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Report Tells Tale of Two Hospitals

Thursday, December 17, 2015

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A new report from the National Center for Policy Analysis aims to show what happens when a construction project managed exclusively by the federal government is sized up against one managed jointly by local governments and private entities.

The result is sobering: The Denver Veterans Affairs project is plagued with a $1 billion-dollar cost overrun, a decade of delays, and remains incomplete; whereas the $1.27-billion Dallas Parkland Hospital has been completed largely within budget and on time, the nonprofit think tank reports.

Denver Hospital
www.denvervahospital.com

The Veterans Affairs hospital project in Aurora, CO, is the most expensive in VA history.

Denver VA versus Dallas Parkland” examines the VA Hospital in Aurora, CO, which is designed to replace an aging facility in Denver, and the Parkland Hospital, a facility replacement project designed to meet growing demand for the Dallas’ indigent population.  

Citing multiple sources, the report compares the design and planning stages, the budget and financing, and outcomes of both projects.

Planning and Funding Differences

“From the start, the teams for each project operated under two different set of expectations,” the report author Jennifer Vermeulen writes.

In the beginning stages of the Aurora VA project, for example, architects worked on plans for years without an estimated proposed budget and without consulting hospital design or equipment experts, according to the report.

Robert A, McDonald
Official Photo

In May 2015, U.S. Secretary of Veterans Affairs Robert A. McDonald said, "The delays and cost overruns that have plagued the Denver Replacement Medical Center campus are inexcusable."

When the original budget of $604 million was agreed upon, the design did not match that figure, the report notes.

“The VA’s failure to [provide a design that could be built to budget] resulted in the project’s general contractor, Kiewit-Turner, filing a successful lawsuit with the U.S. Civilian Board of Contract Appeals for breach of contract.”

Groundbreaking on the 12-structure, 1.2 million-square-foot, 152-bed VA hospital occurred in 2009. However, the facility remains incomplete; the VA has turned over construction management to the Army Corps of Engineers. An estimated completion date is now set for 2017, at a cost of $1.678 billion. The project is being funded by the federal government.

Meanwhile, the Parkland Hospital project began when its Board of Directors launched a renovation effort with three working groups with expertise in different aspects of hospital planning and design. Officials also hired three full-time clinical liaisons to facilitate communication between the design team and hospital, the report indicated.

The project was funded by taxpayers, through a $747 million bond, and from hospital reserve funds and private donations.

The project managers of Parkland hired an independent auditor to track all project transactions, the report said, noting that reports on budget progress were made available to both the Board and the public. Real-time budget estimates were also sent to management, the report added.

Completed in August 2015, the 2.1 million-square-foot, 862-bed hospital took seven years to build with a price tag of $1.27 billion.

Conclusion

The NCPA report concludes that “government construction projects can flounder in the absence of accountability.”

“Twenty years have passed since the VA began exploring options for replacing the Denver VA, and 10 years have passed since planning began,” Vermeulen writes. “Yet, the veterans of Colorado are still waiting to receive the high-quality care they deserve.”

VA representatives did not immediately respond Wednesday (Dec. 16) to comment on the report.

   

Tagged categories: Construction; Government; Government contracts; Health Care/Hospitals

Comment from John Fauth, (12/17/2015, 10:06 AM)

Really, is anyone surprised by this? Maybe we need to divert some of the millions of dollars (mis)spent on countless government funded studies in order to discover why anyone would think a bevy of politicians directing government bureaucrats could cost effectively design and build a functional billion dollar hospital. Wait until they move in and its discovered how poorly engineered, constructed, and ill-suited this hospital is to fulfill its intended purpose of furnishing medical services to our deserving veterans.


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