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75–617 2013

THE NEW ORLANDO VA MEDICAL CENTER: 

BROKEN GROUND, BROKEN PROMISES 

HEARING 

BEFORE THE

COMMITTEE ON VETERANS’ AFFAIRS 

U.S. HOUSE OF REPRESENTATIVES 

ONE HUNDRED TWELFTH CONGRESS 

SECOND SESSION 

AUGUST 13, 2012 

Serial No. 112–74 

Printed for the use of the Committee on Veterans’ Affairs 

( 


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COMMITTEE ON VETERANS’ AFFAIRS 

JEFF MILLER, Florida, Chairman 

CLIFF STEARNS, Florida 

DOUG LAMBORN, Colorado 

GUS M. BILIRAKIS, Florida 

DAVID P. ROE, Tennessee 

MARLIN A. STUTZMAN, Indiana 

BILL FLORES, Texas 

BILL JOHNSON, Ohio 

JEFF DENHAM, California 

JON RUNYAN, New Jersey 

DAN BENISHEK, Michigan 

ANN MARIE BUERKLE, New York 

TIM HUELSKAMP, Kansas 

MARK E. AMODEI, Nevada 

ROBERT L. TURNER, New York 

BOB FILNER, California, Ranking 

CORRINE BROWN, Florida 

SILVESTRE REYES, Texas 

MICHAEL H. MICHAUD, Maine 

LINDA T. SA ́ NCHEZ, California 

BRUCE L. BRALEY, Iowa 

JERRY MCNERNEY, California 

JOE DONNELLY, Indiana 

TIMOTHY J. WALZ, Minnesota 

JOHN BARROW, Georgia 

RUSS CARNAHAN, Missouri 

HELEN W. TOLAR, Staff Director and Chief Counsel 

Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public hearing records 

of the Committee on Veterans’ Affairs are also published in electronic form. The printed 

hearing record remains the official version. Because electronic submissions are used to 

prepare both printed and electronic versions of the hearing record, the process of converting 

between various electronic formats may introduce unintentional errors or omissions. Such occurrences are inherent in the current publication process and should diminish as the process 

is further refined. 


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C O N T E N T S 

August 13, 2012 

Page 

The New Orlando VA Medical Center: Broken Ground, Broken Promises ........ 1 

OPENING STATEMENTS 

Chairman Jeff Miller ............................................................................................... 1 

Prepared statement of Chairman Miller ........................................................ 54 

Senator Bill Nelson .................................................................................................. 3 

Hon. Corrine Brown, Democratic Member ............................................................ 4 

WITNESSES 

Mr. Glenn D. Haggstrom, Principal Executive Director, Office of Acquisitions, 

Logistics, and Construction, U.S. Department of Veterans Affairs ................. 5 

Prepared statement of Mr. Haggstrom ........................................................... 55 

Accompanied By: 

Mr. Robert L. Neary, Jr., Acting Executive Director, Office of Construction 

& Facilities Management, U.S. Department of Veterans Affairs .................... 5 

Mr. Chris Kyrgos, Supervisory Contracting Officer, Office of Construction 

and Facilities Management, U.S. Department of Veterans Affairs ................. 5 

Mr. Bart Bruchok, Senior Resident Engineer, Office of Construction and 

Facilities Management, U.S. Department of Veterans Affairs ......................... 5 

Mr. Jim Gorrie, President and Chief Executive Officer, Brasfield & Gorrie ...... 32 

Prepared statement of Mr. Gorrie ................................................................... 57 

Accompanied By: 

Mr. George Paulson, Vice President/Division Manager, Brasfield & Gorrie ...... 32 

MATERIAL SUBMITTED FOR THE RECORD 

Post-Hearing Questions and Responses for the Record: 

Hon. Jeff Miller, Chairman, Committee on Veterans’ Affairs to Honorable 

Eric K. Shinseki, Secretary, U.S. Department of Veterans Affairs .......... 59 

Honorable Eric K. Shinseki, Secretary, U.S. Department Veterans’ Affairs 

to Honorable Jeff Miller, Chairman, Committee on Veterans Affairs ...... 59 


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THE NEW ORLANDO VA MEDICAL CENTER: 

BROKEN GROUND, BROKEN PROMISES 

MONDAY, AUGUST 13, 2012 

U.S. HOUSE OF REPRESENTATIVES, 

COMMITTEE ON VETERANS’ AFFAIRS, 

Washington, DC. 

The Committee met, pursuant to notice, at 9:10 a.m. at College 

of Medicine Health Sciences, University of Central Florida, 6850 

Lake Nona Boulevard, Orlando, Florida, Hon. Jeff Miller [Chairman of the Committee] presiding. 

Present: Senator Nelson, Representatives Miller, Bilirakis, and 

Brown. 

Also Present: Representatives Webster, Nugent, Adams and 

Mica. 

Staff Present: Samantha Gonzalez, professional staff member. 

OPENING STATEMENT OF CHAIRMAN MILLER 

The CHAIRMAN. The Committee will come to order. We will recognize Ms. Brown when she arrives. And before we begin, I ask unanimous consent that our colleagues from Florida, Senator Bill Nelson, Representative John Mica, Sandy Adams, Rich Nugent, and 

Danny Webster, be allowed to sit at the dais to participate in today’s hearing. 

Hearing no objection, so ordered. 

I want to welcome everybody today. I appreciate you coming to 

our full Committee hearing on ‘‘The New Orlando Department of 

Veterans Affairs Medical Center, Broken Ground, Broken Promises.’’ 

I am grateful to all of my colleagues that have come today and 

our witnesses as well as the interested members of the community 

and the veterans that are here. We appreciate your service and 

your interest in this facility. 

I also want to thank UCF for the space that we are using today, 

the cooperation in providing us with this room right here in the 

heart of Medical Center City. 

When ground was broken in 2008 on what will eventually become the new Orlando VA Medical Center, this area was a mere 

shadow of what it is today. Since then, ideas and plans that existed 

on paper and in the minds of architects, designers and engineers 

have evolved into existing infrastructure and active medical and research institutions. 

You can tell from some of the crowds in the hallway right now, 

particularly the folks carrying backpacks, this is the first day back 


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at school for this medical school. They broke ground in 2007. 

Opened in 2010. 

Behind us is the Sanford-Burnham Medical Research Institute, 

which broke ground in 2007 and opened its doors in 2009. Next to 

Sanford-Burnham is the University of Florida’s Research and Academic Center, which broke ground in 2010 and will open later to 

the faculty and students this year. 

Across the way—we passed it on the way in—is the Nemours 

Childrens Hospital, which broke ground in 2009. It will open to patients just 2 months from now. 

Yet our Orlando VA Medical Center, which was scheduled to be 

complete in October of this year and anchor of this city, is still an 

empty shell. Four years and hundreds of millions of taxpayer dollars later VA has yet to yield anywhere close to the same results 

of any of its neighbors. 

It was not our intention to hold this hearing here. We wanted to 

hold it at the VA Medical Center, but a forum like this would not 

be possible there. 

Brand new state of the art facilities are all around us. Students 

are being educated. Yet, VA can’t turn the lights on, much less accept visitors inside their facility. 

During our committee’s oversight hearing in March the VA acknowledged that design errors, omissions and changes in medical 

equipment and procurement delays, as well as VA oversight and 

management failures, led to serious construction delays. 

In fact, Mr. Glenn Haggstrom, who is here with us today as a 

VA witness, in response to questioning, stated that ‘‘Brasfield and 

Gorrie’s credentials in constructing health care facilities are second 

to none.’’ And he said, ‘‘I am not placing the blame on Brasfield & 

Gorrie at all. We fully recognize that we did have problems.’’ 

The end result was a commitment to work diligently and collaboratively with the contractor to complete construction and begin 

serving the veterans and families of Central Florida as expeditiously as possible. Yet the intervening months have brought more 

finger pointing and very, very little progress. 

It is perplexing to me that recently, in June, the department provided a fact sheet that began by stating the VA is working collaboratively with the prime contractor to get construction completed as 

soon as practicable, yet concluded with the statement that VA has 

issued a cure notice to Brasfield & Gorrie citing the contractor’s inability to diligently pursue the work and to provide suitable manpower to make satisfactory progress. 

Today VA is going to testify that the Medical Center is 60 percent complete and on track to open in 2013. However, since January VA has been telling us that the Medical Center is 60 percent 

complete and on track to open in 2013, even though the contractor 

had repeatedly stated that construction is not 60 percent complete, 

nor is VA’s timeline realistic. My single interest is the expeditious 

completion of this facility for the veterans of Central Florida, who 

have been waiting for almost a decade for a new medical center to 

open. 

What this community is capable of is clear. All you have to do 

is look around you as you leave this facility today. It is time to finVerDate Mar 15 2010 00:38 Mar 30, 2013 Jkt 075617 PO 00000 Frm 00006 Fmt 6633 Sfmt 6633 I:\WAYS\OUT\75617.XXX GPO1 PsN: 75617

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ish what was started so many years ago. Today I want answers as 

to how we are going to accomplish this for our veterans together. 

Again, I want to thank all the members and Senator Nelson for 

being with us today. In lieu of Miss Brown’s late arrival, I would 

yield the floor to Senator Bill Nelson, who has been actively watching this facility long before the ground was ever broken. 

[The prepared statement of Chairman Miller appears on p. 54.] 

OPENING STATEMENT OF SENATOR NELSON 

Senator NELSON. Mr. Chairman, I want you to know how much 

we appreciate you bringing this hearing here. You are a fellow Floridian and you are passionate about protecting and caring for our 

veterans, and I want you to know how much we appreciate it. 

This project, we need to get off the dime and get it done. This 

is a project that has been over three decades in the works. It was 

in the early eighties, when I had the privilege of serving in the 

House, that the Veterans Administration made a policy change 

that a VA hospital did not have to be located next to a medical 

school. 

As a matter of fact, you think back to the old days, they were 

in Gainesville. They were in Miami. The one exception was there 

was a hospital in the Tampa Bay area. 

They changed that policy. And the Veterans Administration, because of the explosion of growth of veterans in Florida, identified 

four areas in Florida. And they said they will go in this order. 

The first will be the West Palm Beach area. And that hospital 

has been up and operating for a number of years. The second will 

be east Central Florida. And then the third and fourth will be either in the Panhandle and/or the Fort Myers area. 

Now, that was over three decades ago. And so once the West 

Palm Beach office got done, then the question was where was it 

going to be? And of course that has been a debate of some magnitude for a long period of time. And finally it was located. And finally it was going to happen in October of 2012. 

I have talked to Secretary General Shinseki, and he assures me 

that he is going to have it done by next summer. But that is 8 to 

10 months late. And he used the same figure that you just did, 60 

percent complete. 

But the fact is we were supposed to have well over a thousand 

workers out here working on it right now, and there is only somewhere between 2 to 400 that are working. And as you get the testimony here, I wish you would get that exact figure. And it is because of you, Mr. Chairman, and your committee, I think you are 

going to keep the focus of the spotlight on this until it gets done. 

Now, this is what they started off with right here, these base 

drawings. Then they got revised to that. And the question is, why? 

Why can’t you take a timeline that was supposed to happen and 

make it happen? And maybe your panel number two with Mr. 

Gorrie will be able to shed some light on that, as we have seen the 

finger pointing go as it has gone. 

So, Mr. Chairman, I want you to know I really appreciate this. 

You know, originally this hospital was going to be in Viera, which 

is in central Brevard. And then the question was, was it going to 


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be as the crow flies some distance of 25 miles? Either it was going 

to be there, or it was going to be on the east side of Orange County. 

Once we got the location decided by the VA making their studies, 

now it is time to get it done. So thank you, Mr. Chairman. 

The CHAIRMAN. Thank you very much, Senator, for being here 

today. I know your schedule is very busy. And we invite you to stay 

as long as you possibly can. 

Members, I would also ask that we waive opening statements. 

They will be entered into the record at the appropriate place. 

I just want to welcome our first panel today. And, with your indulgence, at some point I probably will ask Miss Brown if she 

would like to go ahead and do her opening statement or wait until 

we shift panels. We will just see how things play out today. 

On our first panel is Mr. Glenn Haggstrom, the principal executive director of the Office of Acquisitions, Logistics and Construction. 

And here comes Miss Brown. So we will—I beg your indulgence—we will allow Miss Brown to go ahead and do her opening 

statement for us. We will wait for her arrival at the dais. Thank 

you. 

OPENING STATEMENT OF MS. BROWN 

Ms. BROWN. Well, good morning. Let me just say that it is always a challenge getting around in this most diverse district, and 

the transportation is always an issue, even when I am coming to 

the veterans hearing. 

I have been working on getting a veterans hospital in this area 

for over 25 years. When I first was elected to Congress it was right 

during the BRAC period. And I brought in the Honorable Jesse 

Brown to Central Florida. And we went to the VA health facility. 

And it was really a mess. 

And during the BRAC period the hospital that was there was a 

military hospital. They were going to mothball that hospital. Well, 

when Secretary Jesse Brown came to Central Florida and saw that 

beautiful facility, he worked with the Department of Defense, and 

we got that hospital turned over to Veterans’ Affairs. 

And so we have had that clinic there that was formerly a hos- pital. Of course we had to get additional funding, nearly $25 million. But it is up and operational. It is serving the veterans in this 

area. And when we get that hospital up and operational, I want to 

make sure we continue to use that facility. 

But even with the support of the Secretary, it took another 15 

years until we made it into the VA 5-year construction plan. Really 

shouldn’t take that long to get a facility up, operational, and in the 

system when you have the needs that we have for veterans. 

The Orlando clinic now serving Orlando is not adequate to properly treat the area veterans, but it would supplement the new facility and increase the treatment options for Central Florida veterans. 

I strongly encourage the VA to keep this facility in use. 

I am very pleased that the VA Medical Center will be co-located 

with the University of Central Florida on this beautiful campus 

here today, Medical Center, and near the urban medical complex. 

The new center, along with the Burnham Institute, will create a 

biotech cluster at Lake Nona, allowing the area to become one of 


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which doctors and researchers can work together on the needs of 

our area veterans. 

It is known that teaching hospitals provide the best health care 

available, which is invaluable for the VA and Central Florida veterans. However, the veterans of the Central Florida area cannot 

wait any longer for a full medical Central Florida building. 

Once again, we are having a full Committee hearing on a single 

project. I am surprised, to say the least, that after the hearing 5 

months ago, in March, we are having another hearing on the same 

facility. 

I hope this is not political, because the Veterans’ Affairs Committee has never been political in the 20 years I have been on the 

Committee. But I do know that tomorrow is a primary. 

And so it is very strange that we are having a full Committee 

hearing the day before the primary in Florida, but not at the expense of interfering—I hope this hearing would not interfere in the 

working of getting the facility built up and operation. 

The first hearing we demanded that the VA address many situations to get the facility built. And they have followed our direction 

and used established procedures to resolve differences with the contractors. 

We must put politics aside when it comes to the VA and the veterans, and do what is best. Keeping with the Jesse Brown slogan, 

let us put veterans first. And that is my position. 

I yield back the balance of my time. 

The CHAIRMAN. Thank you very much. We are glad to have you 

with us, as I have already welcomed all of our Florida contingents 

with us. 

We were in the process of introducing Mr. Haggstrom, who is 

going to testify on behalf of the VA today. He is accompanied by 

Robert Neary, the acting executive director of the Office of Construction and Facilities Management; Chris Kyrgos, the supervisory contracting officer for the Office of Construction and Facilities Management; and Bart Bruchok, senior president, resident engineer of the Office of Construction and Facilities Management. 

Thank you again, all of you, for being here today. Mr. 

Haggstrom, you are recognized for five minutes. 

STATEMENT OF GLENN HAGGSTROM, PRINCIPAL EXECUTIVE 

DIRECTOR, OFFICE OF ACQUISITION, LOGISTICS AND CONSTRUCTION [OALC], DEPARTMENT OF VETERANS AFFAIRS; 

ACCOMPANIED BY ROBERT L. NEARY, JR., ACTING EXECUTIVE DIRECTOR, OFFICE OF CONSTRUCTION AND FACILITIES MANAGEMENT; CHRIS KYRGOS, SUPERVISORY CONTRACTING OFFICER, OFFICE OF CONSTRUCTION AND FACILITIES MANAGEMENT; BART BRUCHOK, SENIOR RESIDENT ENGINEER, OFFICE OF CONSTRUCTION AND FACILITIES MANAGEMENT. 

OPENING STATEMENT OF MR. HAGGSTROM 

Mr. HAGGSTROM. Thank you. Thank you, Mr. Chairman. 

Mr. Chairman, Congresswoman Brown, and Members of the 

Committee, I am pleased to appear here this morning to update the 

Committee on the status of the construction of the new VA Medical 


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Center in Orlando. I will provide a brief oral statement and request 

that my full statement be included in the record. 

The CHAIRMAN. Without objection. 

Mr. HAGGSTROM. Our continuing goal is to complete and activate 

this facility as quickly as possible to serve Florida’s veterans, who 

deserve nothing less. Although the project has not progressed as 

originally planned, at no time have veterans been without the care 

they required. 

As VA has stated before, our mission is to serve veterans, which 

includes delivering first rate facilities. VA bears the responsibility 

to manage all projects efficiently and to be good stewards of the resources entrusted to us by Congress and the American people. 

In the execution of the Orlando project six construction contracts 

have been awarded. Work under the first five has been completed, 

with construction under the final contract for the main hospital 

and clinic underway and approximately 60 percent complete. 

Regrettably, this final phase of construction has experienced 

problems in two areas: VA’s revision to facility construction drawings, and the slow progress of construction by Brasfield & Gorrie, 

the prime contractor. 

While VA continues to work with the contractor to resolve issues, 

there was increasing concern with the lack of manpower on the job 

and progress made in constructing the main hospital and clinic. As 

time progressed, the pace of activity at the job site failed to increase, as Brasfield & Gorrie indicated it would, and required on 

a project of this magnitude. 

On June 15th, 2012, the contracting officer issued a contract cure 

notice to Brasfield & Gorrie, identifying two of their failures to 

comply with the VA contract. The first relates to Brasfield & 

Gorrie’s failure and in some cases refusal to diligently pursue the 

work. And the second relates to the lack of sufficient workforce on 

the project. 

On June 25th, 2012, in response to the cure notice Brasfield & 

Gorrie committed to increasing the workforce and pursuing work 

more broadly within the building. In response to Brasfield & 

Gorrie’s commitments, on July 10th, 2012, the contracting officer 

established an evaluation period running through August the 9th, 

2012, and advised Brasfield & Gorrie that their efforts would be observed throughout this period to gauge implementation of its commitment. 

I realize that the key question you all have is, when will this 

hospital be completed and available to serve veterans? There has 

been a substantial difference in the achievable dates between the 

two parties, with VA estimating the project can reasonably be completed in the summer of 2013 based on an analysis of the remaining work and construction extensions granted at the time the analysis was performed. The completion date was determined using 

Brasfield & Gorrie’s approved baseline schedule and the originally 

planned resources. 

Since the time my written statement was submitted, last week 

both teams came together to review the revised schedule Brasfield 

& Gorrie submitted to VA on August the 1st. In that schedule 

Brasfield & Gorrie estimated that construction on the hospital 


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being substantially complete the fourth quarter of calendar year 

2013 was achievable. 

Significant progress was made in gaining a better understanding 

of how each party views achieving the completion date. And there 

is another meeting scheduled to take place on August the 16th to 

continue the dialogue and take into consideration an additional 

time extension Brasfield & Gorrie has requested to complete the 

project. The VA looks forward to continuing the scheduling discussions and working to establish a contractually binding completion 

date in the coming weeks. 

As a result of the challenges faced on the Orlando project, I 

would like to report to the Committee that the department has undertaken a comprehensive review of its construction program. This 

review, which includes the formation of a construction review council chaired by the secretary, has examined the department’s infrastructure programs and identified areas where they can be improved. We are in the process of compiling a report on the council’s 

proceedings and will share that with the Committee once completed. 

