertise, which
is really in the design and construction. We do on occasion
assist with the initial outfitting--
Mr. Coffman. Mm-hmm.
Mr. Caldwell [continued]. --and transition of the facility
because that may involve purchasing equipment, furniture, and
other kinds of supplies. So we do assist the activation in that
regard.
One of the things that we and the VA are working together
on for the other hospitals that we expect to assist them on,
and are assisting, will be an activation plan. So that we can,
early in the life of those projects, can identify what the
requirements are, what the respective parties and stakeholders
will bring to that plan to ensure that it comes together
effectively.
Mr. Coffman. I just want to say the fact that Ms. Fiotes is
here today, and some of the other players, that have their
fingerprints all over this $1 billion in cost overruns, is a
signal to me that the VA has not changed. And so whatever we
can do to strip their authorities in terms of construction
management, in terms of activation, I think is necessary. I
mean, Ms. Fiotes, you said that, I am not clear on what your
explanation is in having gone, in the planning process of
having 34 primary care examining rooms when the existing
facility has 60 and cannot accommodate seven PAC teams, seven
primary care teams in the new facility requiring us to keep
part of the old facility open. Can you really explain how that
number, 34, was devised?
Ms. Fiotes. I will try, Congressman, although the PAC teams
and the 34 and 60 were not in existence when the project was
designed, which was what I tried to explain. When the design
was developed, 2009, 2010, there were no PAC teams. At the
time, the medical center and the construction entities believed
that the project was sized to accommodate the necessary primary
care clinics. As time evolved, the patient aligned care teams
came into existence. They take up more space than the regular
clinics do. And that has resulted in--
Mr. Coffman. Well that is still not an explanation. I mean,
the fact is that you have X number of primary care personnel,
no matter how they are arranged. You had that much capability
in terms of exam rooms. And you have almost half the number
here.
Ms. Fiotes. Again, we are talking about a design that was
developed many years before the construction was completed.
Mr. Coffman. So then we are in, in 2009 and 2010 we are a
Nation at war in Afghanistan and Iraq and you all cannot amend
that plan?
Ms. Fiotes. I cannot answer that, sir. I wasn't there.
Mr. Coffman. Well you--so then and why was PTSD not
included in the initial project?
Ms. Fiotes. I believe PTSD was taken out of the scope of
the project before the final appropriation authorization.
Mr. Coffman. Do you know why?
Ms. Fiotes. I do not recall exactly.
Mr. Coffman. I just do not know how you cannot have answers
to these questions and be in the position that you are in. I
mean, that absolutely makes no sense.
Ms. Fiotes. Again, Congressman, I am going by what I have
heard, not what I experienced. I believe the PTSD was removed
at the time of the authorization appropriation to bring the
cost down.
Mr. Coffman. Well how about this--
The Chairman. The gentleman's time has expired.
Mr. Coffman. Oh, I am sorry.
The Chairman. We are going to have a second round. Mr.
Takano, you are recognized for five minutes.
Mr. Takano. Well I just want to mention for the record that
two and a half to three years ago, this Committee authorized
additional funds to complete the replacement facility. And at
that time this Committee, and by a quick count of nine of us
who were here on the Committee at that time, this Committee
decided to reduce the scope of the facility by not funding the
PTSD inpatient or the assisted living facilities. So to act
shocked that part of the old facility will still need to be
used moving forward is ridiculous. We knew what we were doing,
and now we decide do we invest the money so we can move
everything to the new campus? Or do we keep the status quo and
continue to use it as a political pawn? That being said, what
are the plans for expanding the Aurora facility to include
these services?
Mr. Gigliotti. So the PTSD is, Deputy Secretary Gibson in
one of his last acts as Deputy Secretary notified four corners
that because this is a replacement hospital, it's the first
true replacement hospital to move since Detroit in the 1990s.
And because it's a replacement hospital he made the
determination in coordination with general counsel that PTSD
should move over to the new site and notified four corners and
there was no objections. We went out for a minor project.
Unfortunately when the bids came in for that it was over the
minor threshold. It came in about $3 million over the $10
million threshold. So we have our process for trying to get it
into a major. So that is one thing.
The second piece is the community living center. Currently
the veterans that were in our community living center are being
seen in the community. We follow them. The care is going very
well. That is also in our SCIP process for a long term solution
of building a community living center on the campus at
Fitzsimmons.
Mr. Takano. Well my question is in order to complete a PTS
residential treatment facility and community living center that
were deleted from the project, what are the plans for the VA to
expand the Aurora facility and include these PTSD treatment?
Are they priority projects? What is the estimated cost of each
of these future projects?
Mr. Gigliotti. So we were hopeful that the cost for the
PTSD would be below the $10 million threshold. It came in
higher. It is a priority. The care will be rendered at the
existing medical center site now. If we have to go into an
emergency lease scenario while we're awaiting funding for the
PTSD if we're able to excise the current, we will do that.
Mr. Takano. So it is above $10 million, you are saying?
Mr. Gigliotti. It came in above $10 million.
Mr. Takano. So $10 million, $11 million? Around there?
Mr. Gigliotti. Thirteen million.
Mr. Takano. Thirteen million. So that is what we need to
find in order to fund, because the Committee made its previous
decision. So are other plans or solutions being developed to
ensure facilities available for PTS residential treatment, are
available for PTSD residential treatment, eight primary care
teams, and the community living center beyond the next three to
five years?
Mr. Gigliotti. Yes. So the, all of those will be being
given at the current site and that was the three-year time
period that was referenced. If we are able to divest ourselves
of the hospital, which is our intent, then we will find space
in the community to offer those services while we look for a
permanent solution.
Mr. Takano. And will some facilities continue to be located
in the current Denver Medical Center campus? Or will additional
construction take place on the Aurora campus?
Mr. Gigliotti. Initially it will be on, PTSD, CLC will be
done on the, and the seven PAC teams will be done on the
current campus and we will be looking for solutions in the
metro Denver area for community based outpatient clinics and on
the current campus PTSD and CLC will ultimately end up there.
Mr. Takano. Well, thank you. Will the opening of the new
Aurora VMAC decrease wait times for veterans in the community
and at what rate?
Mr. Gigliotti. So because of the PAC model we're looking
for efficiencies of through put to be able to get more veterans
in. We have PAC at the current facility but the physical
constraints don't let us operate PAC as the model was intended.
The current design will allow that. So we anticipate some
efficiencies but it would be hard to state exactly because the
metro area continues to see growth and we have to address the
seven PAC teams.
Mr. Takano. Thank you. I yield back, Mr. Chairman.
The Chairman. I thank the gentleman for yielding. It is
difficult to argue that this Congress did not provide the money
when this is over $1 billion over budget. And by the way,
passage of Asset Review raises that $10 million to $20 million.
You would be able to go right ahead with it. So that is another
reason we need to do this. Mr. Bost, you are recognized.
Mr. Bost. Thank you, Mr. Chairman. And I was going to ask a
question. I am going to go ahead and send my question just in
writing concerning some personnel hiring practices and things
like that. With that, I would like to yield my time to
Representative Coffman.
Mr. Coffman. I thank the gentleman. First of all, Mr.
Takano, what our conversation was about was that PTSD was not
included in the initial plan for the hospital. So it was after
the fact that a stand-alone building was added for Post-
Traumatic Stress Disorder. And in the negotiations to get the
$1 billion for those cost overruns, there were two buildings
that had not broken ground yet. One was the CLC, the community
living center, and the other one was for PTSD. As part of the
negotiations to get the $1 billion, those had to be scrapped
and now we are going to get them put back in. So my question
was, as an Iraq War veteran, how is it in 2009 and 2010 that we
broke ground for a project without PTSD? Without a plan for it?
And that is certainly the case.
The, Ms. Fiotes, under your leadership the new Rocky
Mountain Regional VA Medical Center construction project has
been plagued with excessive cost overruns, a four-year schedule
delay, and overall mismanagement of the project. When did you
become aware of the variances in the project's scope, schedule,
or cost that put the project at risk of completion as
originally planned? In other words, when did you in working on
this project realize that it was getting out of control? That
it was not going to be on time? That it was not going to be on
budget?
Ms. Fiotes. Congressman, I joined the VA in January of 2013
and over the next few months became familiar with the project,
visited the site, talked with the contractor, of course talked
with our teams. I heard varying versions of cost increases and
schedule delays. And at the time that we were looking for ways
to move the project forward and keep progress on the
construction going. The contractor filed a claim with the
Civilian Board of Contract Appeals. And from that point on we
were in a position where the VA had taken the stance, with
advice from general counsel, its then general counsel that the
contractor was obligated to deliver the facility for $610
million based on a supplemental agreement they signed in 2011.
That was the VA's position. That was the position that I was
relaying to you as well.
Mr. Coffman. But you knew that was not correct, that the
project at that time, given all the change orders, could not be
built for that amount.
Ms. Fiotes. That, that is not accurate, sir.
Mr. Coffman. Well I, I disagree with that. The--so what is
the total number, who can answer this question, so the total
number of personnel is now going to be in the new hospital, is
now going to be 3208? Am I correct in that?
Mr. Gigliotti. That sounds correct, sir.
Mr. Coffman. Okay. So we have an increase in personnel, a
dramatic increase in personnel. We have got double the square
footage. But in effect we have less capability. I mean, there
are some things that are added, like spinal cord. But in terms
of the primary care outpatient, obviously a tremendous reduced
capacity in that. Am I correct in that?
Mr. Gigliotti. It is less PAC teams than we currently have
functioning now, yes.
Mr. Coffman. Okay. And so what is, so essentially right now
until you get these new CBOCs built, these new outpatient
clinics built, the Aurora one I think the lease is coming up,
am I correct in that?
Mr. Gigliotti. That's correct.
Mr. Coffman. And so you're going, is it a plan to build a
new facility or lease a new facility?
Mr. Gigliotti. So the plan would be, we would go out for
bid and see which of those would occur. What's available in the
marketplace, there would be a market study, either use an
existing or do some kind of build. And that would be in the
Aurora and then also in the southern part of the metro area.
Mr. Coffman. So in the southern part, and so that could be
a lease or that could be built as well?
Mr. Gigliotti. Correct.
Mr. Coffman. So how long do you think this entire process
will take? And will that have to, would that require a new
appropriation? I suspect if the $20 million figure is approved
in terms of redefining major construction management projects,
then I suspect that you could go ahead then, I mean, based on
our appropriation, correct?
Mr. Gigliotti. Right. And it would be part of our SCIP
process and it gets competed against other clinic designs and
desires across the country.
Mr. Coffman. And how, so you need those to, so the Aurora
facility you would expand and have additional PAC teams there.
And then you would have, and then obviously this in the
southern metropolitan area, this new outpatient clinic, would
then absorb the remainder of the PAC teams?
Mr. Gigliotti. That would be the intent. And then also, as
I stated earlier, working with VBA to move comp and pen to
another location would free us to be able to put a couple more
PAC teams in both Colorado Springs as well as Golden.
The Chairman. The gentleman's time is expired. Ms.
Brownley, you are recognized for five minutes.
Ms. Brownley. Thank you, Mr. Chairman. I had just a more
global question, I guess, in terms of things that still need to
be done. We have talked about a lot of them. We have talked
about the movement of the old facility and when that is going
to happen, the PTSD facility, etcetera. So I am just, I am
wondering if is there a timeline by which you are following to
get to, you know, certain dates. And if there is, is that
something that is out there and published that is, all of us
can see?
Mr. Gigliotti. We are looking to do a movement of the
outpatient services from the existing facility to the new
facility on July 28th. We are looking to remove the remaining
inpatients from the current facility to the new facility August
4th. So those are the timelines that we are working--
Ms. Brownley. Understood. That timeline, I understand,
because it is in print and I can read it.
Mr. Gigliotti. Okay.
Ms. Brownley. What I am looking for is beyond the August
opening date in terms of closing the old hospital, when the
PTSD facility is going to get done, is there a printed timeline
that VA has agreed upon, all of its contractors have agreed
upon, that can be shared with the Committee? So that clearly on
this project accountability has been an issue. And moving
forward now we want to have the tools to, for you to hold
yourself accountable and for us to hold you accountable.
Mr. Gigliotti. Right. So we're looking after approximately
18 months and then--
Ms. Brownley. Is it a printed timeline?
Mr. Gigliotti. I'm not--
Ms. Brownley. Or is it one that you are, you know, you
think that is what it is going to be, and that is what you are
planning on, but is there an agreed upon that everybody is
working towards?
Ms. Fiotes. Congresswoman, I think that because of some of
the unknowns, including the minor threshold and the ability to
construct the new PTSD, the timelines are somewhat estimates at
this point. That's why the number of three to five years has
been put out there. I can tell you that we are collectively
looking for solutions to allow us to do it sooner rather than
later. We do want to get out of this facility but it does take
some time, not knowing when we're going to be able to build the
new PTSD, not knowing exactly when we're going to get the new
clinic space in our existing clinics.
