[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]







          DENVER VA MEDICAL CENTER: CONSTRUCTING A WAY FORWARD

=======================================================================

                                HEARING

                               before the

                     COMMITTEE ON VETERANS' AFFAIRS
                     U.S. HOUSE OF REPRESENTATIVES

                    ONE HUNDRED FOURTEENTH CONGRESS

                             FIRST SESSION

                               __________

                       WEDNESDAY, APRIL 15, 2015

                               __________

                           Serial No. 114-15

                               __________

       Printed for the use of the Committee on Veterans' Affairs



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                     COMMITTEE ON VETERANS' AFFAIRS

                     JEFF MILLER, Florida, Chairman

DOUG LAMBORN, Colorado               CORRINE BROWN, Florida, Ranking 
GUS M. BILIRAKIS, Florida, Vice-         Minority Member
    Chairman                         MARK TAKANO, California
DAVID P. ROE, Tennessee              JULIA BROWNLEY, California
DAN BENISHEK, Michigan               DINA TITUS, Nevada
TIM HUELSKAMP, Kansas                RAUL RUIZ, California
MIKE COFFMAN, Colorado               ANN M. KUSTER, New Hampshire
BRAD R. WENSTRUP, Ohio               BETO O'ROURKE, Texas
JACKIE WALORSKI, Indiana             KATHLEEN RICE, New York
RALPH ABRAHAM, Louisiana             TIMOTHY J. WALZ, Minnesota
LEE ZELDIN, New York                 JERRY McNERNEY, California
RYAN COSTELLO, Pennsylvania
AMATA COLEMAN RADEWAGEN, American 
    Samoa
MIKE BOST, Illinois
                       Jon Towers, Staff Director
                Don Phillips, Democratic Staff Director

Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public 
hearing records of the Committee on Veterans' Affairs are also 
published in electronic form. The printed hearing record remains the 
official version. Because electronic submissions are used to prepare 
both printed and electronic versions of the hearing record, the process 
of converting between various electronic formats may introduce 
unintentional errors or omissions. Such occurrences are inherent in the 
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                            C O N T E N T S

                              ----------                              

                       Wednesday, April 15, 2015

                                                                   Page

Denver VA Medical Center: Constructing a Way Forward.............     1

                           OPENING STATEMENTS

Jeff Miller, Chairman............................................     1
    Prepared Statement...........................................    51
Corrine Brown, Ranking Member....................................     3
    Prepared Statement...........................................    53

                               WITNESSES

Lloyd C. Caldwell P.E., Director of Military Programs, U.S. Army 
  Corps of Engineers, U.S. Department of the Army................     4
    Prepared Statement...........................................    54
Hon. Sloan D. Gibson, Deputy Secretary, U.S. Department of 
  Veterans Affairs...............................................     6
    Prepared Statement...........................................    56

    Accompanied by:

        Stella Fiotes, the Executive Director of the Office of 
            Construction and Facilities Management

         Dennis Milsten, the Director of Operations for the 
            Office of Construction and Facilities Management
 
          DENVER VA MEDICAL CENTER: CONSTRUCTING A WAY FORWARD

                              ----------                              


                       Wednesday, April 15, 2015

                  House of Representatives,
                    Committee on Veterans' Affairs,
                                                   Washington, D.C.
    The committee met, pursuant to notice, at 10:30 a.m., in 
Room 334, Cannon House Office Building, Hon. Jeff Miller 
[chairman of the committee] presiding.
    Present:  Representatives Miller, Lamborn, Roe, Huelskamp, 
Coffman, Wenstrup, Abraham, Costello, Brown, Takano, Brownley, 
Titus, Kuster, O'Rourke, Rice, and Walz.

