VA CONSTRUCTION

Additional Actions 

Needed to Decrease 

Delays and Lower 

Costs of Major 

Medical-Facility 

Projects

Report to the Chairman, Committee on 

Veterans’ Affairs, House of 

Representatives

April 2013

GAO-13-302

United States Government Accountability Office

GAO
United States Government Accountability Office

Highlights of GAO-13-302, a report to the 

Chairman, Committee on Veterans’ Affairs, 

House of Representatives 

April 2013 

VA CONSTRUCTION 

Additional Actions Needed to Decrease Delays and 

Lower Costs of Major Medical-Facility Projects

Why GAO Did This Study

The VA operates one of the nation’s

largest health care delivery systems. 

Charged with addressing the issues of 

increasing medical demands and aging 

medical facilities, VA currently 

manages the construction of 50 major 

medical-facility projects, each costing 

at least $10 million, some in the 

hundreds of millions of dollars. As 

requested, GAO examined VA’s 

management of such projects. GAO 

reviewed (1) changes to costs, 

schedule, and scope for selected new 

medical-facility construction projects

and (2) actions VA has taken to 

improve management and any 

opportunities that exist for VA to 

improve its management of costs, 

schedule, and scope of these 

construction projects. GAO analyzed 

documents, VA data as of November 

2012 on selected major construction 

projects, and interviewed VA officials, 

architecture and engineering, and 

construction firms.

What GAO Recommends

GAO recommends that VA (1) develop 

and implement agency guidance for 

assignment of medical equipment 

planners to major medical construction 

projects; (2) develop and disseminate 

procedures for communicating to 

contractors clearly defined roles and 

responsibilities of VA officials who

manage major medical-facility projects, 

particularly the change-order process; 

and (3) issue and take steps to 

implement guidance on streamlining 

the change-order process. VA 

concurred with GAO’s 

recommendations, but expressed 

concerns about the depiction of cost 

increases and schedule delays; GAO 

believes its methodology is accurate as 

discussed in this report.

What GAO Found

Costs substantially increased and schedules were delayed for Department of 

Veterans Affairs’ (VA) largest medical-center construction projects in Denver, 

Colorado; Las Vegas, Nevada; New Orleans, Louisiana; and Orlando, Florida. 

As of November 2012, the cost increases for these projects ranged from 59 

percent to 144 percent, with a total cost increase of nearly $1.5 billion and an 

average increase of approximately $366 million. The delays for these projects

range from 14 to 74 months, resulting in an average delay of 35 months per 

project. In commenting on a draft of this report, VA contends that using the initial 

completion date from the construction contract would be more accurate than 

using the initial completion date provided to Congress; however, using this date 

would not account for how VA managed these projects prior to the award of the 

construction contract. Several factors, including changes to veterans’ health care 

needs and site-acquisition issues contributed to increased costs and schedule 

delays at these sites.

Although VA has taken some actions to address problems managing major 

construction projects, the agency has opportunities for further improvement. For 

example, VA established a Construction Review Council in June 2012 to oversee 

the department’s development and execution of its real property programs. 

However, construction management challenges remain, and opportunities exist 

for VA to avoid further cost increases and schedule delays. 

• Given the complexity and speed of medical advances, many health care 

organizations have enlisted the services of experts in planning the 

procurement and installation of medical equipment for new medical centers. 

VA has used these planners at various phases for some projects and is

reviewing its overall procurement of medical equipment. However, VA has 

not taken full advantage of medical equipment planners on all projects, in 

part because there is no guidance for doing so. Not using a medical 

equipment planner can lead to increased design and construction changes 

resulting in cost increases and schedule delays. 

• VA has not yet clearly defined roles and responsibilities of VA construction 

management staff, even though the agency previously identified the need to 

do so. GAO found that conflicting direction from VA to contractors can cause 

some confusion and lead to cost increases and construction delays. For 

example, contractor officials at one site said that VA’s project manager 

directed them to defer the design of specific rooms until medical equipment 

was selected for the facility; however, VA’s central office then directed the 

contractor to proceed with designing the rooms. This conflicting direction 

from VA will require the contractor to redesign the space, further expending 

project resources.

• The federal government’s regulations and VA’s policy specify that changes to 

construction contracts, known as change orders, should be issued in a timely 

manner; however, VA’s change-order approval process requires timeconsuming reviews at multiple organizational levels that have resulted in 

extensive delays and increased costs for some projects. VA is reviewing 

options to shorten the decision cycle for approval of construction contract 

modifications but has not yet streamlined the process. 

View GAO-13-302. For more information, 

contact Lorelei St. James at (202) 512-2834 or

stjamesl@gao.gov. 
Page i GAO-13-302 VA Construction

Letter 1 

Background 3

Cost Increases and Schedule Delays at the Four Largest Projects 

Occurred for a Variety of Reasons 8

VA Has Taken Steps to Improve Its Construction Management 

Practices and Has Opportunities for Further Improvement 16

Conclusions 28

Recommendations for Executive Action 29

Agency Comments and Our Evaluation 29

Appendix I Scope and Methodology 32

Appendix II Changes in Cost for Department of Veterans Affairs Major 

Medical-Facility Projects 34

Appendix III Changes in Schedule for Department of Veterans Affairs Major 

Medical-Facility Projects 38

Appendix IV Comments of the Department of Veterans Affairs 42

Appendix V GAO Contact and Staff Acknowledgments 47

Tables

Table 1: VA Classification of Construction Phases 6

Table 2: VA’s Project Delivery Methods 7

Table 3: VA Major Medical-Facility Projects Cost Increases and 

Schedule Delays, as of November 2012 9

Table 4: Cost of VA’s 50 Major Medical-Facility Projects as of 

November 2012 34

Table 5: Schedule of VA’s 50 Major Medical-Facility Projects as of 

November 2012 38

Contents 
Page ii GAO-13-302 VA Construction

Figures

Figure 1: Range of Cost Changes for 26 Major Medical-Facility 

Projects, as of November 2012 10

Figure 2: Changes in Schedules by Number of Months for 24 Major 

Construction Projects 11

Figure 3: Current Site and Construction of the Orlando VA Medical 

Center Project 14

Figure 4: Underground Spring Located at the Denver VA Project 

Site 15

Figure 5: Example of VA Staff Involvement in Construction 

Management Decisions at Multiple Organizational Levels 22

Figure 6: VA Construction Change-Order Process 26

Figure 7: New VA Construction Change-Order Process for Sites 

with a Higher Threshold for VA OGC Review 27

Abbreviations

CFM Office of Construction and Facilities Management 

DBB Design-Bid-Build

DB Design-Build

IDC Integrated Design and Construction

MOU Memorandum of Understanding

OMB Office of Management and Budget

VA Department of Veterans Affairs 

VHA Veterans Health Administration

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Page 1 GAO-13-302 VA Construction

United States Government Accountability Office

Washington, DC 20548

April 4, 2013

The Honorable Jeff Miller

Chairman

Committee on Veterans’ Affairs

House of Representatives

Dear Mr. Chairman:

The Department of Veterans Affairs (VA) provides services for over 6 

million veterans through the Veterans Health Administration (VHA), one of 

the largest health care systems in the country.1 However, much of VHA’s 

infrastructure was designed and built decades ago under an older 

concept of health care delivery that focused on hospital-centered, 

inpatient care. In addition, VA has experienced a gap between its existing 

medical infrastructure and the infrastructure needed to provide medical 

services for returning veterans from Afghanistan and Iraq, who 

increasingly require specialized care for injuries such as the treatment of 

spinal cord and traumatic brain injuries. According to VA’s fiscal year 

2013 budget submission to Congress, VHA’s infrastructure does not fully 

align with the current health care needs of the veteran population.2

To help address this situation, VA has 50 major medical-facility projects3

 

1

U.S. Department of Veterans Affairs, Healthcare, VHA, accessed December 12, 2012, 

under way, including new construction and the renovation of existing 

medical facilities at a cost of more than $12 billion. Completing these 

projects is a large endeavor for VA, considering that until the construction 

of the Las Vegas, Nevada, medical center, VA had not built a major 

medical center in over 15 years.

http://www.va.gov/health/aboutVHA.asp. 

2

VA, Fiscal Year 2013 Budget Request. Construction IV (Washington, D.C.: 2012).

3

The term “major medical-facility project” means a project for the construction, alteration, 

or acquisition of a medical facility involving the total expenditure of more than $10 million. 

See 38 U.S.C. § 8104. These projects cost at least $10 million, some in the hundreds of 

millions of dollars. The projects types include new construction, renovation of existing 

structures, expansion, or a combination of types. The total number of major VA medicalfacility projects is based on agency data from November 2012.

 
 

Page 2 GAO-13-302 VA Construction

In 2009, we reported that many of VA’s major medical-facility projects 

were over budget and behind schedule for various reasons, including 

changes to project scope, land acquisition issues, and unforeseen events, 

such as site contamination.4 Although we concluded that VA met most of 

our best practices for preparing cost estimates and construction 

schedules, we recommended that VA take actions to reduce potential 

cost increases and schedule delays to its major construction projects. VA 

is in the process of implementing these recommendations.5

Because of questions regarding cost increases and schedule delays to 

major medical-facility projects,6

To address these objectives, we reviewed VA data as of November 2012 

on VA’s current 50 major medical-facility projects, including the original 

cost estimates and completion dates and the projects’ current status.

you asked us to examine how VA 

manages medical facilities construction projects. This report reviewed (1) 

changes to cost, schedule, and scope for selected new medical-facility 

projects and (2) actions VA has taken to improve its construction 

management practices, and any opportunities that exist for VA to improve 

its management of costs, schedule, and scope of these construction 

projects.

7

 

4

GAO, VA Construction: VA Is Working to Improve Initial Project Cost Estimates, but 

Should Analyze Cost and Schedule Risks, 

We 

reviewed and analyzed construction documents, VA’s Strategic Plan

Fiscal Year 2011 to 2015, and other relevant documents. We interviewed 

officials from VA; veterans support organizations; architectural and 

engineering firms; general contractor construction firms; and construction 

management firms. To examine specific projects in greater detail, we 

GAO-10-189 (Washington, D.C.: Dec. 14, 

2009). 

5

Consistent with our recommendations, VA is in the process of implementing integrated 

master schedules for the largest of its major medical center projects, which include all 

phases of a project including design and construction work. VA is also instituting a 

requirement that for all of these large projects, it develop a schedule risk analysis that can 

identify issues that could affect VA’s ability to complete a project on time must be 

performed.

6

See e.g., House Committee on Veterans’ Affairs. The New Orlando VA Medical Center: 

Hearing before the House Committee on Veterans’ Affairs, 112th Cong. (2012). 