In closing, we are prepared to answer the questions that the 

Members of the Committee may have. However, while VA intends 

no disrespect to the Committee, to ensure the integrity of the contracting process, we are unable to address questions specifically 

pertaining to the recently completed evaluation period or the ongoing scheduling discussions, as the contracting officer is in the process of making a determination and we do not want anything discussed here today to potentially influence that decision. As soon as 

the determination is completed we will provide an update to the 

Committee. 

Thank you for the opportunity to testify before the Committee 

today. 

[The prepared statement of Glenn Haggstrom appears on p. 55.] 

The CHAIRMAN. Thank you very much, Mr. Haggstrom. I talked 

about your comments in the hearing back in March. A lot of people 

talked about the fact that we thought that things were beginning 

to progress, that communication had gotten better, and then the 

department decided to proceed with the notice of cure. 

And so I would like to start off with the first round of questions, 

in which there will be several rounds this morning, by asking who 

participated in making the decision to issue the cure notice? And 

at what point leading up to the decision was the contractor even 

maybe not made aware that the cure notice was coming, but that 

there was a possibility that something like that would take place? 

Mr. HAGGSTROM. Mr. Chairman, the cure notice is determined 

and issued by the contracting officer. The contracting officer has 

the sole discretion within the Federal contracting community to do 

so. 

That determination, in terms of whether or not a cure notice 

would be issued, could be a result of discussion with subject matter 

experts, various meetings the contracting officer attends with the 

contractor and things like that. Again, it is their sole determination 

to make that decision. 


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The CHAIRMAN. So I am to believe that you and Mr. Neary and 

maybe others at the table had no input in whether or not to issue 

a notice of cure? 

Mr. HAGGSTROM. We did not directly. The contracting officer 

would issue a cure notice. 

The CHAIRMAN. You had no input. 

Mr. HAGGSTROM. I had input in the standpoint of the discussions 

that took place as we met with the contracting officer on what 

progress had been made on the project and things like that. 

The CHAIRMAN. You just told me that you will not be able to comment on when the contracting officer will make the decision as to 

how we will go forward. The review period was up Friday. Should 

we expect something soon? 

I am not trying to nail down five, six, ten days. Hopefully sooner 

rather than later, so that the contractor can move forward, if in 

fact the contractor is staying—but you have already said that you 

won’t comment on that. 

In Brasfield & Gorrie’s written statement they describe over $60 

million in underfunded change order proposals and requests for equitable adjustments. What I would like to know is what VA’s plan 

is to deal with a discrepancy as large as $60 million? 

Mr. HAGGSTROM. Certainly, Mr. Chairman. In order to keep 

projects like this moving, we use several methods to continue the 

payment. First is a change order, where we will issue a payment 

to keep the project moving until we determine what the final pricing on that particular change order may be. 

Subsequent to that there is a vehicle which we call a settlement 

agreement. That settlement agreement is then used between the 

two parties once we arrive at a mutually agreeable price. Once that 

settlement agreement is signed, for all intents and purposes that 

particular change is off the table and the contractor has been compensated for it. 

The final one is the settlement determination. The settlement determination is a unilateral vehicle that the contracting officer has 

at their disposal in which they will determine what a fair and reasonable price is based on the independent government cost estimate and other information that would be available to them. 

This does not necessarily mean that there is an agreement between the contractor and the government as to the final cost of 

that change order, and that the contractor at some point in time 

may pursue additional funds to do it. 

Currently the value of changes that we have issued against this 

contractor is approximately $42.7 million. There is still exposure 

out there, which we continue to work within VA and with Brasfield 

and Gorrie to make a final determination on what those costs will 

be. 

The CHAIRMAN. And one final question. You said no further appropriations above $616 million; you should be able to finish it 

without any other appropriation. Does that mean appropriations 

for this project? Will funds be shifted from other projects? Or do 

you think 616 or close to that is going to be the final number? 

Mr. HAGGSTROM. Currently, Mr. Chairman, we believe we can work within the $616m appropriated for this project. 

The CHAIRMAN. Miss Brown. 


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Ms. BROWN. You want me to—okay. Yeah. 

You know, I am often concerned that when we—616 was the 

amount. We talking about millions. And we appropriated the 

money up front. 

And I guess it is hard for people that are not elected officials or 

administrators to understand how you can have all of the money 

and then have all of these delays that we have had, and why is it 

that we could not get VA and the construction team to move it forward with the date that we initially planned. I mean, we are talking about 2013. And I was hoping that we would be able to open 

up in the next couple of months. 

So can you explain to me—at the last meeting in Washington we 

discussed—and I don’t want you to discuss anything that is secretive—but what is it that we need to do to move these projects forward? Because we got several throughout the country. 

And I understand that you all have done a comprehensive plan. 

But a lot of veterans feel like it is taking too much time. And if 

you have the money, then what is the issue? 

Mr. HAGGSTROM. I appreciate that, Miss Brown. And certainly 

the department is very grateful to the Congress for the appropriations that we receive to build health care facilities, national cemeteries, and provide benefits to our veterans. 

In this particular project, if you look back on the history of it, 

the first appropriation the department received was in 2004, with 

the last appropriation received in the year 2010. And we do that 

for a number of reasons, because of the complexity, the ability to 

obligate money, the size of these projects, and things like that. 

And so it is a phased approach that VA uses. And Congress has 

agreed with us up to this point in time to be good stewards of those 

money and not obligate funds or tie up funds in appropriation 

which may not subsequently be used for a year or two down the 

road. So from the standpoint of being stewards of the money that 

you provide to us, it does make sense to approach that in a phased 

approach. 

When you look at this project, there have unfortunately been 

issues, as we have discussed earlier. I think overall we try very 

hard and do a very good job in providing major construction services to the department. 

I truly believe we can continue to work this through this project. 

And although we will not deliver it as we had originally intended 

to in the year 2012, in October, we will be able to move forward 

and ultimately deliver this project to our veterans. 

Ms. BROWN. And what is the new time frame? You said August 

1 you all decided on a date. 

Mr. HAGGSTROM. What had happened is VA, in reviewing the 

schedule that had been provided to us and where we should be at 

this point in time, we firmly believe that the summer of 2013 is 

achievable. 

What we are very encouraged by is that one time Brasfield & 

Gorrie relayed that there would be perhaps a 2015 completion date. 

In the schedule that we were provided in response to the government’s cure notice on June 25th that was brought back into late 

2014. And as of a review of the latest schedule provided to us on 


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August the 1st, it would appear that we could have substantial 

completion of the facilities in late 2013. 

So that is progress to us. That is dialogue that continues with 

Brasfield & Gorrie as a partner in this. And when you look at these 

schedules, they are very complex. There are over 11,000 lines of activities taking place. And we just had a very cursory opportunity 

to get into the discussions with Brasfield & Gorrie last Thursday 

and Friday. 

As I said, we are moving forward later this week to continue 

those discussions. We will have the opportunity to do a deep dive 

into the schedule. And we hope, and we believe, that perhaps there 

is still opportunity to move the project to the left, if you will, and 

accelerate it. 

Ms. BROWN. Well, I want to thank you. And I like the idea that 

you all are meeting consistently, and I appreciate that. 

At the last meeting we had in Washington there was some discussion about bringing in some consultant. And I personally do not 

think that we need an independent consultant; that the department and the company will be able to resolve the issues, particularly if you all are meeting constantly, going over these issues. 

So, thank you. And I yield back the balance of my time. 

The CHAIRMAN. Thank you, Ms. Brown. Mr. Bilirakis has yielded 

for the round of questions to go to Senator Nelson first. Senator. 

Senator NELSON. Thank you, Congressman Bilirakis. I just have 

one quick line of inquiry, because you all are going to cover so 

much of this. 

One of the great things about this VA center is it is going to have 

a research facility. It is going to have a nursing home. And it is 

going to have a homeless vet’s facility. 

Now, the homeless vets facility is about complete. So is the nursing home. So why don’t we put that online? So when can that open? 

Mr. HAGGSTROM. Senator Nelson, the issue there is, while the 

domiciliary is complete and the CLC is being ready to be turned 

over to VA, there is a tendency to not operate those facilities because of the completion of the main clinic. And that goes to the 

kitchen facilities, the laboratory facilities, the pharmacy facilities 

and things like that. 

Until those core areas are finished, it is not advisable to bring 

these other facilities online, because we would have to make either 

deliveries from the current medical facility or things like that. So 

being able to serve the veterans to the level they need to be serviced, that can’t be accomplished until we finish these core facilities. 

Senator NELSON. Thank you, Mr. Chairman. It is too bad. It is 

just too bad. 

Ms. BROWN. Can I follow-up? 

The CHAIRMAN. Miss Brown. 

Ms. BROWN. You know, sometime I think we have to think out 

of the box. Because I found facilities with these similar problems 

in California. And I would like for you all to review what we could 

do to expedite these other two, the homeless and the other facility, 

to complete. It is worse that we have completed a facility and it is 

going to stand there for a year, waiting on the main facility. 

So if the services are available in the area, and you can contract 

them out and get supportive, how many people will be serviced in 


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this area if we could move forward? How many people homeless 

and how many people will be able to stay in the other facility? 

Mr. HAGGSTROM. I believe the domiciliary is a 60-bed facility, 

and I believe the community living center is 120-bed facility. 

Ms. BROWN. So we would be able to accommodate over 160 people, and we could put people that need the services there while we 

wait for a system that is not there yet, a year, that we do have 

these supportive services in the community, and people are ready 

to serve. I really wish you all would follow up and review what we 

could possibly do to expedite these projects. 

You know, I am part military now. What happens when failure 

is not an option? You get it done. So please review that. 

The CHAIRMAN. Mr. Bilirakis. 

Mr. BILIRAKIS. Thank you. Thank you. I appreciate it, Mr. Chairman. Thank you so much. Thank you for your testimony, Mr. 

Haggstrom. I have a couple of questions. 

First you stated in the opening statement that the veterans are 

getting the care in spite of the delays. However, don’t they have to 

travel far, you know, an inconvenience, a distance, as maybe Bay 

Pines, Haley, and other hospitals around the state to get the cure 

that they need? 

What is the percentage of veterans that have to travel to these 

long distances to get the care that they need? For example, go to 

Haley or Bay Pines. Could you give me a percentage? 

Mr. HAGGSTROM. Mr. Bilirakis, I do not have that number available. 

Mr. BILIRAKIS. I am concerned about the inconveniences. 

Mr. HAGGSTROM. I understand that. I do not have the number. 

If we could take that question for the record, we would be happy 

to respond to that. 

Mr. BILIRAKIS. I would like to have that information—— 

Mr. HAGGSTROM. Sure. 

Mr. BILIRAKIS [continuing]. For the record, if you could, please. 

When was the last time modified design drawings were submitted to the contractor? 

Mr. HAGGSTROM. If I could ask Mr. Bruchok to address that, 

please. He is our senior record engineer on the project. He is stationed here and works on this project on a day-to-day basis. 

Mr. BRUCHOK. Yes, sir. Thank you for your question. 

Sir, frankly, modified drawings are issued weekly. Part of the 

construction progress process, the bulk of the drawings that were 

issued in the period from January through March were to address 

procurement of medical equipment. Those were issued on the 

schedule that we committed to. 

But certainly each week a project this complex has things that 

are discovered in the field and as the report progresses require 

intervention or clarification from the architects of record. And the 

answer is issued to the contractor in the form of a drawing. 

Mr. BILIRAKIS. Thank you. Next question, sir. How did you come 

to the determination that the hospital was 60 percent complete? 

Mr. HAGGSTROM. The 60 percent complete is based on the contractor’s critical path and the schedule they had sent to us. And 

also that is how we determine payments that are made to the contractor. 


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So, in reality the construction inspection process, aligning that 

with the critical path that the contractor has provided to us, those 

are how we establish the 60 percent completion date. 

Mr. BILIRAKIS. How often does the VA meet with the prime contractor to ensure that the VA has provided them with what they 

need to move forward with the project? 

Mr. HAGGSTROM. These meetings take place sometimes on a 

daily basis, on a weekly basis. There is a continual dialogue between the onsite resident engineering staff that VA has here and 

the contractor’s workforce. 

Since the time that the cure notice was issued to Brasfield & 

Gorrie, both Mr. Neary and myself have been on site weekly to 

meet with Brasfield & Gorrie’s senior leadership. Walk through the 

hospital. Allow them to show us what has been accomplished during this period of time. 

Prior to that we did have several meetings with Brasfield & 

Gorrie, especially in January, to work through some of these issues 

with the medical equipment. So there has been a continual dialogue at all levels of this project and responsibility in an effort to 

move it forward. 

Mr. BILIRAKIS. Thank you, Mr. Chairman. I yield back the balance. 

The CHAIRMAN. Thank you very much. Next is Chairman Mica. 

You are recognized for your questions for five minutes. 

Mr. MICA. Thank you. First of all—let us get this thing on. Think 

I am at a distance? Good. 

Well, first of all, thank you, Mr. Chairman, for bringing this 

hearing to our community and for your constant attention to making certain that our veterans are provided with the best medical facilities possible. You have been unrelenting. Thank you also, Mr. 

Bilirakis, a Ranking Member today, and my colleague. 

A couple of things. First of all, I guess there is some I guess 

semi-good news. It sounds like you have gotten some communications going with the contractor in possibly speeding up the completion of the hospital facility until last quarter of next year. Is that 

correct? 

Mr. HAGGSTROM. That is correct. 

Mr. MICA. That is a good direction, because 2015 is a long ways 

away. And as Senator Nelson and Chairman Miller and others 

have pointed out, our veterans have waited too long. 

I had an opportunity to be briefed, and there is also some other 

good news, if you could confirm it. The power plant is complete. 

The garage is complete. The chapel is complete. The domiciliary 

care unit, where we met, is complete. And soon to be turned over 

in the next few weeks is the nursing facility. Is that correct? 

Mr. HAGGSTROM. That is correct. And also the warehouses. 

Mr. MICA. And I think I was informed around $20 million under 

estimated cost. Is that the neighborhood? 

Mr. HAGGSTROM. We did have good savings. 

Mr. MICA. Can you confirm that? 

Mr. BRUCHOK. Yes, sir. 

Mr. MICA. So those are basically done. The nursing facility, what, 

within a month or so? 


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Mr. BRUCHOK. We are in the process of accepting that now. The 

final inspections are complete. You are correct, the prior phases did 

yield savings to the government of over $20 million. 

Mr. MICA. Okay. So there is some good news, over $20 million 

in savings on the veterans facility. But the issue of getting those 

services online still remains. So I look forward to getting those 

things up and running as soon as possible. But it is contingent 

also, I guess, on the hospital facility. 

And I am not going to get into pointing fingers on the delays. We 

just need to get it resolved. And there may be some litigation between VA and the contractors. We are not going to get in the middle of that. The main thing is getting it done. 

Then the other thing too—well, two things, Mr. Chairman. I was 

glad to hear there won’t be any cost overruns. In case there are any 

cost overruns, I would like this colloquy between myself and Chairman Culberson be made part of the record. 

Mr. MICA. Because I think it is important if there are cost overruns, our veterans don’t want excuses. They want their project 

done. And Chairman Culberson committed to me on the floor that, 

if there are cost overruns, that he would support us if we have an 

issue there. 

The other thing I—my committee doesn’t oversee VA buildings, 

although we get into some issues, like the replacement of New Orleans hospital, because of our jurisdiction in FEMA. But I am concerned about empty Federal buildings, whether they are VA, GSA, 

or any others. 

And I sent last week—and I will share a copy and also ask it to 

be submitted to the record—a letter to the Secretary of Veterans’ 

Affairs to make certain that the Lake Baldwin facility is not left 

vacant. 

Mr. MICA. This asks that it remain as a primary care veterans 

clinic. And also the possibility of some of the use of rest of the facility either for inpatient or domiciliary care, because we have lots of 

veterans returning. 

So I don’t want an empty building. I don’t want to have to be 

talking to you about empty buildings. And it is important to our 

veterans that we have that service. And if you could make that a 

part of the record, I would appreciate that. 

And I would ask also my colleagues, I will be circulating a letter 

from the Florida delegation and others who wish to sign to also 

support that we keep the Lake Baldwin facility to the use and benefit of our veterans. 

So I think—do you have a problem with that? I know you are acquisitions—— 

Mr. HAGGSTROM. No, sir. I understand. I have not seen a copy 

of the letter that you have sent to the Secretary. Nor am I aware 

of any final decision as to Lake Baldwin and what the final use will 

be. 

Mr. MICA. I want to make sure—in fact, I will airmail a couple 

to you right there. But thank you, Mr. Chairman. And thank you 

again for holding this hearing and working with us as we get these 

issues that are important to our veterans in order. 

Yield back. 

The CHAIRMAN. Mrs. Adams. 


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Mrs. ADAMS. Thank you, Mr. Chairman. And I too am concerned 

about the delays. I read in the paper just recently that you had 

come out and said that we were going to have a completion summer of next year, which was very exciting to me, but concerning at 

the same time because of what we were seeing, what we were hearing here on the ground. 

And so I want to ask you, how do you come up with the summer 

of next year, come out and say it, and then come to this meeting 

and say, well, we have done some checking and now it is November, maybe early—it could actually be end of the year, maybe even 

going into the first of next year, the following year, 2013? 

Did you, at the time you made this announcement, had you 

talked with the contractors? Did you have something concrete before making this statement? The reason I ask you this is because 

we have several hundred thousand veterans that rely and look forward to this hospital. 

And this is not political to me. It is very personal to me. I am 

a military family member. My father was World War II and Korean 

War. He is still with us, and he is old. 

But I have met with our returning new warriors and all the different programs that are going on. And they need this hospital to 

be completed. And I know it is inconvenient. But it is not just inconvenient. Some of these men and women, it is too painful. It is 

painful for them to travel these distances. 

So I ask you, when you made this announcement did you have 

the information? Because now you are here saying it is a different 

date. And in the paper you also said there was a plan B if you 

couldn’t get to this. So I would like you to explain that to us. 

Mr. HAGGSTROM. Thank you, Congresswoman Adams. When we 

made those decisions, that was based on the approved critical 

schedule, critical path schedule, that Brasfield & Gorrie had provided to us. 

With regard to what I just mentioned in my oral statement, that 

was an appreciation that these projects could be completed in 2013. 

It does not reflect what VA believes is the contractual completion 

date that has yet to be established. 

And so while there is a recognition based on the new schedule 

that Brasfield & Gorrie has provided us, they have pulled back the 

completion date substantially from the 2014 that was provided to 

us. 

But at the same time we still believe that if we go into the schedule, there is opportunity to move to 2013. If I could ask Mr. 

Bruchok to comment on that. He has been involved very in detail 

with the scheduling process and can perhaps shed more light on 

that for you. 

Mr. BRUCHOK. Yes ma’am. That was a good question. The information we had in hand when we said summer of 2013 was not only 

our own assessment, but we had HDR Architecture, a recognized 

health care firm, go through and do a month long analysis of the 

amount of work that was complete, what was remaining, and using 

our resource loading in schedule, what could be achieved. We still 

feel that is achievable. 

But the date that Mr. Haggstrom referred to is a backing off, if 

you will, of the contractor’s assessment. It was totally collaborative 


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with VA. We sat in a room and said there are other ways to attack 

the project different than your critical path. And we have all 

agreed that we are moving that date back. 

Mrs. ADAMS. Okay. At the time that you had this person do this, 

did they have access to all these extra drawings that were—— 

Mr. BRUCHOK. Absolutely. I think these drawings and binders 

make a great visual impact. And I am sure they are very meaningful to the people here in the room. 

But to people like myself, professional engineer and my team and 

the architect and engineer, this is the world we live in. I mean, 

these drawings and binders sit in our trailer. You know, we have 

received it. We have analyzed it. We have issued it. And the contractor executes it. So, I mean, this is nothing new to us. This is 

the job we do. 

Mrs. ADAMS. I understand that. And I have a young daughter 

who is an engineer. But I have a lot of concerns. I hear plan B. 

I hear this date. These dates are floating around. I have veterans, 

we have wounded warriors coming home. They are all counting on 

you guys to get this right and get it done. 

