The VA operates one of the nation's largest health care delivery
systems. Charged with addressing the issues of increasing medical
demands and aging medical facilities, VA currently manages the
construction of 50 major medical-facility projects, each costing at
least $10 million, some in the hundreds of millions of dollars. As
requested, GAO examined VA's management of such projects. GAO
reviewed (1) changes to costs, schedule, and scope for selected new
medical-facility construction projects and (2) actions VA has taken
to improve management and any opportunities that exist for VA to
improve its management of costs, schedule, and scope of these
construction projects. GAO analyzed documents, VA data as of
November 2012 on selected major construction projects, and
interviewed VA officials, architecture and engineering, and
construction firms. Costs substantially increased and schedules
were delayed for Department of Veterans Affairs' (VA) largest
medical-center construction projects in Denver, Colorado; Las
Vegas, Nevada; New Orleans, Louisiana; and Orlando, Florida. As of
November 2012, the cost increases for these projects ranged from 59
percent to 144 percent, with a total cost increase of nearly $1.5
billion and an average increase of approximately $366 million. The
delays for these projects range from 14 to 74 months, resulting in
an average delay of 35 months per project. In commenting on a draft
of this report, VA contends that using the initial completion date
from the construction contract would be more accurate than using
the initial completion date provided to Congress; however, using
this date would not account for how VA managed these projects prior
to the award of the construction contract. Several factors,
including changes to veterans' health care needs and
site-acquisition issues contributed to increased costs and schedule
delays at these sites. Although VA has taken some actions to
address problems managing major construction projects, the agency
has opportunities for further improvement. Construction management
challenges remain, and opportunities exist for VA to avoid further
cost increases and schedule delays. Given the complexity and speed
of medical advances, many health care organizations have enlisted
the services of experts in planning the procurement and
installation of medical equipment for new medical centers. VA has
used these planners at various phases for some projects and is
reviewing its overall procurement of medical equipment. However, VA
has not taken full advantage of medical equipment planners on all
projects, in part because there is no guidance for doing so. Not
using a medical equipment planner can lead to increased design and
construction changes resulting in cost increases and schedule
delays. VA has not yet clearly defined roles and responsibilities
of VA construction management staff, even though the agency
previously identified the need to do so. GAO found that conflicting
direction from VA to contractors can cause some confusion and lead
to cost increases and construction delays. For example, contractor
officials at one site said that VA's project manager directed them
to defer the design of specific rooms until medical equipment was
selected for the facility; however, VA's central office then
directed the contractor to proceed with designing the rooms. This
conflicting direction from VA will require the contractor to
redesign the space, further expending project resources. The
federal government's regulations and VA's policy specify that
changes to construction contracts, known as change orders, should
be issued in a timely manner; however, VA's change-order approval
process requires time-consuming reviews at multiple organizational
levels that have resulted in extensive delays and increased costs
for some projects. VA is reviewing options to shorten the decision
cycle for approval of construction contract modifications but has
not yet streamlined the process. GAO-13-302
General
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