7

We identified reasons for selected facilities’ overall cost and schedule changes, but were 

not able to identify the extent to which specific reasons changed these costs and 

schedules, unless specifically noted.
 

Page 3 GAO-13-302 VA Construction

selected the four largest and most expensive major medical-facility 

projects based on cost, current status of the project, and type of facility. 

These ongoing projects are located in Denver, Colorado;8 Orlando, 

Florida; New Orleans, Louisiana; and Las Vegas, Nevada. We visited the 

construction sites in Denver, Orlando, and New Orleans to talk to officials 

on-site and determine the reasons for changes in costs and schedules.

We updated our prior work on the Las Vegas facility with information on 

the project completion costs and the change-order process.9

We conducted this performance audit from April 2012 to April 2013 in 

accordance with generally accepted government auditing standards. 

Those standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our 

findings and conclusions based on our audit objectives. We believe that 

the evidence obtained provides a reasonable basis for our findings and 

conclusions based on our audit objectives.

The 

information from our site visits is illustrative and cannot be generalized to 

sites agency-wide. We assessed the reliability of the data through 

interviews with knowledgeable VA officials and a review for completeness 

and any unexpected values. VA data were sufficiently reliable for the 

purposes of this report. In addition, we researched and reviewed relevant 

legislation pertaining to the amounts that were authorized and 

appropriated for these projects. Additional information on our scope and 

methodology appears in appendix I.

VA operates one of the largest direct health-care delivery systems in the 

United States. As well, VA is one of the largest federal property-holding 

agencies, with 35,352 acres of land, 5,873 buildings, and over 149 million 

square feet of medical facilities and administrative space.10

 

8

The site that we refer to throughout this report as the Denver VA Medical Center is 

actually located in Aurora, Colorado, near Denver.

VA provides 

health care to veterans in 152 medical centers, and nearly 1,400 

community-based outpatient clinics, nursing homes known as community9

GAO-10-189. The prior review was conducted from October 2008 through December 

2009.

10VA, The Construction Review Council Activity Report (Washington, D.C.: November 

2012). 

Background
 

Page 4 GAO-13-302 VA Construction

living centers, veteran-counseling centers and live-in facilities.11

According to VA, the average age of VA medical facilities is approaching 

60 years. The department is updating its infrastructure to allow for costeffective management of an aging inventory under increased workload 

demands, changing veteran patient demographics, advances in medical 

technology, complex treatment protocols, new advanced procedures, and 

evolving federal requirements. Additionally, VA’s facility program has 

struggled to keep pace with advancements in health care services that 

often dramatically change the physical infrastructure requirements of 

hospitals and clinics. Furthermore, changes in veteran demographics, 

ranging from the illnesses and care required for veterans of different 

generations and conflicts to the population shifts among different areas of 

the country, place a continued demand on the capital-asset portfolio.

 VA 

medical facilities offer services which range from primary care to complex 

specialty care, such as cardiac or spinal cord injury. VA has specialized 

services at some of its medical facilities for those veterans with posttraumatic stress disorder, whose condition cannot be managed in a 

primary care or general mental health setting.

To plan for future infrastructure needs, VA established its Strategic 

Capital Investment Planning process for the 2012 budget submission.12

 

11Vet Centers offer readjustment and family counseling, employment services, 

bereavement counseling, and a range of social services to assist veterans in readjusting 

from wartime military service to civilian life. Vet centers are also community points of 

access for many returning veterans, providing them with information and referrals to VA 

medical facilities.

As part of this planning effort, VA annually reviews its real property 

priorities and conducts a gap analysis to identify the needs of its medical 

facilities across the country. Local plans are centrally validated, 

evaluated, and consolidated into a prioritized national project list. VA also 

uses this planning process to develop a 10-year capital plan, which 

prioritizes a list of projects targeted to reduce the gaps. From the 10-year 

capital plan developed for the agency’s 2013 budget submission, VA 

estimated that it would cost approximately $21.7 billion to address all 

capital infrastructure costs for major medical-facility projects while also 

remediating all existing and projected gaps in medical facilities. However, 

12VA, Fiscal Year 2013 Budget Request, Construction IV (Washington, D.C.: 2012).
 

Page 5 GAO-13-302 VA Construction

this does not include life-cycle costs for infrastructure maintenance.13

According to VA, it is important to note that this estimate is a snap shot in 

time, based on current market conditions, baseline capital portfolio and 

demographic data, and projected needs.14

The VA Office of Construction and Facilities Management (CFM) is 

responsible for administering major construction projects, including major 

medical-facility projects.

The agency’s 2013 budget 

submission stated that the $21.7 billion in costs will likely change as 

projects move through the planning process and project requirements are 

more refined.

15 No funds may be used for any major medicalfacility construction project over $10 million, unless the funds have been

specifically authorized by law, and VA is required to submit a prospectus 

to the House and Senate Committees on Veterans’ Affairs that contains 

information about each planned major medical-facility project. This 

information includes an initial estimate of the overall cost of the project 

and, in some cases, a completion date for the project.16 To begin a 

project, CFM hires an architectural and engineering firm to develop an 

architectural design for the project and a cost estimate for the project’s 

completion. The cost estimate provided by the architectural and 

engineering firm is generally more detailed and accurate than the initial 

cost estimate VA provides to Congress in a prospectus. After the project 

has been designed, VA requests construction funding. CFM then solicits 

bids for project construction and awards a construction contract.17

 

13GAO, VA Real Property, Realignment Progressing, but Greater Transparency about 

Future Priorities Is Needed,

The 

construction contractor is responsible for developing a detailed 

construction schedule that reflects the contract duration. CFM reviews the 

construction schedule and also assigns CFM engineers—known as 

resident engineers—to work on-site to monitor the construction process 

until the facility is ready to be turned over to local VA medical staff. Once 

construction begins, the construction firm is generally responsible for cost 

GAO-11-197 (Washington, D.C.: Jan. 31, 2011). 

14VA, Fiscal Year 2013 Budget Request, Construction IV (Washington, D.C.: 2012).

15CFM executes these projects under the oversight of the Office of Acquisition, Logistics, 

and Construction.

1638 U.S.C. §§ 8101, 8104.

17In an Integrated Design and Construction model, VA can hire the architecture and 

engineering firm and contractor at the beginning of a project.
 

Page 6 GAO-13-302 VA Construction

increases and schedule overruns under the terms of the firm-fixed-price 

contract, unless VA and the contractor agree to a change to modify the 

scope, account for unforeseen conditions, or remedy a design error.18

VA classifies the phases of construction projects in the following terms: 

planning; design (developing the design and construction documents); 

construction; and activation (staffing and activities that are needed to 

begin operations at a new medical facility). (See table 1 for more detail on 

these construction phases).

Table 1: VA Classification of Construction Phases

Construction phase Construction phase description

Planning VA analyzes its needs for medical facilities. During the conceptual planning phase, VA conducts various 

feasibility studies to define the scope or statement of work based on expectations for facility performance, 

quality, cost, and schedule. VA can consider several alternative design solutions during this phase, 

leading up to the selection of a single preferred approach. The preferred approach may specify functional 

requirements such as square footage estimates for various functions that are desirable.

Design VA develops construction design documents for medical facilities that meet its needs. VA usually begins 

the design phase once it develops the statement of work and preferred design approach. From early 

schematic designsa the design matures into final construction documents comprising the plans and 

specifications from which VA procures equipment and, depending on the construction method used, 

solicits construction bids. VA gives estimated facility cost and scheduling issues increasingly intense 

review during the design phase so that VA is confident prior to bid that it can meet the performance, 

quality, cost, and schedule objectives defined during the conceptual-planning phase.

Construction The medical facility is contracted for and built. Complex facility projects usually include a procurement 

phase in order to expedite the purchase, manufacture, and delivery of long-lead-time equipment such as 

unique process machinery and large electrical and mechanical equipment. Such equipment’s 

procurement involves separate contracts and budget sources and may proceed in parallel with 

construction phase activities, so that VA is able to furnish long-lead-time equipment to the construction 

contractor in a timely manner. Early in the construction phase a formal construction management plan, or 

schedule, is developed describing the intended sequence and method of construction activity as well as 

the relationships, responsibilities, and authorities of all parties. One of the biggest challenges during the 

construction phase is managing changes resulting from sources such as scope of work changes by VA, 

errors and omissions in the construction documents, and unknown or changed site conditions.

Activation VHA occupies and maintains the medical facility. VHA tests building components individually and then in 

system with other components to measure and compare their performance against the original design 

criteria. VHA tests, implements, and refines facility operation and maintenance plans, as appropriate.

Source: GAO analysis of VA data. 

a

According to VA officials, a “schematic design” is a design that is approximately 35 percent complete. 

 

18Many of the VA contracts for major construction are firm-fixed-price contracts—based 

upon a completed design. The uncertainty of site conditions and design flaws are 

examples of the reasons to expect changes to a firm-fixed-price contract.
 

Page 7 GAO-13-302 VA Construction

VA uses three project delivery methods for managing major medicalfacility projects: “design-bid-build,” “design-build,” and “integrated design 

and construction” (IDC). Although VA has mainly used the traditional 

design-bid-build method, it has recently employed design-build and 

integrated design and construction. See table 2 for details on these 

project delivery methods. (App. II includes the project delivery methods 

used for each of VA’s 50 major medical-facility projects).

Table 2: VA’s Project Delivery Methods

Project delivery method Project delivery method description

Design-bid-build This method is the most frequently used delivery method for VA construction projects. VA 

(the owner) contracts with an architect for design, uses the design documents produced 

by the architect to secure competitive bids from contractors and, based on an accepted 

bid, contracts with a contractor for construction of the building. This method generally 

includes three sequential project phases: design, procurement, and construction.

Design-build This method combines architectural and engineering design services with construction 

performance under one contract. Once design is completed, design documents are 

incorporated into a Request for Proposal. One team consisting of an architectural and 

engineering firm and a construction contractor is selected to complete the design and 

construct the project. This method may permit a faster project completion with greater 

risks being assumed by the successful bidder. According to VA’s Program Managers’ 

Handbook, selecting design-build as a procurement method can save approximately 6 

months of schedule time (the time typically used for advertising, selection, negotiation and 

award approval of the project specific architectural and engineering firm) compared to the 

design-bid-build method.

Integrated design and construction This method allows the construction contractor to be involved in the project from design to 

completion. VA believes this can help identify any potential issues early and speed the 

construction process. IDC is similar to a private sector approach called Construction 

Management At-Risk. 

Source: GAO Analysis of VA information. 