Ms. Brownley. Can you give me a timeline when you might be
able to have completed those to know with certainty when things
can get done?
Ms. Fiotes. I don't think we can give you a timeline with
certainty right now.
Ms. Brownley. Can you give me a timeline to get to
certainty now? Is it going to take you a year? Is it going to
take you three years? Is it going to take you five years? That
is all I am asking.
Ms. Fiotes. No, it is not going to take us five years to
get to a timeline.
Ms. Brownley. Not five years. Will it take you one year?
Ms. Fiotes. I anticipate we will have a much better
understanding of the timeline in the next six to 12 months.
Ms. Brownley. Thank you. I want to yield the balance of my
time to Mr. Takano.
Mr. Takano. Thank you, Representative Brownley. For the VA
and the GAO, my understanding is that the PTS residential
treatment facility was part of the original design prior to
2010. Is that correct? It was part of the original design prior
to 2010?
Ms. Fiotes. I am not sure that it was part of the original
design. I know that at some point before 2009-10, there had
been an effort to minimize the size and scope of the facility
and at that point I think the PTSD was initially not included
in the design. At what point it got reinserted, I will be
honest with you I don't know.
Mr. Takano. Could I hear from--
Mr. Milsten. I know when it was reinserted and that's when
we came back with the estimate--oh. Sorry. That's, we--
Mr. Takano [continued]. --When was it reinserted?
Mr. Milsten. It was reinserted when we came back to the
Congress looking for the authority to continue and the money
for the overrun for bringing in the (indiscernible) and
completing it. We put it in the estimate at that time. That's
what drove us to the estimate that I delivered to you that was
$1.73 billion at one point. And in consequence, in subsequent
negotiations that and the CLC, along with a couple of other
minor things, were taken out of that number that got us down--
Mr. Takano. Okay. So I would ask if you could go back and
reexamine the history and my understanding is that it was
originally part of the scope prior to 2010, and then it was
descoped from the contract from when we, when they were trying
to get the costs down. So it was a matter of money, not
necessary planning, that has left us without a PTS residential
treatment center.
Ms. Fiotes. We will provide that. We will take that back
for the record.
Mr. Takano. Thank you. I appreciate it.
The Chairman. I thank the gentleman for yielding. Vice
Chair Mr. Bilirakis, you are recognized.
Mr. Bilirakis. Thank you, Mr. Chairman. I appreciate it so
much. And thank you for your testimony today as well. I have
one question and then I am going to yield the rest of my time,
submit my questions and yield the rest of my time to Mr.
Coffman. But again, to follow up on what Ranking Member Walz
said, that asked this particular question of Mr. Gigliotti,
with regard to the staff positions, I understand you said that
over 250 were filled out of the 421. My question is, do those
numbers include vacancies that already exist at the current
facility?
Mr. Gigliotti. They do not, sir.
Mr. Bilirakis. They do not. How many vacancies exist in the
current facility?
Mr. Gigliotti. I do not have the exact number but I think
the vacancy rate, not counting the 421, is approximately ten
percent.
Mr. Bilirakis. Okay. Next question, why are we having
trouble filling these vacancies? I know you answered the
question but be more specific. And which vacancies are we
having trouble filling? I mean, you know, this, I know Colorado
is not Florida but it is pretty darn nice to live in. And so in
any case if you could answer that, I would appreciate it.
Mr. Gigliotti. Sure. So there is a multitude of reasons.
One is the three percent unemployment rate in the metro Denver
area. That is basically there is no unemployment. Individuals
can go work wherever they want. It is a growing health care
market, so health care professionals have choices all over
metro Denver without having to move. They can just go from job
to job. So it's very important for us to use the tools we have
available, not only to recruit but to retain the staff. The
mission attracts a lot of our workforce. So the one area that
we've made major improvement in was nurse pay. Our nurse pay
lagged in Denver and then we have been very aggressive in the
last two years with nurse salary rates, making sure they are
comparable to the community's rates. So we've been able to
recruit and retain more. But that is still an area that we are
looking to hire more. In, of the 421, some of the positions
we're still recruiting for are nurses. We've hired about 20. We
still have 20 more to go for new nurses for the new facility.
So that's a key area of concentration for us.
Mr. Bilirakis. Very good. If you need any more tools, do
not hesitate to contact us. Because I think it is pretty
desirable to work for the VA. I will yield the rest of my time
to Mr. Coffman. Thank you.
Mr. Coffman. All right. I thank the gentleman. Is it not
true that you also lack an HR director? Is that true to
facilitate the hiring?
Mr. Gigliotti. We, no, we have a--
Mr. Coffman. You have it?
Mr. Gigliotti. Yes, we have a new--
Mr. Coffman. Because I think there was, I thought there was
in the GAO report?
Mr. Gigliotti. It could have been--
Mr. Coffman. Let me refer to Mr. Ah.
Mr. Von Ah. That may have been at the time but I am not
sure of the current status of that.
Mr. Coffman. And when did you, when is that person been on
board?
Mr. Gigliotti. Fairly recently, within the last six months.
Mr. Coffman. Within the last six months. Okay. The, just
still, I am just stunned that just in terms of the knowledge of
the history of the project, is either intentionally lacking or
that you actually do not know these answers. As to the design
questions, it seems like anybody who would go on this project
from a managerial standpoint would have the situational
awareness in terms of what the evolution of this project was
and where the pitfalls were in this project. So I am very
surprised. But I can certainly remember the controversy on the
PTSD issue, that in fact the, it was not included in the
initial design. It might have been taken out early. But when
they broke ground there was not a PTSD facility within it. And
I can remember being called by the media, they said what do
you, as a Member of Congress, what do you think about this
issue? And so I think it was the combination of congressional
pressure along with the VSOs that got the stand alone facility
that was later unfortunately deleted when we had to get the $1
billion in cost overruns done. And when do you anticipate
having the PTSD, that stand alone building, or I understand
there might be an emergency lease to get them out of Building
38 in the old hospital? Where are we at with the PTSD
residential?
Mr. Gigliotti. So, currently it is in Building 38. Until we
know what we are going to do from disposal of the existing
hospital, it will stay there. If we are not able to get the
approximately $13 million, you know, through the major project
in time, currently, now, that would be a major--if we are not
able to get that in time when the current building is excised,
we will have to enter into an emergency lease space for the
PTSD program until we are able to go onto the campus with PTSD,
which is our desire.
Mr. Coffman. So when do you anticipate the--I'm sorry, when
do you anticipate the stand-alone PTSD facility or is that in
the planning process now?
Mr. Gigliotti. I think a lot of it is contingent on when we
devolve ourselves from the current facility and that I don't
know the timeline yet.
Mr. Coffman. Okay.
The Chairman. The time is expired.
Ms. Kuster, you are recognized for 5 minutes.
Ms. Kuster. Thank you very much, and thanks for being with
us.
I think you can tell, this is painful for all of us. And as
I said several years ago in the hearing, I remember an exchange
with my colleague Mr. Coffman that, although I do care a great
deal about veterans in the Denver, Colorado area, my veterans
in New Hampshire and particularly, right
now, Manchester, New Hampshire have a significant problem
with the facility that serves the veterans in New Hampshire.
And all of us also represent the taxpayers. So we are
constantly making decisions on serving veterans with the
highest level of care at a price that our taxpayers can afford,
frankly.
So we are shocked and we continue to be how these decisions
got made to go from over 60 units for serving primary care down
to 34. I don't understand what the plan was from the very
beginning.
So I want to try to zero in here on the questions about
what your plan is now to make sure that after the taxpayers
have spent $1.6 billion that veterans in Colorado won't have
longer wait times. Frankly, it sounds to me as though they
will. So can you walk us through--and I have read the report in
the Denver newspaper and I am trying to understand the response
that was given to the minority staff--it seems to me that the
plan is to move primary care outside of this facility, that it
is not intention that it goes into the new, $1.6 billion
facility, but in fact it gets moved to other areas outside of
the Denver metropolitan area, because apparently this facility
has been built that is not adequate for the needs of Denver
veterans, Colorado veterans. Can you walk us through precisely
what the plans are and where you will need additional
facilities, whether rented or otherwise, to serve veterans in
Colorado?
Mr. Gigliotti. Sure. Thank you.
There will be 12 primary care teams in the new hospital.
There will be--
Ms. Kuster. Twelve, I'm sorry to interrupt, but as compared
to--
Mr. Gigliotti [continued]. --Twenty now in the old.
Ms. Kuster. Okay. So, clearly, I am just doing basic math,
you will not be able to serve as many veterans in the new
facility as were served in the old facility?
Mr. Gigliotti. Right.
Ms. Kuster. Can we just get that for the record straight?
Mr. Gigliotti. That would be correct.
Ms. Kuster. Okay. Where will they be served and what will
you be asking the Congress to fund in addition to the $1.6
billion facility?
Mr. Gigliotti. So the remaining teams will stay at the
current hospital in Building 38--
Ms. Kuster. Indefinitely?
Mr. Gigliotti. Not indefinitely, until the decision is made
on what to do with the current facility. Our desire is to get
out of that facility.
Ms. Kuster. In the meantime, we will have to pay for both
facilities, everything will be doubled in cost?
Mr. Gigliotti. We believe we can take away the clinic--or,
excuse me, part of the physical plant and have it independently
run. So the whole facility, the 600,000 square feet, will not
be operational. It will just be focused on Building 38, one
building.
Then we have a desire to increase the primary care capacity
at Aurora. We have a primary care clinic now. As Congressman
Coffman stated, that lease is due to expire; we are looking to
go into a larger one.
Ms. Kuster. So this is separate from the brand new
facility? This is--
Mr. Gigliotti. It is separate from the brand new facility.
Ms. Kuster [continued]. --a separate lease that would be
required?
Mr. Gigliotti. Right. We already have an approved lease, a
new community-based outpatient clinic in Loveland, Colorado,
which is north of the northern suburbs, and that is scheduled
to open in April. And we believe that will have some of our
patients wanting to go there and not have to drive through
Denver traffic. Then we have in Colorado Springs and in Golden,
we are working with VBA to move comp-and-pen out of those two
areas. If that occurs, that will allow us to place some of
those primary care teams that are left behind at the old site
into those existing sites.
And because our market is growing, Denver is still growing
at a phenomenal rate and trying to stay ahead of that growth,
we are looking at our high-concentration areas of veterans and
an area that we need to get a clinic in is in the Southern
Denver metro area.
Ms. Kuster. Well, my time is up. Can I just say, for the
lessons learned, that the next time we decide to build a
facility we take into account when we are at war in two
different countries with veterans that we have learned have
significantly complex medical, including mental health and
physical health, et cetera. So I would just like that added to
the lessons learned as we spend the taxpayers' dollars and try
to serve the veterans.
I yield back.
The Chairman. I thank the gentlelady for yielding.
In the South, we have a saying, ``A blind pig finds an
acorn every once in a while,'' and I think that is what
happened here. Through no design or plan whatsoever, the VA has
less capacity on this huge campus, but it is going to force
them to go ahead and put the CBOCs out--a very expensive way to
do it, I might add, but the CBOCs need to be--and they showed
us, actually, the last briefing we had was the demographics of
the Denver area and where the veterans are. And so I think
putting those clinics where the veterans are makes a lot of
sense and not having everybody coming on that big, huge campus.
You can't believe how far it is from the parking lot to where
they have got to go.
So we have said this, and I have heard Ms. Brownley say it
and others on the Committee, many times about we need to--and
myself--put the care where the veterans are, not make them
come, like he said, through the Aurora traffic and Denver
traffic to get there. So, all in all, it may actually work out
as a positive.
Mr. Poliquin, you are recognized.
Mr. Poliquin. Thank you, Mr. Chairman.
Ms. Fiotes, when you have any kind of construction process,
I understand that you will have disputes with subcontractors.
How many judgments and settlements has the VA paid to
subcontractors for this project?
Ms. Fiotes. I would have to take that question for the
record, sir. I don't have that number.
Mr. Poliquin. What do you mean, you don't know?
Ms. Fiotes. I don't have that number available.
Mr. Poliquin. Has the VA finalized all of its settlements
with its contractors?
Mr. Milsten. Yes, sir. The original contract, all of the
settlements have been made with the prime contractor. On the
interim contract that we had that spanned--
Mr. Poliquin. Okay, they have all been settled?
Mr. Milsten. They have all been settled.
Mr. Poliquin. Okay, but we don't know how much this is
total, correct?
Mr. Milsten. I don't recall the--
Mr. Poliquin. Okay. My staff--
Mr. Milsten [continued]. --exact number and the--
Mr. Poliquin [continued]. --will be in touch with Ms.