           OPENING STATEMENT OF CHAIRMAN JEFF MILLER

    The Chairman. The committee will come to order. Welcome to 
today's full committee hearing entitled Denver VA Medical 
Center: Constructing a Way Forward.
    I cannot imagine a better day to hold this hearing than 
today, tax day. As millions of Americans prepare to send their 
hard-earned taxpayer dollars to Washington by midnight tonight, 
we gather here to discuss the myriad of ways those dollars have 
been squandered by the Department of Veterans' Affairs in the 
last several years in Aurora, Colorado.
    Discussions surrounding the construction of a replacement 
Denver VA Medical Center date back to 1999. In the ensuing 15 
years, the project has been marked by failures, delays, and 
mismanagement that has culminated in VA's recent announcement 
that an additional $830 million in funding and a total 
authorization of $1.73 billion triple the original 
authorization as needed by mid May in order to continue 
progress on the project.
    And if that wasn't enough, VA informed the committee that 
Denver has a significant space need now of more than 550,000 
gross square feet that is above the space that will be provided 
in the new medical center.
    To simplify all of that for us, the Denver project that has 
been discussed for 15 years is a billion dollars over budget, 
several years behind schedule, and on the day it opens, it will 
apparently be too small.
    At a full committee hearing on Denver in January of this 
year, Congressman Roe stated that this project is a FUBAR on 
steroids. I could not have said it better myself. While Denver 
represents a historic construction catastrophe for the 
department, it did not come without warning.
    Three years ago, this committee held a series of hearings 
about the replacement medical center project in Orlando, 
Florida that uncovered serious deficiencies with VA's major 
medical facility construction management and its oversight. 
Admittedly the problems in Orlando yesterday are different from 
the problems in Denver today.
    But they should have signaled a lightbulb moment for the 
department and served to usher in an era of improved VA 
leadership surrounding construction projects. Instead, VA 
failed to heed the committee's calls for action then which 
allowed Denver to balloon into the billion-dollar budget 
debacle that it is now.
    Deputy Secretary Gibson agrees noting in his prepared 
testimony that, quote, ``Course correction opportunities were 
missed.'' Yet, to add insult to injury, none of the VA 
executives involved have been held accountable, none. This is 
not acceptable.
    Glenn Haggstrom, a former VA construction executive who 
played a key leadership role in the Denver project, was 
recently allowed to retire. But make no mistake, failures of 
this magnitude represent systemic problems above and beyond the 
work of a single person and much more house cleaning and a top-
to-bottom reform is needed before we can even consider whether 
VA is competent to manage a construction program.
    However, the question at hand remains. What do we do about 
Denver? Well, depending on who you ask, the project is either 
62 percent complete, 50 percent complete, or 40 percent 
complete.
    I have heard press reports over the last two days that 
indicate that VA is considering allocating a portion of the $5 
billion provided for staffing and space in the Choice Act to 
the Denver project.
    Then with no forewarning or comment, VA emailed the 
committee at about 6:45 last night draft construction 
authorization language that would increase the authorization 
for the Denver project to $1.73 billion, amend the 
authorization to include a psychiatric residential 
rehabilitation treatment program, and allow unobligated Choice 
funds to be used to fund the completion of the Denver project.
    Last year, VA indicated that there were critical staffing 
and space shortages throughout the VA healthcare system that 
limited veteran access and required emergency funding. I had 
then and still have now serious doubts about the need and the 
justification for those dollars. Nevertheless, Congress 
provided emergency funding per VA's request.
    With the language sent late yesterday evening, VA officials 
are communicating that they would rather avoid identifying 
savings that undoubtedly exist in the department's $163 billion 
budget, the second largest in the Federal Government, by 
instead utilizing money that they claimed just eight months ago 
was needed to increase access across the country and all to 
complete a bloated construction project that includes a glass 
concourse that covers three and a half football fields and now 
apparently includes a secret psychiatric residential 
rehabilitation treatment program that has never been discussed 
previously and is not listed on the reprogramming worksheet VA 
provided three weeks ago in support of the needed additional 
funding.
    Over the last several weeks, I have asked VA via letters to 
the secretary and pre-hearing questions for the record to 
provide us key demographic workload and cost-benefit data to 
identify potential alternatives and to locate possible funding 
sources within the department's vast budget.
    I have also asked for meeting minutes from VA's 
Construction Review Council in order to learn who among VA 
senior leadership was aware of the problems in Denver yet 
failed to take advantage of the course correction. The 
responses I received have either been nonexistent or inept for 
a project with a cost overrun exceeding a billion dollars.
    Veterans across the country should be appalled that VA 
allowed this project to get so out of hand. Forwarding a last-
minute proposal absent supporting detail or justification and 
simply stating like the department does in their prepared 
testimony that VA takes full responsibility for the situation 
in Denver is not enough to convince me that VA leaders have 
done the necessary work to identify what went wrong and how to 
fix it.
    It may be that allocating a portion of Choice Act funding 
to complete the Denver project is the best option to move 
forward. I am not closing the door on the possibility of that 
proposal, but I cannot in good conscience advocate spending 
hard-earned taxpayer dollars by throwing good money after bad 
without receiving much more information from VA.