VA staff at various organizational levels participate in the construction 

management process for major medical-facility projects. For example, a 

contracting officer is ultimately responsible for managing the execution of

the construction contract, while local site-level staff,—such as a project 

manager, senior resident engineers, and resident engineers—oversee the 

actual construction, with assistance provided by the contracting officer. In 

some instances, officials from CFM’s regional offices and VA’s central 

office, including the Office of General Counsel, provide assistance to the 

contracting officer. VA staff from CFM and VHA, such as medical center 

directors, also provide support during the construction of major medicalfacility projects.

During the construction phase of any federal government project, 

changes need to be made to the construction contract. VA contracts 
 

Page 8 GAO-13-302 VA Construction

contain specific language and requirements, in accordance with 

applicable Federal Acquisition Regulations, which give the government 

the right to make changes within the scope of the contract.19 Generally, 

government contracts contain a changes clause that permits the 

contracting officer to make unilateral changes, in designated areas, within 

the general scope of the contract. Contractors can also request changes 

to the contract. Changes can occur for a variety of reasons, such as 

design changes resulting from the addition of new medical equipment.

For VA’s four largest medical-facility construction projects, when 

comparing November 2012 construction project data with the cost and 

schedule estimates first submitted to Congress, cost increases ranged 

from 59 percent to 144 percent,20 representing a total cost increase of 

nearly $1.5 billion and an average increase of approximately $366 million 

per project. The schedule delays ranged from 14 to 74 months with an 

average delay of 35 months per project (see table 3).

 

1948 C.F.R. § 43.201.

20According to the Office of Management and Budget (OMB), federal agencies should 

keep a contingency fund of 10 to 30 percent above total estimated costs to address 

increased costs on construction projects. However, this guidance applies after 

construction has begun, and many of the cost increases we observed occurred before that 

time. The construction contractor is generally responsible for cost increases and schedule 

overruns under the terms of the fixed-price contract. OMB Circular No. A–11, Appendix 8 

(2012).

Cost Increases and 

Schedule Delays at 

the Four Largest 

Projects Occurred for 

a Variety of Reasons

Cost Increases and 

Schedule Delays
 

Page 9 GAO-13-302 VA Construction

Table 3: VA Major Medical-Facility Projects Cost Increases and Schedule Delays, as of November 2012

Project 

location

Initial total 

estimated costs

Total 

estimated 

costs

Percent

increase

Initial estimated 

completion date

Current 

estimated 

completion 

date

Number of 

months 

extended

Total 

estimated 

years to 

completea

Las Vegas $325 million $585 million 80 April 2009 June 2014 74 10.25 

Orlando $254 million $616 million 143 April 2010 July 2013b 39 8.5b

Denver $328 million $800 million 144 February 2014 April 2015 14 10.5

New Orleans $625 million $995 million 59 December 2014 February 2016 14 8.5

Source: GAO Analysis of VA data.

a

The column titled “total estimated years to complete” is reported to the nearest quarter year and is 

calculated from the time VA approved the architecture and engineering firm to the current estimated 

completion date. We calculated the “number of months extended” column by counting the months 

from the initial estimated completion date to the current estimated completion date, as reported by 

VA. According to VA, the dates in the initial estimated completion dates are from the initial budget 

prospectus, which assumed receipt of full construction funding within 1 to 2 years after the budget 

submission. In some cases, construction funding was phased over several years and the final 

funding was received several years later. Naval Facilities Engineering Command officials we spoke 

with told us that historically, medical facility projects take approximately 4 years from design to 

completion. We calculated the percentage change in cost by using the initial total estimated costs and 

total estimated costs, as reported by VA. 

b

VA provided time extensions to the Orlando, Florida contractor extending the contract completion 

date to July 2013. Because of an ongoing dispute between VA and the general contractor regarding 

performance of the contract in Orlando, Florida, VA issued a show cause notice to the contractor on 

January 31, 2013. The show cause notice provides the contractor an opportunity to present any facts 

relevant to the dispute. As of the publication of this report, VA has yet to determine the next steps to 

resolve this matter. July 2013 is considered the current completion date provided to us by VA officials. 

However, the general contractor disagrees with this date, and has estimated that it will be spring 

2014. 

In commenting on a draft of this report, VA stated that project designs, 

initial cost estimates, and completion dates are developed years 

prospectively, several years before Congress appropriates funds and the 

construction contract is awarded, which determines the cost to complete 

the project and the completion date. VA provided information indicating 

that after the Department received appropriations for these four projects, 

and the construction contract was awarded, the magnitude of cost 

increases and schedule delays was significantly less. For example, the 

costs for the four projects decreased or remained unchanged, and the 

number of months the completion dated extended ranged from 0 to 10 

months.21

 

21VA officials provided further detail in comments responding to this report in Appendix IV. 

 VA officials said that using the initial completion date from the 

construction contract would be more accurate for measuring schedule 

delays; however, using this start date would not account for how VA 
 

Page 10 GAO-13-302 VA Construction

managed these projects prior to awarding the construction contract. By 

using the methodology VA suggests, the schedule delays and cost 

increases are significantly lower. We believe that the methodology in this 

report and in our past report on VA construction provides an accurate 

depiction of how cost and schedules for construction projects can change 

from the time they are first submitted to Congress.22

Of the remaining 46 major medical-facility projects, 26 are under 

construction or were recently completed. As shown in figure 1, of these 

26, half have experienced cost increases, but the other half experienced 

either no change in costs or a decrease in costs. (See app. II for detailed 

information on all 50 ongoing projects.) 

 It is at this time that 

expectations are set among stakeholders, including the Veterans 

community, for when projects will be completed and at what cost. We 

recognize that many factors can affect cost and schedules over the life of 

a project and that some of these factors, including when appropriations 

are actually received, are beyond VA’s control. We also acknowledge 

that after Congress appropriates funds and contractors are selected for 

projects, VA and the contractors develop more accurate cost estimates 

and schedules and the likelihood increases that cost and schedule risks 

are mitigated or realized. 

Figure 1: Range of Cost Changes for 26 Major Medical-Facility Projects, as of 

November 2012

Note: This figure contains data provided by VA in November 2012. We calculated the percentage 

change in cost by using the initial total estimated costs and total estimated costs, as reported by VA. 

 

22 GAO-10-189
 

Page 11 GAO-13-302 VA Construction

The 26 VA major ongoing construction projects are currently underway or recently completed. The 4 

largest projects are not included in the figure: Denver, Colorado; Las Vegas, Nevada; New Orleans, 

Louisiana; and Orlando, Florida. 

Nineteen of 24 construction projects currently under construction or 

recently completed have experienced schedule delays.23

Figure 2: Changes in Schedules by Number of Months for 24 Major Construction 

Projects

(See fig. 2 for an 

overview of schedule delays for these 24 projects).

Note: VA’s 26 major ongoing construction projects are currently under way or recently completed. We 

calculated the change in schedule by counting the months from the initial estimated completion date 

to the current estimated completion date, as reported by VA. The 4 largest projects are not included 

in the figure: Denver, Colorado; Las Vegas, Nevada; New Orleans, Louisiana; and Orlando, Florida. 

For the purpose of our analysis, we consider complete schedule data as being projects that reported 

both initial estimated completion date and current estimated completion date. VA did not provide 

schedule data for both initial estimated completion date and current estimated completion date for two 

projects under construction. As such, this analysis is comprised of 24 of VA’s 26 major medical-facility 

projects that are under construction or recently completed. 

At each of the four locations we reviewed, different factors contributed to 

cost increases and schedule:

• Changing health care needs of the local veteran population changed 

the scope of the Las Vegas project.

• Decisions to change plans from a shared university/VA medical center 

to a stand-alone VA medical center affected plans in Denver and New 

Orleans.

 

23VA did not provide schedule data for both initial estimated completion date and current 

estimated completion date for two projects under construction. 

Reasons for Cost Increases 

and Schedule Delays at 

VA’s Four Largest Projects
 

Page 12 GAO-13-302 VA Construction

• Changes to the site location by VA delayed efforts in Orlando.

• Unanticipated events in Las Vegas, New Orleans, and Denver also 

led to delays.

In the case of the Las Vegas facility, the evolving needs of veterans drove 

the scope of the construction changes. VA officials told us that the Las 

Vegas Medical Center was initially planned to be an expanded clinic 

collocated with Nellis Air Force Base. However, VA later determined that 

a much larger medical center was needed in Las Vegas after it became 

clear that an inpatient medical center VA shared with the Air Force would 

not be adequate to serve the medical needs of local veterans. As a result, 

the cost of the project increased from an initial estimate of $325 million to 

a final estimate of $585 million—an increase of 80 percent. Since the 

estimate for the Las Vegas Medical Center was based on a preliminary 

design for an expanded clinic, additional functions, such as a specialty 

care unit and inpatient rehabilitation care, had to be added to the clinic’s

design to provide the services necessary for the medical center. In 

addition, after the mental health ward was designed, VA Mental Health 

guidelines changed to require more space to treat veterans, which 

caused VA to re-design the space.24 Construction was completed for 

most of the Las Vegas medical center in August 2012; however, VA is 

building additional phases to the project that are expected to be 

completed in June 2014.25

For Denver and New Orleans, VA revised its original plans for shared 

facilities with local universities to stand-alone facilities after proposals for 

a shared facility could not be finalized. In Denver, plans went through 

numerous changes after the prospectus was first submitted to Congress 

in 2004. In 1999, VA officials and the University of Colorado Hospital 

began discussing the possibility of a shared facility on the former 

Fitzsimons Army base in Aurora, Colorado.26

 

24

Negotiations over different 

aspects and revisions of this proposal continued until late 2004, at which 

time VA decided against a shared facility with the University of Colorado 

Hospital because of VA concerns over the governance of a shared facility 

GAO-10-189, see appendix pages 58–60. 

25VA officials told us that VA is still constructing an operating room, administration 

building, and education center, while also expanding the emergency department and 

upgrading the women’s clinic, at the site of the Las Vegas Medical Center. 

26Fitzsimons Army base was closed in 1999 as part of the Department of Defense’s base 

realignment and closure process.

Changing Veterans’ Health Care 

Needs 

Decisions to Change from 

Shared Facilities to Stand-alone 

Facilities
 

Page 13 GAO-13-302 VA Construction

and space limitations.27

Hurricane Katrina devastated the New Orleans VA hospital in 2005, 

flooding several floors. Initially, VA was going to build and operate the 

hospital with Louisiana State University; however, VA changed its 

decision in response to veterans’ concerns about the quality of care they 

would receive at a facility shared with the general public and because 

several analyses VA conducted on the project indicated that a shared 

facility presented financial and operational issues. In late 2007, VA 

selected the architectural and engineering firm and signed a 

memorandum of understanding (MOU) with the city of New Orleans. The 

original MOU with the city of New Orleans provided that after VA selected 

a site, the city had 365 days for the city to turn it over to VA. As such, the 

site should have been turned over to VA in November 2008. However, the 

city had to remove numerous homes and businesses, and the first parcel 

of the land was not transferred until June 2010. The remaining parcels 

were transferred to VA in April 2011.