You know, I am not here for pointing fingers either. But what 

we would like to know is truly what our veterans can hold on to. 

What can they believe? Because a week or two ago it was the summer. Now this week it is the end. 

We need for you to have a real discussion with the contractors, 

and then make an announcement based on all the facts. 

I yield back. 

The CHAIRMAN. Mr. Bruchok, certainly you didn’t mean that the 

issues that we are having to contend with now are nothing new to 

you. Have you ever been involved in a project that has had this 

much consternation and problem? 

Mr. BRUCHOK. I think there are some issues as we attested to 

back in March that there were some issues with the design that 

were certainly not anticipated. As far as the equipment drawings 

themselves, we issued them as a bundle. They would have been 

issued throughout the duration of the project. I know that during 

the procurement process, a lot of things happened at once. 

I kind of take exception to the characterization of it as a blitz. 

We sat down with the contractor. Acknowledged that we did have 

some issues, which is why we put the suspension in place. We 

asked them in which path would they proceed through the project 

and where did they need the information first. 

We followed that sequence to a T, with the expectation that the 

contractor would address those revisions as they received them. 

Unfortunately, they kind of waited until they had everything and 

marked time for a while. But as of last week, we are really making 

a collaborative effort to move things forward. But to answer your 

question, yes, there are some excesses that perhaps go beyond the 

norm. 

The CHAIRMAN. So as I am instructed, the green is what we 

started with. The blue is kind of what got done through the middle 

of January. The yellow was what had been termed a ‘‘blitz’’ and 

you take exception to the name but that was kind of the push that 

took place after some focus was made. 

Mr. BRUCHOK. Yes, sir. 


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The CHAIRMAN. And then the orange is after. Explain to me why 

you would have twice as many, maybe three times as many, additional drawings after the ‘‘blitz’’. 

Mr. BRUCHOK. The drawings, again, visually look pretty significant. But what is not told by those piles are the value. The equipment drawings certainly have some value in the value of the 

changes that result from them. 

The other drawings are simply clarifications of questions that the 

architect—or the contractor has asked, an RFI, request for information. For a job this big and complex, we have tried to get away 

from just handing sketches and saying here is an answer. You 

know, we have done a quick detail and get it out to the field. 

The contractor has actually expressed concern that, with this 

many issues and this many drawings, that there has to be a clear 

and concise way of getting the direction down to the employees in 

the field when our inspectors go to review the work. The only way 

to know if something has been changed is to put it on a revised 

drawing. 

So, frankly, yes, there is a volume. But it is clearly the best and 

most accurate way of making sure we are literally all on the same 

page. 

The CHAIRMAN. And it is my understanding that, based on all of 

these drawings, all of the binders behind us are the requests for 

information, additional information, that was needed in order to 

proceed. 

Mr. BRUCHOK. Yes, sir. And each request has the question, and 

there is often drawings and backup and specification records. So 

you could create a binder for a single RFI. It is, again, it is impressive to look at, but it is a very complex project. I would expect a 

lot of documentation to surround these issues. 

The CHAIRMAN. So this would be normal. 

Mr. BRUCHOK. For this size project, and like I said, with the exception of, no bones about it, the electrical design was a problem, 

and we said that it was. But beyond that, yes, this is normal. 

The CHAIRMAN. No problem with roof design. 

Mr. BRUCHOK. That is a 50/50 question. The flat roof, no problem 

at all. The super roof, we did have some issues with drain locations 

and the material that we selected, and we did issue change orders 

for that. 

[Phone ringing] 

The CHAIRMAN. Is that the President? 

[Laughter] 

Mr. MICA. Mr. Chairman, I might say as a developer, I have 

never had project that had a problem—— 

The CHAIRMAN. Mr. Nugent. 

Mr. MICA [continuing]. Without a roof problem. 

Mr. NUGENT. Thank you, Mr. Chairman. And thank you for allowing me to participate in this field hearing. 

I am concerned about a couple of things or a number of things, 

obviously. But these design drawings are strictly for the hospital; 

is that correct? It is not the other buildings that are already completed. 

Mr. BRUCHOK. Yes, sir, that is correct. 


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Mr. NUGENT. Let me go, first start with, we have two buildings, 

the homeless shelter and the nursing home facility, that will be 

done or that are done this year. 

Mr. BRUCHOK. Right. 

Mr. NUGENT. And from what I have heard from testimony today 

is that—and I am not clear on when the real date is when the hospital will be done—the clinic will be complete enough to support 

those two facilities I just talked about. What I am concerned about 

is we are going to leave two facilities that are already done unoccupied, unutilized for 2 years. 

My question to you is—and maybe you are not the one to answer 

it—but why in God’s name would we do that when we have veterans out there that need those facilities today? 

Mr. HAGGSTROM. I admit I don’t think it was intentional by any 

means, certainly. And as Congresswoman Brown has asked us, we 

will go back and take a look and see if there is a possibility to activate those facilities prior to completion of this. 

As I had stated earlier, the dependencies of those other two facilities in terms of the feeding, the pharmacy, the laboratories, 

those are all tied up in the completion of the main hospital and 

what we call the—— 

Mr. NUGENT. Well, I would ask that the VA come back with a 

proposal in regard to how they would actually utilize those two facilities. Because we have no idea when the clinic and hospital are 

going to be done, based upon the testimony today. I mean, we 

haven’t heard from the contractor yet. 

But it certainly sounds like there is enough disfunction to go 

around that we don’t know. And then we have two facilities that 

are done and we have veterans in need. So I would like to see the 

VA respond back to the Committee in regards to how do we, going 

along with Miss Brown’s proposal, how do we do that and get it 

done so we take care of the veterans? Because that is really what 

we are all here about. And I know you are. And I know this committee is. And the chairman, obviously, is very committed to it. 

You know, currently I cover areas that they go to Haley, they go 

to Gainesville, and Orlando if and when it ever gets complete, 

about 215,000 veterans that I am concerned about. Besides the 

three that currently live in my family that are currently serving on 

active duty, I am concerned about our ability to meet the needs of 

our veterans today. 

While, you know, it is great that we set aside funds to do this. 

It is when you heard the first initial monolog by our chairman, 

talking about all the facilities built around this campus and the 

time that they were able to get them, not only from design, construction to occupying, and here we are sitting here still talking 

about a facility that was designed, that broke ground in 2008, and 

we are now still talking that it is going to be, from date of breaking 

ground, could be 7 years to completion? 

Now, I don’t know who is at fault, but I do know it takes two 

to tango. And so I would suggest that the key to this is getting this 

done to support our veterans. And like I said before, I want, Mr. 

Chairman, I don’t know if it is improper to ask, but that the VA 

respond back to how they can get those two facilities up and serving our veterans tomorrow. 


ccoleman on DSK8P6SHH1PROD with HEARING
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The CHAIRMAN. That I think is a very important issue, obviously 

with the domiciliary and the other facility completed. And Mr. 

Haggstrom has already said he would go back and ask and, look, 

is there any way that those can be activated early? Obviously it is 

on the back site of a construction site that is taking place now. 

Mrs. Adams. 

Mrs. ADAMS. Yes, Mr. Chairman, we do have the VA clinic that 

is up in Winter Park. Is there a way—and maybe they can respond 

back to you and your committee on how they could maybe utilize 

their services over there at the clinic at Winter Park to open up 

these facilities that, so they don’t sit empty for 2 years. 

The CHAIRMAN. Mr. Mica. 

Mr. MICA. I met several weeks ago with the medical director, and 

they are exploring exactly that. In fact, we had the conversation. 

And they are looking at servicing it, because they do need the food 

and some other things to make those happen. So, there is an active 

plan underway to try to expedite utilization of the completed buildings. 

Mr. BRUCHOK. Sir, if I may, that is accurate. We are actually 

going back to a 2-week track pattern, looking at ways to use the 

back gate to keep away the construction traffic. So that is an active 

plan underway. 

The CHAIRMAN. We have a plan underway. Do we have any idea 

how long it will take to decide whether or not that can be done or 

not done? 

Mr. BRUCHOK. I don’t want to speak for the medical center, but 

there is a commitment from them, sir. 

The CHAIRMAN. Is there anybody here that can speak to whether 

it can or can’t be done? Mr. Neary. 

Mr. NEARY. I can’t really speak for the medical center. I do know 

from discussions with the medical center that they are thinking 

about how they could do that. And I think it is likely a possibility 

they could, but there are a lot of complications that need to be 

worked through. So—— 

The CHAIRMAN. Mr. Haggstrom, do you subscribe? 

Mr. HAGGSTROM. Absolutely, Mr. Chairman. I will work with 

VHA to do our best to come up with a plan and advise the Committee on such. 

The CHAIRMAN. Mr. Webster. 

Mr. WEBSTER. Thank you, Mr. Chairman. Thank you for being 

here. Thank you for the interest. Also thank Congressmember 

Brown for her interest and the longtime interest also of Senator 

Nelson for his being involved in this. I watched him from afar, but 

it has been a long, long time. 

I have a letter here that I got five days ago from Secretary 

Shinseki, and it talked about the summer completion date as a confirming date. It also mentions the fact that—which has already 

been mentioned—about a cure notice that was sent in June of 

2012. 

And I guess my first question would be, if you were to change 

contractors—I am not saying you are or not, I am not asking that 

question—but if you were, how long would it be, if you changed 

today, how long would it be before you could restart the project? 


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Mr. HAGGSTROM. Thank you, Mr. Webster. I would like to reiterate that there has no decision been made in terms of the response to the cure notice. The contracting officer is still taking that 

into consideration for their final determination. I do not know what 

that final determination is. 

If you look at the mechanisms that are available to the Federal 

Government in terms of when we encounter a situation like this, 

if you put it hypothetically after a cure notice is issued and the determination is made, if that determination is not favorable to continue with the current contractor, then the government would issue 

what we call a show cause notice. 

And that show cause then puts the contractor on notice that 

their response to the cure notice in terms of what they have been 

able to accomplish was not substantial enough to you, mitigating 

what the government’s concerns were. They do have an additional 

opportunity to provide to the contracting officer what additional actions they would take during that period of time to mitigate those 

actions. Either that would be successful in convincing the contracting officer they could in fact move forward successfully, or not. 

When you look at it, the first place the government would go to 

would be the surety company, or company that essentially bonds 

the contractor, and a determination on whether the surety would 

assume liability for the remaining portion of the contract that has 

been left uncompleted. It then becomes, if they accept that, the relationship then becomes one between the surety company and the 

government, with the surety essentially becoming the prime contractor to complete out that facility. 

If the surety company refuses to accept the remaining responsibility, then the government would be forced to re-procure that. So 

if you look, in a rough order of magnitude I believe, if the surety 

would accept that responsibility, it would be a four to 6-month period for them to get another contractor, get them up to speed, do 

those kinds of things. If the government was forced to re-procure, 

I would say we would be looking at an 8- to 10-month delay to go 

through that re-procurement process. 

Mr. WEBSTER. So, if that took place, whoever the contractor may 

be, would you be willing to issue a fixed price contract for completion by say June—July, is it July of 2013? 

Mr. HAGGSTROM. Yeah, if that would be the date. Our normal 

procedures for construction are for a fixed price contract. We do not 

normally do a cost plus or cost contract for construction. 

Mr. WEBSTER. Could they still finish by July of 2013? 

Mr. HAGGSTROM. I would have to look at that. If you are looking 

at an 8- to 10-month delay, probably not in July of 2013. If you go 

into an 8- to 10-month delay, say at the end of this month, that 

re-procurement time would not be until July. So finishing in July 

of 2013 would probably not be viable. 

Mr. WEBSTER. So from a time standpoint, that would be a, sort 

of a bad option, only from the time standpoint? 

Mr. HAGGSTROM. I think from any standpoint it is a bad option. 

Our desire is to continue to finish this hospital with Brasfield & 

Gorrie. I believe that is doable, with a commitment on behalf of 

both parties to do so. 


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Mr. WEBSTER. If we were to take the bad option, if that is the 

only choice the Committee made, would you still stay within the 

$616 million price tag? 

Mr. HAGGSTROM. We believe so. 

Mr. WEBSTER. Okay. Yield back, Mr. Chairman. 

The CHAIRMAN. Is the medical center director here today? 

Mr. HAGGSTROM. No, sir. The medical center director is not in 

Orlando today. He is attending a class, I believe, a senior executive 

class sponsored by the department. 

The CHAIRMAN. And that was more important than being here? 

Mr. HAGGSTROM. Sir, I can’t answer to that. 

The CHAIRMAN. Would anybody like to take that for a question? 

Ms. MOONEY. The chief of staff is here, sir, of the medical center 

The CHAIRMAN. So it is more important that the chief of staff 

come than the medical center director to a full Committee hearing 

of the Veterans’ Affairs Committee? 

Mr. HAGGSTROM. Sir, I am sorry. I can’t answer that. The director was not part of the panel. And so—— 

The CHAIRMAN. That is a good reason not to be here, because you 

are not on the panel. But just, again, there have been, from me, 

from Miss Brown, from Mr. Bilirakis, from Mr. Mica, from Mrs. 

Adams, from Mr. Nugent, and from Mr. Webster, there have been 

questions that could have easily been answered by that person. 

Was that person not here for a particular reason? 

Mr. HAGGSTROM. No, sir. 

The CHAIRMAN. Other than they chose to go to a class sponsored 

by VA? 

Mr. HAGGSTROM. It was not the choice. Had Mr. Liezert been a 

part of this panel, I can assure you he would have been here. 

The CHAIRMAN. Well, there was a choice, because the chief of 

staff is here, but Mr. Liezert is not here. I find it—and know it is 

not in your wheelhouse but I find it very curious that the medical 

center director is not here at a full Committee hearing, where this 

committee will be having a site visit after this hearing and the 

medical center director is not here. 

I think Mr. Webster was asking the same question. But I want 

to delve back into it if we can. You said numerous times that 

Brasfield & Gorrie has walked back their completion date that 

started at 2015, 2014 and now you said substantially complete at 

the end of 2013. Have they ever said that it would cost additional 

dollars in order to meet that deadline? 

Mr. HAGGSTROM. Specifically, no. We have had discussions that 

we would anticipate that Brasfield & Gorrie may view this as an 

acceleration and then ask for compensation to do that. 

The CHAIRMAN. Mr. Bruchok, knowing the way the schedule has 

been established, is there any way to do it with the current projected number of a thousand some workers? Could they do it working in a normal schedule? Are they going to have to double schedule and bring some new shifts in in order to do it? 

Mr. BRUCHOK. No. Certainly it is past the point of where we 

could proceed business as usual with the previously anticipated 

manning of the job. There would have to be, if not overall at least 

in certain trades, some weekend work, some shift work. There is 


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some critical areas that the contractor has noted might take extra 

effort, such as the operating rooms and the kitchen, server area. 

So certainly to go from now to that date would require, I would 

think, an increased effort in what they would have planned ordinarily. 

The CHAIRMAN. My assumption would be that an increased effort 

would be at increased cost as well. So I am just trying to make 

sure that the Committee understands—and I know Mr. Webster 

certainly does—that if you are bringing additional people on board, 

it is going to cost additional dollars. But we can wait for Brasfield 

& Gorrie to ask those questions. 

Thank you, Mr. Bruchok. 

Miss Brown. 

Ms. BROWN. Yes, sir. Is it on? 

The first question that I don’t want to be charged to my time, 

because some of the lay persons, like myself, can you explain the 

cure notice? 

Mr. HAGGSTROM. Certainly. The cure notice is a contractual vehicle available to the contracting officer. It is specified in the Federal 

Acquisition Regulation. And what this vehicle does, it allows the 

government to put the contractor on notice that they are potentially in fault of defaulting on the specifications and requirements 

of the contract. 

Ms. BROWN. Okay. So that I think is important for someone to 

understand. And this particular contractor has done lots of work 

with the VA and is still doing a lot of additional work around the 

country is my understanding. It has other projects. 

Mr. HAGGSTROM. They do have other projects as a commercial 

contracting firm. I am only familiar with the work that they have 

done on this particular site. They did have other contracts here at 

the medical center in which they completed. I believe it was the 

warehouse, department parking garage, and the structural components of the hospital. 

Ms. BROWN. Well, one other thing. It has been very difficult to 

get VA in a hundred percent support to want to partner, sometime 

it seems to me, with other nonprofits, veterans-owned businesses, 

minority-owned businesses, African-American owned businesses. 

The services that we are talking about, even pharmacists, would 

love to work with VA to staff those facilities. It could be contracted 

out. 

We don’t have to do all of the work ourself. I know a lot of the 

people on the Committee want the VA to take over additional responsibilities. But as far as I am concerned, there are groups, colleges, ready to assist us. We could put people to work. We don’t 

have to wait until the facility is completed. 

And so I am looking forward to you all, not just speaking about 

how VA can do it, but how VA can partner to get what we need 

done. And it could be a short-term contract. But I am very interested in seeing what we could do together with other community 

groups and organizations, veterans-owned businesses. 

I mean, it is no reason that we have a vet facility over there that 

we don’t have activity going on, phased-in opening. We don’t have 

to wait for a year to get the facilities up in operation. And I am 

hoping that we can work together to figure out how we can do it. 


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I would like to see an education facilities pilot project. This looks 

like a great pilot project to me. 

Any additional comments about the timeline? 

Mr. HAGGSTROM. No, ma’am. As I said, we are going to be meeting again later this week to discuss the schedule, get a fuller understanding of it. As the chairman had talked about, cost implications as we get deeper into that discussion on the schedule, I am 

sure costs will be a part of that. 

Ms. BROWN. And you all didn’t have to hire additional consultants to get this going on. I mean, at the last meeting there was 

some discussion, that I am totally against, millions of dollars to 

having some consultant to come in to put you with the contractors 

in the same room. I am very pleased to know that we are doing 

it on our own without any additional cost. 

Mr. HAGGSTROM. Yes, ma’am. 

Ms. BROWN. Well, I yield back the balance of my time. 

The CHAIRMAN. Really quickly, we talked about a cost savings of, 

I think you had said, $20 million for what has already been completed. What cost savings have already been extracted out of this 

project? 

Because I think that there were—if I am not mistaken, and I 

may be wrong—dollars allocated to a SIM center. There also was 

at one time some discussion of a substantial cost savings that was 

going to be allocated to New Orleans. If you could briefly discuss 

the cost savings to date and where that money has been allocated. 

Is it normal to allocate cost savings before the project is finished? 

Mr. HAGGSTROM. We can answer that, Mr. Chairman, but I ask 

Mr. Neary to take that question, please. 

Mr. NEARY. Certainly. Thank you, Mr. Chairman, for the question. 

In total we have had approximately $100 million in bid savings 

on the project. And in the fiscal year 2012 budget the VA proposed 

transferring $49 million of those bid savings as part of the Fiscal 

Year 2012 budget requests that would support other projects. 

And so that left approximately $51 million. Twenty-seven million 

dollars has been set aside for the SimLEARN Center, and the balance remains available in a reserve available as needed for the 

project. 

As to your question about is it normal to move money off the job 

before it is completed, typically we would want to wait until we are 

about 70 percent completion before we think about that. But given 

the economic situation around the country, we have had significant 

bid savings. And so in this case $100 million is a significant 

amount of money. We made a decision to propose to move some of 

that before we found ourselves in our current circumstances. 

The CHAIRMAN. Does the 616—and I know that is not a noninclusive number—include the start-up costs that would be necessary 

for the hospital, the clinic, the domiciliary? 

Mr. NEARY. It does not. The original appropriation was $665, and 

then we transferred the money off to get down to $616. That is design fees and construction. It does not include the activation costs 

of furnishing the medical equipment, staffing, supplies, that sort of 

thing. 


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The CHAIRMAN. Is there a number that you are dealing with now 

that would be the activation costs? 

Mr. NEARY. There is. I am not familiar with that number here 

this morning. The medical center has an activation budget. That 

has been evaluated by the Veterans Health Administration in 

Washington, and there is a plan on that as needed. 

The CHAIRMAN. Would it be appropriate to ask the chief of staff 

what that number is, since he is here? 