    [The prepared statement of Chairman Jeff Miller appears in 
the Appendix]

    And with that, I yield to the Ranking Member, Ms. Brown, 
for her opening statement.

       OPENING STATEMENT OF RANKING MEMBER CORRINE BROWN

    Ms. Brown. Thank you, Mr. Chairman.
    Today, we start the process of figuring out how to fix the 
mess in Denver. I know from painful experiences with my Orlando 
facility what it means to wait years for a facility to be 
completed and to open. I know what the veterans in Colorado are 
feeling waiting for their facility to open. There will be time 
another day to figure out who should be blamed. Today, we must 
focus on how to fix the mess we have.
    We have been told that VA will reach its authorizing level 
next month. We have been told by VA that the only good option 
is to more than double this authorization level and come up 
with an additional $900 million in order to complete this 
project.
    Let me clear. This committee, at the end of the day will 
take care of our veterans in Colorado like we have take care of 
all our veterans across the country. But in order to do this, 
and to make sure that actions we take in regards to Denver do 
not unduly harm veterans in other areas of the country, we must 
have an honest discussion as to what our options are, and a 
time line of what we must do, as a Committee and as a Congress.
    I look forward to having this frank discussion today, and 
working with the VA and our veterans to fix this mess. What are 
all of our options?
    I also look forward to beginning to figure out how we make 
sure that this does not happen again, where veterans have to 
wait years and years for a promised facility and taxpayers are 
on the hook for hundreds of millions more than planned.
    Thank you, Mr. Chairman, and I yield back the balance of my 
time.

    [The prepared statement of Ranking Member Corrine Brown 
appears in the Appendix]

    The Chairman. Thanks very much, Ms. Brown.
    Joining us on our first and only panel today is Lloyd 
Caldwell, the director of Military Programs for the U.S. Army 
Corps of Engineers. Mr. Caldwell is joined in the panel by the 
Honorable Sloan Gibson, deputy secretary for the Department of 
Veterans Affairs, and he is accompanied by Stella Fiotes, the 
executive director of the Office of Construction and Facilities 
Management, along with Dennis Milsten, the director of 
Operations for the Office of Construction and Facilities 
Management.
    Thank you all for being with us today. Mr. Caldwell, you 
are recognized for your opening testimony.

STATEMENTS OF LLOYD C. CALDWELL, DIRECTOR OF MILITARY PROGRAMS, 
  U.S. ARMY CORPS OF ENGINEERS, U.S. DEPARTMENT OF THE ARMY; 
SLOAN D. GIBSON, DEPUTY SECRETARY, U.S. DEPARTMENT OF VETERANS 
  AFFAIRS, ACCOMPANIED BY STELLA FIOTES, EXECUTIVE DIRECTOR, 
    OFFICE OF CONSTRUCTION AND FACILITIES MANAGEMENT, U.S. 
  DEPARTMENT OF VETERANS AFFAIRS, DENNIS MILSTEN, DIRECTOR OF 
 OPERATIONS, OFFICE OF CONSTRUCTION AND FACILITIES MANAGEMENT, 
              U.S. DEPARTMENT OF VETERANS AFFAIRS

