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Army Engineers Take Over Hospital After VA Bungles Project

The Army Corps of Engineers has decided to take over failed plans to build a billion dollar hospital in Denver, now that the main contractor is thinking of leaving out of frustration with the VA’s bungling of the project, the Denver Post reports.

Plans show that the VA intended for the hospital to treat approximately 83,000 veterans, and for the massive facility to house research and clinical trials, as well. It was originally commissioned to upgrade the aging Denver VA hospital, which was built in 1951. (RELATED: The VA’s Billion Dollar Boondoggle)

Trouble appeared right from the start, as the contract mandated that construction begin even before designs were finalized, representing a break from past contracts. This new type of project essentially necessitated future budgetary problems, and although the VA allocated $600 million dollars, the amount required quickly spiraled out of control.

“We find that the behavior of the VA has not comported with standards of good faith and fair dealing required by law,” a three-judge panel wrote on Tuesday, according to The Wall Street Journal. “The agency does not have sufficient funds to pay for construction of the entire project as currently designed and has no plans to ask for more money.”

The hospital is still at only 62 percent complete. Originally the contractor Kiewet-Turner stated that they would stay on the project if the Army Corps of Engineers oversaw it to completion, but now with the ruling, Kiewet-Turner is still considering abandoning the hospital, leaving lawmakers desperate to reconcile the two sides. In the meantime, the VA has no plans for how to complete the hospital.

“The bad name of this project is on the street. No one wants to bid on this project,” a VA resident engineer wrote in December 2012.

But the contractor is arguing that it can’t move forward with construction until the VA issues a full reimbursement for the $100 million dollars that Kiewet-Turner invested into the project. The VA is considering using an emergency fund for federal agencies to cover the minimum costs, in order for construction to resume as soon as possible.

Colorado legislators are hoping for a new short-term contract with Kiewet-Turner, so that long-term funding issues don’t permanently ruin the hospital’s completion.

“VA’s senior leadership is in discussion with Kiewit-Turner’s senior leadership to find a potential way forward in light of the ruling,” wrote VA spokeswoman Genevieve Billia.

VA Secretary Robert McDonald has been publicly quiet about the project.

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