In 2005, VA selected an architectural and 

engineering firm for a stand-alone project, but VA officials told us that the 

firm’s efforts were suspended in 2006 until VA acquired another site at 

the former Army base adjacent to the new university medical center. 

Design restarted in 2007 after land acquisition proceedings began, but 

the architectural and engineering firm’s design efforts were once again 

suspended in January 2009, when VA reduced the project’s scope 

because of lack of funding. By this time, the project’s costs had increased 

by approximately $470 million, and the project’s completion was delayed 

by 14 months. The cost increases and delays occurred because the costs 

to construct operating rooms and other specialized sections of the facility 

were now borne solely by VA, and the change to a stand-alone facility 

also required extensive redesign. Since construction commenced at the 

current site in 2009, the project has not experienced any further cost 

increases or delays, according to VA officials. The Denver VA Medical 

Center is expected to be completed in April 2015.

In Orlando, VA’s site location changed three times from 2004 to 2010. It 

first changed because VA, in renovating the existing VA hospital in 

Orlando, realized the facility site was too small to include needed 

services. However, before VA could finalize the purchase of a new larger 

 

27VA, VA Health Care: Experiences in Denver and Charleston Offer Lessons for Future 

Partnerships with Medical Affiliates, GAO-06-472 (Washington, D.C.: Apr. 28, 2006).

Changes to Site’s Location
 

Page 14 GAO-13-302 VA Construction

site, the land owner sold half of the land to another buyer, and the 

remaining site was again too small to accommodate a medical center.

Finally, VA selected another nearby site and the architectural and 

engineering firm had to revise the design to accommodate the new site 

(see fig. 3). As a result of these changes, all dates for the project slipped 

and the design schedule was compressed.

Figure 3: Current Site and Construction of the Orlando VA Medical Center Project

The Las Vegas project experienced scope changes after construction 

started because of new security requirements and changing construction 

market conditions. After September 11, 2001, the Department of 

Homeland Security instituted new security requirements for federal 

facilities, which increased construction costs for this and other medical 

facilities. After this cost increase was absorbed, VA officials stated that 

the cost of material and labor subsequently increased, because demand 

for construction increased nationwide, due in part to the rebuilding in the 

New Orleans area following Hurricane Katrina. Moreover, construction 

costs had increased locally because of the previous construction boom in 

Las Vegas. For example, the Las Vegas area had several multi-billion 

dollar projects under way when construction began on the Las Vegas 

facility in 2006. Locally, construction costs increased over 20 percent from 

2004 to 2006. VA staff told us that at that time Las Vegas builders were 

employing almost 80 percent of the nation’s large cranes used to build tall 

buildings.28

 

28

Conversely, as construction of the medical facility progressed, 

GAO-10-189. 

Unanticipated Events 
 

Page 15 GAO-13-302 VA Construction

the economic recession that began in 2008 drove construction costs 

lower than what was estimated. As a result, VA was able to add features 

back into the project that had been eliminated and still stay on budget. VA 

is now using some of the savings to construct an administrative building 

at the facility.

Unforeseen issues also increased costs and exacerbated delays in 

Denver and New Orleans. For example, VA officials at the Denver project 

site discovered they needed to eradicate asbestos and replace faulty 

electrical systems from pre-existing buildings. They also discovered and 

removed a buried swimming pool and found a mineral-laden underground 

spring that forced them to continually treat and pump the water from the 

site (see fig. 4). In New Orleans, the city began demolishing existing 

structures on the site in November 2010 and completed demolition in 

April 2011. After the property was transferred to VA, VA had to make 

provisions for the removal of hazardous materials discovered on-site. 

Figure 4: Underground Spring Located at the Denver VA Project Site
 

Page 16 GAO-13-302 VA Construction

In April 2012, the Secretary of Veterans Affairs established the 

Construction Review Council to serve as the single point of oversight and 

performance accountability for the planning, budgeting, execution, and 

delivery of the VA real property capital-asset program.29 The council 

issued an internal report in November 2012 that contained findings and 

recommendations that resulted from meetings it held from April to July 

2012.30

 

29The Council was comprised of officials from the VA, including the secretary, deputy 

secretary, chief of staff, under secretaries, and assistant secretaries, as well as key 

leaders across the department. The Secretary of VA chaired nine meetings from April 18 

through June 15, 2012, to review the VA construction program and identify challenges that 

led to changes in scope, cost over-runs, and scheduling delays of major projects.

According to the council report, multiple internal and external VA 

reviews have found systemic deficiencies in a range of areas, including 

defining requirements, estimating costs, designing and scoping the 

project, managing the contract, overseeing the program, and activating 

completed projects. The analyses revealed that the challenges identified 

on a project-by-project basis were not isolated incidents but are indicative 

of systemic problems facing VA. The council report has several 

recommendations including that VA streamline processes and procedures 

for change orders and link the purchase of medical equipment with the 

coordination of the construction schedule. VA officials are reviewing 

specific options to address this issue and began receiving progress 

updates on these topics and others on a monthly basis in February 2013. 

However, VA has not yet developed specific guidance or instructions on 

how to implement these recommendations, which would provide specific 

30VA, The Construction Review Council Activity Report (Washington, D.C.: November 

2012).

VA Has Taken Steps 

to Improve Its 

Construction 

Management 

Practices and Has 

Opportunities for 

Further Improvement

Creation of a Construction 

Management Review 

Council
 

Page 17 GAO-13-302 VA Construction

steps on the new process to help ensure VA avoid problems involving the 

purchase of medical equipment on future construction projects. As 

discussed later in this report, VA is taking steps to address some of the 

council’s other recommendations.

We have emphasized in previous work the need for federal agencies to 

collaborate with other agencies to leverage each others’ resources, thus 

obtaining additional benefits that would not be available if they were 

working separately.31 VA’s Strategic Plan also recognizes the importance 

of such collaboration and of 1) addressing construction management 

issues by increasing communication and collaboration across

organizations, such as federal agencies, to share best practices, and 2) 

identifying and addressing other opportunities to improve performance 

management.32

VA has taken some action to tap the experience of other federal agencies 

involved in constructing medical facilities. VA stated that it has 

collaborated with Department of Defense agencies such as the Tricare 

Management Activity, U.S. Army Corps of Engineers, and Naval Facilities 

Engineering Command as well as other federal agencies such as the 

National Institute of Building Sciences and the Federal Preservation 

Institute to discuss general construction issues.33

 

31GAO, Results-Oriented Government: Practices That Can Help Enhance and Sustain 

Collaboration among Federal Agencies, 

Additionally, VA 

participates in the VA/Department of Defense Joint Executive Council and 

GAO-06-15 (Washington, D.C.: Oct. 21, 2005). 

32VA, Strategic Plan Refresh: FY2011–FY2015 (Washington, D.C). 

33The Tricare Management Activity manages the TRICARE health care program for active 

duty members and their families, retired service members and their families, National 

Guard/Reserve members and their families, survivors, and others entitled to Department 

of Defense medical care. The Army Corps of Engineers managed the Army military 

construction program between 2006 and 2013, which totaled approximately $44.6 billion. 

The U.S Naval Facility Engineering Command manages the planning, design, and 

construction of shore facilities for the U.S. Navy, Marine Corps, and other federal clients. 

The National Institute of Building Sciences is a non-profit, non-governmental organization 

that brings together representatives from government and the professions of industry, 

labor and consumer interests to focus on the identification and resolving problems that 

hamper the construction of safe, affordable structures for housing, commerce, and 

industry throughout the United States. The Federal Preservation Institution provides 

education and information to federal agencies to carry out historic preservation efforts. 

Collaborating with Other 

Federal Agencies and the 

Construction Industry
 

Page 18 GAO-13-302 VA Construction

the Federal Facilities Council, as well as federal agency construction 

forums.

VA has also taken steps to reach out to the construction industry. In June 

2011, VA convened a construction industry forum to facilitate 

communications with the construction industry about ways to improve 

medical facilities construction practices. VA hosted attendees from 75 

contractor firms, who provided written feedback. According to a summary 

of the proceedings issued by VA, attendees said that VA needed to 

improve communication among project team members. VA construction 

officials noted that the participant suggestions have been valuable and 

have assisted them in their effort to improve medical-facilities construction 

practices. VA plans to host another industry forum in the future.

To better manage the cost and schedules for major medical-facility 

projects, VA has taken steps to implement a new project delivery method, 

such as the Integrated Design and Construction (IDC).34

VA officials stated that Denver and New Orleans were initiated as designbid-build projects and later switched to IDC after the projects had already 

begun. According to VA officials, the IDC method was very popular with 

industry, and VA wanted to see if this approach would be effective in 

delivering a timely medical facility project. Thus while the intent of the IDC 

method is to involve both the project contractor and architectural and 

engineering firm early in the process to ensure a well coordinated effort in 

designing and planning a project, VA did not hire the contractor for 

Denver until after the initial designs were completed. New Orleans 

officials said that they were delayed in bringing on the contractor because 

of a bid protest.

In response to 

the construction industry’s concerns that VA and other federal agencies 

did not involve the construction contractor early in the design process, VA 

and the Army Corps of Engineers began working to establish a project 

delivery model that would allow for earlier contractor involvement in a 

construction project, as is often done in the private sector. However, in 

Denver and New Orleans VA did not implement IDC early enough to 

garner the full benefits.

35

 

34See table 2 for an overview of project delivery methods.

The designer was allowed to continue with design 

35Nova Builders: B-402091; B-402091.2; B-402091.3 (Washington, D.C.: Jan. 19, 2010).

Evaluating Project 

Delivery Methods
 

Page 19 GAO-13-302 VA Construction

development during the resolution of the protest, which did not allow the 

project to fully benefit from the IDC method. According to VA officials, had 

the award not been protested, sufficient interaction between the

architectural and engineering and construction firm could have taken 

place during design development, which should have greatly limited or 

mitigated many of the design issues. According to VA, in both Denver and 

New Orleans, because the contractors were not involved in the design of 

the projects and formulated their bids based on a design which had not 

been finalized, these projects required changes that increased costs and 

led to schedule delays. VA staff responsible for managing both projects 

said it would have been better to maintain the design-bid-build model 

throughout the entire process rather than changing mid-project because 

VA did not receive the value of having contractor input at the design 

phase, as the IDC method is supposed to provide. For example, 

according to Denver VA officials, the architectural design called for curved 

walls rather than less expensive straight walls along the hospital’s main 

corridor. The officials said that had the contractor been involved in the 

design process, the contractor could have helped VA weigh the aesthetic 

advantages of curved walls against the lower cost of straight walls.