Fiotes after this hearing to get that number from you.
Does the VA have any management reserve or contingency
funds, Ms. Fiotes, remaining for this project?
Mr. Milsten. Yes.
Ms. Fiotes. I will let Mr. Milsten answer that.
Mr. Poliquin. This is not a tough question.
Mr. Milsten. Yes, yes, sir, we do.
Mr. Poliquin. You do have contingency funds?
Mr. Milsten. Yes, sir.
Mr. Poliquin. How much?
Mr. Milsten. We have got about 6 and a half million dollars
of that. That is the 5 and a half million dollars that we are
using to fund the completion items that have been identified
earlier.
Mr. Poliquin. Thank you.
Mr. Caldwell, do you over at the Army Corps have a
contingency fund remaining for the completion of this project?
Mr. Caldwell. Sir, we do have funds remaining from the
funds that were set up for the original construction.
Mr. Poliquin. Do you have a contingency fund remaining?
Mr. Caldwell. Those can be used as contingency funds.
Mr. Poliquin. So you do. How much is it?
Mr. Caldwell. Sir, we expect that there is going to be
about $40 million available.
Mr. Poliquin. Okay. Mr. Von Ah--thank you--Mr. Von Ah, in
2016, the VA told Congress that there was $55 million in
recurring costs and $341 million in one-time costs to activate
the facility, and today we are hearing the activation cost is
341 million. What the heck happened to the 55 million?
Mr. Von Ah. Yeah, the 55 million, it turns out, is not part
of the activation costs.
Mr. Poliquin. Where is it?
Mr. Von Ah. Those are the--that was at the time the
estimate for the incremental additional staff salaries and
services provided at the new facility over and above what is
moving over from the old facility.
Mr. Poliquin. Thank you.
Mr. Chairman, I am going to yield the rest of my time to
Mr. Coffman, whose district encompasses this facility.
Mr. Coffman. I thank the gentleman.
Mr. Von Ah, to what extent did the fact that the VA did not
use professional, I think they call it, medical equipment
planners in the process, to what extent did that drive cost?
Mr. Von Ah. The focus of our 2017 report was not exactly on
that question but, again, I think from our perspective we
looked at exactly what sorts of processes they have in place
for estimating costs and certainly didn't meet the criteria
that we have in place.
Mr. Coffman. Mr. Caldwell, how significant is--I believe
that the Army Corps of Engineers utilizes medical equipment
planners when it builds a facility from the start. Obviously,
you took this over very late, but could you comment on that?
Mr. Caldwell. Sir, we do have medical equipment planners,
we do that in conjunction with the medical departments where
their expertise resides.
I will tell you that, in this business of medical
facilities, the technology is constantly evolving. So one of
the constant challenges that we have on virtually every major
medical facility is the fact that, by the time we have gone
from design through construction, there have been technological
changes that have to be accommodated.
Mr. Coffman. So the fact that this construction project has
been 4 years behind schedule, how much did that delay drive
additional cost in terms of what we have been discussing?
Mr. Caldwell. Sir, I can't give you a number on how that
affected it, but it is likely that whether it would have been 4
years after the project would have been completed or 4 years
after the start of construction, in either case there would
have had to have been changes made to upgrade to current
medical equipment at that point.
Mr. Coffman. So the problem is rooms are configured that no
longer comports with the technology in the lapse of time, codes
have changed, and those factors are going to drive cost?
Mr. Caldwell. Yes, sir, there is an added cost associated
with that typically.
Mr. Coffman. Okay. Oh, on the question about your HR
director, isn't that person just an acting HR director and
there is a question about qualifications?
Mr. Gigliotti. I will have to look into that, sir.
Mr. Coffman. Well, is it or not? I mean, is that person the
acting HR director and does not fit the qualifications of an HR
director?
Mr. Gigliotti. My impression was that that individual--that
the Denver facility has a permanent HR chief. Let me take a
look--
Mr. Coffman. I yield back.
Mr. Gigliotti [continued]. --and we will get it for the
record.
The Chairman. I thank the gentleman for yielding.
Mr. Sablan, you are recognized for 5 minutes.
Mr. Sablan. Thank you, Mr. Chairman. I actually had no
intention to speak. But say in the past 20 years, maybe one of
the witnesses could answer, in the past 20 years, how many
facilities did the Department build, open and operate? New
ones, new ones.
Ms. Fiotes. To my knowledge, the VA has built four major
hospitals in that timeframe: the Las Vegas, Denver, Aurora,
Orlando, and New Orleans. And numerous other specialty
facilities, such as poly-trauma facilities and others.
Mr. Sablan. CBOCs?
Ms. Fiotes. CBOCs are typically done as leases, not as our
own construction, but yes.
Mr. Sablan. And how many of those four major facilities
were done on time, according to schedule, and consistent with
the estimate?
Ms. Fiotes. I believe that they all had schedule delays.
Mr. Sablan. And the cost overruns or--
Ms. Fiotes. I am looking to my colleague for Las Vegas,
because that was finished before I arrived. For the other
three, yes, they did.
Mr. Sablan. Okay.
Mr. Milsten. And the Las Vegas did not have a cost
increase. There were increases to the contract, but within the
appropriated and authorized funds that were provided, not after
we came back for additional funds.
Mr. Sablan. All right. Thank you very much.
I yield back my time.
The Chairman. Dr. Wenstrup, you are recognized.
Mr. Wenstrup. Thank you, Mr. Chairman.
I am not sure who may want to answer this, but has there
been any attempt in the existing facility to try and sell some
of the buildings that may be scheduled for demolition rather
than demolishing them? Has there been an outreach attempt? I
hear the economy is good in the area, you know, unemployment is
low. So is there any attempt to sell the existing buildings?
Ms. Fiotes. Congressman, we have just engaged with the
General Services Administration to conduct what they call a
target asset review. That is the first phase, if you will, of a
real estate due diligence that we must follow in the Federal
Government before we can take any action on existing Federal
property.
The target asset review identifies the property boundaries,
identifies value constraints due to environmental liabilities
or historic encumbrances, it identifies also potential interest
from private or public entities in use of the facility. And,
ultimately, it begins to shape an informed decision about the
highest and best use of the property.
This target asset review has just been completed, is my
understanding from GSA, and it will be followed by an appraisal
by a professional of the property value, and at that point in
time we will be able to consider options for disposal,
exchange, or other disposition.
Mr. Wenstrup. And I am also curious too, you know, it is a
pretty active market, are people reaching out and inquiring? I
mean, it is not necessarily--real estate isn't necessarily a
one-way street, you know, people look for potential. So has
there been any outreach to take a look at these facilities and
have they had the ability to take a look at them?
Ms. Fiotes. There may be outreach. We have to follow
certain processes within the Federal Government--
Mr. Wenstrup. I think that would be--
Ms. Fiotes [continued]. --and I think that this is the
first phase in--
Mr. Wenstrup [continued]. That doesn't mean people can't
inquire, regardless of what the process--
Ms. Fiotes [continued]. I am not--
Mr. Wenstrup [continued]. --of the Federal Government--
Ms. Fiotes [continued]. --personally--I am not--
Mr. Wenstrup [continued]. --and that is really my question.
Ms. Fiotes. --personally aware of any inquiries.
Mr. Wenstrup. And also when it comes to the CBOCs and
community outreach, has there been a market assessment? Because
that is kind of key, you know, are we going necessarily where
we need to be and, at the same time, do we necessarily have to
build a new facility, a new CBOC, et cetera, if there is some
former clinic or something in the area that could be used.
Mr. Gigliotti. So, as far as a market assessment goes, we
do know where the veterans live in the metro Denver area with
higher concentrations. So that is what we are looking at and
then both of those would be on the table, which would be most
cost-effective, either an existing building or have to build
one.
Mr. Wenstrup. Thank you.
I yield my time to Mr. Coffman.
Mr. Coffman. I thank the gentleman for yielding.
Who can answer this question, how long have you known--I
mean, literally, you have had to have known for years, let me
just put it that way, that you didn't have the capacity in the
new hospital to fit all of the primary care capability from the
old hospital, and yet you are testifying today that you have no
definitive plan as to how to address that issue. And can
anybody explain to me--well, first of all, can you tell me when
you knew that the plan for the new hospital didn't support the
plan for the new hospital didn't support the plan for the old
hospital in terms of outpatient capability?
Mr. Gigliotti. So I became Network Director in 2012 and was
made aware that the design was set and that our plan to deal
with that, as we have articulated, was if we added the Golden
clinic, we added an expanded Colorado Springs clinic, we got
approval and are activating a Loveland, Colorado clinic, we
opened up an Aurora clinic, and so that was the plan was to
offset that by those clinics.
The population growth in Denver, coupled with the PACT
model, compromised our, you know, ability to successfully meet
that total issue. So that is why we are looking at expanding
Aurora and then looking at Southern Denver.
Mr. Coffman. How many PACT teams--I have seen two numbers,
I have seen 17 and I have seen 20--how many PACT teams, again,
do you have right now?
Mr. Gigliotti. So we have, it would be 20, seven or eight
remaining and twelve going over.
Mr. Coffman. And how long have you had 20 PACT teams?
Mr. Gigliotti. We have added PACT teams probably less than
a year. A PACT team is 1200 veterans and the growth in the
Denver area has been more than 1200 veterans a year.
Mr. Coffman. Well, how is it they are just bringing this to
public light now? I mean, Friday was the first time I have been
briefed on having to keep primary care capability at the old
hospital, and why is it just coming to light now?
Mr. Gigliotti. Well, like I said, I got there in 2012, the
plan was in place with what I stated, it is a challenge. I
thought we have been transparent on the issue of the challenges
with the PACT team capacity at the new facility. I will have to
look into that, sir, if we haven't been transparent, but my
assumption was we were with all the briefings we have done with
Congressional Representatives and with the United Veterans
Coalition.
Mr. Coffman. It was certainly clear on the PTSD issue, but
not on the PACT team issue, and I am just surprised that there
is no definitive plan in the works, because it is going to be
very, very expensive to keep this old hospital open. I mean, it
is really beyond its service life and so that is going to be an
extraordinary cost. And even if you--and so you are going to
have to maintain now the first floor of the old hospital from 3
to 5 years, is the estimate that I have from you--
The Chairman. The time is expired.
Ms. Esty, you are recognized for 5 minutes.
Ms. Esty. Thank you, Mr. Chairman. I want to thank the
Chairman and Ranking Member for holding today's important
hearing, and I want to thank our witnesses for joining us.
As you are hearing from all of us, we are deeply concerned
about the time this has taken and the cost overruns, because
these funds are to go to serve our veterans. So now we are
looking at a facility that is over cost, way late, and we are
going to have two facilities open.
So there are two issues I would like to address with you,
one has to do with the customer service for the veterans who
are now going to have to figure out which of two facilities
they go to and if you have figured out how you are going to
deal with that. You are talking about World War II veterans,
you are talking about Korea veterans, who now are going to have
to figure out where their appointments are. I see massive
opportunity for confusion. So that is one and just a brief
answer on that.
With the other--and I apologize for having been out, but I
am also vice Ranking Member of the Transportation and
Infrastructure Committee, I serve on the Water Resources
Subcommittee, and so we deal with the Corps all the time. So I
have questions about what have we learned from this in specific
about how are we going to do delivery of projects faster?
Because if we take so long, that is how we wind up in part with
the project being completed not meeting the needs that we then
have. If it takes 15 years to do a project, at the beginning
you have a certain set of needs you are trying to meet, at the
end of it you aren't even meeting those needs.
And so the delivery time is incredibly important. So I was
in fact just in a Subcommittee, you know, powwow about that
issue, what we can do on streamlining.
And so I want more specifics, both from you, Ms. Fiotes,
and from you, Mr. Caldwell, about specific lessons that we have
learned from this that will be implemented with Corps
involvement on supervision and construction of VA facilities,
because I heard general remarks, but not specifics like these
are three things other than that executives ought to be
involved. Well, yes, executives ought to be overseeing projects
and holding people's feet to the fire, but that is construction
101. And I say this as the daughter and granddaughter of civil
engineers who worked on Army Corps projects.
So, first, it looks like we have you ready to T up on the
customer service.
Mr. Gigliotti. Sure. We have 60 activation teams of
employees working on all the logistics and that issue you
raised about notifying and working with our veterans, that will
be with the remaining PACT teams, that is part of what they are
doing. So they will be communicated with, they will know that
they will be remaining back at the current site, and they will
be kept abreast throughout the entire process.
Ms. Fiotes. Thank you for that question, Congresswoman. And
let me just state for the record, I share those concerns. This
is a project that none of us want to have happen ever again and
so we have many lessons learned. The causes have been analyzed
and we have taken those reviews and assessments to heart, and
we have put in place new policies, new procedures at the VA to
make sure that we don't make these mistakes, and just very
briefly let me summarize.
