May 08, 2013

GAO Report Exposes Cost Increases and Delays in VA Construction Projects

Washington, D.C.  – Today, the Subcommittee on Oversight and Investigations of the House Veterans’ Affairs Committee held a hearing examining the Department of Veterans’ Affairs (VA) construction program. GAO’s May 2013 report “VA Construction: Additional Actions Needed to Decrease Delays and Lower Costs of Major Medical-Facility Projects” found that VA’s four largest medical-facility construction projects (Las Vegas, Orlando, Denver and New Orleans) all had cost increases ranging from 59% to 144%, representing a total cost increase of nearly $1.5 billion and an average increase of about $366 million per project. Reported schedule delays ranged from 14 to 74 months with an average delay of 35 months per project.  

“While I understand the reasons for some of the delays, clearly there is a need for VA to scrutinize their construction program and make improvements,” said Rep. Ann Kirkpatrick (Arizona-01), Ranking Member of the Subcommittee on Oversight and Investigations. “This issue directly impacts VA’s budget and, most importantly, veterans’ access to health care. While efforts have been made to improve and streamline construction projects, I urge VA to implement GAO’s recommendations. I stand ready to work with my colleagues and VA as we tackle these critical construction issues moving forward.”

Starting with FY 2012, VA initiated a new planning process called the Strategic Capital Investment Plan (SCIP), which is an agency-wide review of their real property priorities. SCIP prioritizes projects for budget consideration along with a 10-Year Capital Plan. According to the FY 2014 budget submission, the Long-Range SCIP plan includes over 3,900 capital projects that would be necessary to close all currently-identified gaps with an estimated cost of between $46 billion and $56 billion.

Secretary Shinseki, in an effort to improve the construction process, created a Construction Review Council to serve as the single point of oversight and performance accountability for the planning, budgeting, execution, and delivery of the VA real property capital-asset program.

The following recommendations were made to the VA by the GAO:

  • Develop and implement guidance for assignment of medical equipment planners to major construction;
  • Develop and disseminate procedures for communicating, to contractors, clearly defined roles and responsibilities of VA management, particularly with the change-order process; and
  • Issue and take steps to implement guidance on streamlining the change-order process based on the findings and recommendations of the Construction Review Council.

Rep. Kirkpatrick’s full opening statement can be found here.