VA officials have emphasized that they need the flexibility to change their 

heath care processes in response to the development of new 

technologies, equipment, and advances in medicine.36

 

36VA, Strategic Plan Refresh: FY2011–FY2015 (Washington, D.C). 

Thus, for new 

heath care facilities, VA seeks to ensure that the most up-to-date 

equipment is installed, and that space and electrical installations support 

the equipment. However, this can be a challenge for projects that take a 

number of years to complete, as advances in technology can require 

design changes. Given the complexity and sometimes rapidly evolving 

nature of medical technology, many health care organizations employ 

medical equipment planners to help match the medical equipment 

needed in the facility to the construction of the facility. Naval Facilities 

Engineering Command officials told us that they use medical equipment 

planners on all medical facility projects, hired through the architectural 

and engineering contract. Army Corps of Engineers officials said they 

also use medical planners from the Department of Army’s Office of the 

Surgeon General on all of their medical facility projects. Officials from 

contracting firms currently working on VA projects told us that in their 

Using Medical Equipment 

Planners
 

Page 20 GAO-13-302 VA Construction

experience with other federal agencies, including the U.S. Army Corps of 

Engineers, medical equipment planners have helped avoid schedule 

delays. VA officials told us that they sometimes hire a medical equipment 

planner as part of the architectural and engineering firm’s services to 

address medical equipment planning. The planner can be brought on 

early in the design phase and remain through construction phases of the 

project. The planner should help coordinate with the architectural and 

engineering firm to ensure that the project’s design and construction will 

accommodate the necessary medical equipment. However, we found that 

for costly and complex facilities, VA does not have guidance for how to 

involve medical equipment planners during each construction stage of a 

major hospital.

VA has sometimes relied on VHA staff to make medical equipment 

planning decisions. For example, in Orlando, VA relied on local VHA staff 

with limited experience in procuring medical equipment for a new 

hospital.37

VA officials recognized in Orlando that the procurement of medical 

equipment was not successful because there was no guidance on 

determining the need for medical equipment procurement when building a 

major new facility. CFM headquarters and Orlando officials acknowledged 

Orlando VA officials recommended hiring a consulting firm to 

assist them with various aspects of medical equipment planning, 

procurement, delivery, and installation in 2011. However, VA was unable 

to implement this recommendation until fiscal year 2012, at which point 

the design decisions had already been made. Because the medical 

equipment specifications changed several times, construction design 

documents for various parts of the medical facility had to be changed.

Consequently, the facility also had to be altered, and some previously 

constructed areas required minor demolition to accommodate the medical 

equipment. These and other alterations led to cost increases of at least 

$14 million in addition to schedule delays. In other areas of the facility, 

medical equipment issues forced VA to suspend construction until the 

issues were resolved.

 

37According to VA officials, in Orlando, the architecture and engineering firms used a 

medical equipment planner during design to develop the equipment list and coordination 

comments. The planner used equipment planning guides, spacing plans, and medical 

center user group meetings to develop the design requirements. This planner has been 

involved throughout the construction phase to assist with coordination efforts and to 

answer requests for information. 
 

Page 21 GAO-13-302 VA Construction

that these problems might have been avoided if experienced medical 

equipment planners were used to coordinate the construction schedule 

and select medical equipment. They also agreed that a medical 

equipment planner is needed for future large scale projects. Procedures 

supporting the timely use of medical equipment planners—so that design 

decisions are coordinated with construction—would help ensure that 

medical equipment specifications such as space and electrical needs are 

included in planning and construction efforts and help to avoid added cost 

and construction delays later.

Construction of large medical facilities involves numerous staff from 

multiple VA organizations. For example, VA staff involved in the projects 

we visited included local on-site officials and staff from VA’s regional and 

central office. In its 5-year Strategic Plan, VA identified the need for each 

organizational unit, including CFM, to review its spans of control and 

establish clear roles and responsibilities and make changes where 

necessary.38 Additionally, CFM stated that during the construction 

process, effective communication is essential and must be continuous 

and involve an open exchange of information among VA staff and other 

key stakeholders.39

 

38VA, Strategic Plan Refresh: FY2011–FY2015 (Washington, D.C.). 

See figure 5 for a depiction of the main VA officials 

and offices involved in the construction management process.

39VA, Construction Primer (Washington, D.C.: January 2013). 

Sharing Information on the 

Roles and Responsibilities 

of VA’s ConstructionManagement Staff 
 

Page 22 GAO-13-302 VA Construction

Figure 5: Example of VA Staff Involvement in Construction Management Decisions 

at Multiple Organizational Levels

a

The term CFM refers to the Department of Veterans Affairs’ Office of Construction and Facilities 

Management. 

We found that because the roles and responsibilities of CFM and VHA 

staff are not always well communicated, it is not always clear to general 

contracting firms which VA officials hold the authority for making 

construction decisions. VA’s contracting officer is the only VA official with 

the direct line of authority to alter contracts for VA’s major medical-facility 

projects. However, we found the level of involvement from other VA 

officials can cause some confusion for contractors and architectural and 

engineering firms, ultimately affecting the relationship between VA and 

the general contractor. For example, contractor officials at one site said 

that VA’s project manager directed them to defer the design of specific 

rooms until medical equipment was selected for the facility; however, 

VA’s central office then directed the contractor to proceed with designing 

the rooms. This conflicting direction from VA is expected to require the 

contractor to redesign the space, further expending project resources. 

Additionally, staff from a general contractor said they work with the 

resident engineer or contracting officer depending upon the nature of the 
 

Page 23 GAO-13-302 VA Construction

issue, in addition to working with the VHA medical director. However, this 

can be a time-consuming process and sometimes results in unresolved 

issues. Architectural and engineering officials told us that nonconstruction VA officials—such as VHA medical center officials who 

develop the types of care needed and the subsequent medical equipment 

needed—do not always understand the lines of authority for making 

construction decisions for major medical-facility projects. As a result, 

decision making on projects can be delayed, creating a cumulative effect 

where various issues go unresolved, possibly resulting in schedule 

delays. For example, contractors we interviewed at all three sites we 

visited said that although CFM’s contracting officer is the only official 

contractually allowed to request the architectural and engineering officials 

to make changes to the project, VHA medical center staff request the 

construction contractor and architectural firm to make construction 

changes without consulting with the contracting officer. According to 

these officials, when such a situation occurs, the changes have to be resubmitted by the contracting officer, a resubmission that can result in 

delays in their implementation.

Participants from VA’s 2011 industry forum reported that VA roles and 

responsibilities for contracting officials were not always clear. To address 

these issues, industry participants made several recommendations to VA.

For example, they recommended using a matrix of roles and 

responsibilities for each project to clarify how teams will work together 

and who is responsible for which decisions. They also recommended that 

VA officials communicate to all parties—staff, designer and builder—

regarding the construction project budget from the start of the project so 

that everyone can be working towards a common purpose.

VA developed a primer in January 2013 that generally outlines the 

responsibilities of VA staff involved in construction projects. VA 

headquarters officials told us the primer is not available on the VA web 

site, and there is no requirement that it be transmitted to contractors 

selected for construction projects. The officials stated that local VA project 

staff can share it with the contractor at their discretion. It was not clear 

that VA staff had provided the primer to contractor staff at the sites we 

visited, since VA developed the document after our visits. Tailoring the 

guidance with specific local VA project team information and 

communicating it to contractor staff for major construction sites could 

potentially help VA avoid confusion that could lead to cost increases and 

construction delays.
 

Page 24 GAO-13-302 VA Construction

Most construction projects require some degree of change to the facility 

design as the project progresses, and typically, organizations have a 

process to initiate and implement these changes through change orders. 

Federal regulations40 and agency guidance41 state that change orders 

must be made promptly, and that equitable adjustments resulting from 

change orders are negotiated in the shortest practicable time. However, 

VA does not specify any time frames for how long it should take to issue 

change orders, nor does it systemically track the amount of time it takes 

to process change orders despite the possibility that delays in processing 

can affect project costs and schedules. According to VA officials, the 

agency has formed an informal working group that is evaluating how the 

change-order process can be improved. This group is looking at 

comparing VA processes with other federal entities, benchmarking the 

stages in the VA process, and seeing how VA processes compare with 

the other federal entities involved in medical facilities construction. VA 

officials acknowledge that setting a single time frame for the change-order 

process is difficult because some changes take more time than others, 

but they recognize that the agency needs to speed the process. VA 

officials at the sites we visited stated that change orders that take more 

than a month from when they are initiated to when they are approved can 

result in schedule delays; however, officials noted some change orders in 

their experience have taken much longer than a month. For example, 

officials at two sites we visited said that it was common for VA to take 6 

months to process a change order, even though VA has directed its staff 

to eliminate or minimize delays.42

 

4048 C.F.R. § 43.201. 

Although officials at one of these sites 

said that VA’s timeliness of the change-order process has improved, they 

noted that a change order still takes an average of 2 to 3 months, 

indicating to them that further improvement is needed. Officials from the 

Naval Facilities Engineering Command and the U.S. Army Corps of 

Engineers–two federal agencies that also construct large medical 

projects–told us that while the time frame for change orders and 

contractual modifications can vary for each case; it should not take more 

41VA, VA Resident Engineer Handbook, “Chapter 3: Major Construction: Contract 

Changes” (3.24), (Washington, D.C.). 

42VA, VA Resident Engineer Handbook, “Chapter 3: Major Construction: Contract 

Changes” (3.24), (Washington, D.C.). 

Managing the ChangeOrder Process
 

Page 25 GAO-13-302 VA Construction

than a few weeks to a month to issue most change orders.43

One factor that can add to processing delays is the difficulty involved in 

VA’s and contractors’ coming to agreement on the costs of changes. After 

conducting a data analysis, VA staff at the Orlando site indicated that 

costs for some proposed changes submitted by the contractor varied 

significantly from the costs that VA determined were justified. VA Orlando 

officials said the analysis also concluded that one of the contractors 

averaged more than 100 days to submit cost estimates for change orders, 

indicating that the delays can arise from the contractor. One general 

contractor told us that delays from the change-order process can affect 

the project schedule and can require the contractor to pay out-of-pocket 

for specific tasks until VA approves the change orders or the contractor 

must stop work. At one point, according to the contractor, the firm was 

owed more than $8 million for work that it completed on the project but 

VA had not yet approved the change orders. VA officials stated that once 

disagreements between the contractor’s proposals for payment versus 

independent government estimates are resolved, the contractor will 

receive payment.

Contracting 

firm officials at two VA project sites told us that in their opinion, the U.S. 

Army Corps of Engineers generally resolved change orders in a 

reasonable time frame thus avoiding delays. In addition, two VA officials 

who previously worked at the Naval Facilities Engineering Command 

stated that the command resolved change orders in a timely manner and 

required fewer levels of review than VA.