                 STATEMENT OF LLOYD C. CALDWELL

    Mr. Caldwell. Thank you, Mr. Chairman and members of the 
committee. It is good to have the opportunity to appear before 
you again on behalf of Lieutenant General Thomas Bostick, the 
Chief of Engineers.
    The Corps recognizes the importance of the service of 
members of the Armed Forces and the service of our veterans in 
sustaining the strength of our Nation. As I have previously 
testified, the Corps has significant construction management 
capabilities and experience in delivering medical facilities.
    Today I will address the actions we are taking in 
partnership with the Department of Veterans Affairs to complete 
the construction of the Denver hospital.
    The Department of Defense Construction Program utilizes 
designated construction agents of which the Corps of Engineers 
is one who procure and execute the design and construction of 
projects to deliver the department's infrastructure 
requirements as authorized by law.
    Interagency collaboration is an important element of the 
Corps' work and the Corps provides interagency support to non-
defense agencies as part of our service to the Nation.
    The Economy Act provides the necessary authorities for the 
Corps to assist the Veterans Administration with construction 
requirements whether it be minor or major construction to 
include the completion of the Denver hospital.
    There are currently three lines of effort associated with 
the Corps' support to the VA in its major medical program. That 
includes the completion of the Denver hospital as serving as 
the construction agent.
    We are also undertaking a review to identify lessons 
learned from the Denver hospital and three other major 
projects, the Las Vegas, Orlando, and New Orleans projects 
which may be used by the Veterans Administration to assess 
their organizational structure, processes and controls for 
executing major projects.
    In addition to that, we are engaging with VA leadership in 
discussion regarding the application of best practices and 
execution of their program as appropriate.
    In December of 2014, the Veterans Administration and the 
Corps entered into an Economy Act agreement to allow the Corps 
to assess the Denver hospital project. Subsequent modifications 
to this agreement have provided funding and the authority which 
will permit the Corps to develop a contract to complete the 
construction.
    We are working now with the VA on a new agreement that 
would allow the Corps to award the contract at the appropriate 
time and to manage that contract as the construction agent when 
authorized.
    Beginning in January, we had a number of technical experts 
that visited the site and assessed the completed work and the 
contracting documents. Subsequently we are using those experts 
as well as other teams of professionals to undertake the steps 
that will lead to award of a new construction contract as well 
as to manage that contract through completion.
    We have identified a preferred course of acquisition and in 
February, we issued a public notice of intent to negotiate and 
award a sole-source contract to the current joint venture 
Kiewit-Turner.
    We have prepared and submitted the appropriate 
justification and approval documentation per the federal 
acquisition authority to the approval authority within the 
Department of the Army.
    As we work toward a new contract award, we continue to 
assess the detailed requirements of this project and the plans 
for completion with the Veterans Administration taking into 
account that the construction is continuing under a separate VA 
contract currently with Kiewit-Turner.
    The Corps of Engineers provided a preliminary estimate for 
completing construction at Denver and that preliminary estimate 
was one component of the increased authorization requirement 
reported to Congress by the VA. The VA included the Corps' 
estimate along with other VA costs for the project.
    Meanwhile, we are developing an independent estimate which 
will be suitable for negotiation of the new contract and next 
week, we will have our first meeting with Kiewit-Turner to 
begin discussions about the way forward on the next contract.
    As the actions for a new contract are proceeding, the Corps 
is also advising the VA on the management of the interim 
construction contract which the VA has with Kiewit-Turner. The 
interim contract permits continued progress on the project 
while the Corps prepares to assume construction agent 
responsibility.
    Although the Corps will assume a lead role in the 
construction of the Denver hospital, the Veterans 
Administration as the project's proponent is still responsible 
for project requirements, resourcing, and facility transition 
to full operations. We believe by using our project delivery 
process, we have confidence that the Corps can complete 
construction of the Denver hospital in the most effective way.
    We have other projects not related to the Denver hospital 
that we continue to execute for the Veterans Administration and 
that association predates the current requirement for the 
Denver hospital.
    We are committed to working with the VA as the construction 
agent as well as to assist them with future major medical 
projects as required.
    Mr. Chairman, that concludes my statement and I will be 
glad to answer questions from you or other members of the 
committee.

    [The prepared statement of Lloyd C. Caldwell appears in the 
Appendix]

    The Chairman. Thank you very much, Mr. Caldwell.
    Mr. Gibson, you are recognized.