So, clear definition of the requirements up front. One of
the issues found with this project was that it took way too
long to nail down what kind of project it was going to be, it
took years of back and forth. So, clear definition of the scope
and the requirements.
And then clear control of the scope and of changes. And we
have put processes in place not just within the Office of
Construction and Facilities Management, but at a higher level
within the VA to ensure that any scope changes receive the
appropriate review and approval and budgetary consideration.
And where there are issues of non-agreement, that the issues
are raised to the Deputy Secretary.
Risk-informed acquisition strategies. Clearly, the
acquisition strategy on this project was not the appropriate
one and that cost us dearly. We have now put in place a very
structured and disciplined way of making decisions about our
acquisition strategy.
Disciplined governance, and that part of it is what Mr.
Caldwell mentioned before about engagement about the senior
executives, but also, importantly, roles and responsibilities
and clear lines of decision authority for the projects.
And, finally, adequate resources. Clearly, we were found to
be understaffed and under-resourced in the execution of this
project from the beginning, and that is a lesson we have
learned. We have developed a staffing model, so for the
projects that we will continue to execute we have the
appropriate staff, both contracting and engineering, to see the
project to fruition.
Mr. Caldwell. Madam, thank you. There are so many places
you could go with your question about how to expedite projects
and let me touch on just a few.
And I have got to say, the point I made earlier about
senior level involvement is not a throw-away idea. That is
something that is critically important to ensure that both the
contractor and the other stakeholders are unified in their
objectives as opposed to getting cross with each other in
nonproductive ways. So it does help us cut through issues if
things are working well.
From a construction agent's standpoint, when we are doing
work for the Department of Veterans Affairs or doing work for
another defense agency, early involvement by the construction
agent is critically important to define the scope of the
project and to determine how that project will be executed. And
in that process determining what are the mission critical-
requirement dates that have to be met, so that you can set up
an acquisition strategy that will help you achieve those.
Another thing is funding. And when you talk about civil
works, although I am not in my current job responsible for
civil works, I can tell you that one of the chronic problems
that we have in civil works projects has to do with the
continuity of funding to take that job to conclusion. The
concept applies--
The Chairman. Mr. Caldwell, could you wrap this up? We have
other Members and she has exceeded her time significantly.
Mr. Caldwell. It applies as well to other projects as well.
The Chairman. I thank the gentlelady for yielding.
Mr. Higgins, you are recognized for 5 minutes.
Mr. Higgins. Thank you, Mr. Chairman.
We have shared from both sides of the aisle on this
Committee great concerns regarding this project. This is a
bipartisan Committee. I thank the Chairman and the Ranking
Member for their leadership, and I thank the panel for
appearing today.
The Department of Veterans Affairs is making a concerted
effort to modernize the VA methods of care and to transition to
an outpatient model. We need fewer in-patient beds in distant
facilities and more accessible health care services closer to
where the veterans reside, yet we hear today that the Eastern
Colorado Health Care System will be in the unique and
undesirable position of operating both the new Aurora Medical
Center and the Denver Medical Center it is supposed to be
replacing.
How long after the opening of the Aurora Medical Center can
we expect the Denver Medical Center to close?
Ms. Fiotes. As we mentioned earlier, Congressman, we really
don't know that specifically. We are targeting sooner rather
than later, but some of it will depend on the opportunities
that exist for disposal of the old facility, as well as the
opportunities to provide those services that will be left
behind at other locations.
Mr. Higgins. I represent the district in the southernmost
part of Louisiana. So, like my colleague Ms. Esty, I also have
a great deal of interaction and experience with the Corps.
So my question for the Corps, sir, much of the difficulty
of the VA that has been encountered regarding construction can
be attributed to the complex and expansive design that no
longer reflects modern standards of care, how would you
recommend allowing for future flexibility in blueprints and
plans? Is there a way that the VA can better manage the
construction of a project, as my colleague suggested, that
takes many years and requires regular updates to keep up with
nationwide trends? How can the Corps help us streamline future
projects, so that we don't encounter this type of gross
mismanagement again?
Mr. Caldwell. Congressman, I think that the Corps and the
VA have already reached a milestone, and I will say it was in
conjunction with guidance from this Committee and other
Congressional Staff Members, to assist us in ensuring that we
understood what the scope of projects are. It is critically
important when a construction project is being designed and
constructed that we understand with some precision what
Congress has authorized and how that entire project will come
together, especially if it is being executed in multiple
phases.
So one of the things that together we have done, is
determine that on these future projects that we are working
together on, that we are going to have a clear definition of
what the scope is, a clear understanding, we believe, with the
Congress about what that scope is, so that we can work together
effectively to achieve that.
Mr. Higgins. That is an encouraging answer. If my colleague
Mr. Coffman would like, I would certainly yield the balance of
my time, Mr. Chairman.
Mr. Coffman. I thank the gentleman.
Mr. Gigliotti, you stated that you have been transparent in
this entire process, and I want to argue that you haven't been
transparent and that the VA hasn't been transparent, because of
the fact that in all the hearings we had the issue of keeping
the old hospital open to house primary care outpatient services
was never discussed, was never brought forward by the VA. So
this whole notion that you have been transparent is absolutely
false and because you all have known for years. But I think the
embarrassment of having these incredible cost overruns and
having to come back to Congress with that was not going to be
complicated by another issue, so I think it was intentionally
kept away from the Congress.
And let me just say that, thank God--I think Ms. Esty had
questions about how do we do better next time--let me tell you,
the VA, by the wisdom of Congress, will never build another
hospital again on its own, it has been stripped of that
authority, and I think it needs to be stripped of more
authority.
I yield back.
The Chairman. I thank the gentleman for yielding.
General Bergman, you are recognized for 5 minutes.
Mr. Bergman. Thank you, Mr. Chairman.
Good morning, folks. Thanks for being here.
There are two ways to make the above-the-fold in the
newspaper, you know, and I didn't really know what the above-
the-fold in the newspaper meant until about a year ago, but I
do now, and the point is usually it is the negative that gets
the first chance to be above the fold. You know, backwards
congratulations to this project--not anyone in particular, but
this project for being above the fold for much too long a time.
In the spirit of the timing of the season here, we are
towards the end of the professional football season and today
we are looking at game films of this weekend's games, so we can
tell exactly what occurred at what point that caused an
outcome.
Now, I am going to ask a question rhetorically, there is no
need to answer this: do you know the difference between a
lesson learned and a lesson observed? Pure and simple. You
didn't learn anything if you just observed it.
So, having said that, in the military we are very, very big
on lessons learned, so that we do not repeat in any way, shape,
or form the mistakes. What is the plan to collate the data,
because I have heard a couple of different people say we are
doing this, we are doing that, what is the plan, the overall
plan to collate the data of this entire experience in such a
way that anyone, whether it is someone within the VA, someone
within the Army Corps, someone within GAO, someone within
Congress, someone anywhere can view the game films, if you
will, as it relates to the Denver VA project? Is there an
overall game plan right now to put all of this together, so
that it does not repeat itself in the future?
Mr. Caldwell. Sir, speaking for the Corps of Engineers and
from the point in time that we became involved, we have been
collecting lessons learned. We have held a number of workshops,
we have brought in a number of people, including from the DVA,
Department of Veterans Affairs, as well as from across the
Corps, people that will be involved in the future VA contracts
to learn what we can from this project. So those have been
workshops and at the same time we have been recording the
lessons learned.
At a point in time when we are completed with this project
and that point in time will be--it is imminent and it will be a
few months beyond--we will refine those lessons and we will
publish them, so that they are available both within the VA,
within the Corps, as well as to the Committee or anyone else
that would have an interest to have those.
I can't speak to how far we go back. I am speaking from the
point in time that the Corps of Engineers became involved. But
I think that, as we work together, it is likely that what we
will do is to identify some of the lessons that caused this
project to get into the circumstance that it was in when we
became involved, we will work with our colleagues to do that.
Mr. Bergman. So just to make sure I understood what I
thought I heard you say, the Army Corps has accepted
responsibility for overall lessons learned on this project,
whether it is construction, whether it is design, whether it is
placement, whether it is consideration of clinical outcomes
based upon old hospital, new hospital, veterans' waits, et
cetera, et cetera. So did I hear that the Army Corps has got
the dot?
Mr. Caldwell. Sir, I did not intend to say that. What I
intended to say is that we will take--
Mr. Bergman. So you are going to take your part or a
certain part. I guess what I am asking you collectively, as a
group and I don't care, plan a meeting time, and then tell one
member a different meeting time, they miss the meeting, you
elect them and they got it. There is a little humor in there.
Okay. The point is, don't segment this out to the point
where someone doing something future, especially here in
Veterans' Affairs where we are trying to figure out all the
pieces and parts and what went wrong. One last analogy, and I
know my time has expired. As a pilot, whenever there is an
aviation incident, think about how airplanes are pulled out of
the depths of the ocean and reassembled, that is what we are
talking about, that is what we need to do going forward.
And, I'm sorry, I yield back, sir.
The Chairman. I thank the gentleman for yielding.
Let's see, Miss Gonzalez-Colon, you are recognized.
Miss Gonzalez-Colon. Thank you, Mr. Chairman.
I know the Aurora facility has undergone multiple budget
changes and completion dates, plus most of the staff has
changed throughout this process, has transitioned out of the
VA. How will you say that, will this be one of the problems,
the transition of those employees, the turnover staff will be
one of the problems or not?
Ms. Fiotes. I am not sure I understood your question,
Congresswoman. The transition of which staff?
Miss Gonzalez-Colon. Most of the staff has changed and has
transitioned out of the VA during all that process; that is
correct or not?
Ms. Fiotes. Yes. Do you mean--
Miss Gonzalez-Colon. Yes.
Ms. Fiotes [continued]. --the VA staff--
Miss Gonzalez-Colon. Yes.
Ms. Fiotes [continued]. --on the project? Yes.
Miss Gonzalez-Colon. Did that affect the whole process, yes
or no?
Ms. Fiotes. I don't believe so.
Miss Gonzalez-Colon. Okay, you don't believe so. So you
don't understand that the VA have staff turnover on the
facilities?
Ms. Fiotes. The staff turnover on the project team was not
that significant. I thought you were talking about the turnover
to the Army Corps of Engineers, that transition. I am not sure,
that's why I asked for a clarification.
Within the VA, the project team was fairly consistent for a
length of time.
Miss Gonzalez-Colon. So staff turnover was never a problem?
Ms. Fiotes. I did not say that staffing was never a
problem, but turnover in particular was not the issue. I think
this lack of sufficient staffing and some of the project
leadership was not adequate for that project.
Miss Gonzalez-Colon. Thank you.
With that, I will yield the rest of my time to Mr. Coffman.
Mr. Coffman. I thank the gentlelady.
Mr. Von Ah, in a 2017 GAO report, it cites on page 8, ``In
our March 2017 report, we found VA's policies were not clear or
consistent in the way that they require VA to link construction
and activation schedules to form an integrated master
schedule.''
Could you elaborate on that and your concerns or GAO's
concerns about VA's ability to execute an activation plan?
Mr. Von Ah. Sure. Our concerns at that time were, we found
when we looked at--the integrated master schedule at the time,
as well as the construction schedule and the activation
schedule--as we looked at all three of them, many of the dates
didn't match up where they should have matched up, so they were
misaligned. We didn't have a huge amount of documentation
regarding the activation schedule at that time, but just the
fact that those dates misaligned was the basis for our
recommendation.
When we looked back at VA's policies regarding that, it was
not clear what should have been aligned or how these schedules
should work together.
Since then, VA has changed their policies, so that they do
clarify exactly what they mean by this delivery date or this
delivery date, and have worked with the Army Corps to put that
together in an integrated master schedule. So, at this time, we
don't have significant concerns about their ability to do that
going forward.
Mr. Coffman. Ms. Fiotes, when can you have a copy of your
activation plan to this Committee and to my office?
Ms. Fiotes. Congressman, I would have to ask my colleagues
to answer that. I don't have the activation plan.
Mr. Coffman. Have you read the activation plan, Ms. Fiotes?
Ms. Fiotes. I have not.
Mr. Coffman. Who can respond to that?
Mr. Gigliotti. Sir, yes, we do have an activation plan, we
can share that with the Committee.
Mr. Coffman. When can you share it with the Committee?
Mr. Gigliotti. This week. We have it, so--
Mr. Coffman. Okay.
Mr. Gigliotti. And, Congressman, on that earlier comment,
if I could, on the human resource director, I misspoke. The
individual is coming on in February, we believe, I believe from
what I have been told, the current acting is qualified.