VA requires multiple levels of review for many of VA’s change orders, 

which can be another factor that can increase the time it takes to finalize 

them. According to VA, these reviews are necessary to ensure that VA is 

in accordance with its regulations and reduce the risk that changes will 

result in unwarranted costs to the government. VA’s change-order 

process requires contracting officers to obtain a legal review and 

concurrence from VA’s Office of General Counsel for proposed contract 

modifications if any of the following occur 1) the total value of the 

modification is $100,000 or more; 2) a time extension of more than 60 

 

43We recognize that the U.S. Army Corps of Engineers, Naval Facilities Engineering 

Command, and the Department of Veterans Affairs serve different populations in the 

defense community—active duty military personnel and veterans, respectively. However, 

these organizations construct similar medical facilities, in addition to being subject to

federal government regulations for construction projects. 
 

Page 26 GAO-13-302 VA Construction

days is sought; or 3) the contractor has taken exception to the proposed 

modification.44 For proposed contract modifications ranging from 

$100,000 to $250,000, the contracting officer reviews the proposed 

modification; if the contracting officer recommends approval, the 

proposed modification is submitted to Office of General Counsel through 

or by an official at least one level above the contracting officer. The Office 

of General Counsel must review it before it can be approved by the 

regional office.45

Figure 6: VA Construction Change-Order Process

When the change exceeds $250,000, the proposed 

modification must also be finalized by the CFM regional office. All 

change-order proposals in excess of $700,000 require an audit by the 

Defense Contract Audit Agency, VA Office of Inspector General, or 

another contracted audit organization. See figure 6 for the change-order 

process.

a

The term CFM refers to the Department of Veterans Affairs’ Office of Construction and Facilities 

Management. 

 

44Contract modifications issued only to exercise contract options are exempt from this 

review requirement.

45The Veterans Affairs Acquisition Regulations requires Office of General Counsel to 

complete reviews as expeditiously as possible, with due regard for procurement actions 

that require an unusually short period for completing the procurement. 48 C.F.R. § 

801.602-85.
 

Page 27 GAO-13-302 VA Construction

VA officials at four major medical facilities we visited said change orders 

needed to be processed and approved more quickly to avoid further 

delays. To speed the process, VA issued a memorandum in July 2012 

that raised the Office of General Counsel review threshold for the Denver, 

New Orleans, Orlando, and Palo Alto medical facilities from $100,000 to 

the current $250,000. Because of the size and cost of these projects, VA 

anticipated a large number of change orders over $100,000, and 

reviewing all of them could delay construction at these sites.46

Figure 7: New VA Construction Change-Order Process for Sites with a Higher Threshold for VA OGC Review

However, 

this change does not address the multiple levels of review that many 

change orders must still undergo. See figure 7 to see the new process at 

the four VA sites, which raises the threshold for Office of General Counsel 

review to $250,000.

a

The term CFM refers to the Department of Veterans Affairs’ Office of Construction and Facilities 

Management. 

VA is aware of change order delays and is taking some steps to address 

this issue. One of the Construction Review Council’s responsibilities is the 

 

46In the memorandum, VA authorized a deviation from VA Acquisition Regulation for New 

Orleans VAMC, Denver VAMC, Orlando VAMC, and the Palo Alto tower which required 

OGC review for all change orders above $100,000. 48 C.F.R. § 801.602-83. In this 

memorandum, VA cites that it anticipates a large number of modifications over $100,000 

for these sites because of their size, and that these modifications may result in delays. 

The Palo Alto tower is a project for Ambulatory Care/Polytrauma Rehabilitation.
 

Page 28 GAO-13-302 VA Construction

review of the effectiveness and efficiency of processes used on 

construction projects, including change orders. During the council’s 

meetings, VA officials said they consistently were told by project staff that 

change orders were taking too long and delaying the completion of 

projects. In its report, the council recommended that VA review the 

opportunity to shorten the decision cycle for approving change orders. As 

a part of this effort, the council recommended 1) that VA examine the 

authority levels of contracting officers in the field to execute change 

orders without additional review and (2) that VA consider support for 

hiring three additional attorneys to review change orders. However, VA is 

reviewing the options proposed by the council and began receiving 

progress updates on this review in February 2013.

VA has made improvements in its management of major medical-facility 

construction projects, but many of these projects continue to experience 

cost increases and schedule delays similar to those we reported in 2009. 

Although we recognize that some cost increases and schedule delays 

result from factors beyond VA’s control, our review of VA’s four largest 

projects indicates that weaknesses in VA’s construction management 

processes also contributed to cost increases and schedule delays. The 

Construction Review Council has also identified a number of these same 

weaknesses, including in particular a review process that hinders the 

timely processing of change orders. VA is considering the council’s 

recommendations for addressing construction management weaknesses.

As part of its action involving the council’s recommendations, VA is 

confronted with addressing a lack of guidance and procedures for some 

important aspects of construction management, specifically, guidance 

and procedures for using medical equipment planners on projects, clearly 

communicating the roles and responsibilities of VA construction staff to 

stakeholders, and streamlining the change-order process. Such guidance 

would help institutionalize the types of changes that the Construction 

Review Council and others say are needed in VA’s construction 

management process. Without guidance on which projects require 

medical planners and at which the stage they should be used, VA could 

continue to experience delays and cost increases resulting from latestage design changes to accommodate medical equipment. Furthermore, 

the lack of clear guidance delineating the roles and responsibilities of VA 

staff for managing each aspect of construction projects, can make it 

difficult for VA and contractors to communicate clearly, which also 

contributes to schedule delays and cost increases. Moreover, while the 

Construction Review Council has identified opportunities to streamline

Conclusions
 

Page 29 GAO-13-302 VA Construction

VA’s multi-layered change-order process, VA has yet to be develop 

guidance to ensure that change orders are approved in a prompt manner 

to avoid project delays. Given that VA is currently involved in 50 major 

medical-facility construction projects, including four large medical centers, 

such guidance could help to strengthen the management of these 

projects.

To improve the management of VA’s major construction projects, we 

recommend that the Secretary of Veterans Affairs should take the 

following three actions: 

• develop and implement agency guidance for assignment of medical 

equipment planners to major medical construction projects;

• develop and disseminate procedures for communicating, to 

contractors, clearly defined roles and responsibilities of VA officials 

who manage major medical-facility projects, particularly the changeorder process; and

• issue and take steps to implement guidance on streamlining the 

change-order process based on the findings and recommendations of

the Construction Review Council.

We provided a draft of this report to VA for review and comment. In its 

written comments, VA concurred with our recommendations, generally 

agreed with our conclusions and discussed actions underway or planned 

to implement the recommendations. However, VA stated that it had 

significant concerns with how we portrayed medical center cost and 

scheduling issues, particularly with respect to the table in the draft report 

showing cost increases and schedule delays for these projects. In our 

analysis of changes in cost and schedules for these projects, we 

considered the initial cost estimates and completion dates to be those 

that were first submitted to Congress. Cost estimates at this stage should 

be as accurate and credible as possible because Congress uses these 

initial estimates to consider authorizations and make appropriations 

decisions. We used a similar methodology to estimate changes to cost 

and schedule of construction projects in a previous report issued in 2009 

on VA construction projects. VA has been working to improve its initial 

cost estimates, as noted in our 2009 report. In its comments, VA stated 

that designs, initial cost estimates, and initial completion dates are 

developed several years before Congress appropriates funds and the 

construction contract is awarded, actions that then determine the cost and 

completion date. According to VA, a more accurate depiction of the 

Recommendations for 

Executive Action

Agency Comments 

and Our Evaluation
 

Page 30 GAO-13-302 VA Construction

project’s cost would be to make a comparison between the total 

appropriations received and the current total estimated cost, and a more 

accurate depiction of the schedule would be to compare the initial 

completion date established at the award of the construction contract with 

the estimated or actual completion date. In its letter, VA provided 

information on the changes to cost and schedules for the four projects 

after the final congressional appropriation was received and the 

construction contract was awarded. By using the methodology VA 

suggests, the schedule delays and cost increases are significantly lower. 

VA asked that we include this new information to supplement the 

information on cost and schedule changes already included in the report.

We believe that the methodology we used in this and our prior report on 

VA construction provides an accurate depiction of how cost and 

schedules for construction projects can change from the time they are 

first submitted to Congress. It is at this time that expectations are set 

among stakeholders, including the veterans community, for when projects 

will be completed and at what cost. As noted earlier, we recognize that 

many factors can affect cost and schedules over the life of a project and 

that some of these factors, including when appropriations are actually 

received, are beyond VA’s control. We also recognize that VA and the 

contractors develop more accurate cost estimates and schedules after 

Congress appropriates funds and contracts are awarded, and the 

likelihood increases that cost and schedule risks are either mitigated or 

realized. We therefore incorporated information in the report indicating 

how cost increases and schedule delays for the four projects have 

decreased in the stages after VA received appropriations. In addition, VA 

suggested a number of technical corrections which we incorporated as 

appropriate. VA’s letter is reprinted in appendix IV.

As agreed with your office, unless you publicly announce the contents of 

this report earlier, we plan no further distribution until 30 days from the 

report date. At that time, we will send copies of this report to the 

appropriate congressional committees, the Secretary of Veterans Affairs, 

and other interested parties. In addition, the report will be available at no 

charge on GAO’s website at http://www.gao.gov.

If you or your staff have any questions regarding this report, please 

contact me at (202) 512-2834 or stjamesl@gao.gov. Contact points for 

our Offices of Congressional Relations and Public Affairs may be found 
 

Page 31 GAO-13-302 VA Construction

on the last page of this report. GAO staff who made key contributions to 

this report are listed in appendix V. 