                  STATEMENT OF SLOAN D. GIBSON

    Mr. Gibson. Thank you, Mr. Chairman.
    Our priorities are to get this medical center complex 
finished and make the best use of resources needed to get the 
job done. We are grateful for the help of the members of this 
committee and other Members of Congress, the Corps of 
Engineers, Kiewit-Turner (KT), and the leaders of many Veteran 
Service Organizations (VSO).
    VA made mistakes on this project going back years producing 
an unacceptable result for veterans and taxpayers who deserve 
better from their VA. I apologize again.
    This project has a long history going back to the mid 
1990s. My record testimony provides a detailed account, but let 
me briefly cover some of the major decision points.
    In 2006, VA developed a plan for 1.4 million square feet of 
facility in Denver. That plan was subsequently revised to 
945,000 square feet. And in 2010, VA requested $800 million for 
the project.
    We hired an architect engineer joint venture to complete 
design with an estimated construction cost at award of $583 
million. The original acquisition strategy for the project was 
to complete 100 percent design and then solicit construction 
proposals to build the project, but VA in a misguided effort to 
get work underway changed strategies to a contract mechanism 
known as early contractor involvement also referred to as 
Integrated Design and Construct (IDC).
    The idea behind this contract structure is to bring the 
contractor onboard early to participate in the design. In 
August of 2010, VA entered into a contract with Kiewit-Turner 
to perform design, constructability, and cost reviews with an 
option to award facility construction to the contractor. But at 
the time of this contract award, the design work had already 
been underway for 15 months, limiting the ability of KT to 
influence design and cost.
    KT maintained that the project could not be built for the 
established cost. Months of negotiations ensued, but 
significant differences remained.
    Under pressure to move the project forward, VA and the 
contractor executed an option in November of 2011 to construct 
the project. That option was known as supplemental agreement 07 
or SA07 for short. The design at that time was roughly 65 
percent complete.
    Under SA07, VA committed to deliver a design that could be 
built for $583 million and KT committed to build the project at 
the firm target price of $604 million. VA's promise to ensure 
that the design would meet the contract cost and KT's 
commitment to a firm target price became the centerpiece of 
diverging interpretations and conflicts between VA and the 
contractor.
    While poor project and contract management and increasingly 
strained relationships contributed, these two watershed events, 
the selection of the IDC contract form and VA's commitment to 
deliver a design that could be built for less than $600 million 
were critical.
    KT filed a complaint with the Civilian Board of Contract 
Appeals in July of 2013. In December of 2014, VA was found in 
breach of contract for failure to provide a design that met the 
contract price.
    That brings us to where we are today. After analysis by the 
Corps of Engineers, we informed the committee that the total 
estimated cost of the facility will be $1.73 billion. That 
includes $899 million already spent or available to be 
obligated to get the project to the stage it is now, a little 
over 50 percent complete.
    The Corps estimates an additional $700 million to complete 
construction and we estimate $130 million is required to close 
out the original contract and complete the PTSD residential 
treatment facility.
    The $1.73 billion total would require an authorization 
increase of $930 million and additional funding of $830 
million. This significant increase in cost in my opinion 
results from several factors.
    First, VA not locking down design early in the process, 
some design aspects that clearly added to cost, and increases 
to construction costs in the Denver market. At the same time, 
we had not effectively negotiated a firm target price, and 
premiums paid to contractors for their perceived risk due to a 
history of problems on the project.
    That is an explanation, not an excuse. It is where we are. 
But I want to be absolutely clear this is totally unacceptable 
and will not happen again, at least not on my watch.
    After consulting with our partners in reviewing the status 
of the project, we believe the best option for veterans and for 
taxpayers is to contract with KT to complete the project. This 