Mr. Coffman. Mr. Von Ah, is that an issue that you all
looked at?
Mr. Von Ah. I'm sorry, what was the question?
Mr. Coffman. Concerning the qualifications of the current
acting human relations--I mean human resource person?
Mr. Von Ah. The qualifications was not something we looked
at, no.
Mr. Coffman. Okay. Mr. Chairman, I yield back.
The Chairman. I thank the gentleman for yielding.
Mrs. Radewagen. Thank you, Mr. Chairman. I too want to
welcome the panel.
I have a question for Ms. Fiotes. How was the allocation of
beds and floor space in the new facility determined?
Ms. Fiotes. I can't answer that question, Congresswoman.
The design predates my arrival at the VA.
Mrs. Radewagen. Mr. Gigliotti, I have the same question for
you: how was the allocation of beds and floor space in the new
facility determined?
Mr. Gigliotti. I'm sorry, I don't know that either. The
project was designed before I got to my position.
Mrs. Radewagen. Thank you, Mr. Chairman. I yield back my
time to Mr. Coffman.
Mr. Coffman. Thank you.
Ms. Fiotes, when did you start working, directly or
indirectly, on this particular construction project?
Ms. Fiotes. January of 2013.
Mr. Coffman. January of 2013. And when were you given
essentially a promotion, albeit acting?
Ms. Fiotes. I was asked to be acting and have been Acting
Principal Executive Director since April of 2017.
Mr. Coffman. And whose place did you take in that position?
Ms. Fiotes. Mr. Greg Giddens.
Mr. Coffman. Okay. I am just--how can you, as a
professional--I mean, you have either not answered or evaded a
number of questions today that are very basic to this
particular construction project, and so I am just absolutely
amazed at your lack of professionalism in not understanding the
origins of this project and how you could assume leadership
over something that you seem to go out of your way not to
understand. Could you answer that?
Ms. Fiotes. What was the question?
Mr. Coffman. Well, just tell me, I am just stunned at your
lack of knowledge on this project, that anything that occurred
the day before you got there somehow you don't know. It is the
difference between your saying I am not responsible for and I
don't know, but there seems to be an awful lot you just don't
know. So I guess I can understand how this project got in the
condition that it is. I mean, if none of you seem to know, have
any real understanding of why it was designed the way it was,
you know, it is just stunning.
I guess you are right, there is no explanation on your part
for your answers or your lack of answers today to the questions
that have been presented to you.
So, for the record, I would like an explanation on how we
got to going from 60 beds to 34 beds. For the record, I want to
know why PTSD was taken out of the initial plan of the
hospital; not the standalone, but the initial plan of the
hospital. For the record, I want to know when you all became
aware that PACT teams would have to be left at the old
hospital. And, for the record, I want to know when you brief
Congress on all these facts.
I yield back.
The Chairman. I thank the gentleman for yielding.
I think everyone has had an opportunity. I am going to have
a second round, because of the importance of this. We are going
to limit the second round to a couple of minutes and I will
yield myself now 2 minutes of time.
Let me just summarize what I think I have learned in this.
Number one, the initial design build is a bad idea. I think
design, bid, build, and include the people who are going to be
working in that building and in that facility, because I think
you would have had a much different facility if you had done
that, instead of start designing it as you are building it.
This was a train wreck. So I would do that and I would include
the people who are going to be working there every day.
Secretary Shulkin said this past year when he was
testifying here that his primary goal this year was to reduce
veteran suicide. And so what did we do? Mr. Coffman and I
attended in that Building 38--and you all, some of you all were
there--we had a town hall for those veterans in that PTSD
facility and they had nothing but great things to say. And Dr.
Wahlberg, who is in charge of that facility, apparently has one
of the best outcomes of any in the country in that facility,
and to have sort of left that out when that is a primary goal
of VA.
And I think the other, when we look at the construction
cost of this, I looked at a hospital that we built, it has been
about 8 or 9 years ago in my hometown, so about $1 million a
bed, so we have about $120 million in a 120-bed hospital. In
this facility--and it is a more complex facility, this was a
community hospital--it looked like it is about 13 million per
bed, is what we have in this facility, if you look at 150 beds
and $2 billion. So an enormous cost and we just cannot afford
that.
So one question, very quickly, that I want to get answered
on the record--two things, very quickly.
One, Ms. Fiotes, do you believe that the Committee's
legislation, H.R. 4243, the VA Asset and Infrastructure Review
Act, would help you vacate the Clermont campus?
Ms. Fiotes. It would help in terms of raising the threshold
for the minor construction, yes, it would.
The Chairman. And what about reinvesting the money back in
the VA, not to the general fund?
Ms. Fiotes. Absolutely, Mr. Chairman.
The Chairman. Thank you.
And, Mr. Caldwell, very quickly, why do we have a second
contractor who doesn't know anything about the building that is
going to come into the building to finish up all these 300-plus
minor things or minimal things that have to be done and we
don't have a contractor yet? And we know the unemployment rate
is very low in Denver and we also know that the building trades
have moved in these areas, for instance, Texas. And we are
finding problems just getting sheet rock where we are at home
now and the cost has gone up for all this, I know the sheet
rock is up 25 percent in our town and we can't find anybody to
put it up.
So why are we not using the original contractor who knows
all about this building, where every plug is, getting a second
contractor we don't have and expect it to be done by August?
Mr. Caldwell. Sir, there were several reasons that we made
that decision. One is, we thought it was important that we
ensure the prime contractor, Kiewit-Turner, focus on completing
the work that they were responsible for. We did not want to
distract them with beginning to add things to the job.
In addition to that, the things that--
The Chairman. Let me interrupt you there. Isn't that what
their job was to do this, like the contractors laid out? I
mean, maybe I am confused--
Mr. Caldwell. Well, not the added things. We are talking
now about adding things to them.
And the other factor was the cost associated with using
that very large contractor and the general conditions costs
that we are incurring on a daily basis for having that
contractor on the project site. So the longer that we add--the
more we add work to them and the longer we extend them on the
job, the Government would be responsible for those general
conditions, which are going to be or would have been much
larger than they would be with this smaller contractor.
The Chairman. Well, are you confident that we can get
somebody in here to do all this? Because you cannot open that
building at 98 percent--
Mr. Caldwell. Yes, sir.
The Chairman [continued]. --it has got to be 100 percent.
Mr. Caldwell. Yes, sir. We have good confidence that we can
do this. We are using an 8A, a small business firm, as our
acquisition strategy permits us to go to a firm that has a
proven track record that we can depend upon. And so we are
confident that we can pull this together.
The Chairman. Thank you.
I now yield to Mr. Coffman.
Mr. Coffman. Thank you, Mr. Chairman.
I think, first of all, that all the last four projects, to
include this one, major construction hospital projects, the VA
in each project has been hundreds of millions of dollars over
budget and years behind schedule. This just happens to be the
worst and, unfortunately, it is in my community.
This project I think is an affront to the veterans who have
made tremendous sacrifices in defense of our country in not
getting the kind of state-of-the-art care, given the fact that
this hospital is so late in terms of its schedule, and it is an
affront to the taxpayers of the United States that have had to
pay for this.
And I can tell you, I am very disappointed, you know,
President Trump ran on the fact that he was going to clean up
the Veterans Administration. I think he has certainly made
progress, but this is an area that is very critical and I see
no change, I see absolutely no change. It is the same--those
that have their fingerprints on this hospital, I mean, it is
virtually the same bureaucratic incompetence and culture of
corruption.
And so I will ask Dr. Shulkin and ask the President to
clean house, and that is what he should have done from day one
and it hasn't been done.
I yield back.
The Chairman. I thank the gentleman for yielding.
General Bergman, you are recognized.
Mr. Bergman. Thank you, Mr. Chairman.
And I am just going to reiterate, we have got a chance here
to not repeat history and the only way we are going to do that
is if we are not laying blame here, we are looking objectively
at what occurred and what we do, all of the stakeholders--and
someone does have to have the lead, by the way, whether it is
the Army Corps or somebody else--someone, I would suggest, do
that should be within the VA. Okay? It is your business, it is
your business. So, please take for action the fact that this
situation needs to be objectively looked at, totally in such a
way that those who would potentially in the future not have any
clue what happened here can read about it, study it, and not
repeat it.
I yield back, Mr. Chairman.
Mr. Milsten. Sir, I would add that we are taking the lead.
We are the one that is going to consolidate them, but beyond
consolidating them, to get back to the point that you made, one
of the processes that were put in place is that at all of our
stage gates on these projects, when we sit down with the Corps
and do the reviews, that we positively review the lessons
learned and record for the record how they are accomplished on
this project, on the project of the future.
So it is not we are going to learn, we are looking at that
process that says, if this is what we learned here, how are we
applying it on this project, and my project teams will record
positively how they have evaluated that lessons learned in that
future project.
Mr. Bergman. So then we will at some point, as Members of
Congress or anyone else for that matter, be able to review what
you all created.
Mr. Milsten. Yes, sir, you will.
Mr. Bergman. Very good. Thank you.
Mr. Von Ah. Mr. Bergman, I would also just add that GAO is
following up on all of our recommendations regarding this
project and others that we have made over the years, and we
have ongoing projects that also look at other aspects of VA's
construction.
Mr. Bergman. Well, this is an opportunity for us to excel.
I mean, truly, this is bad, but we can make it good for the
second time.
Thank you, sir.
The Chairman. I thank the gentleman for yielding back.
And I want to thank our panel for being here today and I
want to thank you for touring us through the facility last
week. It was very informative to me.
And, with that, I will yield to Mr. Walz for any closing
comments that he may have.
Mr. Walz. Again, well, thank you all for being here, and
thanks to the Chairman.
And maybe segueing from General Bergman, I think that
starting several years ago under the leadership of then
Chairman Miller and transitioning to Chairman Roe, the
ownership of this Committee had started to change at asking for
things. I remember in 2015, we sat in this room and that is
when I was asking, quite unrealistically, but out of
frustration that every change order should come to here and we
should sign off on it, because we have ownership in it and I
was getting tired of being blamed for things that were outside
of our ability to provide that oversight. So I think what the
General is bringing up is a good point.
I would also like to say and recognize the leadership of
Mr. Coffman. It is undeniable, he is a friend and champion of
veterans; his frustration is justified and understandable. I
mentioned earlier, we have been getting a little more feedback,
but he is absolutely right, we had no idea on these PACT teams
staying over there; that took us blind-sided, it was
unacceptable. That should be a lesson learned and that
frustration is real and I thank him for continuing to hold all
of us accountable on that piece.
So if we can get this thing through, the bottom line is
improved care and access for our veterans. We can't let it go.
It is a continuing journey, not a destination. We are
scheduled, I believe, for August 11th.
I would again use General Bergman's references looking at
game field and, as a Vikings fan, there is a hopefulness of
what can happen, but there is a flip side to that coin: there
are Saints fans out there that everything seemed certain and it
was not certain.
So I would caution all of you and I know you will not raise
those toasts to what has to be done. This system was broken,
there is much more work to be done. Our focus in the short term
is getting that facility up, functioning, and getting quality
care for our veterans. So I encourage all of you to continue on
with that. You can rest assured that this Committee, certainly
under the leadership of Chairman Roe and the doggedness of Mr.
Coffman, isn't turning away on any of this.
And, with that, I yield back.
The Chairman. I thank the gentleman for yielding.
And, in closing, I think you can sense from Members up here
a great frustration. And I think what humanizes it, when Mr.
Coffman and I sat down with those veterans in the PTSD unit and
listened to their stories, I then left and went to Castle Rock
with Mr. Buck and spoke to over 200, a standing-room-only crowd
of veterans who were there, who had served this country from
Iraq and Afghanistan all the way through Vietnam, and some even
Korean War veterans that were there, and when you look at those
men and women that have served this country, you understand why
we are doing this and why it is.
And sometimes I think in these kind of projects we forget
who we are doing this for and it is for the patients who have
served this country. And I don't want us to lose sight of that
and I think that is why there is some frustration, because we
as Representatives, Mr. Walz, all of us, go home and meet
people whose needs are not being met and I think that is--I
think I am correct there and that there is light, I think, at
the end of the tunnel, hopefully in August of this year. After
planning this facility since the 1990s, we now have an end in
sight, and it is a concrete goal and I appreciate VA's
willingness to set this goal.
Transparency has not always been the operative principle, I
think we have heard that over and over today. And, as we have
discussed this morning, many challenges persist and meeting
this activation schedule will in no means be easy, but the
veterans have waited long enough. And this Committee will keep
a close eye on the activation process throughout the year.