Mr. NEARY. If you would like to, sir. 

Voice. Sir, I am the chief of the medical staff at the Orlando VA, 

not chief of staff for the entire VA. So I can address medical issues 

concerning the Orlando VA, but not the larger ones. 

The CHAIRMAN. I am talking about the activation costs for the 

hospital, the domiciliary, the nursing facility, and the clinic. 

Mr. BIRDSONG. I am the activation executive. I want to say our 

nonrecurring health—— 

The CHAIRMAN. And your name is? 

Mr. BIRDSONG. My name is Jeff Birdsong. 

The CHAIRMAN. Okay. 

Mr. BIRDSONG. I have been in this role since January. I want to 

say our nonrecurring activation costs are in the neighborhood of 

$200 to $220 million over a number of years. So that would include 

things like the equipment, the furnishings, telecommunications, a 

number of different items. 

The CHAIRMAN. So we could be talking about a billion dollars 

when we are all said and done to get this hospital up and running? 

Mr. BIRDSONG. It will be under a billion dollars. But—— 

The CHAIRMAN. You hope it will be under a billion dollars. 

Mr. BIRDSONG. I would assume so. 

The CHAIRMAN. Okay. Thank you very much. Mr. Bilirakis. 

Thank you. 

Mr. BILIRAKIS. Thank you very much. My concern again is that 

how—elaborate on how you came up with this figure now of completion, or substantially the hospital would be completed by the 

fourth quarter of next year. 

I don’t want to give our veterans a false hope here. How have 

you arrived at that figure? And have there been major discussions 

with the contractor with regard to this cost? Please elaborate on 

that. 

And I hope that this wasn’t—you didn’t come up with this yesterday just to appease us here at the hearing today, and then we are 

going to go back to, you know, possibly 2014 or 2015. It really concerns me. Our veterans really need to know. Can you elaborate on 

that? 

Mr. HAGGSTROM. To a certain extent, Mr. Bilirakis. First of all, 

VA did not determine that. That date was determined by the revised schedule that Brasfield & Gorrie proposed to us on August 

the 1st. 

For the details, I would ask, when they are the panel, perhaps 

they could give you a bit more elaboration on how they have arrived at that date. But in general, to my understanding is there is 

a significant difference in terms of how the work was being approached. 


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There is now a concurrent effort to perform work in multiple 

areas of the hospital, the clinic, the DNT, and the inpatient area. 

Whereas on the prior schedule these things were worked in a parallel, where they would move throughout specific areas of the hospital with their crews. 

So the main difference is there is additional staffing. There are 

additional crews, to my understanding. And also there would be an 

additional crew to the additional crew, if you will, to work in the 

operating rooms area and also the kitchen area. 

So there has been a completely different approach in how 

Brasfield & Gorrie has taken to look at how they could move this 

schedule to an earlier completion date. But I think they could probably be the best people to answer that question. 

Mr. BILIRAKIS. Yield. 

The CHAIRMAN. Senator Nelson. 

Senator NELSON. Mr. Chairman, Senator Murray, the chairman 

of the Veterans Committee in the Senate, wanted me to convey a 

clear understanding of the cost increases and all of these numbers 

having been thrown around here. We started out in 2009 GAO reported that the Orlando facility cost increased by 89 percent, from 

$347 million to $656 million. And you all have testified that we are 

talking about something just south of $1 billion now. 

Can you give some clarity to that, please? 

Mr. HAGGSTROM. If I could ask Mr. Neary to comment on that 

please, Senator. 

Mr. NEARY. Thanks for the question, Senator. It is my recollection that at the time the hospital was originally proposed the economic assumptions that were used in the marketplace, what the 

contractor would face when it went to the marketplace, were considerably different. 

And in addition, the requirements for the medical center grew 

from the original proposal that was identified. As you know, many, 

many more veterans are coming to VA today than it did in the past 

and technologies have changed significantly. New technology 

brought on board. So I think those two things largely contributed 

to the growth in cost from the time of the original proposal until 

it was ultimately fully funded. 

Senator NELSON. I will have our Senate Veterans Committee collaborate with you, Mr. Chairman, on understanding exactly those 

cost increases, because we are talking about 3 years from GAO 

doing a report in 2009, and this seems exceptional. 

Thank you. 

The CHAIRMAN. Thank you. Thank you very much. Thank you, 

Senator. We will move to Mr. Mica next. 

Mr. MICA. A couple of questions. Again, I am pleased that the 

various adjunct facilities, the chapel, the domiciliary care units, 60 

bed, 120-bed nursing home, power plant, other parking that is in 

place, and the question of getting, again, these up and running as 

soon as possible. 

I have had some conversations with the medical director. We 

don’t have him here, but we do have the chief of staff, Mr. Chairman. Maybe we could direct the question—I don’t know if you want 

to direct it to her or from the Committee to the medical director 

to respond to the Committee. But I think that is important. 


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We could get those facilities up and running as soon as possible. 

They have to be safe and secure. But since we are not sure about 

the delays, if we could get that question answered, I think it would 

be helpful, if they think that is possible. 

And again, the whole project has still come in under budget. According to the 616, they took out money and transferred it to other 

projects. Is that correct, Mr. Haggstrom? 

Mr. NEARY. Yes, sir, that is correct. 

Mr. MICA. Well, hopefully we can keep it in that direction. The 

question of workers, I don’t know if that was answered. We were 

down to about 400. What is the current level again? 

Mr. HAGGSTROM. I believe we are in the vicinity of 500–550. 

Mr. MICA. Five hundred to 550. All right. And part of the ramp 

up would depend on, again, the final resolution between you and 

the contractor; correct? 

Mr. HAGGSTROM. It would. The contractor, in their response to 

our cure notice, had originally estimated that during the course of 

the cure notice there would be approximately, at the highest time, 

700 to 750 workers there. 

Mr. MICA. And I did give you copies of the request to keep Lake 

Baldwin open. You have all had that. And we will make sure the 

medical director has that too. That is an important facility. There 

is a lot of other veterans on the north side are dependent. And I 

think it can provide them—the 60-bed domiciliary care is great, because we have many homeless veterans. 

We have many returning veterans. But they need some stability. 

They can’t just come to a pharmacy or a clinic and then end up 

sleeping in the car or under a viaduct or something. So I think that 

that 120-bed capacity, if we could double that, using Lake Baldwin 

for that facility, and then a full service clinic would be beneficial. 

The last thing. I am a transportation kind of guy. Are you all coordinating—veterans have to get here. You have a huge number of 

workers around here. Can anyone comment on the transportation 

connections here? Are you working with Lynx or someone—— 

Mr. HAGGSTROM. I am sorry, Mr. Mica, I can’t, unless the chairman would direct the question to VHA, I cannot answer that question. 

Mr. MICA. Well, maybe, Mr. Chairman—— 

Mr. HAGGSTROM. We can take that for the record—— 

Mr. MICA [continuing]. I know we have been talking to Lynx. We 

have several systems coming into this location on both the commuter rail and now other service that FEC is proposing. 

But I think those links are very important. And I will be glad 

to sit down with them and try to make certain that the VA has the 

connections, so veterans, the staff and then this greater community, which is—I mean, when you come in here, you just see the 

incredible facilities, but people need to get in and out of here. And 

who would the person be that would be—— 

Mr. HAGGSTROM. It would be the acting supervisor, sir. When we 

look at, no matter what the facility is, whether it is a CBOC and 

HCC or a medical center, transportation is always first and foremost. 


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Mr. MICA. If you could provide me and the Committee with just 

a copy of where you are with transportation connections, and I will 

be glad to work with you. 

Mr. HAGGSTROM. We will be happy to do that. 

Mr. MICA. Thank you, Mr. Chairman. 

The CHAIRMAN. Mrs. Adams. 

Mrs. ADAMS. Thank you, Mr. Chairman. Along the same lines, as 

we go forward and hopefully we get this hospital opened up in a 

timely manner, in a safe and timely manner for our veterans, because of the length of time that it has taken, the drawn-out time 

frame, looking at how many of our wounded warriors are returning 

home, I believe it would be in the best interest of our veterans to 

keep the facility in Winter Park open. 

I think—and you can correct me if I am wrong—but by the time 

you open you will have already probably reached capacity, quite 

quickly. Is that not true? 

Mr. HAGGSTROM. I think that could be a reasonable assumption, 

yes. 

Mrs. ADAMS. So you are going to be at capacity or overcapacity 

at the time of opening. So I would think that the VA would want 

to go ahead and keep that facility open to maintain some assistance to this facility in taking care of our veterans. And I would 

strongly urge you to make sure that that happens and that we 

don’t have veterans not having the ability to get the services they 

need. 

Looking at where we are today—and I keep going back to this, 

because I think Mr. Webster asked it, the chairman asked it—I 

heard a number of $42 million plus and you are on schedule. We 

are already past the schedule. We don’t know for sure what the 

time frame is. You are confident that when you meet with the contractor this next go-round you will have a more solid date of completion? 

Mr. HAGGSTROM. I think that will certainly be our goal, Ms. 

Adams, is to arrive—— 

Mrs. ADAMS. And in doing so, do you anticipate any more 

changes to this level? 

Mr. HAGGSTROM. I can’t comment as to the level. But as Mr. 

Bruchok said, the size of this project, we are constructing approximately 1.9 million square feet of a very complex medical center, 

and there will be changes. It is just the nature of the beast, unfortunately. 

Mrs. ADAMS. How far along are you on the medical equipment? 

Mr. HAGGSTROM. The medical equipment changes have been 

completed, so we have made determination on the medical equipment. 

Mrs. ADAMS. At the last hearing we were still waiting, the contractor was still waiting for the equipment. But it is completely 

completed. 

Mr. HAGGSTROM. It is completed in terms of initiating the buys 

and where we are going to go with what we have. 

Mrs. ADAMS. And what equipment is going into the building. And 

so we can anticipate probably not having to see those drawings—— 

Mr. HAGGSTROM. Not with regard to medical equipment. 


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Mrs. ADAMS. Thank you. Well, again, I just want to thank the 

chairman for bringing the Committee over here, because it is so important. And when you walk through the hospital over there—you 

know, we drive by it. 

I have had veterans, every one of us were excited when we could 

see the shell being completed. And everybody was excited because 

we thought we were going to see it actually opening. And I have 

been here since the ground-breaking, and I know that our veterans 

deserve this facility. They need this facility. So I would just encourage you, when you meet with the contractors—I believe you said 

this week? 

Mr. HAGGSTROM. Yeah. 

Mrs. ADAMS. That you finally solidify where you are and how you 

are going to complete this in a timely manner for them. 

And I yield back my time. 

The CHAIRMAN. Mr. Webster. 

Mr. WEBSTER. Thank you, Mr. Chairman. I just have a followup question I thought of. 

Will liquidated damages be charged against the contractor—whoever that contractor is—if they don’t finish by July 2013? 

Mr. HAGGSTROM. There is a potential for liquidated damages. 

And not in all cases are the liquidated damages ultimately assessed against a contractor. 

Mr. WEBSTER. I had one other question about change orders. Is 

the determined cost or agreed to cost of that change order before, 

during, or after the actual execution of that change order? 

Mr. HAGGSTROM. I think it could be a combination of any one of 

those three, sir. If it is a relatively simple issue, we could probably 

come to that determination relatively quickly. 

What sometimes happens is some change orders are very complex. And what we will do is we will fund a portion of that change 

order, and at the same time we will ask the contractor for additional information in terms of what the ultimate cost of that 

change order is. 

What we get into in these very large change orders is an issue 

of certified cost and pricing. So when we reach a certain threshold 

we have to have that certified cost and pricing from the contractor 

in terms of those areas. 

And so what we do is we work with the contractor collaboratively. We have an independent government cost estimate. If 

those two areas don’t come together, then we ask the contractor, 

can you show us the documentation of how we can close that gap 

relative to what the actual cost of that change was for you? 

Mr. WEBSTER. Do you use standard industry costs to determine 

the government’s estimated value of the change order? 

Mr. HAGGSTROM. We do. I have to ask Mr. Bruchok to comment 

on that little bit further on that, if you would like. 

Mr. BRUCHOK. Yes, sir, absolutely we do. We have professional 

estimators on our staff that do nothing but. They are here on the 

site. They can actually see the field conditions. They use estimating 

guides and industry standards. We have market pricing for commodities. 

We also have the benefit of having other contractors on the site 

with which we can compare and get basically an idea of the change 


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order pricing here on site in this area. Geographically market conditions are all identical. So we have multiple metrics for determining a fair and reasonable price. 

We prepare the estimate. Issue the change order. And as Mr. 

Haggstrom said, the onus has been on the contractor to substantiate the proposal that they provided us. And in some cases we 

close the gap, because our estimates might have left out scope or 

missed items. And we certainly are not above raising our estimate 

to make sure we are being fair and reasonable in compensating. 

But then there are those cases where we simply cannot substantiate, or the contractor can’t to our satisfaction, that what they are 

asking for the change is in fact fair and reasonable. And we will 

issue a settlement determination, as we said, that is as much as 

we can justify. And the contractor is entitled to dispute that bid via 

a dispute clause in the contract. 

Mr. WEBSTER. Would there be currently change orders that are 

differences in magnitude of difference—— 

Mr. BRUCHOK. Absolutely. 

Mr. WEBSTER. It is multiples of differences between you and 

what the contractor believes? 

Mr. BRUCHOK. Yes, sir, absolutely there are. It mainly pertains 

to the electrical scope of work. We have had tremendous challenge 

in trying to close that gap, if you will. A lot of people on our side 

with a lot of experience, and the numbers we are seeing are those 

we are not accustomed to. Simply cannot close that gap. And so 

that has been an ongoing problem. 

And it is, a portion of that, that overage or that underfunding 

term that Brasfield would use. I would say it is not underfunding. 

We just simply can’t justify it in addition to being veterans, we are 

also taxpayers. And we are trying to make sure we are not providing the proverbial $1,200 toilet seat. 

Mr. WEBSTER. Doesn’t that though in some way affect the manning of the job? If there is a contractor that is stretched to the 

edge, let us say a sub—I know a sub does not work for you, but 

works for the general—but becomes so stretched that they can’t go 

forward without getting some of those resolved, do you think that 

affects the manning on the job? 

Mr. BRUCHOK. Well, I think, again, all we can do is issue what 

we think is fair and reasonable. We go through tremendous effort 

to make sure that we get that funding in place even before the 

work begins. I don’t think—— 

Mr. WEBSTER. I am just saying from a time standpoint, even 

when you do come to an agreement, when there is disagreements, 

that takes time. Therefore the cash flow of that subcontractor, whoever that may be—— 

Mr. BRUCHOK. Sure. 

Mr. WEBSTER [continuing]. Has issues. 

Mr. BRUCHOK. Absolutely. And there are times where we will adjust the price upward. And this isn’t a finger-pointing thing. But 

it takes the contractor some amount of time to get us that proposal. 

And that is where I think sometimes we are hamstrung. 

All we can rely is our estimate at the time. I am not going to 

say that it is always perfect. But until we get that qualifying information, we can’t even have a negotiation to make that adjustment. 


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Mr. WEBSTER. But that could affect manning on the job. 

Mr. BRUCHOK. Sure, it could. 

Mr. WEBSTER. Thank you. 

The CHAIRMAN. Mr. Nugent. 

Mr. NUGENT. Thank you, Mr. Chairman. And I apologize for having to step out. And this may have been covered in questions while 

I was out. 

But I am curious to the fact that you have a $616 million num- ber that we have already shaved $100 million in savings off, and 

of that $100 million of savings we siphoned off $49 million of that 

to another project. While I can appreciate that, but then I look at we have $42.7 

million overruns in regards to change orders. And I believe we still 

have—and I think maybe this was what Mr. Webster was talking 

about—the fact that we have outstanding dollars to the tune of $30 

plus million. 

Mr. BRUCHOK. I heard a $60 million number given by the contractor. I think that could be broken down almost into two pieces. 

Roughly half of that is a potential claim or a request for equitable 

adjustment for perceived inefficiencies. 

We are in receipt of the documentation that they provided for 

that. We are not convinced that they provided a what you would 

call a causal link between the government causes and the value 

that they are asking for. They used a total cost approach and said 

we anticipated spending X. We spent Y. The VA owes us the difference. And so that is a big chunk of what is being worked about. 

However, government contract regulations requires the contractor, even when there is a disputed amount out there, to diligently pursue the work and not just sit there and wait for these 

things to get resolved. That is half of the overage, or the $60 million of underfunding, as they termed it. 

The other half is outstanding change orders. And the government 

estimate for the other $30 million is about $13. So, we are still seeing almost a 300 percent overage, if you will, of the proposed 

amount versus the estimated amount. So, yes, there are some numbers out there. 

Mr. NUGENT. And I apologize for my simplicity, but I am a visual 

kind of guy. And I just hear all these numbers being thrown all 

over the place. And I will be honest with you. I have a hard time 

reconciling how that all flushes out to the 616 base number that 

you have appropriated. 

So, you know, Mr. Chairman, I would like to indulge that—I 

would like to see those numbers on a graph, a piece of paper. Show 

me how in the heck we live within 616 and we already trim off 

$100 million and we are—you know, I don’t get it when you have 

all the overages. It doesn’t seem to add up in my simple—— 

Mr. BRUCHOK. Yes, sir. Our contingency accounts for the direct 

cost of the work as we estimated. It does not account for, again, 

the inefficiencies and things that would be potentially claimed. 

Mr. NUGENT. The contingency, is that included within the 616 or 

is that above and beyond the 616? 

Mr. BRUCHOK. I believe Mr. Neary—— 

Mr. NEARY. It is within the 616. 

Mr. BRUCHOK. It is within the $616. 


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Mr. HAGGSTROM. Within the appropriation. 

Mr. NUGENT. And what percentage do you have in regards to 

when you take that 616 number, obviously when you come up with 

that—and I understand it is a budget figure—but what percentage 

of that is for cost overruns or change orders? 

Mr. NEARY. We budget a 5 percent construction contingency. And 

that contingency is for unforeseen conditions, changes, unanticipated things that come along. So on this job we would have budgeted 5 percent of our estimated construction. 

Mr. NUGENT. And what would that number be? 

Mr. NEARY. In round numbers we initially received appropriation of $665 million. I am anticipating about $550 million might have 

been our projection of construction costs. So 55 million would be 

the contingency that was established as part of the budget. 

Mr. NUGENT. You said, I am sorry, 5 percent. 

Mr. NEARY. Five percent, right. So it would be $24 million. 

Mr. NUGENT. So we have exceeded that budget amount already. 

Mr. NEARY. We have. 

Mr. NUGENT. Far exceeded it. Because we have outstanding 

claims that haven’t been paid, but we have paid at least $30 million—I am sorry—$42 million today. 

Mr. NEARY. Correct. We had a—as you say, in the weeds a bit. 

We, at the time of bidding, we included a bid item that the total 

changes we made included a pre-priced bid option that we exercised for $16 million. I don’t think that was part of the contingency. 

Mr. NUGENT. I yield back my balance of time. 

The CHAIRMAN. Thank you. I would also like to recognize Miss 

Brown. And as I do, if folks would either wrap up. Hopefully you 

have asked your final question. If you have some other questions, 

be prepared. We have another panel. Miss Brown. 

Ms. BROWN. Thank you. Listen. The building physically is a very 

attractive building. I have been over there several times. And it is 

really a catalyst for the development here, whether we talking 

about the universities or whether we are talking about our stakeholders that are working together. The VA is truly the catalyst for 

the community. 

And we have spent a lot of time talking about quantity. But I 

want to know about quality. I was told that it was raining yesterday and it was raining in the facility. 

So I want to know what is the quality of the work. Do we have 

mold or rust in this new fabulous-looking on the outside building? 

What is the quality of the work of the contractors? 

And I am going to ask them that same question when they come 

up in a minute. And I hope they will be ready to answer it. Is it 

raining in the facility? Is there rust in the facility? Has there been 

damage to any of the equipment? What is the status? 