option leverages the 100 percent design, KT's knowledge of the 
project, their presence on the site, and existing subcontractor 
relationships.
    In considering options to move forward, we have considered 
cost, risk, time to complete, the scope and scale of the 
project, and the fact that it is halfway complete. Now we must 
work with this committee and with others to secure funding.
    We have proposed funding the increased cost by requesting 
authority to use funds provided to VA in the Veterans Access 
Choice and Accountability Act. The act provided $5 billion in 
mandatory funding to increase healthcare staffing and improve 
physical infrastructure.
    We propose adjusting that language to fund completion of 
the project. We believe this is the best approach among the 
difficult choices before us. This hospital complex is an 
important part of VA infrastructure and completing it will 
improve access to care.
    We understand that accountability is central to ensuring 
that the department never repeats the mistakes that led to 
delays and cost overruns. We owe it to veterans, taxpayers, and 
the huge majority of VA employees who do the right thing every 
single day.
    As stated earlier, I believe the two most critical 
decisions leading to the current situation were made in 2010 
and 2011. None of the people who were in positions of 
responsibility at that time are still in those positions from 
the secretary, the deputy secretary, the head of acquisition, 
logistics, and construction, the director of CFM, the CFM 
director of operations, all the way down to the project 
executive and the CFM contracting officer. In fact, of all of 
those, only the former project executive is still with VA and 
that is after being moved from the project and reassigned to 
non-supervisory duties at a lower grade.
    Additionally, our ongoing Administrative Investigation 
Board deposed Mr. Glenn Haggstrom under oath on March 23rd. On 
the morning of March 24th, he came to work with the required 
paperwork to retire from federal service effective immediately.
    I recognize that his retirement has been criticized and is 
frustrating to many. The law allows federal employees to retire 
if they are eligible and decide to do so. And, frankly, as I 
reflect on 30 years of experience in the private sector, that 
is pretty much the way it works there too.
    So while I understand and share in the frustration, I will 
continue to pursue accountability actions wherever the evidence 
from our ongoing Administrative Investigation Board supports 
it.
    As previously discussed during the hearing in January, the 
Corps of Engineers is also conducting a broader detailed 
examination of VA's largest construction projects. We expect 
them to complete their review and report their findings next 
month.
    In addition to the Corps' review of our large hospital 
projects, an independent third-party organization is conducting 
a comprehensive assessment of VA's entire construction program 
as part of the Choice Act legislation and will report their 
findings to Congress by September of 2015.
    Last week, we named Mr. Greg Giddens as the new executive 
director of the Office of Acquisition, Logistics, and 
Construction. Greg has broad experience in both acquisition and 
construction at VA, the Department of Defense, the U.S. Coast 
Guard, the Department of Homeland Security, and with Customs 
and Border Protection where he managed a multibillion dollar 
portfolio with over a thousand facilities. OALC under Greg's 
leadership will report directly to me.
    We are now in the process of transitioning responsibility 
of the project to the Corps of Engineers. Once that transition 
is complete, we will still be the customer, but the Corps will 
be in charge in Denver on a day-to-day basis to make sure the 
project is completed.
    We have a long history of working with the Corps. We have 
got a fully designed facility and the Corps' acquisition 
strategy is to stay with the general contractor that knows the 
project, all of which augurs well for reducing risk and 
ensuring the completion of the project.
    In the future, I would expect to see a very strong 
collaboration and a major role for the Corps in any comparable 
hospital projects of this scope and scale.
    Mr. Chairman, like you and the members of this committee, I 
remain committed to doing what is right for veterans and here I 
believe that means getting the Denver medical facility 
completed in the most effective and cost-efficient way from 
where we are right now.
    Thank you. We are ready to answer your questions.