And I will also say that that move, I have gone from an old
hospital to a new medical center, I have made that transition
where you move patients, and that will require a tremendous
amount of planning on the hospital staff's part. I do not
believe there was ever a time in the Government or in the
private sector when a 10-year $1 billion hospitals were a
workable model, much less a 10-year $2 billion hospital. And
the size of the capital need of the VA is enormous, I think it
is $50 billion, and if we double it on everything it will be
$100 billion. While Congress and this Committee specifically
have repeatedly demonstrated a willingness to allocate
resources, we will never be able to solve the problem if we are
not able to get value for the dollars we invest.
Modern medicine is also increasingly agile, and flexibility
and adaptability are more important than ever, and I am afraid
VA's experience with this hospital design has demonstrated the
risks of obsolescence. At the end of the day, I hope that all
involved have learned lessons from the mistakes that were made
and will carry those forward.
Without a doubt, putting the Army Corps of Engineers in
charge was the right response to the problem that confronted us
in 2015. I am encouraged by what the VA and the Corps have
achieved working together. Taking over a construction project
when it hit rock bottom is significantly different from
managing it from the outset and preventing problems before they
develop; those are different challenges. It seems the Army
Corps' involvement is necessary, but not sufficient for its
success.
And we have heard some good testimony today about how we
prevent these problems that have occurred in the past repeating
themselves. A repeatable model incorporating the lessons
learned must be developed and carried forward on future
projects.
Finally, we must all focus as much attention on stewardship
of the property VA already has as on flashy, new construction.
I want to again thank you all for being here. And I will
probably make, as Mr. Coffman will, another trip to Denver to
see how this process is going, and hopefully get it on schedule
and get it there, and open it up and hand the keys to the
medical people in August of this year.
I ask unanimous consent that all Members have 5 legislative
days in which to revise and extend their remarks.
Without objection, so ordered.
The meeting is adjourned.
[Whereupon, at 12:03 p.m., the Committee was adjourned.]
A P P E N D I X
----------
Prepared Statement of Stella Fiotes
Good morning, Mr. Chairman and Members of the Committee. Thank you
for the opportunity to update the Committee on the status of the
construction of the new Rocky Mountain Regional VA Medical Center in
Aurora. I am accompanied today by Mr. Dennis Milsten, Director of
Operations, of the VA Office of Construction and Facilities Management;
and Mr. Ralph Gigliotti, Veterans Integrated Service Network 19
Director.
We are pleased that this facility will enable us to serve over
390,000 Colorado Veterans and their families, as we work to ensure that
local Veterans receive the VA services that they have earned and
deserve. The Denver VA Medical Center currently provides a robust range
of tertiary health care services and the replacement campus will
provide all of these same services upon opening. The only exception to
this is the relocation of the Post Traumatic Stress Disorder (PTSD)
Residential Rehabilitation Treatment Program, which will remain at the
Denver facility until such time as its replacement structure can be
built. In addition, the new campus will add mammography and PET/CT to
its imaging services.
The Rocky Mountain Regional VA Medical Center is also proud to be
the latest Spinal Cord Injury and Disorders (SCI/D) Center within the
VA system. This center will serve Veteran populations in Colorado,
Utah, Wyoming, and parts of Nebraska and South Dakota. The SCI/D Center
will include both an Outpatient Clinic and Inpatient Unit, offering
comprehensive, multi-disciplinary care for patients with SCI, Multiple
Sclerosis (MS), and Amyotrophic Lateral Sclerosis (ALS). The SCI Center
will offer a full range of inpatient and outpatient services, including
Physical Therapy, Occupational Therapy, Psychology, Social Work,
Nutrition, Assistive Technology, Therapeutic Recreation, Pool Therapy,
and Urology assessment. The facility will be able to accommodate
ventilator-dependent patients, and have separate indoor and outdoor
space for recreation, community re-entry, and training.
Lastly, the new facility will provide a much more up-to-date and
positive Veteran and family experience, as illustrated below. The
following is a summary of some of these significant improvements to the
delivery of health care to our Veterans:
Patients will now have private rooms, which include their
own bathrooms, as well as space for family members to stay overnight.
All interventional services, such as surgery,
bronchoscopy, and interventional radiology, will be located on the same
floor of the Diagnostics and Treatment building. These complex services
are also adjacent to the pre-operative and post-operative beds, which
will improve the coordination of care and efficiency of service
delivery.
The new operating rooms will also have Operating Room
integration.
There is a sky bridge that connects the operating rooms
to the Intensive Care Unit, which will allow for ease of movement for
those patients requiring an overnight stay following a procedure.
The intensive care unit will also have an 800-square-foot
waiting room suite, which will emphasize family support.
The construction contract with Kiewit-Turner (KT) at the new
location is 98 percent complete and 11 of 12 structures have been
turned over for activation. VA and the United States Army Corps of
Engineers (USACE) are currently working through contract completion
items and actively working with our contracting partners to bring this
contract to completion as swiftly as possible. Activation activities
are ongoing and the facility will open to serve our local Veterans in
August 2018.
The current activation schedule has the majority of installation,
calibration, and testing of newly procured equipment being completed in
May 2018. This will enable the Denver Medical Center staff to complete
over 40,000 staff hours of education, training, and orientation in July
2018. We are currently on schedule to complete relocation of the
existing patient services by August 2018. We will be monitoring the
remaining construction activities as we coordinate the ongoing
activation process with facility completion.
VA's current activation budget for this project is $341 million,
which covers activity from 2013 to 2020. This budget includes $2.6
million to serve as contingency fund. The activation budget has been
adjusted annually based upon current needs for respective fiscal year
(FY) obligation plans. However, the overall activation budget is still
on track with the planned $341 million, per the data table below.
Project obligations and planning are summarized as follows:
To date, we have spent 53 percent of the total amount,
with 2.75 years remaining in the plan. All High Tech-High Cost
equipment for the new facility was procured in prior years.
FY 2017 costs included the procurement of furniture,
equipment, and low voltage systems ($45 million).
FY 2018 costs will involve equipment leases and service
contracts ($20 million).
Recurring (staffing) expenditures have occurred in each
year since FY 2013 and have been increasing yearly, as hiring ramps up
to staff the new facility.
The subsequent years of the plan will involve operating and
recurring staffing costs, which will support the new operations and
pave the way for the Medical Center's budget to undergo annual
programming as part of VA operations.
During the USACE construction management activities for the
project, VA minimized all user-requested design, equipment, and
functionality changes. This provided an opportunity for KT to propose
to USACE that labor would concentrate on completing and turning over
the facility to VA building-by-building, rather than a longer process
of delivering it in full at a later date, which saved a substantial
amount in KT overhead costs. Additionally, USACE has not incurred the
staffing costs that USACE budgeted for the project, and will be
returning approximately $10 million of unused staffing funds to VA. We
also note that about $6 million in settlements were saved with
subcontractors from the original contract and the interim contract.
Based on the decision to turn over building-by-building, VA is now
in the process of working with USACE to let a ``completion contract,''
to address code requirements, necessary equipment changes and process
modifications that have changed throughout this project, at a lower
overhead cost. It is common on complex projects like this one, to defer
items that can be more cost effectively and efficiently handled through
a follow-on contractor. This completion contract is estimated to cost
about $10 million and will be funded from savings realized on the
project. USACE will coordinate with VA as it contracts for and manages
the completion contract. The overall goal under that contract will be
to reach project completion as soon as possible.
In August 2017, VA initiated a Targeted Asset Review with the U.S.
General Services Administration (GSA) to assess the existing property,
and also initiated a market survey in December 2017. VA currently
expects to receive the results for the Targeted Asset Review in early
February. The objective is to leverage the property to maximize
benefits to VA, Veterans, and our Nation's taxpayers.
VA plans to keep the existing hospital in service until the PTSD
building can be completed at the new campus. VA is currently reviewing
options to expand this capability at the new replacement facility.
Additionally, seven Patient Aligned Care Teams (PACT) will remain at
the current facility to serve Veterans until VA conducts further
analysis on how to optimize their impact for local area care based on
where those PACT teams can continue to function. There will also be
limited support service such as police, food service, and facility
maintenance at the current hospital, until all services are relocated.
In closing, VA is thankful for the work this and other
Congressional Committees have done to help VA navigate the challenges
this project has posed and to secure the funding necessary for its
planned completion. And despite those challenges, VA remains committed
to ensuring the project provides a facility where Veterans will receive
convenient 21st Century health care in a manner where the Department,
Congress, Veterans Service Organizations, and local stakeholders work
together for the benefit of our Nation's Veterans.
Mr. Chairman, this concludes my statement. Thank you for the
opportunity to testify before the Committee today. My colleagues and I
would be pleased to respond to questions from you and other Members of
the Committee.
Prepared Statement of Lloyd C. Caldwell, P.E.
DENVER REPLACEMENT MEDICAL CENTER CONSTRUCTION PROJECT, AURORA COLORADO
Mr. Chairman and Members of the Committee, thank you for the
opportunity to appear before you on behalf of Lieutenant General Todd
Semonite, the Chief of Engineers. I provide leadership for execution of
the U.S. Army Corps of Engineers (Corps) engineering and construction
programs in support of the Department of Defense (DOD) and other
agencies of the Federal Government.
The Corps fully recognizes the importance of the service of members
of the armed forces and the service of our veterans in sustaining the
strength of our nation. The Corps has significant capabilities and
experience delivering medical facilities for our service members and
veterans. We understand the link between the technical capabilities we
provide to enable vital health care for our veterans.
DOD's construction program utilizes designated Construction Agents,
of which the Corps is one, that procure and execute design and
construction of projects to deliver the Department's infrastructure
requirements authorized by law. The Corps is also known for the Civil
Works mission we execute for the Nation, and the Corps' capabilities
are uniquely developed to deliver both defense and non-defense
infrastructure. Interagency collaboration is an important element of
the Corps' work, and the Corps provides interagency support as a part
of its service to the nation. The Economy Act (31 USC 1535) provides
the necessary authority for the Corps to assist other federal agencies,
to include the Department of Veterans Affairs (VA), with any design and
construction requirements.
Today, we have been asked by the Committee to testify on the
subject of the Denver Replacement Medical Center in Aurora, Colorado
(Denver Hospital), including the Corps' accounting of the total
construction costs known to date and any ancillary construction
activities. In addition, I will provide information pertaining to the
Corps' lessons learned as related to the Denver Hospital.
While the Corps has the lead role in the construction execution of
the Denver Hospital, VA, as the project proponent, remains responsible
for project requirements, resourcing and facility transition to full
operations, as well as the activation budget and timeline and planning
for the existing medical center's continued use or decommissioning.
In December 2014, the VA and the Corps entered into an Economy Act
agreement to allow the Corps to assess the Denver Hospital construction
project. Subsequent modifications to this agreement and a new agreement
provided the Corps the necessary funding and authority to transition
the project's construction agent responsibility to the Corps.
Upon completion of the initial Corps assessment, we identified a
preferred course for procurement as a Fixed Price - Incentive Firm
Target contract. This contract was awarded on October 30, 2015, after
lengthy negotiations with the contractor, and it has demonstrated
effectiveness in cost and time savings, due to numerous factors, not
the least of which has been a dedicated team consisting of the Corps,
VA, and the Contractor working towards the goal of timely, cost
effective delivery of a quality facility.
During construction, the Corps and VA have collaborated with each
other, and staff from the House Veterans Affairs Committee to provide
transparency of the completion status, ongoing activities, changes and
expenditures associated with the project. Additionally VA and the Corps
provided quarterly briefings to Committee staff on the project's
completion status.
Our contract provided a target value for completing this project of
$570.75 million, with contingency for unforeseen conditions held in the
amount of $14.25 million, for a total estimated construction value of
$585 million. With the construction now 98 percent complete, our
current estimate anticipates that upon final completion, we will have
expended approximately $555 million for construction resulting in
approximately $30 million being returned to VA. Additionally, we
anticipate returning $10 million from the government and contract
oversight and audit costs. This will result in a total of approximately
$40 million being returned to VA from the original $625 million
provided to the Corps via Interagency Agreement. Construction remains
on schedule for substantial completion of all buildings this month.
Upon completion of the new facilities, there will remain ancillary
construction activities for the Denver Hospital, which fall into two
categories; punch list items and modifications to address current
medical facility requirements. Punch list requirements are routine with
any construction project, and involve minor work remaining for
correction or completion that the contractor must finalize to be in
full compliance with the contract. These punch list items will not
delay project occupancy and use.
The second category typically involves emergent requirements
necessary to assure the new facility complies with current codes and
practices that may have evolved during the course of the construction.
These are relatively minor as compared to the total project
requirements.
These emergent requirements were identified and validated by VA,
and will be a separate contract action from the contract with Kiewit
Turner. We anticipate completing these requirements using the same
government team currently on the project but with a new contract. The
time required to complete this contract action is still under review
but we are currently targeting to have this remaining work completed by
the summer of 2018. It is normal that medical facilities require
modifications to address emergent requirements. The Corps and VA made
the decision to address these emergent medical requirements via a new
contract. This course of action provides clarity and transparency to
completion of the project and assures finality in completion of the
larger contract. This decision also allows the current contractor to
concentrate on completing their contract requirements.
