A cutting edge Veterans Affairs hospital that is under construction in the Denver area is only half complete but is already more than $470 million past its original estimated cost, as officials are saying it will take another $300 million to complete the project — making the total $1.1 billion.
Colorado's new VA hospital was supposed to cost $328 million according to the initial estimate, which was later bumped to $604 million to complete, but Congress has already approved a $800 million spending cap for the project that broke ground in 2010,
The Denver Business Journal reported.
Veterans' Affairs Deputy Secretary Sloan Gibson testified before the House Veterans' Affairs Committee on Wednesday and said that the $800 million cap has already been reached, and the VA is in the process of shifting funds from other projects to keep construction going.
"I understand that everyone is anxious to know what it will cost to complete the project," Gibson said. "Right now, we don't know. The (Army) Corps (of Engineers) doesn't know, and (contractor) Kiewit-Turner doesn't know."
Gibson told the House committee that the current estimate for completing the project is $1.1 billion, with an estimated completion date of 2017. It was supposed to be completed in February 2014.
According to The Denver Post, the contractor Kiewit-Turner threatened to walk away from the project in December after the U.S. Civilian Board of Contract Appeals concluded that the VA had breached its contract with the contractor, giving Kiewit-Turner leave to abandon the project.
The board concluded that the VA had a $604 million budget for a more than $1 billion design, saying that the federal agency "does not have sufficient funds to pay for construction of the entire project as currently designed and has no plans to ask for money."
The VA and the contractor have a short-term $234 million bridge contract to continue construction, until a longer, more permanent arrangement can be made. An overdue payment of $157 million of the bridge contract costs went to Kiewet-Turner.
The U.S. Army Corps of Engineers was also asked to help manage the project, which was also part of the bridge contract. The Corps is also supposed to examine the construction process at the site.
The Government Accountability Office released a report concerning four VA hospital projects, including the one in Colorado.
"We found in April 2013 that of the four largest medical-facility construction projects VA had underway, Denver had the highest cost increase,"
the GAO said in its report.
New VA hospitals being built in Las Vegas, Orlando and New Orleans have also far exceeded their initial estimated costs and missed their estimated completion dates, according to the report.
It will take an act of Congress to approve an increase in the spending cap to complete the Colorado hospital.
The VA announced Monday that it was launching an investigation into the matter to determine what has gone wrong and what it will cost to complete the hospital, which when completed is supposed to be able to treat approximately 830,000 veterans and be equipped to handle extensive research and clinical trials.
Colorado Rep. Mike Coffman, the Republican congressman who represents Aurora, where the hospital is being built, said that he is working on a bill to get more money approved to complete the project.