Sincerely yours,

Lorelei St. James

Director

Physical Infrastructure Issues
Appendix I: Scope and Methodology

Page 32 GAO-13-302 VA Construction

To determine changes to costs, schedule, and scope for selected 

Department of Veterans Affairs’ new major medical-facility projects, we 

obtained and analyzed data that VA provided on the status of VA’s 50 

active major medical-facility projects as of November 2012, including the 

original cost estimates and completion dates and the project’s current 

status. The data included a short project description, project location, the 

original and current total estimated cost of the project, the original and 

current completion date, and the type of acquisition strategy selected for 

the project. We analyzed the current cost and completion dates to 

determine any increases in costs and the extent to which projects may 

have exceeded time allotted and summarized the results. We also 

collected VA information on reasons for cost increase and schedule 

changes to VA projects based on scope changes. We assessed the 

reliability of the data through interviews with knowledgeable VA officials 

and a review for completeness and any unexpected values. We 

determined that the data was sufficiently reliable for the purpose of this 

report. To identify the reasons for cost, schedule, and scope changes in 

VA’s construction projects, we interviewed VA’s headquarters officials 

regarding the status of all major medical-facility projects and examined 

project documents and interviewed on-site managers and engineers. We 

selected the four most expensive ongoing major medical-facility 

construction projects based on cost, current status of the project, and 

type of facility, located in Denver, Colorado; Orlando, Florida; New 

Orleans, Louisiana; and Las Vegas, Nevada.1 We obtained specific 

information from VA’s ongoing major medical-facility projects as of 

November 2012. We visited the construction sites in Denver, Orlando, 

and New Orleans to talk to officials on site to determine the reasons for 

changes in costs and schedules. We updated our prior work on the Las 

Vegas facility with information on the project completion costs and the 

change-order process.2

To identify which actions VA has taken to improve its construction 

management, and any opportunities that exist for VA to further improve its 

management, we reviewed VA’s management practices of construction 

projects at the three locations we visited and interviewed VA 

The information from our site visits is illustrative 

and cannot be generalized to sites agency-wide.

 

1

The site that we refer to throughout this report as the Denver VA Medical Center is 

actually located in Aurora, Colorado, near Denver.

2

GAO-10-189. This review was conducted from October 2008 through December 2009.

Appendix I: Scope and Methodology
Appendix I: Scope and Methodology

Page 33 GAO-13-302 VA Construction

headquarters’ officials from the Veterans Health Administration, Office of 

Construction and Facilities Management, Office of General Counsel, as 

well as project managers and senior resident engineers at the 

construction sites we visited. We reviewed and analyzed construction 

documents, agency policy and guidance, previous VA reports, and 

interviewed officials from VA, veterans support organizations, architecture 

and engineering firms, general contractor construction firms, and 

construction management firms. We also reviewed the Federal 

Acquisition Regulations, VA’s Strategic Plan, and GAO past reports. In 

addition, we interviewed officials from the Naval Forces Engineering 

Command and the U.S. Army Corps of Engineers to discuss their current 

construction practices in major medical-facility projects.

We conducted this performance audit from April 2012 to April 2013 in 

accordance with generally accepted government auditing standards. 

Those standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our 

findings and conclusions based on our audit objectives. We believe that 

the evidence obtained provides a reasonable basis for our findings and 

conclusions based on our audit objectives.
Appendix II: Changes in Cost for Department 

of Veterans Affairs Major Medical-Facility 

Projects 

Page 34 GAO-13-302 VA Construction

In November 2012, VA provided GAO with data for its 50 ongoing major 

medical-facility projects. The term “major medical-facility project” is 

defined as “a project for the construction, alteration, or acquisition of a 

medical facility involving the total expenditure of more than $10 million.”1

Table 4: Cost of VA’s 50 Major Medical-Facility Projects as of November 2012

We calculated the percentage change in cost by using the initial total 

estimated costs, which were first submitted to Congress and total 

estimated costs, as reported by VA. Included is a summary of cost data 

arranged in descending order by the percentage change for each of VA’s 

50 major medical-facility projects.

Location Project description

Initial 

estimated 

cost

Estimated 

cost as of 

November 

2012

Cost 

increase/ 

decrease

Percentage

change Project status

Project 

typea

Projects experiencing cost increases

St. Louis (JB), MO Medical Facility 

Improvements & 

Cemetery Expansion

$69 million $367 million $298 million 432% Construction DBB

Bronx, NY Spinal Cord Injury 

(SCI) 

82 million 226 million 144 million 176 Construction 

Documents

DBB

Denver, CO New Medical Facility 328 million 800 million 472 million 144 Construction IDC

Orlando, FL New Medical Facility 254 million 616 million 362 million 143 Construction DBB

West Los Angeles, 

CA

Seismic Correction of 

12 Buildings

155 million 347 million 192 million 124 Construction 

Documents

DBB

San Juan, PR Seismic CorrectionsBuilding145 million 277 million 132 million 91 Construction DBB

Las Vegas, NV New Medical Facility 

(Multiple Phases)

325 million 585 million 260 million 80 Construction DBB

Dallas, TX Spinal Cord Injury 

(SCI) 

89 million 155 million 66 million 74 Construction 

Documents

DBB

Biloxi, MS Restoration of 

Hospital/Consolidation 

of Gulfport

175 million 304 million 129 million 74 Construction DBB

Syracuse, NY Construct Addition for 

SCI Center

54 million 92 million 38 million 70 Construction DBB

New Orleans, LA New Medical Facility 625 million 995 million 370 million 59 Construction IDC

Palo Alto, CA Ambulatory Care/ 

Polytrauma Rehab

450 million 717 million 267 million 59 Construction DBB

 

1

See 38 U.S.C. § 8104.

Appendix II: Changes in Cost for Department 

of Veterans Affairs Major Medical-Facility 

Projects 
Appendix II: Changes in Cost for Department 

of Veterans Affairs Major Medical-Facility 

Projects 

Page 35 GAO-13-302 VA Construction

Location Project description

Initial 

estimated 

cost

Estimated 

cost as of 

November 

2012

Cost 

increase/ 

decrease

Percentage

change Project status

Project 

typea

Palo Alto, CA Seismic Corrections 

Building. 2

34 million 54 million 20 million 59 Construction DBB

Pittsburgh, PA Consolidation of 

Campuses (Multiple 

Phases)

191 million 283 million 92 million 48 Construction DBB

Fayetteville, AR Clinical Addition 56 million 88 million 32 million 57 Construction DBB

Lee County Outpatient Clinic 65 million 88 million 23 million 35 Physically 

Complete

DBB

Long Beach, CA Seismic CorrectionsBuildings 7,126103 million 130 million 27 million 26 Construction DBB

Seattle, WA B101 Mental Health 179 million 222 million 43 million 24 Construction 

Documents

DBB

Seattle, WA Correct Seismic 

Deficiencies B100,NT, 

and NHCU

43 million 52 million 9 million 21 Construction 

Documents

DBB

Gainesville, FL Correct Patient 

Privacy Deficiencies

85 million 102 million 17 million 20 Physically 

Complete

DBB

San Antonio, TX Ward Upgrades And 

Expansion

19 million 21 million 2 million 11 Physically 

Complete

DBB

San Diego, CA Spinal Cord Injury and 

Seismic Deficiency

183 million 195 million 12 million 7 Design 

Development

DBB

Tampa, FL Polytrauma/Bed 

Tower

224 million 232 million 8 million 4 Construction DBB

Totals for the 23 projects experiencing 

cost increases

$3.9 billion $6.9 billion $3 billion 77%

Projects experiencing no cost increases

West Los Angeles, 

CA

Construct New 

Essential Care 

tower/B500 Seismic 

Correction and 

Renovation

$1.03 billion $1.03 billion $0 0% Construction 

Documents

DBB

Omaha, NE Replacement Facility 560 million 560 million 0 0 Design 

Development

DBB

St. Louis (JC), MO Replace Bed Tower & 

Clinic Expansion

433 million 433 million 0 0 Schematics/Desi

gn Development

DBB

Canandaigua, NY Construction and 

Renovation

370 million 370 million 0 0 Schematics/Desi

gn Development

DBB

Livermore, CA Realignment and 

Closure

354 million 354 million 0 0 Schematics/Desi

gn Development

DBB

Long Beach, CA Seismic Cor.-Mental 

Health and 

Community Living 

Center

258 million 258 million 0 0 Design 

Development

DBB
Appendix II: Changes in Cost for Department 

of Veterans Affairs Major Medical-Facility 

Projects 

Page 36 GAO-13-302 VA Construction

Location Project description

Initial 

estimated 

cost

Estimated 

cost as of 

November 

2012

Cost 

increase/ 

decrease

Percentage

change Project status

Project 

typea

San Francisco, CA Seismic 

Retrofit/Replace 

Buildings.

225 million 225 million 0 0 Selection of the 

AE Firm for 

Design

DBB

Reno, NV Upgrade of Building 1 

Seismic, Life Safety, 

Utility Corrections & 

Expand Clinical 

Services 

214 million 214 million 0 0 Selection of the 

AE Firm for 

Design

DBB

Alameda Point, CA Outpatient Clinic and 

Columbarium

209 million 209 million 0 0 Schematics/Desi

gn Development

DBB

Brockton, MA Long-Term Care 

Spinal Cord Injury

188 million 188 million 0 0 Design 

Development

DBB

Dallas, TX Clinical Expansion for 

Mental Health

156 million 156 million 0 0 Design 

Development

DBB

Perry Point, MD Replacement 

Community Living 

Center

90 million 90 million 0 0 Schematics/Desi

gn Development

DBB

Walla Walla, WA Multi-Specialty Care 71 million 71 million 0 0 Construction DB

San Antonio, TX Polytrauma Center 66 million 66 million 0 0 Construction IDC

American Lake, 

WA

Seismic Corrections 

Building 81

53 million 53 million 0 0 Design 

Development

DBB

Anchorage, AK Outpatient Clinic 75 million 75 million 0 0 Physically 

Complete

DBB

American Lake, 

WA

Seismic CorrectionsNHCU & Dietetics38 million 38 million 0 0 Physically 

Complete

DBB

Biloxi, MS Gulfport - 

Environmental 

Cleanup 

36 million 36 million 0 0 Physically 

Complete

DBB/DB

Martinsburg, WV Capital Region Data 

Center

35 million 35 million 0 0 Physically 

Complete

DB

Indianapolis, IN 7th & 8th Floor Ward 

Modernization Add

27 million 27 million 0 0 Physically 

Complete

DBB

Columbia, MO Operating Suite 

Replacement

26 million 26 million 0 0 Construction DBB

Totals for the 21 projects experiencing 

no cost increases

$4.5 billion $4.5 billion $0 0%

Projects experiencing cost savings

Cleveland, OH Brecksville 

Consolidation 

$105 million 102 million ($3 million) -3% Physically 

Complete

DBB

Tampa, FL Upgrade Essential 

Electrical Dist. Sys.