As part of our process the Corps reviews our project execution at
various stages and identifies lessons learned. The lessons learned help
to determine if quality objectives have been met, enable us to identify
root cause(s) for quality objectives not met, and help us to formulate
strategies to improve performance during ongoing execution of current
or future projects. While this project is not yet complete, lessons
learned are being continuously recorded.
For example, one significant lesson learned is the value of
consistent Senior Executive Review of the project. The Senior Executive
Review Group for this project was comprised of senior leaders from VA,
the Contractor's organization, and the Corps. This group met regularly
to receive project updates from the team on the project and to provide
guidance. This commitment at the senior levels of the organizations of
all stakeholders helped to ensure that the entire team remained focused
on the success of the project and achieving our collective goals. At
the completion of the project, a final package of lessons learned will
be formally developed and documented.
Finally, while we are pleased to be nearing completion of this
important project, we are also keenly aware of the trust the Committee
has placed in the Corps. We appreciate the partnership that has
developed during this project between the Corps and VA. We believe that
the completion of the Denver Hospital will be a source of great value
to the veterans in the region, and will validate the trust that you
have placed in the Corps and the VA to bring it to completion. We are
committed to working with VA for final completion of the Denver
Hospital, and to continue this partnership and collaboration on future
VA major construction projects.
Mr. Chairman, this concludes my statement. Thank you for allowing
me to be here today to discuss the Corps' capabilities and our work to
assist VA. I would be happy to answer any questions.
Prepared Statement of Andrew Von Ah
VA CONSTRUCTION
Actions Taken to Improve Denver Medical Center and Other Large
Projects' Cost Estimates and Schedules
Chairman Roe, Ranking Member Walz, and Members of the Committee:
I am pleased to be here today to discuss the Department of
Veterans' Affairs (VA) management of medical facility construction
projects costing $100 million or more, particularly the Denver VA
Medical Center, \1\ and other matters.
---------------------------------------------------------------------------
\1\ VA's Denver VA Medical Center is actually located in Aurora,
Colorado, near Denver.
---------------------------------------------------------------------------
As you know, VA has pressing infrastructure needs and has struggled
to make progress addressing them. VA operates one of the largest health
care systems in the country with 1,376 sites in 2017. However, many
facilities were built decades ago and were designed for an inpatient-
driven health care system that does not align with VA's current
wellness approach, which emphasizes outpatient and specialized care
that, according to VA, served 6.26 million of the 9-million enrolled
veterans in 2016. VA has endeavored to design and construct new
facilities to replace its aging infrastructure with the intent of
improving veterans' health care. However, we found substantial cost
increases and schedule delays for VA's largest medical-facility
construction projects in 2013, finding that four of the largest had
experienced a total cost increase of nearly $1.5 billion. \2\ These
overruns included the Denver VA Medical Center, which, at the time, had
experienced a 144 percent project cost increase. As a result of these
cost increases and schedule delays, Congress mandated that VA outsource
management of certain projects costing $100 million or more. As a
result of these mandates, \3\ VA contracted with the U.S. Army Corps of
Engineers (USACE) to manage construction of the Denver project as well
as the others that Congress specified. Nevertheless, VA continues to
manage other projects costing $100 million or more that Congress has
not specified should be outsourced. While cost increases and schedule
delays at VA's medical-facility construction projects can occur for
many reasons, such as unforeseen site conditions, management issues
also play a part.
---------------------------------------------------------------------------
\2\ GAO, VA Construction: Additional Actions Needed to Decrease
Delays and Lower Costs of Major Medical-Facility Projects, GAO 13 302
(Washington, D.C.: Apr. 4, 2013).
\3\ Provisions related to three laws enacted in 2015 collectively
require VA to contract with other federal entities to provide full
project management services for the design and construction of certain
then ongoing construction projects with a total estimated cost of $100
million or more as well as such construction projects Congress
authorizes in the future. See, Pub. L. No. 114-58, Sec. 502, 129 Stat.
530, 537-38; Pub. L. No. 114-92, 129 Stat. 726, 1020 (2015); and Pub.
L. No. 114-113, 129 Stat. 2242, 2691-92 (2015). The explanatory
statement accompanying Public Law 114-113 specified seven ongoing
projects for which VA was directed to outsource design and construction
management. These seven projects are in Alameda, CA; American Lake, WA;
Livermore, CA; Long Beach, CA; Louisville, KY, San Francisco, CA; and
West Los Angeles, CA.
---------------------------------------------------------------------------
This testimony (1) provides an update on VA's Denver project and
selected other projects reviewed in our March 2017 report and (2)
discusses VA's progress toward addressing the recommendations in that
report. \4\
---------------------------------------------------------------------------
\4\ GAO, VA Construction: Improved Processes Needed to Monitor
Contract Modifications, Develop Schedules, and Estimate Costs, GAO 17
70 (Washington, D.C.: Mar. 7, 2017). VA concurred with the
recommendations we made our report.
---------------------------------------------------------------------------
To address these objectives, we reviewed our March 2017 report and
obtained and reviewed documentation and interviewed VA officials on the
status of the Denver project and our selected projects at VA's major
medical-facilities, as of January 2018, and the steps VA has taken to
address recommendations in our March 2017 report. We did not assess the
extent to which USACE or VA is following best practices for cost
estimates or schedules on projects initiated since our 2017 report.
Detailed information on the scope and methodology used in our issued
reports and testimony statements can be found in those products. We
conducted the work for this statement in accordance with generally
accepted government auditing standards. Those standards require that we
plan and perform the audit to obtain sufficient, appropriate evidence
to provide a reasonable basis for our findings and conclusions based on
our audit objectives. We believe that the evidence obtained provides a
reasonable basis for our findings and conclusions based on our audit
objectives.
Background
We have previously reported on significant cost overruns on VA's
major medical-facility projects, as well as VA's weaknesses in managing
these projects. Specifically, in our 2013 report, \5\ we made three
recommendations to improve VA's management of its major construction
projects, and VA took actions to address those recommendations as
described below: \6\
---------------------------------------------------------------------------
\5\ GAO 13 302.
\6\ ``Major construction projects'' are those estimated to cost
more than $10 million. Of VA's 25 major construction projects, 22 are
estimated to cost $100 million or more.
1. Integrate medical equipment planners in the design and
construction of medical facilities to better integrate medical needs
with the design of the facilities: In response, VA issued a policy memo
providing guidance that medical equipment planners be assigned to
medical-construction projects costing $10 million or more to better
integrate medical needs with design and construction of facilities. \7\
During our 2017 work, VA officials at project site locations indicated
that this had improved VA's capabilities for medical facilities'
planning, including equipment planning.
---------------------------------------------------------------------------
\7\ Department of Veterans Affairs, Office of Construction &
Facilities Management, Architectural Design Manual (Aug. 1, 2014).
2. Improve VA's communication with contractors to clarify roles and
responsibilities, especially for change orders: \8\ In response, VA
implemented procedures to address our finding that a lack of clear
communication with contractors contributed to project delays and cost
increases. During our 2017 work, contractors at the three selected
projects we reviewed that VA managed told us they had established good
working agreements with VA's Office of Construction and Facility
Management.
---------------------------------------------------------------------------
\8\ Change orders are used to process changes to a project's
design.
3. Issue and take steps to implement guidance on streamlining the
change-order process based on the findings and recommendations of the
Construction Review Council: \9\ In response, VA took steps to
streamline its change-order approval process including establishing
processing time frames for change orders on construction projects and
authorizing more people to approve change orders. However, our 2017
work found further room for improvement with regard to VA's tracking of
change orders, as I will discuss later in this testimony.
---------------------------------------------------------------------------
\9\ In April 2012, the Secretary of Veterans Affairs established
the Construction Review Council to serve as the single point of
oversight and performance accountability for the planning, budgeting,
execution, and delivery of the VA's real property capital-asset
program.
Cost Increases and Schedule Delays Persist at Major Medical-Facility
Projects; However, USACE Expects to Finish Constructing the Denver
Facility Within Its Estimated Costs and Meet the Project's
---------------------------------------------------------------------------
Construction Schedule
While VA had taken steps to improve its management of major
construction projects, some VA major medical-facility projects we
reviewed for our March 2017 report continued to experience cost
increases and schedule delays. For example, in 2017 we found that the
Denver project's costs increased another 100 percent over the estimated
cost of the project since our previous report. See table 1 for the most
recent available information on five projects we examined for our March
2017 report. These five projects, among the most costly projects, are
in different phases of construction and represent a mix of projects
managed by USACE and VA; thus, this information cannot be generalized
to sites agency-wide.
Table 1: Changes in Costs and Completion Time Frames between
November 2012 and December 2017 for Selected Department of Veterans
Affairs' (VA) Medical-Facility Construction Projects
(a) The Louisville project did not have estimated completion dates
available in November 2012 or December 2017.
(b) VA expects the cost estimate for the Palo Alto project to
increase.
(c) The St. Louis project did not have an estimated completion date
available in November 2012.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
When USACE took over the Denver the project in August 2015, it
estimated that completing construction would cost $585 million. We
found that the cost estimate substantially met the characteristics of
reliable cost estimates identified in the GAO Cost Estimating and
Assessment Guide. \10\ According to USACE, it currently expects to
complete the Denver project at a cost of less than the $585 million
estimate.
---------------------------------------------------------------------------
\10\ GAO, GAO Cost Estimating and Assessment Guide: Best Practices
for Developing and Managing Capital Program Costs (Supersedes GAO 07
1134P) GAO 09 3SP (Washington, D.C.: Mar. 2, 2009). Specifically, on a
scale from ``fully meets'' to ``does not meet,'' for four
characteristics of a cost estimate, we found the USACE estimate to
substantially meet all characteristics. The estimate was comprehensive,
well-documented, accurate and credible. See GAO 17 70 p. 20-21 for
further information on these characteristics.
---------------------------------------------------------------------------
Further, according to VA officials, they expect construction of the
Denver project to be complete in January 2018. \11\ While in our March
2017 report we found that the USACE construction schedule to complete
the Denver project in January 2018 was not reliable, USACE decided not
to revise it because doing so would have been costly and disrupt
progress on the project. USACE officials explained they would have
followed best practices if they had initiated the project. However,
they stated that the Denver project presented a unique situation
because USACE began managing the project when it was about 50 percent
complete.
---------------------------------------------------------------------------
\11\ We did not independently verify the remaining construction
schedule to confirm this completion date. While the VA expects the bulk
of the construction to be complete by January 2018, VA officials stated
that certain construction activities will continue beyond January under
a new contract that USACE will award and manage. USACE and VA expect
that the cost of this work will still result in keeping the overall
project within USACE's total $585 million cost estimate.
VA is Working on Improving its Management of Change Orders and
---------------------------------------------------------------------------
Estimated Project Costs and Schedules
VA Has Improved Data Collection of Timeframes for Change Orders, but it
Is Unclear How VA Will Use this Information to Improve Project
Management
In our March 2017 report, we found the following limitations
related to change orders, or changes to a project design:
1. VA did not collect the necessary information to determine
whether efforts to streamline the change order process have in fact
been successful.
2. VA did not collect sufficient information to categorize and
monitor the reasons change orders occur.
3. It was unclear how VA plans to use this information to monitor
whether change orders are approved within VA guidelines.
For example, three of the five VA sites we selected for our 2017
report kept some information on processing time frames, but it was
incomplete and inconsistent. Further, the monitoring process was done
manually by the regions, according to VA officials. We thus recommended
that the VA establish a mechanism to monitor the extent that major
facilities' projects are following guidelines on change orders' time
frames and design changes.
Since then, VA has implemented changes to its system that captures
information on time frames for approving changes and, according to VA,
the reasons for the changes. This improvement should allow VA to track
change orders that are still open and how long it takes to close them,
and the extent to which VA's guidelines for these timelines are being
adhered to. It should further allow VA to identify and track the
reasons why changes occurred, such as whether a change resulted from a
design oversight, an unforeseen condition discovered during
construction, or some other reason. VA officials also stated that they
have developed guidance that discusses how to track and report change-
order time frames and the reasons for the change orders, and how this
information will be used going forward. While VA has yet to provide
documentation, if fully implemented, these mechanisms should improve
VA's accountability and allow for more informed decision-making by
Congress and VA. \12\
---------------------------------------------------------------------------
\12\ These mechanisms do not apply to change orders for the Denver
project, since it's being managed by USACE, which has its own change
order process.