Mr. HAGGSTROM. Miss Brown, there is water in the facility. We 

were in there yesterday. The facility is not completely dried in yet. 

Albeit that the roofs are substantially complete, there are still open 

areas in the atrium and on the exposures on some of the walls that 

have not been dried in. So it does present the opportunity for water 

to come into the facility as it currently stands. 

As we have gone through the facility, there is rust in some of the 

duct work, in some of the mechanical equipment. So those condiVerDate Mar 15 2010 00:38 Mar 30, 2013 Jkt 075617 PO 00000 Frm 00034 Fmt 6633 Sfmt 6633 I:\WAYS\OUT\75617.XXX GPO1 PsN: 75617

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tions do exist. They are being identified as we go through and do 

our inspections. And the contractor will be expected to mitigate or 

repair those particular areas. 

Bart, do you want to add anything? 

Mr. BRUCHOK. Mr. Haggstrom summed it up pretty well. There 

is some installed work that subject to water are showing signs of 

corrosion. We do have a hygienist come in and test for all the mildew. Make sure that we don’t have that situation. But until we accept the work from the contractor, they are responsible for protecting this work. 

Ms. BROWN. Well, I have two minutes left. Does anyone else 

want to respond to my question? Or any additional things? 

Mr. NEARY. I guess I would like to offer that at the end of the 

day this will be a high, high quality facility. The problems that the 

panel have mentioned are ones that need to be corrected. But at 

the end of day, our veterans will have a very, very high quality facility here. 

Ms. BROWN. The parking is something that I didn’t know what 

a deal breaker it could be. 

Mr. NEARY. The what? I am—— 

Ms. BROWN. It is something I learned. How parking, make sure 

you have adequate parking spaces, it could break the deal. I have 

learned that being on this committee. 

Mr. NEARY. For many of the facilities I am sure you visited that 

were originally constructed when VA had a very small component 

of ambulatory care and now a great component of ambulatory care. 

You have far more people coming to the site each day, and parking 

is a difficult thing in many locations. 

Ms. BROWN. So we didn’t have that problem here? 

Mr. NEARY. We have attempted to size this. We have two structured parking facilities, and then approximately I believe it is 500 

surface parking spaces. 

Ms. BROWN. Are we going to have some kind of a way that we 

can take the veterans maybe to and from in trolleys or something 

like that? 

Mr. NEARY. I have to check. I can’t answer that. I will be glad 

to provide that for the record. 

Ms. BROWN. Thank you. I yield back. 

The CHAIRMAN. Thank you, Miss Brown. Any other questions? 

Mr. Webster, anything? 

Mr. WEBSTER. No. 

The CHAIRMAN. Thank you very much for being here with us 

today. We are a little bit behind schedule, so I would ask the next 

panel to come forward. Why don’t we take just about a five-minute 

recess. We will start back at 11:00 AM. 

[Recess.] 

The CHAIRMAN. Other members will be making their way back 

in. But with us this morning from Brasfield Gorrie general contractors is Jim Gorrie, the president and chief executive officer. 

Mr. Gorrie is accompanied by George Paulson, vice president and 

division manager, also at Brasfield & Gorrie. I want to thank you 

both for being here today. 

Mr. Gorrie, you may proceed with your statement. 


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STATEMENT OF JIM GORRIE, PRESIDENT AND CHIEF EXECUTIVE OFFICER, BRASFIELD & GORRIE; ACCOMPANIED BY 

GEORGE PAULSON, VICE PRESIDENT/DIVISION MANAGER, 

BRASFIELD & GORRIE. 

OPENING STATEMENT OF MR. GORRIE 

Mr. GORRIE. Thank you very much, Mr. Chairman, and all of the 

representatives from the great State of Florida. We appreciate the 

opportunity to be here with you today. And if appropriate, I would 

like to also offer our written testimony for the record and try to 

summarize it the best I can based on what we have just heard. 

The CHAIRMAN. Very well. Without objection. 

Mr. GORRIE. I would also like to extend my thanks to the University of Central Florida and the veterans that are here present. This 

is a wonderful facility and we appreciate you hosting this today. 

We appreciate the opportunity to meet. And my name is Jim 

Gorrie. And I am the president and CEO for Brasfield & Gorrie. 

And as you will see today, the VA Medical Center is an incredible facility. As discussed in the March hearing, planning and design errors have plagued our efforts to construct the medical center. In March the VA not only acknowledged the problems and confirmed they were acting to correct the problems, but we went on 

and that also resulted in, between January and March of this year, 

the VA agreed to furnish over 45 separate design corrections that 

were named by the job as the blitz, which are represented in the 

yellow binders, with RFIs in the yellow drawings as you see before 

you. 

The blitz was a major commitment by the VA that required taking responsibility for the design errors. Unfortunately, the blitz has 

grown to include over 100 separate design corrections, which are 

reflected by all the questions that—which are the orange binders 

and the subsequent orange drawings. 

Unfortunately, these corrections have lasted longer than we anticipated too. But we are seeing the signs of these changes are 

slowing down. However, we do know that they are coming. 

Last week we did receive another significant revision to the operating rooms, and we have been notified that additional changes are 

coming for additional structure to support the recently selected 

medical equipment. Unfortunately for the project, the operating 

rooms are on the critical path schedule. 

We are starting to make positive progress with the new corrected 

design, and our team is anxious to keep the momentum going. 

Since the March hearing, we have almost doubled the manpower 

working on this job, despite the continued changes. 

The project desperately needed the design blitz. However, this effort was 2 years too late. For Brasfield & Gorrie and our subcontractors, this time is lost forever. 

The process requires us to submit a request for equitable adjustment, which you heard about earlier, to recover the impact due us 

and our subcontractors. It was also mentioned at the March hearing our first REA was valued at $33.6 million, and it is currently 

unresolved today. And it is largely represented by the blue drawings you see over here to the right. 


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The cost of our REA are being carried by us and our subcontractors. I sincerely hope the VA will review the entire REA process in 

the future, as the costs that the contractor and subcontractors have 

incurred create real financial challenges. And given our subcontracting plan goals for this project, including small and disadvantaged veteran-owned businesses, this matter is of real importance. 

After the March hearing the VA committed to work with us to 

expedite the project, but things have not gone as we had hoped. Despite Tim Dwyer, who couldn’t be with us today, our south regional 

president, and my personal efforts, productive meetings with the 

VA to develop a new game plan never happened. 

In June, instead of discussing how we can accelerate the schedule, the VA issued us a notice to cure, which we feel is totally baseless, and threatened to terminate us for default. We learned about 

this notice to cure via an email approximately ten minutes before 

the VA held a press conference announcing its actions. One reason 

this was so strange is that it was just 1 week after the VA met 

with us to discuss our approach towards partnering. 

A few weeks ago the VA also withheld two million additional dollars from our monthly pay request without any discussion. This action creates an additional financial hardship to us. 

The VA has also contacted our bonding company for meetings on 

several occasions without contacting me directly to discuss their 

concerns first. Our bonding company attended a meeting in Washington, DC at the request of the VA in July. 

This is the first time in our 48-year history our bonding company 

has attended such a meeting. Last month the VA gave us our first 

unsatisfactory rating we have ever received on a government 

project in our 48-year history of doing business. Again, with not so 

much as an advance warning. 

As you know, these unsatisfactory ratings are shared throughout 

the government and will have a major negative impact on our ability to get new work. We take our reputation and our finances very 

seriously. 

The recent actions taken by the VA are extremely disturbing. We 

have struggled to understand how the VA could take these actions, 

take full responsibility of the multi-year design problem at the 

March hearing and just 11 weeks later issue us a very public notice 

to cure and threaten termination. It just doesn’t make sense. 

But B&G has constructed many large health care facilities, many 

around here, and we appreciate the positive comments by the VA 

at our first hearing regarding our qualifications. 

This particular hospital has been a job of firsts for us: The first 

time we have had to fund owner changes in the tens of millions of 

dollars; the first time our bonding company has been called to get 

involved; the first time we have testified at a congressional hearing; the first time we have ever received an unsatisfactory rating. 

And unfortunately for us our list is growing. 

Our contract requires us to provide a revised schedule for completion with each monthly pay request. Our July pay request forecasted the completion for November of 2014, which would also be 

no surprise to anybody within the VA, because we have been forecasting that date, the 2014 date, for over a year. I would also like 

to mention that that date does not include any acceleration. That 


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is what we have to do, just follow the contract as submitted accordingly. 

During the VA’s notice to cure 30-day evaluation period we were 

instructed to provide a new obtainable schedule, and so we updated 

our contract schedule for completion for the entire building and 

presented it to the VA. And we also proposed as requested a detailed alternative accelerated contract schedule, which shows us 

working in more areas. And this schedule shows a completion of 

the clinic in 2013 and the remainder of the facility by April of 2014. 

We have not received any formal feedback on these schedules in 

the past 2 weeks. However, as you heard a little while ago, it was 

this past Friday we reached an agreement at the job site on the 

effect of the current changes to us on the job and a mutual commitment to work towards a completion date of 2013. That was important. 

We know that for months the VA has mentioned this completion 

date in the summer of 2013. But they have not been willing to discuss the detailed logic they are using to reach those conclusions. 

And based on what I think I just heard, their analysis is based on 

our original logic that we presented to them before you making any 

changes. That is what I think I heard. 

But from preliminary reports, we know their analysis is not apples to apples with ours. It does not include any of the most current information included in the major changes issued during the 

blitz and post blitz. 

At this time we are proceeding with the development of a plan 

to complete the entire project in 2013, should the VA decide to 

adopt and support it. Although the contracting officer has not 

signed off on the new goal, she is fully informed, and we hope she 

will act shortly. 

Our team has been raising the red flag since the first month of 

the job. We need direction, and we need direction immediately if 

we are going to make this 2013 date. The VA and the hospital and 

the design team must support it. 

The changes we have faced over the last 2 years in just keeping 

everyone working on the job has been a major effort. I would like 

personally to thank everyone on the job, especially our subcontractors, for hanging in there with us, even though we do not have all 

of our schedule issues resolved, and that we are still dealing with 

the nearly $30 million of unresolved change orders. And that does 

not include costs associated with the REAs and other changes. 

We also think it is important that you understand that the VA 

keeps stating the project is 60 to 70 percent complete in terms of 

dollars. But these discussions ignore all the pending changes, current changes, and REAs on the project, which ultimately truly reflect the cost of the work. 

The most important thing this job needs today is open and direct 

communication. We reiterate our eagerness to explore an expedited 

completion of the project. The threats of default should stop. The 

only thing that could put this job over the edge would be a termination. 

I can’t even imagine what such an action would cost the taxpayers, not to mention the opening—the delays for our veterans. 

Such an action would have a devastating effect on all the workers 


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employed on the job. At this stage in the game no one can complete 

this project faster and more economically than Brasfield & Gorrie. 

In closing, we welcome face-to-face working sessions with the VA 

and are available to answer any questions you may have about our 

current progress. We really do want to finish this project. It is a 

wonderful facility. And we can’t wait for you to see it. 

And we thank you for your time. And one of the things that we 

tried to do was to share some really straightforward exhibits to 

help you maybe understand our progress of where we are. So, Mr. 

Chairman, I don’t know if you would like me to just—to share with 

you quickly what is included in with our statement. 

[The prepared statement of Jim Gorrie appears on p. 57.] 

The CHAIRMAN. Let us not do that now. We are a little over time 

on your opening statement. 

Mr. GORRIE. Okay. 

The CHAIRMAN. Let us go ahead and move to questions, if we 

can. We will do a couple of rounds, if that is what it necessitates. 

Thank you very much. 

You pointed to a document on the table that has got some signatures on it. Is that the agreement that was reached on Friday? 

Mr. GORRIE. It is. 

The CHAIRMAN. Is that something you can make available to the 

Committee? Or is it something the VA has asked you not to disclose? 

Mr. GORRIE. I would just ask probably Mr. Haggstrom’s concurrence. But if he concurs I could—— 

Mr. HAGGSTROM. That is fine. 

The CHAIRMAN. Is that okay? If you want to keep it just between 

you all, that is okay with us too. If we can have it, fine. 

Mr. HAGGSTROM. If I could ask that the chairman allow us to 

continue to work with Brasfield & Gorrie over the coming weeks 

to get a better understanding of the schedule, that would be very 

beneficial. 

The CHAIRMAN. Then I won’t ask for that to be placed into the 

record at this time. 

We have heard discussions of varying degrees of project completeness. Can you give me, from the contractor’s standpoint, where 

you think you are in completion? The VA says 60 to 70 percent. 

Where do you think you are, based on the changes that you are 

aware of so far? 

Mr. GORRIE. Well, our estimated completion date was November 

14 per the contract. 

The CHAIRMAN. Percentagewise though can you—— 

Mr. GORRIE. By dollars? 

The CHAIRMAN. Well, no, no. They say 60 percent complete. Are 

they 50 percent? Are they 65? Are you 65? Mr. Paulson? 

Mr. GORRIE. Yeah. 

Mr. PAULSON. Yes. I believe the percentage that the VA is using 

is based on our current contract value, which would equate to 

about a 68 percent completion of money paid to Brasfield & Gorrie. 

The CHAIRMAN. But your—but your—estimate of completion is 

what? 


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Mr. PAULSON. Through our time extension request number three, 

it would be about 55 percent. Through our time extension request 

number four, it would be about 45 percent. 

The CHAIRMAN. So you are saying 45. They are saying 60 plus. 

Mr. PAULSON. Yes, sir. 

The CHAIRMAN. Based on your experience, testimony at other 

hearings, and information that has been provided, you have significant experience in constructing health care facilities. Would you 

say that the number of equipment revisions and accompanying 

drawings were normal, abnormal, or about normal? 

Mr. GORRIE. There is nothing normal about this project. I would 

call this the furthest thing from normal we have ever experienced. 

I would suggest to you All Children’s Hospital, which is, you know, 

a similar size facility down the street, we would have maybe had 

6 or 8 RFI binders for that whole project. And the orange ones are 

just since the cleanup, to catch the cleanup. 

The CHAIRMAN. Why do you think that is the case? 

Mr. GORRIE. We don’t—we can’t explain the evolution. 

The CHAIRMAN. There hasn’t been a whole lot of discussion about 

the design team that was put together, the architect and the engineers. Is that where the issue began, with an incomplete design? 

And if so, obviously the project was bid off that design. 

Mr. GORRIE. Well, in public projects we are—there is a very clear 

line that you have design and you have construction. And so that 

is the major difference. And so we really aren’t privy to what information is involved with creating the design. 

In fact, we have, you know, we really—we have tried to get involved with that in the past to try to help through that. But we 

really have not had much success with that effort. And we have 

tried to explore that. 

The CHAIRMAN. Knowing what you know now, and looking back 

to the first time you ever saw the complete set of plans that were 

given to you to bid off of, were the plans complete? Were you aware 

they were incomplete when you bid on them? 

Mr. GORRIE. Clearly we thought they were. And as you can see 

in the timeline of the design history, which is in here, there was 

a, right before the job issued, there was a complete reissuance of 

the drawings. 

But I guess there was no way for us to know that there was 

going to be a complete fruit basket turnover of all the medical 

equipment. But that, you know, that is the result. 

The CHAIRMAN. Miss Brown. 

Ms. BROWN. Thank you. First of all, we are having communication problems, because we are talking about how I wanted the 

project 2012. October to be exact, or even the summer. So where 

VA and where the construction—we are just totally different. 

But keep it in mind that the veterans here have waited 25 years 

to get this hospital. And so whatever we are talking about the details, we need to expedite it. You all are years apart from me. And 

you all may think I am not realistic. 

But I feel—and I am not in construction—and but I feel that 

when you put the money up front, you all are always talking about 

private business, and the government, and this is a partnership, 


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but when you have—if money is not an issue, I just think we all 

should be able to work through whatever issues that we have. 

Now, I am confused. We are not talking about how much money 

that we owe you, or you owe them, or we are negotiating. The status of the project complete. We are not talking about money. The 

VA say it is 60 percent complete. What do you say? 

Mr. GORRIE. I would start by saying I think we probably wanted 

that November of 2012 date as much if not more than you did. 

Ms. BROWN. November. I was trying to get ahead of November. 

Mr. GORRIE. Okay. Well, I would like—— 

Ms. BROWN. I wanted October. 

Mr. GORRIE. I would just like you to know, when we bid this job, 

clearly our whole approach was for that. 

So clearly—— 

Ms. BROWN. We all wanted the same thing. 

Mr. GORRIE. We are all on the same page with you on that. We 

have no—there is no benefit for us to have ever asked for the first 

delay. That was certainly never our intention. And it is really, 

quite frankly, it is really impossible for us to ask that—answer that 

question today because of what is happening over here. We just got 

the orange drawings, and they are still coming. 

Ms. BROWN. Well, the important thing for me is that you all are 

meeting. You all are talking. And you are working through the 

issues. And that is good. I mean, that is a good report. You met 

August 1st. You are meeting August the 15th. 

And I don’t want it to be we have another hearing on this same 

subject. And, you know, I want you all to continue to meet and 

work through the issues. As the person that watches the taxpayers’—not just the money, but we want the service provided. The 

veterans in this area, Central Florida, have waited 25 years. 

Shouldn’t take 25 years to do nothing. Nothing. 

So, what is the percentage that the project is completed? Not how 

much money we owe you. But how much—the VA says it is 60 percent. What do you say? 

Mr. GORRIE. The critical path of the—when we are going to finish depends on—— 

Ms. BROWN. Right. 

Mr. GORRIE.—when we get those. 

Ms. BROWN. But if you looked at it today what would you say? 

Mr. GORRIE. If I would have said today, November 14. That is 

what our—if you follow the contract, before you try to do something, like what we have tried to do around the table the last few 

weeks, it is what we have been saying for the year. 

Ms. BROWN. November the 14th what year? 

Mr. GORRIE. November of 2014. 

Ms. BROWN. Yeah, but see, I am at 2012. 

Mr. GORRIE. No, I don’t—— 

Ms. BROWN. So what I am saying—— 

Mr. GORRIE. You are just asking me a question. But that is 

where we are before we try to pull it back. 

Ms. BROWN. But what is the percentage of completion? That is 

what I am trying to find. 

Mr. GORRIE. Forty-five percent, if you look at it just along 

the—— 


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Ms. BROWN. So you are 45 and the VA say you are 60. That is 

a big difference right there. 

Mr. GORRIE. Yeah. Are you talking about dollars or are you talking about—— 

Ms. BROWN. No. I am talking about physical work. Not money, 

work. 

Mr. GORRIE. Well, there is 45 percent when you look at it time 

is what we are saying here. But the problem is, the schedule, the 

24 months, or the bigger schedule initially was never able to be 

built. And so we were—we are having to now create a new schedule, which we have all committed to do. 

Ms. BROWN. Okay. And you are capable of doing it. 

Mr. GORRIE. We’re committed. Yes, we are more than capable. 

Ms. BROWN. More capable. 

Mr. GORRIE. We are committed to what our team discussed with 

their scheduling professionals and our scheduling professionals, 

they have been meeting for weeks and months trying to reconcile 

all these drawings and what we might can do. And this is the first 

time we have actually kind of seen the goal line at the same place. 

Ms. BROWN. Well, let me just say in closing from this round, the 

military slogan for the Army is one team, one fight. And we all 

doing it to move forward, getting veterans the facility that they deserve. 

Thank you, Mr. Chairman. 

The CHAIRMAN. Mr. Bilirakis. 

Mr. BILIRAKIS. Thank you very much. During the testimony you 

gave in Washington, DC you talked about a lack of cooperation 

with the VA. 

Mr. GORRIE. That was my brother, the older Gorrie. 

Mr. BILIRAKIS. Yes. Go ahead and elaborate on that a little bit. 

What is it going to take to get it done? What is it going to take, 

in your opinion? 

Mr. GORRIE. Open a direct communication. We can’t ignore the 

elephant in the room. We have to deal with—you know, we have 

shared with you the $60 million of outstanding changes. They have 

to be reconciled. 

