Report: Lax oversight of VA project caused $17.7M overrun, construction collapse

Source:, April 2, 2018
By: Kim Slowey

Dive Brief:

  • The Office of Inspector General for the U.S. Department of Veterans Affairs issued a report that found both a contractor and VA hospital officials demonstrated “shoddy planning” and poor oversight of an $8.7 million generator project that is $17.5 million over budget, according to The Oklahoman.
  • The VA in June 2014 hired Florida-based BCI Construction for $8.7 million to install a generator system and accompanying structure to house the unit at the Jack C. Montgomery VA Medical Center in Muskogee, Oklahoma. According to the inspector general, the VA did not submit an excavation plan for approval before beginning work. Subsequently, a hillside and parking lot collapsed, and the damage will cost $17.5 million to fix. In addition to supervisory and procedural errors, the inspector general also found that BCI’s worksite to be unsafe. Safety inspections were sporadic, and 49 safety violations were never reported to the government contracting officer, which is a violation of VA policy.
  • The inspector general recommended requiring contracting officer representatives are qualified and follow VA regulations and mandating that employees follow safety inspection guidelines. The current Muskogee hospital director, hired after the collapse, said the facility has implemented the recommendations.

Dive Insight:

Unfortunately, this lack of construction oversight and management is not a one-off occurrence within the VA system. Construction of the VA’s Rocky Mountain Regional Medical Center in Aurora, Colorado, is four years behind schedule and the cost now is $2 billion, double the original budget. Congress was so fed up with the agency’s performance that it put the Army Corps of Engineers in charge of any VA construction project expected to cost more than $100 million.

The Rocky Mountain hospital is close to completion, but VA officials had more bad news to deliver to lawmakers in January. Although the new hospital has more than double the square footage than the facility it will replace, design errors have limited the space available for primary care teams, medical beds, psychiatric units and a residential post-traumatic stress disorder program. VA officials said there are also hundreds of small snafus, like surfaces that cannot be cleared, which will require a new contractor to fix the problem.

The new facility’s poor design means that both hospitals will have to remain open for up to five years in order to provide a full scope of services, unless the agency can buy an additional building. However, the VA will still have to spend $350 million to upgrade the older hospital.

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