49 million 46 million (3 million) -6 Physically 

Complete

DBB
Appendix II: Changes in Cost for Department 

of Veterans Affairs Major Medical-Facility 

Projects 

Page 37 GAO-13-302 VA Construction

Location Project description

Initial 

estimated 

cost

Estimated 

cost as of 

November 

2012

Cost 

increase/ 

decrease

Percentage

change Project status

Project 

typea

Bay Pines, FL Inpatient/Outpatient 

Improvements

174 million 158 million (16 million) -9 Construction DBB

Milwaukee, WI Spinal Cord Injury 

Center

33 million 28 million (5 million) -15 Physically 

Complete

DB

Temple, TX Information 

Technology Facility

56 million 11 million (45 million) -80 Construction DB

Totals for the 5 projects experiencing 

cost decreases

$417 million $345 million ($72 

million)

-17%

Projects Awaiting 

Cost Estimates

Louisville, KYb New/Renovate 

Medical Facility

TBD $900 million TBD TBD Master Planning DBB

Total cost increases for all projects $8.9 billion $11.8 billion $2.9 billion 33%

Source: GAO Analysis of VA data

Note: This table contains data provided by VA in November 2012. 

a

At VA’s 50 ongoing major medical-facility projects, VA utilized three construction types including: 

design-bid-build (DBB); integrated design and construction (IDC); and design-build (DB). The large 

majority of projects are being constructed using DBB. For further information regarding these 

construction types, see table 2. 

b

The Louisville, Kentucky, project is not part of the included calculations since no data was available 

for the projects initial estimated costs. 
Appendix III: Changes in Schedule for 

Department of Veterans Affairs Major MedicalFacility Projects 

Page 38 GAO-13-302 VA Construction

In November 2012, VA provided GAO with data for its 50 ongoing major 

medical-facility projects. The term “major medical-facility project” is 

defined as “a project for the construction, alteration, or acquisition of a 

medical-facility involving the total expenditure of more than $10 million.”1

Table 5: Schedule of VA’s 50 Major Medical-Facility Projects as of November 2012

We calculated the “total months delayed” column by counting the months 

from the initial estimated completion date, which was first submitted to 

Congress, to the current estimated completion date, as reported by VA. 

According to VA, the dates in the initial estimated completion dates are 

from the initial budget prospectus, which assumed receipt of full 

construction funding within 1 to 2 years after the budget submission. In 

some cases, construction funding was phased over several years and the 

final funding was received several years later. Included is a summary of 

schedule data arranged in descending order by the number of months 

delayed for each of VA’s 50 major medical-facility projects.

Location Project description

Initial 

estimated

completion 

date

Estimated 

completion date as 

of November 2012

Total 

months 

delayed Project status 

Project 

typea

Projects experiencing schedule delays

San Juan, PR Seismic CorrectionsBuilding 1August 2009 October 2016 86 Construction DBB

Las Vegas, NV New Medical Facility 

(Multiple Phases)

April 2008 June 2014 74 Construction DBB

Palo Alto, CA Seismic Corrections 

Building 2

November 

2007

September 2013 70 Construction DBB

Long Beach, CA Seismic CorrectionsBuildings 7,126March 2010 August 2014 53 Construction DBB

San Antonio, TX Ward Upgrades And 

Expansion

August 2007 December 2011 52 Physically 

Complete

DBB

Walla Walla, WA Multi-Specialty Care February 2012 January 2016 47 Construction DB

Syracuse, NY Construct Addition for 

Spinal Cord Injury Center

August 2009 February 2013 42 Construction DBB

Orlando, FL New Medical Facility April 2010 July 2013b 39 Construction DBB

San Antonio, TX Polytrauma Center December 

2010

December 2013 36 Construction IDC

 

1

See 38 U.S.C. § 8104.

Appendix III: Changes in Schedule for 

Department of Veterans Affairs Major 

Medical-Facility Projects
Appendix III: Changes in Schedule for 

Department of Veterans Affairs Major MedicalFacility Projects 

Page 39 GAO-13-302 VA Construction

Location Project description

Initial 

estimated

completion 

date

Estimated 

completion date as 

of November 2012

Total 

months 

delayed Project status 

Project 

typea

Palo Alto, CA Ambulatory 

Care/Polytrauma Rehab

February 2015 December 2017 34 Construction DBB

Indianapolis, IN 7th & 8th Floor Ward 

Modernization Add

April 2008 March 2010 23 Physically 

Complete

DBB

West Los Angeles, 

CA

Seismic Correction of 12 

Buildings

March 2012 December 2013 21 Construction 

Documents

DBB

Milwaukee, WI Spinal Cord Injury Center December 

2009

July 2011 19 Physically 

Complete

DB

New Orleans, LA New Medical Facility December 

2014

February 2016 14 Construction IDC

Denver, CO New Medical Facility February 2014 April 2015 14 Construction IDC

Columbia, MO Operating Suite 

Replacement

May 2012 June 2013 13 Construction DBB

Temple, TX Information Technology 

Facility

September 

2011

September 2012 12 Construction DB

American Lake, WA Seismic CorrectionsNHCU & DieteticsMarch 2009 March 2010 12 Physically 

Complete

DBB

Pittsburgh, PA Consolidation of 

Campuses (Multiple 

Phases)

March 2013 February 2014 11 Construction DBB

Lee County Outpatient Clinic November 

2011

April 2012 5 Physically 

Complete

DBB

Gainesville, FL Correct Patient Privacy 

Deficiencies

March 2011 June 2011 3 Physically 

Complete

DBB

Bay Pines, FL Inpatient/Outpatient 

Improvements

December 

2014

February 2015 2 Construction DBB

Tampa, FL Upgrade Essential 

Electrical Dist. Sys.

July 2010 September 2010 2 Physically 

Complete

DBB

Tampa, FL Polytrauma/Bed Tower August 2011 October 2011 2 Construction DBB

Projects experiencing no schedule delays 

Cleveland, OH Brecksville Consolidation March 2011 March 2011 0 Physically 

Complete

DBB

Fayetteville, AR Clinical Addition July 2014 July 2014 0 Construction DBB

Anchorage, AK Outpatient Clinic March 2010 March 2010 0 Physically 

Complete

DBB

Biloxi, MS Gulfport - Environmental 

Cleanup 

February 2010 February 2010 0 Physically 

Complete

DBB/DB

Martinsburg, WV Capital Region Data 

Center

June 2010 June 2010 0 Physically 

Complete

DB
Appendix III: Changes in Schedule for 

Department of Veterans Affairs Major MedicalFacility Projects 

Page 40 GAO-13-302 VA Construction

Location Project description

Initial 

estimated

completion 

date

Estimated 

completion date as 

of November 2012

Total 

months 

delayed Project status 

Project 

typea

Projects awaiting schedule estimates

Dallas, TX Spinal Cord Injury TBD December 2014 TBD Construction 

Documents

DBB

Seattle, WA B101 Mental Health TBD June 2015 TBD Construction 

Documents

DBB

Seattle, WA Correct Seismic 

Deficiencies 

TBD September 2015 TBD Construction 

Documents

DBB

Biloxi, MS Restoration of 

Hospital/Consolidation of 

Gulfport

TBD June 2016 TBD Construction DBB

Alameda Point, CA Outpatient Clinic and 

Columbarium

TBD TBD TBD Schematics/Design 

Development

DBB

American Lake, WA Seismic Corrections 

Building 81

TBD TBD TBD Design 

Development

DBB

Brockton, MA Long-Term Care Spinal 

Cord Injury

TBD TBD TBD Design 

Development

DBB

Bronx, NY Spinal Cord Injury TBD TBD TBD Construction 

Documents

DBB

Canandaigu, NY Construction and 

Renovation

TBD TBD TBD Schematics/Design 

Development

DBB

Dallas, TX Clinical Expansion for 

Mental Health

TBD TBD TBD Design 

Development

DBB

Livermore, CA Realignment and Closure TBD TBD TBD Schematics/Design 

Development

DBB

Long Beach, CA Seismic Cor.-Mental 

Health and Community 

Living Center

TBD TBD TBD Design 

Development

DBB

Louisville, KY New/Renovate Medical 

Facility

TBD TBD TBD Master Planning DBB

Omaha, NE Replacement Facility TBD TBD TBD Design 

Development

DBB

Perry Point, MD Replacement Community 

Living Center

TBD TBD TBD Schematics/Design 

Development

DBB

Reno, NV Upgrade of Building 1 

Seismic, Life Safety, Utility 

Corrections & Expand 

Clinical Services

TBD TBD TBD Selection of the AE 

Firm for Design

DBB

San Diego, CA Spinal Cord Injury and 

Seismic Deficiency

TBD TBD TBD Design 

Development

DBB

San Francisco, CA Seismic Retrofit/Replace 

Buildings

TBD TBD TBD Selection of the AE 

Firm for Design

DBB
Appendix III: Changes in Schedule for 

Department of Veterans Affairs Major MedicalFacility Projects 

Page 41 GAO-13-302 VA Construction

Location Project description

Initial 

estimated

completion 

date

Estimated 

completion date as 

of November 2012

Total 

months 

delayed Project status 

Project 

typea

St. Louis (JC), MO Replace Bed Tower & 

Clinic Expansion

TBD TBD TBD Schematics/Design 

Development

DBB

St. Louis (JB), MO Medical Facility 

Improvements & Cemetery 

Expansion

TBD TBD TBD Construction DBB

West Los Angeles, 

CA

Construct New Essential 

Care tower/B500 Seismic 

Correction and Renovation

TBD TBD TBD Construction 

Documents

DBB

Source: GAO Analysis of VA data

a

This table contains data provided by VA in November 2012. 

b

At VA’s 50 ongoing major medical-facility projects, VA utilized three construction types including: 

design-bid-build (DBB); integrated design and construction (IDC); and design-build (DB). The large 

majority of projects are being constructed using DBB. For further information regarding these 

construction types, see table 2. 

c

VA provided time extensions to the contractor extending the contract completion date to August 

2013. The contractor has not submitted a recovery schedule reflecting its efforts to meet that date as 

of January 31, 2013. 

d

This calculation only includes the 29 of the 50 that currently have “initial scheduled completion date” 

and “estimated completion date” data available as of November 2012. 
Appendix IV: Comments of the Department of 

Veterans Affairs

Page 42 GAO-13-302 VA Construction

Appendix IV: Comments of the Department of 

Veterans Affairs

VA sent our agency 

comments 3/29/13. 
Appendix IV: Comments of the Department of 

Veterans Affairs

Page 43 GAO-13-302 VA Construction
Appendix IV: Comments of the Department of 

Veterans Affairs 

Page 44 GAO-13-302 VA Construction
Appendix IV: Comments of the Department of 

Veterans Affairs

Page 45 GAO-13-302 VA Construction
Appendix IV: Comments of the Department of 

Veterans Affairs

Page 46 GAO-13-302 VA Construction
Appendix V: GAO Contact and Staff 

Acknowledgments

Page 47 GAO-13-302 VA Construction

Lorelei St. James, (202) 512-2834 or stjamesl@gao.gov.

In addition to the contact named above, Ed Laughlin, Assistant Director; 

Nelsie Alcoser; George Depaoli; Raymond Griffith; Joshua Ormond; Amy 

Rosewarne; James Russell; Sandra Sokol; and Crystal Wesco made key 

contributions to this report.

Appendix V: GAO Contact and Staff 

Acknowledgments 

GAO Contact

Staff 

Acknowledgments

(544178)
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