And we got to—the schedule has to be based on logic. It can’t be 

based on somebody that is not here or a schedule that doesn’t exist 

any more. It has got to be based on fact. And we are ready. And 

that is all we want to do. 

Mr. BILIRAKIS. Okay. In the construction process, are drawings 

simply—when are they to be completed in the construction process? 

What has been your past experience? 

Mr. GORRIE. In the private sector or the public sector? 

Mr. BILIRAKIS. Yeah. Well, both. 

Mr. GORRIE. Well, the public sector, they are required by law to 

complete the design. I mean, it is a requirement. So that is—so 

they are required by law to be completed before they are issued to 

us. So that is—I don’t know how else to answer it. 

Mr. BILIRAKIS. Yeah, these drawings, the design drawings, the 

changes that have been occurring, and I understand that about the 

equipment and the up-to-date equipment, and that that attributed 

to a lot of these changes, design changes. Tell me how you feel 

about that. 


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You have already told me that there has been a lack of communication. But is that the case? I mean, did you attribute these 

changes to updated equipment, design equipment? 

Mr. GORRIE. Yes. I think the VA has shared in the March hearing where their design was insufficient. And, you know, the biggest 

one clearly is medical equipment. That one you just—that one 

jumps off the page. 

Mr. BILIRAKIS. Tell me what type of medical equipment. 

Mr. GORRIE. There is 27—how many, 27,000? 

Mr. PAULSON. Yes. 

Mr. GORRIE. I mean, it is in every room. 

Mr. BILIRAKIS. It is in every room. 

Mr. GORRIE. It is in every room. So when you start a job like this 

and you assume you have the right drawings, you have flow, you 

go. Now we have been directed to a cure notice to just kind of go 

wherever we can go. So we are hopscotching all over the place, but 

we have to have flow. 

Mr. BILIRAKIS. All right. Following up on that. In the alternative, 

so the contract schedule, you propose working in more areas to expedite completion. If it is feasible to work in more areas, why 

wasn’t that incorporated into the current contract schedule? You 

can probably answer the question. But go ahead and elaborate on 

that. 

Mr. GORRIE. Well, there is a lot of ways you can answer it, but 

it doesn’t make sense to work inefficiently. I guess that would be 

partly it. And we are willing to work wherever we can work. And 

that is what we are doing now. 

But first we are obligated by contract to follow—they have a 

very—there is very rigid rules about how you do a schedule for the 

VA, and you have to follow it. So that is what we are trying to do. 

But since June 15th we have been told you got to have more 

manpower. At the same time we are getting the orange stack. 

Mr. BILIRAKIS. Okay. Where are the additional costs associated 

with expediting the project? 

Mr. GORRIE. It is about everywhere. But if you will look at the 

management, when you see the job, there is a—we have furnished 

two or three times the amount of supervision that is needed, because we never have flow. We are just working wherever we can 

work. I mean, that is the plan right now is work wherever you can 

work. 

Mr. BILIRAKIS. Okay. Elaborate on the lack of the cooperation 

that you have been receiving from the VA. 

Mr. GORRIE. You have to have direction. I mean, for us to get off 

of the plan, we have to agree that we need to get off the plan and 

then be directed to get off the plan. And we haven’t gotten that yet. 

We think we may have Friday actually made a break-through on 

that. I mean, the contracting officer hasn’t necessarily endorsed it 

yet. But we think we are—— 

Mr. BILIRAKIS. You think you can get it done by the fourth quarter ’13? 

Mr. GORRIE. That is our plan, but it will take a ton of effort. And 

if it doesn’t quite—I mean, the changes are still coming, so I can’t 

commit to something that I don’t have. And the design isn’t completely finished. 


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Mr. BILIRAKIS. Okay. Thank you very much. 

I yield back, Mr. Chairman. 

The CHAIRMAN. Mrs. Adams. 

Mrs. ADAMS. Thank you, Mr. Chairman. A couple of things. 

Do you have the final equipment list? 

Mr. GORRIE. No. 

Mrs. ADAMS. No. You were here when I asked that question earlier, were you not, of the VA? Your testimony is—— 

Mr. GORRIE. They have one. 

Mrs. ADAMS. But you do not. 

Mr. GORRIE. We do not. 

Mrs. ADAMS. Okay. The design, the VA designs, are they consistent with the equipment vendors’ designs when—and is that 

why—— 

Mr. GORRIE. We don’t have the list to verify. 

Mrs. ADAMS. So you have no idea. Because that will create more 

delays; correct? 

Mr. GORRIE. Hopefully not. 

Mrs. ADAMS. Do you believe you have all the current changes? 

Mr. GORRIE. No. 

Mrs. ADAMS. No. You said follow the rules by the VA. You are 

required by your contract to follow and proceed in precise areas 

throughout the contract. At any time did you ask the VA to be able 

to deviate in order to keep people working and moving forward 

with this project? 

Mr. GORRIE. Yes, ma’am. 

Mrs. ADAMS. And what was the answer? 

Mr. GORRIE. Well, when I went to Washington in the spring of 

whatever—what is this year, ’12?—’11, we knew we had the problem with the surfacing. And we didn’t—we just didn’t really get an 

answer. But we finally—it finally dawned—everybody realized that 

summer we had to do something. 

And so they issued a change order, change order 05W, to resequence the job that would enable us to make up for the lost time. 

And the answer was we just got an email that said, stop that. We 

are no longer interested in that exercise. 

Mrs. ADAMS. So they had the opportunity to resequence, is your 

word, to get everybody moving again. And then you got an order 

from them—— 

Mr. GORRIE. To stop. 

Mrs. ADAMS.—to stop the resequencing. So is that the reason we 

don’t have a lot of workers on the job? 

Mr. GORRIE. That is a major part of it, yes, ma’am. 

Mrs. ADAMS. I see. So you got a contract and new rules by VA 

to follow. You went over to the VA back in ’11, summer of ’11. You 

started resequencing. Then you are told to stop resequencing by the 

VA. And we are here today because you continued to get the 

change orders and revision drawings. 

You still do not have all the equipment list, something that I 

asked during the Committee hearing in Washington. And I am very 

concerned because the VA didn’t tell me that they had the list, but 

they hadn’t provided it to you when I asked them. I guess I need 

to be more careful with my questioning. I need to go back to my 

law enforcement days. 


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So I have some concerns about this, Mr. Chairman. We have, I 

believe, a little bit of a difference of opinion on who has the equipment list now. And I don’t know how we complete it if we don’t 

have an equipment list. 

Mr. GORRIE. And we are not today—— 

Mrs. ADAMS. Can you tell me how you complete it without equipment list? 

Mr. GORRIE. We have to just assume what they issue us in the 

drawings have been fully coordinated on their end. 

Mrs. ADAMS. Have they in the past? 

Mr. GORRIE. No, ma’am. 

Mrs. ADAMS. No. So that is quite an assumption and risk you 

take in that assumption I would believe. 

I heard you say the REA is $33.6 million unresolved. Can you 

elaborate on how that affects your subcontractors and where we 

are with our subcontractors on this job? 

Mr. GORRIE. Well, the construction industry works off pretty thin 

margins. And so everybody is asking me—I get calls daily wanting 

to know the status. So it is a cash flow business. 

Mrs. ADAMS. When did you get notified that the VA was willing 

to start talking to you again? When you had that—these meetings 

just recently? How long before the Committee hearing was it released? 

Mr. GORRIE. Well—— 

Mrs. ADAMS. Or was it after? 

Mr. GORRIE. It was right around the notice to cure. 

Mrs. ADAMS. Well, I am happy to hear that they finally are 

speaking with you, and I hope that open dialogue continues. Because as you heard me say many times, this is about our veterans 

and a facility they need and they deserve. And I hope the VA will 

continue that open dialogue. 

And I yield back, Mr. Chairman. 

The CHAIRMAN. Mr. Nugent. 

Mr. NUGENT. Thank you, Mr. Chairman. 

Mr. Gorrie, you had mentioned in your statement in regards to 

you have a mutual agreement reference in the summer of 2013. 

But you sort of caveated or put a caveat in there, a reference, but 

you need direction to get there. What did you mean by you need 

direction to get to 2013 as the completion date? 

Mr. GORRIE. The mutual agreeable date right now is, you know, 

the end of 2013. We have never had any kind of understanding of 

a summer date. But the end of ’13, with the substantial completion 

at February ’14, where they can start moving in. We are trying to 

work with them on how they can compress the activities to complete. 

So for us to pull back from November, which is what the current 

rules—if you follow the rules, right now we are on November of ’14. 

And so we are trying to and we have worked morning, noon and 

night and their scheduling teams have worked to compress that 

time frame. And that is what we are trying to do. And we can’t do 

that without their help. 

So we are, you know, we are having to create a new game plan. 

And everybody—that is what the team committed to do, is that we 

are basically—since the cure notice, we have had to suspend the 


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original logic. And so we are working off—we are having to work 

on new logic now. 

Mr. NUGENT. I want to ask you a question. How many hospitals 

has your corporation built? 

Mr. GORRIE. Well, we are the second largest, first or second every 

year. You know, we have done the All Childrens, you know, Florida 

Hospital, ORMC. We are the largest health care contractor, probably, health contractor in the country. 

Mr. NUGENT. Do you normally get them built on time? 

Mr. GORRIE. Yes, sir. 

Mr. NUGENT. Have you exceeded the time limit on any of the 

projects in the last few years? 

Mr. GORRIE. No, sir. I am not aware of any that we failed to 

meet a schedule that we have given. Commitment is everything in 

our business. 

Mr. NUGENT. Is there a reason why you were able to meet that 

time period when you respond to an RFP, to a request for proposal, 

and you can deliver? Is there a reason why that happens? Or is 

that just by chance? 

Mr. GORRIE. Well, we are just familiar with that positive working 

relationship. Most of the work in health care facilities is done, you 

know, in partnerships, so that the drawings can even evolve. And 

we can sometimes, if you have a plan, you know—and the VA now 

is considering alternative ways to contract for hospitals, because 

public bid, bidding of a hospital, is very difficult because of this 

equipment. 

And so in the other facilities and the other ways of contracting, 

you are able to work with that medical equipment process. So the 

processes we are normally involved with is we are very much at 

the table in the medical selection process. 

Mr. NUGENT. Well, Florida Hospital, are you the contractor, the 

general, on that? 

Mr. GORRIE. Yes. Well, everybody knows, it is a big system. 

Mr. NUGENT. Right. 

Mr. GORRIE. We started at Celebration. We started working with 

Florida Hospital 15 years ago. We have been there ever since. And 

there has been a few other people that have managed to get a job 

or two. 

Mr. NUGENT. Well, there is a new hospital being built in Wesley 

Chapel. In watching—I don’t know if that is yours or not—but in 

watching the construction, they actually left a large wall open so 

they could move some of this larger medical equipment in. 

But even though they were, I guess, at 50 percent complete, they 

had a roof that kept the water out, because that is part of drying 

in. I mean, when you build a house or, you know, when I built a 

sheriff’s office, there are certain things you have to have done first, 

and one is you have to dry it in. 

Mr. GORRIE. Yes. 

Mr. NUGENT. Is there a reason why this building is not dried in? 

Mr. GORRIE. Well, the roof design totally changed. That was, you 

know, that was discussed in March. And you know, we have tried 

not to dwell on the past problems. But the current critical path is 

what it takes to get the medical equipment and those operating 


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rooms going. So we have to focus on what is that stream of work 

that gets you to the end. 

And at this point—and it hasn’t been for a long time—the dryin has not been where it is on most projects. It is not necessarily 

critical. Right now it is critical to prevent quality issues, some of 

which you heard. I mean, obviously when we can finally get the 

new roof on, it mitigates those kind of issues, but it doesn’t help 

us get to the finish line earlier. 

Mr. NUGENT. I reserve the rest of my comments. 

The CHAIRMAN. Mr. Webster. 

Mr. WEBSTER. Thank you, Mr. Chairman. 

In the testimony by the VA they mentioned also the movement 

of the date back from the end of 2014 in several steps and eventually possibly in 2013. And they also said thought that there was 

no discussion on additional dollars at all. 

Did that agreement that come out of that and the partially 

agreed to, did that include any talk—would you think there was 

any talk or any agreement or any mention of the additional cost 

to move those dates up? 

Mr. GORRIE. The only way we knew to get an agreement on the 

end date of this project was to allow the best scheduling minds to 

get in the room and take money out of it. And that is what we did. 

I continue to have some dialogue with Mr. Haggstrom about, you 

know, what the next steps are, because he and I have been able 

to have conversations about what can we do. And so we have, you 

know, we have had very broad brushes on this. 

But the main thing we have to have is a mutually agreeable target. And I think anybody that takes what the VA requires us to 

do on the schedule, if you go back to November ’14, you can’t do 

that, you know. And you go to end of ’13 for substantial completion. 

You know, we never—I don’t have any experience with the 

claims. But, you know, they mentioned claims. We don’t have any 

experience with that. But if that is what we have to do, that is 

what we have to do. We want to finish. We just want to finish. 

Mr. WEBSTER. So is there a considered and possibly a logical 

step-by-step partial completion date of certain areas—— 

Mr. GORRIE. Sure. 

Mr. WEBSTER [continuing]. Of the hospital? 

Mr. GORRIE. Sure. We can open the clinic early. 

Mr. WEBSTER. Well, there was mentioned three items, the education, maybe the clinic was, some other thing, in order to open two 

other facilities there. Is there a possibility to complete those 

and—— 

Mr. GORRIE. There is all kind of possibilities. 

Mr. WEBSTER [continuing]. Still continue construction. 

Mr. GORRIE. There is all kinds of possibilities with disconnecting 

the logic and allowing us. If we could really know what was important, instead of just plopping the whole 2 million out there, square 

feet, we are—that was part of the discussion a year ago, when we 

got in that change order of 5W that we mentioned that was 

stopped. That was part of that exercise, was to give them the 

menu, the road map. 

Mr. WEBSTER. So you could, if there were a—if the idea was to 

open up the rest of the facility that is already available and there 


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were some requirements, that could be done in a logical, step-bystep basis within the current time to finish and do it partially and 

that would fit in the schedule that would possibly accelerate some 

movement and not others? 

Mr. GORRIE. I think we are going to have—I think the team is 

going to have to do that. I just don’t think there is any question 

that there is going to be additional changes. 

And I think, quite frankly, I think we are going to have to isolate 

the operating rooms. We are getting daily changes on the operating 

rooms. And I mean, what is not even in the orange set were the 

changes we got last week. But I mentioned to the operating rooms, 

and George could tell you more with those, if you would like. 

Mr. WEBSTER. All right. So now in order to accomplish that, it 

takes what you had said, maybe VA had said, and that is open, direct communication. So if you were able to say, all right, after this 

meeting we are going to have some open and direct communication, 

who would you want at that meeting? Because I don’t think I 

know, and maybe none of the other members know. Who would you 

want there? So if we publicly say that, maybe we could help that. 

I don’t know. 

Mr. GORRIE. Well, we have to have—we have been able to have 

good discussions with Mr. Haggstrom. And we would have to 

have—we would certainly need to have the contracting officer 

present. Because we can’t—the scheduling people all agree now on 

what is doable. But the testimony just reflects they still think 

maybe the summer is possible. And the contracting officer hasn’t 

necessarily agreed with our logic. So we can’t—we can’t really do 

much without—I can speak and any of our people can speak for us. 

And we have done whatever is asked. But we do really to get the 

contracting officer—— 

Mr. WEBSTER. Let me ask, if you set a meeting up, and you 

wanted the people there that it would take to maybe resolve some 

of this—— 

Mr. GORRIE. Well, it would have to be the contracting officer, you 

know. I guess we—you know, we have invited General Shinseki. 

We would love to have somebody say, make it happen. 

Mr. WEBSTER. Well, maybe one just final quick answer you could 

give me. Which of these documents, green, blue, yellow, or orange, 

is 68 percent complete? 

Mr. GORRIE. That would—— 

Mr. WEBSTER. Any of them? 

Mr. GORRIE. Well, by dollars or by time? 

Mr. WEBSTER. Thank you very much. 

The CHAIRMAN. For the record, we did ask for the contracting officer to be present, but that request was declined by VA. I understand VA’s reason for declining but I do hope that communication 

can be opened between the contracting officer and B&G because I 

think that appears to be one of the biggest issues here. 

Miss Brown. 

Ms. BROWN. Thank you. 

I just returned a couple weeks ago from down in Miami to their 

VA facility. Their operating room is 95 percent complete. All they 

need is a final authorization from the Committee and they will be 

ready to finish that facility and operate it. 


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I understand that equipment is, you know, is I think changing. 

I went to the nice facility that we have down in Gainesville. And 

the equipment is—not just the operating—even the kinds of equipment, because of our veterans and their additional needs, not even 

for a person to touch them, that they have to lease equipment. So 

I understand that technology is changing. 

And so I guess we all need to think out of the box as to how we 

are going to do it. And I guess you need a different kind of people. 

You know, I think sometimes it would be helpful to have the 

physicians and the people that are going to actually use the equipment in the room as you work through the additional what do we 

need to make sure that when we turn—you all turn it over to the 

VA, it is the state of the art wherever we need it. 

And I have spent time with you all, the contractors and the VA 

and, you know, it is a little frustrating, because, like I said, you 

all’s dates, all of your dates is different from, in my mind, what the 

dates are. And I have been waiting with the veterans for over 25 

years. 

In looking at this stack of blueprints, the change orders here, is 

this normal? 

Mr. GORRIE. No, ma’am. 

Ms. BROWN. It is not normal. Well, I know that Florida is unique, 

and I know that our VA hospital is going to be unique, and it is 

going to be the state of the art. And when you all finish it, it is 

going to be something that we know the raining in the facilities, 

the leaking—because I guess did it have anything to do the with 

the roofing or just the way the building—— 

Mr. GORRIE. It is the design of the roof. We have to have—they 

changed the design of the roof. 

Ms. BROWN. Okay. Is that why it is raining in the building? 

Mr. GORRIE. Yes, ma’am. 

Ms. BROWN. Why can’t we stop it? 

Mr. GORRIE. We are close. 

Ms. BROWN. Close to stopping it. It rained yesterday. It rains 

every day here. 

Mr. GORRIE. But I have been through the building a lot. And we 

have made great strides to, as you will see on the tour, you will 

see that those obstacles are under—are manageable at this point. 

Ms. BROWN. And the mold and the mildew and all of that is— 

and the rust, all of that is going to be corrected. 

Mr. GORRIE. Yes, ma’am. 

Ms. BROWN. Okay. You all do a lot of business. I have had a lot 

of complaints from veterans-owned businesses and minority businesses, and female-owned businesses, that we have not been able 

to partner. 

What kind of records do you all have working with small businesses and others? Because we have a lot of—he wants to answer 

the question, and that is fine. We have a lot of veterans-owned 

businesses in the area, and they complain to me that they are not 

getting any work. Can you—— 

Mr. GORRIE. He can speak specifically to this job. I will give you 

the corporate commitment if you need it. 

Ms. BROWN. That is what I want to know, because you all do a 

lot of government work, and perhaps we need to do something. 


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When I was listening to the VA about this whole issue—because 

I know a lot of people like to talk about government, but government is a business and it is a big business. And it could help other 

small businesses do better. Yes, sir. 

Mr. PAULSON. Our commitment and/or requirement on this particular project was 11 percent of the total subcontracts be let to either a disabled veterans-owned business or veteran-owned business, and we have exceeded those goals. 

Ms. BROWN. You have done that? 

Mr. PAULSON. Yes, ma’am. 

Ms. BROWN. Did you do—get a lot of the local businesses? Because this is where I have gotten my complaints from. 

Mr. PAULSON. Some of those businesses are local. Some of them 

are not. The contractual requirements of the small business program, it is not a local proem, per se, as a requirement. 

Mr. GORRIE. We are mentoring. And we have a lot of engagement 

and involvement. George has been helpful with other Federal agencies. You know, we are very interested in helping and working with 

mentor programs. 