VA is Improving its Activation Processes; However, it Has Not Produced
---------------------------------------------------------------------------
a Reliable Estimate for the Denver Facility
In our March 2017 report, we found that VA had minimal supporting
documentation for its estimate for the cost to ``activate''-the process
of bringing a facility into full operation-the Denver Medical Center,
and as such determined that the activation estimate was unreliable.
\13\ While the USACE is under contract with VA to manage the
construction of the Denver project, VA is responsible for activating
the Denver facility and has estimated that this process will cost $341
million. \14\ With minimal supporting documentation of this estimate,
we recommended that VA develop an activation cost estimate for the
Denver project that is reliable and conforms to best practices, as
described in the GAO Cost Estimating and Assessment Guide. Without a
reliable estimate, it is difficult for VA to make funding decisions for
activating various facilities. Further, the lack of a reliable estimate
poses difficulties for Congress, which relies on this estimate to make
annual appropriations decisions.
---------------------------------------------------------------------------
\13\ Activation includes activities such as purchasing and
installing furniture and medical equipment and hiring new staff for the
facility.
\14\ VA continues to expect activation to cost $341 million.
---------------------------------------------------------------------------
In July 2017, VA provided us with additional documentation on its
activation cost estimate. We analyzed this information and found that
the estimate did not meet best practices. Specifically, the VA Denver
hospital's activation cost estimate partially met two (comprehensive
and credible) and minimally met two (well documented and accurate) of
the four characteristics of a reliable cost estimate as described in
the GAO Cost Estimating and Assessment Guide. In December 2017, VA
provided comments on our analysis, concurring with some of GAO's
assessments and identifying additional information for us to consider.
While we cannot find that the current estimate meets or substantially
meets all of the characteristics of a reliable estimate, VA has made
improvements in the documentation of the estimate since our report. VA
officials also indicated they are taking steps such as developing
training and going forward will be providing staff GAO's Cost
Estimating and Assessment Guide to improve activation estimates.
VA Has Taken Steps to Clarify Its Policies on Linking Construction and
Activation Activities with the Integrated Master Schedule
In our March 2017 report, we found VA's policies were not clear or
consistent in the way that they require VA to link construction and
activation schedules to form an integrated master schedule. The
integrated master schedule is an important element for ensuring the
successful and timely completion of these projects. Although VA and
USACE officials at the Denver project provided a construction schedule,
an activation schedule, and an integrated master schedule, we found
that certain activities and milestones in these schedules were not
aligned with each other across the three schedules. This lack of
alignment may be because, although VA required an integrated master
schedule, many of its policies on developing an integrated master
schedule were not clear or consistent. For example, VA's policies used
conflicting and undefined terms to describe the activities an
integrated master schedule should cover. Without a fully integrated
master schedule, VA could have encountered additional delays in
completing the project. We thus recommended that VA clarify policies on
integrating schedules.
In response to our recommendation in our March 2017 report, VA
clarified various policy documents in June 2017 and reinforced that all
projects develop and maintain an integrated master schedule that
includes and links all construction and activation activities. VA also
has updated its policy to require USACE to comply with the requirements
related to integrated master schedules. VA provided documentation of
these changes which we reviewed and found that the clarifications
addressed our recommendation. Moreover, VA officials indicated that
they have worked with USACE to develop an integrated master schedule
linking construction and activation activities for the Denver Medical
Center and agreed to provide documentation. These actions should help
VA avoid schedule delays and better manage its major construction
projects.
Chairman Roe, Ranking Member Walz, and Members of the Committee,
this completes my prepared statement. I would be pleased to respond to
any questions that you may have at this time.
GAO Contact and Staff Acknowledgments
If you or your staff have any questions about this testimony,
please contact Andrew Von Ah, Director, Physical Infrastructure team at
213-830-1011 or [email protected]. Contact points for our Offices of
Congressional Relations and Public Affairs may be found on the last
page of this statement. GAO staff who made key contributions to this
testimony are Cathy Colwell (Assistant Director), Brian Bothwell,
Antoine Clark, Lynn Filla-Clark, George Depaoli, Geoff Hamilton, Jason
Lee, Nitin Rao, and Malika Rice.
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SUPPLEMENT TO ANDREW VON AH STATEMENT
Why GAO Did This Study
VA and USACE are nearing completion of the Denver Medical Center,
which is intended to improve health care to veterans in that region.
This project has suffered from substantial cost increases and delays
resulting not only from unforeseen circumstances but also from
mismanagement. In response, Congress mandated that VA outsource
management of certain projects costing $100 million or more. VA
contracted with USACE to manage construction of the Denver project,
among others. VA continues to manage other major construction projects.
In March 2017, GAO reported on opportunities to improve the
management of Denver and other VA construction projects. Specifically,
GAO recommended that VA: (1) establish a mechanism to monitor change
orders; (2) develop a reliable activation cost estimate for the Denver
project, and (3) clarify policies on integrating schedules. VA
concurred with our recommendations. This statement discusses, among
other objectives, VA's actions to address these recommendations.
The statement is based on GAO's March 2017 report (GAO-17-70),
additional documentation VA provided to address GAO's recommendations,
and selected updates on the Denver Medical Center as well as other
major VA projects.
VA CONSTRUCTION
Actions Taken to Improve Denver Medical Center and Other Large
Projects' Cost Estimates and Schedules
What GAO Found
The Department of Veterans Affairs (VA) is taking actions to
implement GAO's 2017 recommendations related to project management, as
described below. However, in some cases VA has yet to fully implement
these actions.
Change orders: In 2017, GAO found that VA did not track: (1) how
long it took for change orders-changes in a project's design-to be
approved and whether that amount of time met VA's guidelines, or (2)
the reasons for those changes. Since then, however, VA has started
tracking the time frames. Additionally, VA told GAO it is tracking the
reasons for those changes as well as developing guidance on how to use
this information and agreed to provide documentation. This step does
not affect change orders for the Denver project (see photograph), which
is managed by the U.S. Army Corps of Engineers (USACE) but, if fully
implemented should improve VA's management of other projects.
Cost Estimate for Activating Facility: In 2017, GAO found that the
most recent cost estimate of $341 million for activating, or bringing
the Denver Medical Center into full operation, had minimal supporting
documentation. Although VA is improving its cost estimation process for
activation in response to our recommendation, the Denver estimate does
not yet meet or substantially meet the characteristics of a reliable
activation cost estimate.
Integrated Master Schedule: In 2017, GAO found that certain
activities and milestones from Denver's construction and activation
schedule were not aligned with its integrated master schedule-the
schedule intended to link construction and activation activities.
Without a fully integrated master schedule, VA could have encountered
additional delays in completing the project. GAO recommended VA clarify
its guidance on linking schedules. VA said it has since aligned its
construction and activation schedules for the Denver project and agreed
to provide GAO documentation. VA has clarified its guidance and is
working with USACE to ensure this clarification occurs on other
projects.
One picture here
Statements For The Record
PATRICK MURRAY
WITH RESPECT TO
``The Denver Replacement Medical Center: Light at the End of the
Tunnel?''
Chairman Roe, Ranking Member Walz and members of the Committee, on
behalf of the men and women of the Veterans of Foreign Wars of the
United States (VFW) and its Auxiliary, I want to thank you for the
opportunity to present the VFW's views on the Denver Medical
Replacement Center.
The Denver Replacement Medical Center in Aurora, Colorado, has been
an embarrassment for the Department of Veterans Affairs (VA) for years,
and its completion date does not mean the end of the struggle for this
project. Overdue and over budget is simply not enough to describe how
badly this project was mismanaged. Without the voices of local veterans
and their representatives in Congress, this hospital project would
still be floundering.
Major construction on the hospital is set to be completed this
month, with the majority of the building work coming to an end. This
does not mean the project is complete by any means, there is still
millions of dollars' worth of work to be done. The major construction
milestone can sound misleading as some may think the work is done, but
there are still months ahead of this project before they can start
operating fully.
In the next six months, VA has to fully stock the hospital with
furniture and medical equipment which will cost hundreds of millions of
dollars. Even though substantial completion will be reached this month,
the building will still not be ready to receive significant numbers of
patients until this summer.
Activation and startup costs are typical for every project, but
every additional dollar spent on the Aurora hospital continues to erode
public trust for an already extremely expensive project. Supplying the
hospital with equipment, testing and approving the equipment, and
staffing the facility are all part of typical startup costs.
Transparency in all the additional time and money needed for the actual
completion of the project is one important step in regaining the
public's trust in how tax dollars are spent.
The Aurora hospital project was mismanaged from the start and is a
clear indication that the VA construction division is not up to speed
with innovative and progressive construction practices. Many have
stated that the leadership of this project lied to Congress and the
public about the progress and costs associated with the hospital from
the beginning. It took the U.S. Army Corps of Engineers to take over
control of the project for any significant headway to be made toward
completion. VA and Congress must make certain this is not allowed to
occur again and that those responsible are held accountable.
For future VA major construction projects to succeed, the personnel
within VA managing those projects need to be empowered to be decision
makers on the ground and be given the authority to make changes to stay
ahead of schedule and under budget. The VFW has been an advocate for VA
construction to fully embrace the Integrated Design-Bid-Build (IDBB)
process for all projects. Until they do so, construction projects like
Aurora will continue to hit unnecessary pitfalls like they have in the
past.
IDBB allows contractors, designers and owners representatives to
come together in the early stages of the entire project in order to
avoid conflicts during the building process. By integrating the early
phases of the project, designers and the contractors building the
hospital can easily navigate conflicts and changes that would typically
stall progress during key phases of the project. Avoiding having to
redo work that does not fit for the staff using the facility saves
costs to the tax payer.
Small issues like electrical outlets needing to be replaced in
Aurora due to incompatibility with the types of patients being seen in
certain clinics, could have been avoided if the end users had input
from the beginning. Having to go back and redo work-in-place only adds
to the already staggering cost of the facility. The IDBB process helps
reduce overall time and cost of any project by overlapping early phases
of the project and bringing all stakeholders to the table in order to
get the work done right the first time.
Projects like Aurora should never have reached the level of
mismanagement that it did, but once the waste and abuse of government
money was fully brought to light, Congress stepped in and demanded
change. A shining example of Congress getting it right is
Representative Mike Coffman who was one of the leaders in demanding
change and accountability for the Aurora project. The VFW shares Mr.
Coffman's frustrations with the project, and are happy to see members
of Congress taking the right approach to correcting the problems
associated with it.
Another key voice in calling out the problems associated with this
project are the local veterans themselves. Nobody knows their own
communities better than the people living in them. Whenever issues that
involve honesty and transparency arise it is important to listen to the
voices most affected by them. The VFW's local leadership has been
extremely vocal about this project since the beginning. With such a
large veteran community surrounding the hospital, there are thousands
of local area veterans that will benefit once the hospital obtains
fully operational status. That is why the combination of local
leadership, with that in Congress are so integral in making future
projects a success.
The VFW has called on VA to reform its construction process so
facilities can be delivered on time and on budget. Previous errors must
be corrected to ensure the issues in Aurora, Colorado, never occur
again. However, Congress and the Administration must not ignore the
growing capital infrastructure needs of the VA's health care system.
When VA asked its Veteran Integrated Service Networks to evaluate what
they need to improve its facilities to meet the increased outpatient
demand, VA determined that ``improving the condition of VA's facilities
through major construction projects (96) accounted for the largest
resource need. \1\'' Yet the Administration's major construction
request for the Veterans Health Administration is 36 percent less than
FY 2017 and 85 percent less than actual expenditures in FY 2016. Aurora
must not deter Congress and VA from continuing to invest in major
projects like this in the future in order to continue providing world
class care to our veterans.
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\1\ Department of Veterans Affairs 2018 Budget and 2019 Advance
Appropriations Requests, Volume IV: Construction, Long Range Capital
Plan and Appendix. Long Range Capital Plan, page 8.3-8.
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Another area of major concern for the VFW is the lack of a
comprehensive replacement plan for the existing services offered at the
original Denver hospital. The new Aurora facility has less primary care
services offered and substantially less PTSD services. The original
hospital will need to remain open for years to keep serving primary
care patients, and there is currently no plan to have a replacement
PTSD facility built on the new Aurora campus. VA needs to provide an
accurate and transparent plan for making sure the new facility offers
better support for veterans, and does not represent a step backward. It
is unacceptable for VA to invest almost two billion dollars in a new
facility that does not offer the same measure of care as the hospital
it is meant to replace. New VA hospitals should be expected to meet
current demands, and have the capacity to address future needs as well.
While the Aurora hospital project will remain in the memory of
those associated with it for years to come, we hope it also serves as a
reminder of why getting it right the first time is the best case
scenario. Transparency is an absolute must in all future projects in VA
construction, and bringing in all key stakeholders as early as possible
will help mitigate unnecessary cost overruns and ensure the timely
completion of future projects.