Ms. BROWN. Well, this has been truly an area that I am interested in. Because when we look at the unemployment with veterans, it is much higher than other groups. It would be instrumental for us, as members of Congress, that as we move forward 

with projects, to include a percentage. Not just, you know, saying 

after you get the contract, then we are going to talk about what 

kind of veteran businesses or businesses that we do business with. 

It should be a part of the contract when it goes out. And then we 

would issue you some kind of requirements that you employ veterans to do the work when they are able to do the work. 

So, you know, I am hoping that as we spend taxpayers’ dollars 

for veterans, that we include them as far as how they can participate with businesses and hire other veterans. That is one of my 

goals. I yield back. 

The CHAIRMAN. Maybe some of the homeless veterans that are 

put in the domiciliary can be put to work on the site. 

Ms. BROWN. Yes, sir. But in addition to that, if you put them in 

the sites, then the people that is providing the food, the services, 

the clothing, the helping with the keeping the facilities up, those 

could be veterans. So, I mean, it is a whole opportunity there if we 

could just think out of the box. 

The CHAIRMAN. In your view, what effect did the notice of cure 

have on the job site and the completion date? I mean, has it affected it? Or have things moved along? Did things slow down? Did 

they stop? Give us kind of a snapshot of what the notice of cure 

did to the job site. 

Mr. GORRIE. Well, primarily, it destroyed moral. As the drawings 

taper down the changes, our manpower is picking up. So it has basically directed us to now just start working wherever we can work. 

So I guess the—it is just there is no way for us to answer that 

question yet, until we know when they have told us to go run and 

jump. But we don’t know where we are going yet. So as soon as 

we can all agree on where we are trying to run to, I will better be 

able and I can come back to you with an answer. 


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But, you know, in essence, you wouldn’t think that we would 

have needed—we were—we are not really doing anything different, 

other than talking. I mean, we are having to internally meet every 

day. We talk to subs every single day because they literally are 

scared for their jobs. 

The CHAIRMAN. Have you done a cost estimate of bringing this 

thing to completion by the fall of next year? What would it cost, 

dollarwise? 

Mr. GORRIE. Obviously that is of utmost importance. And we have told you the 34 and the $30 million that we sure would like 

somebody to help us catch up on. And we testified in Congress in 

March. It was asked of us then. And Mr. Dwyer said $120 million. 

And we don’t—we are just speculating. But that is—we don’t have 

a better guess today than we did in the March hearing. But we do 

have an orange stack. But that is the only difference. 

The CHAIRMAN. I would hope that you would have, with you and 

VA sitting down together, they touted the fact that you had backed 

your dates from ’15 to ’14, to substantial completion is what I 

heard. I heard substantial completion. I didn’t hear completion—— 

Mr. GORRIE. That is correct. 

The CHAIRMAN [continuing]. Fall of 2013. 

Mr. GORRIE. Yeah. 

The CHAIRMAN. If you had to bring double shifts on, what does 

that do to the cost of the project? The fixed costs are, I assume, are 

there, I mean, your steel, your concrete, your drywall, all of that. 

But your labor costs would have to, I would assume—— 

Mr. GORRIE. We will be glad to do that exercise. I mean, obviously doing that last year, when we thought we would a year ago, 

would have helped. 

And I want to say for the record the ’15 date that has been mentioned several times was a 1 month blip when it was forecasted. 

And that was before the schedulers could reconcile the amount, you 

know. 

We were able to mitigate that one time ’15 date, and that seems 

like that continues to be. But we have been fairly consistent for a 

long period of time when we would think this job would finish, and 

that is the end of ’14. That is per the rules. It has, you know, it 

has ebbed and flowed, as you can imagine. But we have been fairly 

consistent on that point. 

So the exercise we are doing now is a—it is not a all of a sudden 

we got a new date. It is going from what we—the way we interpret 

our contract to what can we do, which is we wish we could have 

done this a year ago. 

The CHAIRMAN. Mr. Bilirakis. 

Mr. BILIRAKIS. Thank you. Appreciate it. Again, this is your first 

contract with the VA? 

Mr. GORRIE. No. 

Mr. BILIRAKIS. What have been your past experiences? 

Mr. GORRIE. We have not experienced anything like this. 

Mr. BILIRAKIS. Nothing like this. 

Mr. GORRIE. No. 

Mr. BILIRAKIS. Nothing. Never seen anything like this in the history of the firm. 

Mr. GORRIE. That is correct. 


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Mr. BILIRAKIS. What—— 

Mr. GORRIE. Yeah. Excuse me. I didn’t—— 

Mr. BILIRAKIS. In your estimation, what would this cost the taxpayers if there were a termination of your contract? 

Mr. GORRIE. I don’t think it is calculable. You heard—— 

Mr. BILIRAKIS. You can’t estimate here—— 

Mr. GORRIE.—for each 12 months—— 

Mr. BILIRAKIS.—the cost in delay. 

Mr. GORRIE. The cost to the veterans I don’t think is calculable. 

Because, you know, there is nobody that can pick up these drawings. There is just nobody else that can finish. I mean, it is just— 

it is not fathomable how somebody could say, okay, here is your 

sets. Here is your RFIs. You know? Finish it in a year. It is just 

not possible. It is just—— 

The CHAIRMAN. Are you done, Jim? 

Mr. BILIRAKIS. Yes. 

The CHAIRMAN. For the record, we did write a letter to the Secretary on the 22nd of June asking those questions. The response 

from the Secretary—and I would like to ask that our letter be entered into the record, and also his response. 

It was not a complete response. There were no numbers. There 

were comments such as VA cannot predict the cost that might be 

associated with possible legal actions that may result from 

Brasfield & Gorrie’s termination. 

So to follow in behind your question, I would like to enter these 

two documents into the hearing record. 

[The attachment appears on p. 59.] 

The CHAIRMAN. And you are yielding back. 

Mr. BILIRAKIS. I will yield back. 

The CHAIRMAN. Mrs. Adams. 

Mrs. ADAMS. Thank you, Mr. Chairman. 

The document that you guys are still working on, is it—I want 

to ask if it is—there is anything other than what you discussed. Is 

there anything else outstanding that could shift the projection completion date? Is there anything else that you still have to work out 

with the VA that could shift the projection completion date? 

Mr. GORRIE. Yes. 

Mrs. ADAMS. Yes. 

Mr. GORRIE. Yes. 

Mrs. ADAMS. And is it something that is large enough to shift it 

in a huge manner? Or is it something that is minor? Is it—I mean, 

and how many are there? 

Mr. GORRIE. Well, there is no normal on this job. So I would have 

to say it would have the potential to be a major. 

Mrs. ADAMS. It has the potential to be a major. 

Mr. GORRIE. If we are not committed arm in arm to solve it. Because what I was—what—— 

Mrs. ADAMS. If you do get a commitment arm in arm to solve 

this potentially major issue, would it add to, in addition to, the 

completion date of the end of next year? Is it possible? Will it? 

Mr. GORRIE. The change that we received in the ORs makes it 

extremely difficult for us to answer that question. And I would be 

glad to tell you what we received last week in the ORs if you want 

a visual of that. 


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Mrs. ADAMS. Okay. 

Mr. GORRIE. George. 

Mr. PAULSON. The change that Mr. Gorrie is referring to is RFP 

319, in which in the third floor of the hospital where the ORs are 

located, we have added smoke evacuation to those rooms. We have 

added structural steel support for the medical equipment in those 

areas. We have added digital controls to monitor all of the ORs. We 

have added monitors and TV rough-in. 

Mr. GORRIE. And the drawing equipment. 

Mr. PAULSON. Of 76—— 

Mr. GORRIE. That is in the orange stack there. 

Mrs. ADAMS. There is 76 more—— 

Mr. GORRIE. They are not in the stack. 

Mrs. ADAMS. So what I am hearing, Mr. Chairman, is it looks 

like they came to agreement on possible completion date, substantial completion date, but there is still—— 

Mr. GORRIE. I would give you my commitment that we really are 

committed. And part of the agreement was that we would mitigate 

that. 

Mrs. ADAMS. Or is there still a—— 

Mr. GORRIE. Yes, there is no way it could be mitigated without 

the arm-in-arm approach. If it has to be, you know, just go to the 

contract, it would be impossible to get there. I mean, just you have 

to kind of agree we are doing something unique to get there. 

Mrs. ADAMS. So I would just ask that the VA make a commitment to work arm in arm with you so that our veterans don’t have 

to continue to wait any longer. And I heard you say that you think 

that if you could resequence, like we were trying to do a year ago, 

that we would be able to get parts of it open to be available to our 

current veterans today. Is that correct? 

Mr. GORRIE. We would love for you to start getting a return on 

your investment. And we are open to any shape or form that 

comes. 

Mrs. ADAMS. Thank you. I yield back. 

The CHAIRMAN. Mr. Nugent. 

Mr. NUGENT. Mr. Gorrie, I guess what you are looking for is 

some kind of certainty, at least what I am hearing, and maybe not 

correctly. 

At some point in time there has got to be an end to the change 

orders. I mean, at some point in time I would think the VA has 

got to say, this is what we want this hospital to be, and we want 

to get it completed within a certain time period. 

If they continue to provide all these change orders as they have 

in the past, is this going to push the extension of this, you know, 

this program, hospital, further out? 

Mr. GORRIE. Potentially. 

Mr. NUGENT. Potentially. Have you heard any commitment from 

the VA that, listen, we think this is the hospital we want and we 

want it done now? Now, there is always going to be some, I guess, 

new innovation come out. But is that how you build a hospital is 

to keep stretching this out? 

Mr. GORRIE. We don’t see any need for it to be stretched out. You 

can take cherry and substitute it for vanilla on certain things. Certain things you can’t. 


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Mr. NUGENT. Right. 

Mr. GORRIE. And we are not involved in that. We just get the 

drawings. We are not involved with the selection of the equipment 

or the discussions of the impacts that that decision might make. 

Mr. NUGENT. While we want to have the most effective and state 

of the art facility there is, if it never opens, then it doesn’t matter 

what our great intentions are. Correct? 

Mr. GORRIE. Correct. 

Mr. NUGENT. So at some point in time the VA, and I guess sitting with you, saying this is our baseline. 

Mr. GORRIE. That is right. 

Mr. NUGENT. And unless something comes up that it drastically 

changes that, we are moving forward and we want you to get this 

done. Is that the direction you are looking for? 

Mr. GORRIE. We have to have that. The project has to have that. 

I mean, they either—they either need to—they either are going to 

terminate us or they got to work with us. You know, you just can’t 

let this thing continue down the path that it is on. 

Mr. NUGENT. It almost sounds like it is time to fish or cut bait. 

And the time clock is ticking on our veterans that need it. So we 

got this, when I drove up here, it is amazing, the exterior of this 

facility. I don’t know if that helps in regards to the quality of care. 

I doubt it. The quality of care is what happens within the mortar. 

And so what I want to know from you, is if you get a commitment from the VA to substantially complete this project based upon 

what you have today, that you can get this done in a timely manner. And you are saying the end of 2013. 

Mr. GORRIE. Yes. That is what we are saying. 

Mr. NUGENT. If they continue out, who knows—— 

Mr. GORRIE. We can only control what we know. But we are willing to do our part. 

Mr. NUGENT. Well, having, you know, built—having been on the 

site where we built a facility, a public building, our biggest thing 

was to try to—was to stay away from change orders. Because it 

was always somebody coming up saying, hey, boss, you know, there 

is a new wood-banger. There is something new that we can put in 

place. And you always had to sit down and say, can we retrofit 

later? 

But we need to get into the facility. And I guess that is what we 

need the VA to commit to is that, while there may be something 

on the horizon every day, but let us get this done today. 

So, I know that representatives from the VA are sitting out 

there. I would hope that we can get all this, you know, in the past 

behind us and really consider, you know, what this all—what all 

this means is that it is care for our veterans that need it the most 

at the end of the day. 

And so I would ask again, Mr. Chairman, I appreciate you having this hearing here. Thanks very much. 

The CHAIRMAN. Mr. Webster. 

Mr. WEBSTER. Thank you, Mr. Chairman. 

So time and money, I guess, those are directly related. Do you 

agree with that? 

Mr. GORRIE. Yes. 


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Mr. WEBSTER. So we squeeze the time; we probably increase the 

cost. But that is just the way it is. And it wouldn’t be any different 

in any other situation in any other day at any other project, probably the same thing; correct? 

Mr. GORRIE. Yes. There is a point where you cross the efficiency 

line. There are certain parts that we can accelerate that aren’t, you 

know, that we may can accelerate without costing you a lot of 

money. But it depends on which effort you want. 

So time is money. There is no question in that statement. But 

as it relates to this project, that could take a lot of different forms. 

Mr. WEBSTER. Mr. Chairman, I have a letter from the Secretary 

that I got last week I would like to insert into the record, because 

he does list some of the dates and so forth. But more importantly, 

he does say by October he will have someone in place that would 

meet the statutory requirements to run this construction job. And 

I would like to have that for the record. 

I also have two other letters for the record from UCF, the construction manager there, and from Orlando Health, of what requirements they would have if they were doing a project of this 

kind or projects around the country. And these would be for smaller. And it does match what we have in our own statutes. So I 

would like to put these into the record. 

The CHAIRMAN. Without objection. 

Mr. WEBSTER. Yield back. 

The CHAIRMAN. Miss Brown. 

Ms. BROWN. Yeah, I am ready for the tour. But I just have one 

statement, and I would like for you all to respond to it. I would 

hate to leave this room, people thinking that change orders are just 

one-sided. And I am not in construction. But I do know the VA may 

have had changes. But I am sure you all have change orders also. 

That is a part of what you all do. Correct me if I am wrong. 

Mr. GORRIE. No, ma’am. You are absolutely right. There is two 

sides to it. And I would say that—I would say this job has had, 

when we have resolved our changes on the ones that we have resolved—which is unfortunately the small things—we did it about, 

I don’t know, 80 to 90 percent. So, you know, if you could just give 

us $0.50 on the dollar until we—you know, we are just out a lot 

of money. 

Ms. BROWN. Okay, okay. And you said the small businesses, they 

are out of money too? 

Mr. GORRIE. Yeah. We all are. 

Ms. BROWN. A lot of small businesses can’t absorb as much as 

big businesses. But change orders are the part of when you build 

buildings, that is part of everybody, they do that. I do know that. 

You said that is correct. 

Mr. GORRIE. Yes, ma’am. That is correct. 

Ms. BROWN. So we don’t want to think it is just the VA changing 

when you all run into something or it is something different, then 

you all come to us and say VA is the issue. 

But I guess what you have heard from this committee that we 

want the veterans facility to be completed and in a time efficient, 

and that this project is unique. People sometimes people think 

unique is not a pretty thing. But unique is this project. The fact 

is 25 years overdue is uniqueness. 


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But we have a growing Central Florida community that needs 

the services and, you know, Florida is unique. So all I want to be 

sure is that we are uniquely working together to complete it. 

And I would love to see you all complete it. But basically it is 

going to be a team effort. And we all have to work together, the 

VA, along with—I mean, you all are basically in the driver’s seat. 

Because if you all do what needs to happen, then I am sure that 

it could turn out positive quickly. 

Mr. GORRIE. Can I comment on the change orders? 

Ms. BROWN. Yes, sir. 

Mr. GORRIE. We would love for these to be zero cost change orders. Brasfield & Gorrie is certainly not in the business of change 

orders. I personally have never testified. I have never been in a 

claim. I have never even given my deposition. 

Our company is founded on avoiding disputes, if at all possible. 

If you look back at our record, we don’t have claims. We just don’t 

have them. 

So, yes, there is two sides. But it is almost like we don’t want 

to go to claims. We want to resolve them as we go. We want to— 

we want to clean up where we are. And the claims process is a lose. 

So we are committed. And to date we just don’t know where we 

stand on these $60 million of changes. 

Ms. BROWN. But you all are working together. And you had a 

meeting August the 1st. And you have another one on August the 

15th. Is that right? 

Mr. GORRIE. Yes, ma’am. That is about the schedule. 

Ms. BROWN. So then, and I am sure that we all hear you. 

Mr. GORRIE. Okay. 

Ms. BROWN. And that you all are going to work through these 

issues. And I feel very positive about it. And I hope I feel this positive as when I go and tour the facility. It looks good from the outside. 

Mr. GORRIE. It sure does. 

Ms. BROWN. But outside is not what we look at. We going to look 

into the interior and see. Because like I mentioned, I just visit the 

facility down in Miami, where the operation room, I mean, is the 

state of the art and they were able to do it 95 percent complete. 

Cost a little bit more, I guess, than what was initially anticipated. 

But they serve veterans, Orlando, all the way down to Miami, state 

of the art operational room. 

And so, basically, I know that the state of the art equipment is 

there and that they can work together. And they kept this facility 

operational while the veterans was still being served. So I am hoping we could expedite this project. 

The CHAIRMAN. Thank you, Miss Brown. 

Members, any other questions for the second panel of witnesses? 

If not, thank you, gentlemen, for being here today. Thank you, 

VA, for being here today. 

We are going to be taking a tour of the facility right after this. 

We appreciate everybody being here to listen to the testimony and 

this committee. 

I would ask that all members would have five legislative days to 

revise and extend their remarks, add any extraneous material they 

wish to do. 


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Without objection, so ordered. 

The CHAIRMAN. And with that this hearing is adjourned. 

[Whereupon, at 12:13 p.m., the Committee was adjourned.] 


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A P P E N D I X 

Prepared Statement of Chairman Miller 

Good morning, and welcome to today’s House Committee on Veterans’ Affairs Full 

Committee field hearing, ‘‘The New Orlando Department of Veterans Affairs (VA) 

Medical Center: Broken Ground, Broken Promises.’’ 

I am grateful to my colleagues, our witnesses, interested members of the community, and—most importantly—the veterans in our audience today, for joining us this 

morning as we bring Congress to Orlando. 

I also want to recognize and thank the University of Central Florida (UCF) College of Medicine for their hard work and cooperation in providing us with this space 

in the heart of the Medical City. 

When ground was broken in October 2008 on what will—eventually—become the 

new Orlando VA Medical Center, this area was a mere shadow of what it is today. 

Since then, ideas and plans that existed on drafting paper and in the minds of 

architects, designers, and engineers have evolved into existing infrastructure and 

active medical and research institutions. 

As you can tell from the crowds of backpacks in the hallway, today is the first 

day of classes this year at the UCF College of Medicine, which broke ground in 2007 

and opened in 2010. 

Behind us is the Sanford-Burnham Medical Research Institute, which broke 

ground in 2007 and opened its doors in 2009. 

Next to Sanford-Burnham is the University of Florida’s Research and Academic 

Center, which broke ground in 2010 and will open to students and faculty later this 

year. 

And, across the way is the Nemour [KNEE–MORE] Children’s Hospital, which 

broke ground in 2009 and will open to patients just two short months from now. 

Yet, the new Orlando VA Medical Center which was scheduled to be complete in 

October 2012 and an anchor in this Medical City, is an empty shell. 

Four years and hundreds of millions of taxpayer dollars later, VA has yet to yield 

anywhere close to the same results as its neighbors. 

It was my intention to hold this hearing at the new Orlando VA Medical Center 

site. 

However, a forum like this would be impossible. 

Brand-new, state-of-the-art facilities all around us are educating students and 

conducting research—and VA can’t turn the lights on, much less accept visitors. 

During the Committee’s oversight hearing in March, VA acknowledged that design errors and omissions, changes in medical equipment and procurement delays, 

as well as VA oversight and management failures led to serious construction delays. 

In fact, Glenn Haggstrom, who is also our VA witness today, in response to questioning, stated that ‘‘Brasfield and Gorrie’s credentials in constructing health care 

facilities are second to none’’ and ‘‘I am not placing the blame on Brasfield and 

Gorrie at all. We fully recognize that we did have problems . . . ’’ 

The end result was a commitment to work diligently and collaboratively with the 

contractor to complete construction and begin serving the veterans and families of 

Central Florida expeditiously. 

Yet the intervening months have brought more finger pointing and little progress. 

It is perplexing that as recently as June, the Department provided a Fact Sheet 

that began by stating that ‘‘VA is working collaboratively with the prime contractor 

to get construction completed as soon as practicable.’’ 

Yet, concluded with the statement that VA ‘‘. . . has issued a Cure Notice to B&G 

citing the contractors [sic] inability to diligently pursue the work and to provide 

suitable manpower to make satisfactory progress.’’ 

Today, VA will testify that the Medical Center is sixty percent complete and on 

track to open in 2013. 

However, since January, VA has been telling us that the Medical Center is sixty 

percent complete and on track to open in 2013. 


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Even though the contractor has repeatedly stated that construction is not sixty 

percent complete nor is VA’s timeline realistic. 

My single interest is the expeditious completion of this facility for the veterans 

of Central Florida who have been waiting almost a decade for the new medical center to open. 

What this community is capable of is clear—just look at our surroundings this 

morning. 

It is time for VA to finish what it started here so many years ago. 

Today I want answers as to how we are going to accomplish this for our veterans. 

Again, I thank you all for joining us today. 

f 

Prepared Statement of Glenn D. Haggstrom 

Mr. Chairman, Congresswoman Brown and Members of the Committee, I am 

pleased to appear here this morning to update the Committee on the status of the 

construction of the new VA medical center in Orlando. Joining me this morning are 

Mr. Robert Neary, Acting Executive Director; Mr. Chris Kyrgos, Supervisory Contracting Officer; and Mr. Bart Bruchok, Senior Resident Engineer, all with the VA’s 

Office of Construction and Facilities Management. 

Across the street from where we are now sitting, a 21st century medical center 

for Florida’s Veterans is under construction. For many years, a debate took place 

concerning whether and where this facility should be constructed. While design 

began in 2004, the decision to build the medical center at the Lake Nona location 

was made in March of 2007, with Congress providing funding for the land acquisition in fiscal year 2008. Over the next two fiscal years Congress continued to provide the Department with additional funding to complete the medical center in a 

phased approach. The project is currently funded at $616,158,000 and VA believes 

this funding level is sufficient to finish the project without any additional appropriation by Congress. 

Once completed, this facility will contain 134 inpatient beds, a 120-bed community 

living center and a 60-bed domiciliary. In addition, the center will provide a comprehensive range of outpatient services for Veterans within the 1.2 million square 

feet facility. Our continuing goal is to complete and activate this facility as quickly 

as possible to serve Florida’s Veterans who deserve nothing less. Although the 

project has not progressed as quickly as originally planned, at no time have Veterans been without the care they require through the existing VA medical center, 

community based outpatient clinics and non-VA care. 

As VA has stated before, our mission is to serve Veterans, which includes delivering first-rate facilities. VA bears the responsibility to manage all projects efficiently and to be good stewards of the resources entrusted to us by Congress and 

the American people. In an effort to regain momentum on the project, VA has reallocated its staffing resources to task more resident engineers, more architects, and 

more construction management staff to oversee and support the project. VA regrets 

that there are areas in this project where we have not met our projected delivery 

schedule. 

In the execution of this construction project, six construction contracts have been 

awarded. Work under the first five has been completed and includes site utilities 

and grading, an energy plant, hospital foundations and superstructure, the community living center, domiciliary and chapel, and the warehouse and parking structures. Construction under the final contract for the main hospital and clinic is underway and approximately 60 percent complete. 

Regrettably, this final phase of construction has experienced problems in two 

areas: VA’s revisions to the facility design drawings, and, the slow progress of construction by Brasfield and Gorrie, LLC, the prime contractor. 

There are three primary areas where we experienced problems with the design. 

First errors and omissions were identified in the drawings related mostly to the 

electrical system. These issues were addressed and corrected drawings were provided to Brasfield and Gorrie in April 2011. Second, there were design and performance issues with the roofing systems. These issues have been resolved and the roofing systems for the facility are essentially complete. 

Finally, because of a desire to have the most up-to-date medical equipment in this 

new facility, some medical equipment selections and the associated drawing updates 

to accommodate installation were delayed. In January of 2012, VA and Brasfield 

and Gorrie met to discuss the issues surrounding the medical equipment to be installed in the facility and the availability of the construction drawings. Recognizing 


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these deficiencies, VA issued a partial suspension in the construction of the diagnostic and treatment area of the hospital. In mid-March of this year, the partial suspension was lifted and the last of the drawing changes associated with the medical 

equipment changes were corrected and provided to the Brasfield and Gorrie. 

Brasfield and Gorrie asked for a continuance of the suspension for an additional 8 

weeks to enable them to coordinate the changes with their subcontractors and to 

increase their workforce to a level that would allow them to fully resume work in 

accordance with the approved schedule. VA did not approve this request because 

Brasfield and Gorrie could and would be expected to continue coordinating throughout the suspension; thus, they were directed to resume work. VA was encouraged 

when Brasfield and Gorrie advised VA in mid-March that work would resume in the 

clinic areas by the end of March. Unfortunately the level of work VA expected to 

take place never materialized and on April 16, 2012 the contracting officer advised 

Brasfield and Gorrie of their deficiencies in pursuing work in the hospital. 

While VA continued to work with the contractor there was increasing concern 

with the lack of manpower on the job and progress made in constructing the main 

hospital and clinic. As time progressed, the pace of activity at the job site failed to 

increase as Brasfield and Gorrie indicated it would and as required on a project of 

this magnitude. 

On June 15, 2012, the contracting officer issued a contract cure notice to Brasfield 

and Gorrie identifying two failures of the contractor to comply with the VA contract. 

The first relates to the contractor’s failure and in some cases refusal to diligently 

pursue the work; and the second relates to the lack of a sufficient workforce on the 

project. 

On June 25, 2012 in response to the cure notice, Brasfield and Gorrie committed 

to increasing the workforce and pursuing work more broadly within the building. 

In response to the Brasfield and Gorrie’s commitments, on July 10, 2012, the contracting officer established an evaluation period running through August 9, 2012 

and advised the Brasfield and Gorrie that their efforts would be observed through 

this period to gauge implementation of its commitments. VA provided the Brasfield 

and Gorrie with its observations on a weekly basis during the evaluation period. 

Now that the August 9 date has passed, the contracting officer will make a determination in the near future as to whether additional actions are required to ensure 

that the terms of the contract are met and that the project moves to a timely completion. 

VA remains concerned about the schedule to complete the project. Brasfield and 

Gorrie has offered several conflicting indications that a more extended duration is 

required, including at one point a schedule update stating that completion would not 

take place until early 2015; most recently, Brasfield and Gorrie has predicted that 

the project will be completed late in 2014 if VA will fund work on an accelerated 

basis. 

VA continues to believe that the project can reasonably be completed in the summer of 2013 without additional resources, based on an analysis of the remaining 

work. This completion date was determined by utilizing the Brasfield and Gorrie approved baseline schedule and the resources originally planned for by the Brasfield 

and Gorrie. 

Our ultimate objective is to have this project completed to specifications as quickly as possible so that it can be put into service to provide Veterans the high-quality 

health care they deserve. While the evaluation period has ended, we continue to 

monitor the efforts of the Brasfield and Gorrie as they work to complete the project. 

In closing, I would like to report to the Committee that as a result of the challenges faced on the Orlando project, the Department has undertaken a comprehensive review of its construction program. This review, which includes the formation 

of a Construction Review Council chaired by the Secretary, VA has examined the 

several programs within the Department related to VA’s physical facilities including 

the major construction, minor construction, nonrecurring maintenance and leasing 

programs as well as a focused review of the new hospital projects currently underway. This review has identified action items to improve these programs. One key 

reform decision already made by the Secretary as an outcome of the Construction 

Review Council’s work, is that prior to including a new major construction project 

in a budget request, the project will have been developed to the level of 35 percent 

design. This will ensure that the scope of the requirement is more fully defined and 

the cost estimate used for budgeting is more accurate. It will also enable the construction contracts for all projects to be awarded in the years in which the funds 

are received. 

Other areas identified for review and improvement include the design-review 

process and steps that can be taken to streamline procedures while at the same 

time ensuring that decision-making is taken at the appropriate levels within the DeVerDate Mar 15 2010 00:38 Mar 30, 2013 Jkt 075617 PO 00000 Frm 00060 Fmt 6604 Sfmt 6621 I:\WAYS\OUT\75617.XXX GPO1 PsN: 75617

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partment. We will keep the Committee informed of our progress in these areas. The 

Department is committed to providing the Veterans of the Orlando area with a 

state-of-art facility that the community deserves and that keeps in line with the Department’s high standards of health care facilities. 

Thank you for the opportunity to testify before the Committee today. We are prepared to answer questions that the Members of the Committee may have. 

f 

Prepared Statement of Jim Gorrie 

Thank you, Mr. Chairman and Committee Members. 

Thank you for the opportunity to meet today in Orlando. My name is Jim Gorrie 

and I am President/CEO of Brasfield & Gorrie. As you will see today, the VA Medical Center is an incredible facility. 

As discussed at the March hearing, poor planning by the VA and design errors 

have plagued our efforts to construct the VA Medical Center. In March, the VA not 

only acknowledged these problems and confirmed they were acting to correct them; 

they also went on to say that Brasfield & Gorrie was not to blame. Between January and March of this year, the VA agreed to furnish over forty-five (45) separate 

design corrections (referred to by the team as the ‘‘Design Blitz’’) to get the job back 

on track. 

The ‘‘Blitz’’ was a major commitment by the VA that required taking responsibility for the design errors. Unfortunately, the Blitz has grown to include over one 

hundred (100) separate design corrections and lasted significantly longer than the 

VA planned. We are seeing signs that the changes are slowing down but just last 

week we received another significant revision to the operating rooms and we have 

been notified that additional changes are coming for additional structure to support 

the new medical equipment. Unfortunately for the project, these areas are on our 

Critical Path schedule. We are starting to make positive progress with the new design and our team is anxious to keep the momentum building. Since the March 

hearing, we have almost doubled the manpower working on the job despite the continued changes. 

The project desperately needed the Design Blitz. However, this effort was two (2) 

years too late. For B&G and its subcontractors, this time is lost forever. The process 

requires us to submit a Request for Equitable Adjustment (or REA) to recover the 

impact to us and our subcontractors, which was mentioned in the March hearing. 

Our first REA was valued at $33.6 million, and it is currently unresolved. The costs 

of our REA are being carried by us and our subcontractors. I sincerely hope the VA 

will review the entire REA process in the future as the costs that the general contractor and the subcontractors have incurred create real financial challenges. Given 

our subcontracting plan goals for this project, including small and disadvantaged 

veteran owned businesses; this matter is of real importance. 

At the March hearing, the VA committed to work with us to expedite the project— 

but things have not gone as we had hoped. Despite Tim Dwyer’s (our South Regional President) and my personal efforts, productive meetings with the VA to develop a new game plan never happened. In June, instead of discussing an accelerated schedule, the VA issued us a Notice to Cure and threatened to terminate us 

for default. We learned about the Notice to Cure via email approximately ten (10) 

minutes before the VA held a press conference announcing its actions. One reason 

this was so strange is that it was just 1 week after the VA met with us to discuss 

our partnering approach. 

A few weeks ago—the VA also withheld $2 million from our monthly payment, 

without discussion. This action creates an additional financial hardship to us. The 

VA has also contacted our bonding company for meetings on several occasions without contacting me directly to discuss their concerns first. Our bonding company attended a meeting in Washington, D.C. at the request of the VA in July. This is the 

first time in our 48 year history our bonding company has attended such a meeting. 

Last month, the VA gave us the first ‘‘Unsatisfactory’’ rating we have ever received 

on a Government project in our 48 year history of doing business—again with no 

advanced warning. As you know—these ‘‘Unsatisfactory’’ ratings are shared 

throughout the Government and will have a major negative impact on our ability 

to get new work. We take our reputation and finances very seriously. The recent 

actions taken by the VA are extremely disturbing. We have struggled to understand 

how the VA could take full responsibility for the multi-year design problem at the 

March hearing and 11 weeks later, issue a very public Notice to Cure and Threat 

of Termination. It just doesn’t make sense. 


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B&G has constructed many large health care facilities and we appreciated the 

positive comments by the VA at our first hearing regarding our qualifications. This 

particular hospital has been a job of ‘‘firsts’’ for B&G: the first time we have had 

to fund owner changes into the tens of millions of dollars, the first time our bonding 

company has been called to get involved, the first time we have testified at a congressional hearing, the first time we have received an ‘‘Unsatisfactory’’ rating and 

unfortunately the list is growing. 

Our contract requires us to provide a revised schedule for completion with each 

monthly pay request. Our July pay request forecasts a completion in November 

2014 based on the approved schedule which the contract requires us to follow. During the VA’s Notice to Cure 30-day evaluation period, we were instructed to provide 

a new ‘‘obtainable’’ schedule. We updated our contract schedule for completion of the 

entire building and presented it to the VA. We also proposed a detailed alternative, 

accelerated contract schedule which included us working in more areas. This schedule showed completion of the clinic in 2013 and the remainder of the facility by 

April 2014. We have not received any feedback on these schedules in the past 2 

weeks. 

For months the VA has mentioned completion dates in the summer of 2013; but 

to date they have not been willing to disclose the detailed logic they are using to 

reach that conclusion. From preliminary reports, we know their analysis is not apples-to-apples with ours and does not include the most current information, including major changes issued during the Blitz. Last week, the VA asked if we could possibly make a late 2013 construction completion date. We said we thought it was possible; however, it would come at a higher premium than our suggested schedule. 

Nevertheless, we are proceeding with the development of a plan to complete the entire project in 2013, should the VA decide to adopt and support it. It is our desire 

to complete the project as soon as possible, and we hope that the VA will support 

and pay for our efforts to do so. We look forward to hearing back from the VA and 

hope that a new, obtainable completion date will be established in the next few 

weeks. 

Our team has been raising the red flag since the first month of the job. We need 

direction immediately if we are to complete in 2013, and the VA, the Hospital and 

the Design Team must support it. The challenges we have faced over the last 2 

years in just keeping everyone working on the job have been a major effort. I would 

like to personally thank everyone on the job—especially our subcontractors for hanging in there with us even though we have not yet reconciled our schedule issues 

and even though we are still dealing with nearly $30 million of unresolved Change 

Order Requests (which does not even include costs associated with our REA mentioned earlier and recent Change Order Requests). 

We also think it is important that you understand that the VA keeps stating the 

project is 60–70 percent complete in terms of dollars—but these discussions ignore 

all the pending changes, current changes and REA’s on the project which ultimately 

represent the true cost of the work. 

The most important thing this job needs today is clear, open and direct communications. We reiterate our eagerness to explore an expedited completion of the 

project. The threats of default termination should stop. The only thing that could 

push this job over the edge into the ‘‘Twilight Zone’’ would be a termination. I can’t 

even imagine what such an action would cost the taxpayers, not to mention the 

delays in opening the Hospital to our veterans. Such an action would also have a 

devastating effect on all the workers employed on the jobsite. At this stage in the 

game, no one can complete this project faster or more economically than Brasfield 

& Gorrie. 

In closing, we welcome face to face working sessions with the VA and are available to answer any questions you may have about our current progress. We sincerely desire to finish this project. It is a wonderful facility and we are excited for 

you to see it today. Thank you again for your time and we have enclosed a few very 

simple exhibits with our written comments to hopefully help give you a better feel 

for the status of the overall project. 

Thank you for your continued time and interest. 

f 


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MATERIAL SUBMITTED FOR THE RECORD 

Honorable Jeff Miller, Chairman, Committee on 

Veterans’ Affairs to Honorable Eric K. Shinseki, 

Secretary, U.S. Department of Veterans Affairs 

June 22, 2012 

Honorable Eric K. Shinseki 

Secretary 

U.S. Department of Veterans Affairs 

810 Vermont Avenue, NW 

Washington, DC 20420 

Dear Mr. Secretary, 

I am writing to express my deep concern about the impact the Contract Cure Notice issued by the Department of Veterans Affairs (VA) to Brasfield and Gorrie, 

LLC, (B&G) the prime contractor for the hospital and clinic build out of the new 

Orlando VA Medical Center, on Friday, June 15, 2012, will have on the completion 

of the project. 

My single interest is the expeditious completion of this facility for the veterans 

of Central Florida who have been waiting almost a decade for the new medical center to open. 

It is perplexing that in the Department’s June 2012 Fact Sheet Update, the opening paragraph states that ‘‘VA is working collaboratively with the prime contractor 

to get construction completed as soon as practicable.’’ Yet, the fact sheet concludes 

with the statement that VA ‘‘. . . has issued a Cure Notice to B&G citing the contractors [sic] inability to diligently pursue the work and to provide suitable manpower to make satisfactory progress.’’ 

This project from the start has been compromised by the lack of oversight by VA 

leadership in addition to being fraught with design deficiencies, medical equipment 

and procurement delays, a bevy of change orders, and communication issues. 

I respectfully request that you respond in writing by June 30, 2012, with a report 

calculating the impact should VA ultimately act to terminate B&G’s contract for default and providing an integrated master schedule for moving forward. 

The report should include the following: 

a. A detailed list of any and all costs associated with a termination for default 

to include legal actions, project transition logistics with regard to project familiarity, management, mechanism, and repurchase of same or similar services; 

b. A complete and updated baseline and timeline for project completion and an 

explanation as to how this will accelerate construction; and, 

c. A detailed list of additional resources needed to complete the project. 

I appreciate your cooperation and look forward to receiving this information. 

Sincerely, 

JEFF MILLER 

f 

Chairman 

Honorable Eric K. Shinseki, Secretary, 

U.S. Department Veterans’ Affairs to Honorable Jeff 

Miller, Chairman, Committee on Veterans Affairs 

August 9, 2012 

The Honorable Jeff Miller 

Chairman 

Committee on Veterans’ Affairs 

U.S. House of Representatives 

Washington, DC 20515 

Dear Mr. Chairman: 

Thank you for your letter regarding the contract cure notice issued to the prime 

contractor, Brasfield and Gorrie (B&G), and issues affecting construction of the new 

Department of Veterans Affairs (VA) Medical Center in Orlando, Florida. I share 

your interest in the expeditious completion of this facility for the Veterans of Central Florida. The delay in responding was necessary to consider B&G’s response to 

the cure notice. 


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You specifically asked that I provide a report calculating the impact to the project 

if VA ultimately terminated the subject contract. VA continues to work with B&G 

to complete the Orlando project. The VA’s contracting officer clearly stated the government’s expectations to B&G in a July 10, 2012, letter: VA will evaluate B&G’s 

performance in resolving the issues identified in the cure notice (specifically, B&G’s 

not diligently pursuing work and not providing a sufficient workforce on the project) 

at the conclusion of the 30-day period referenced in the letter. 

A report detailing the costs, project baseline and timeline, and additional resources needed should VA ultimately terminate B&G’s contract for default is premature. While VA can generally provide potential alternate scenarios for completing 

the project, the development of true cost, scheduling, and resource information 

would depend on the specific method of completing the project after termination. In 

this regard, note the following: 

Scenario 1: If the surety completes the project, minimal down time is expected 

during the transition. In this scenario, 4 to 6 months would be added to the projected completion of summer 2013. However, VA does not anticipate the need to request additional funds. VA cannot predict the costs that might be associated with 

possible legal actions that may result from B&G’s termination. 

Scenario 2: If the surety is unable to complete the project, VA would reprocure. 

This entails approaching the original bidders and determining their ability to complete the project. If the prior bidders are unable to meet VA’s requirements, VA 

would be required to issue a new solicitation which would add 8 to 10 months to 

the project completion date of summer 2013. If VA must reprocure, this may involve 

additional costs based on market conditions; however, at this time VA believes there 

would be adequate funds to complete the project and we do not anticipate a need 

to request additional funds. VA cannot predict the costs that might be associated 

with possible legal actions that may result from B&G’s termination. 

VA will continue to closely monitor this project. Should you have any further 

questions, please have your staff contact Mr. Robert Madden, Congressional Relations Officer, at (202) 461–6470 or by e-mail at robert.madden@va.gov. 

Thank you for your continued support of our mission. 

Sincerely, 

Eric K. Shinseki 

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