    [The prepared statement of Sloan D. Gibson appears in the 
Appendix]

    The Chairman. Thank you very much.
    Mr. Caldwell, I will start with the first set of questions. 
Do you think that your team has had access to all of the 
information to make a fully informed determination as to the 
progress in the future for the Denver project?
    Mr. Caldwell. Yes, sir. So far as we are aware, we have had 
full access to all of the records and information that are 
available at the project site. And that has been the primary 
source of the information working both with the VA staff on-
site as well as with the designer of record, the construction 
contractor, and the firm that was the construction management 
support contractor for the VA.
    The Chairman. Do you concur with VA's estimated 
authorization increase and request for additional funding?
    Mr. Caldwell. Sir, I do. I cannot speak to the content of 
the costs that have been incurred prior to the estimate that 
the Corps provided. The Corps provided an estimate which was 
based fundamentally on an estimate that was made by Jacobs 
Engineering as the foundation.
    We made adjustments to that estimate based on what we 
thought would be escalation rates for the increased time of 
construction and other overhead costs associated for the 
contractors being on the site. So we have made adjustments to 
that estimate and that was the basis that was used by the VA 
for the reprogramming request.
    Now, we are in the process of making a separate independent 
estimate. That estimate is not going to be completed probably 
for another couple of months. That estimate will be a more 
refined estimate. It will be a later estimate and that will be 
the estimate that we will use as the basis for entering into 
the contract with Kiewit-Turner.
    The Chairman. So could I assume that that estimate, refined 
estimate could be higher than the estimate that the department 
has put forth?
    Mr. Caldwell. Sir, I do not expect it to be higher. Our 
objective is to come lower than the numbers that you have seen 
projected heretofore.
    The Chairman. I know you would like to come in lower, but 
could it come in higher?
    Mr. Caldwell. Sir, I can't say that is not possible, but I 
do not expect that to be the case. I expect the number to be 
lower and that will be our objective and that is what we are 
driving to.
    The Chairman. Mr. Deputy Secretary, you know where we are 
on accountability. We think that is the cornerstone in many of 
the issues that have plagued VA over the years.
    And I want to talk to you a little bit about an article 
that was in the Denver Post yesterday about an individual, a 
former VA individual, Adelino Gorospe, who asserts that he 
emailed high-ranking VA officials to warn them that the Denver 
project was running significantly over budget. And I think 
today we are all aware that that, in fact, was true.
    In return for the foresight and attempt to raise the red 
flag, he was fired by Glenn Haggstrom. We also know today he 
was at the root of many of the problems that exist within the 
VA construction program.
    Have you read the article?
    Mr. Gibson. I have seen the article, yes, Mr. Chairman.
    The Chairman. Have you directed VA's Office of 
Accountability Review or any other office to review this 
gentleman's case?
    Mr. Gibson. I have not directed it yet, but I will tell you 
my operating assumption and I will see that it is included. 
There are thousands of pages of documentation that are being 
reviewed as part of this case and particularly becoming aware 
of this particular piece of evidence, I will ensure that that 
is part of what is considered.
    The Chairman. And what is confusing is that VA leaders and 
individuals can make mistakes that cost billions and billions 
of dollars to the department and they face no accountability, 
yet you have a low-level employee who attempted to blow the 
whistle and he could be fired and yet I keep being told you 
can't fire people, yet the low-level guy got the ax.
    So, you don't need to answer that question, but----
    Mr. Gibson. It is no more acceptable to me than it is to 
you, Mr. Chairman.
    The Chairman. Is it fair to say that when Ms. Fiotes 
testified before this committee in March in relation to the 
project that, and I quote, ``We believe that the project 
designs that we have delivered are, in fact, able to be 
constructed within the appropriated amount for this project,'' 
close quote, that was a view that you and others shared at the 
time?
    Mr. Gibson. The view that was held by VA at the time was 
based upon the interpretation of the contract terms and the 
reliance on the firm target price that was clearly wrong.
    The Chairman. And can you tell me, and my time is running 
out, but the addition of the psychiatric residential 
rehabilitation treatment program in the draft construction 
authorization that we got last night to my knowledge has never 
been acknowledged at any point, and so my question is, why was 
the need for the program not communicated to the Congress in 
any of the numerous conversations that we have had, that this 
committee has asked over the last year, why is it not listed on 
the reprogramming worksheet that VA provided three weeks ago 
regarding changes that will need to be made in Denver and why 
is it not listed apparently anywhere else?
    Mr. Gibson. First of all, I apologize for the poor 
communication. The intention had been for us to have some very 
deliberate conversations once the White House had cleared the 
formal request. Unfortunately, a lot of that leaked out and 
then the White House cleared the communication late last night.
    As it relates to the PTSD facility, that was actually part 
of the original concept for the facility. It was taken out back 
in 2010 as part of a cost-saving measure. As we looked at where 
we were on the construction and had conversations with the 
Corps, it sits right next door to the Community Living Center 
(CLC), the nursing home, and the idea was construct those two 
at the same time because you can do it more efficiently and 
economically. That is the reason that it was added at this 
point.
    The Chairman. Mr. Takano.
    Mr. Takano. Thank you, Mr. Chairman. I think we both know 
what bipartisan heartburn means.
    Mr. Gibson, I know that you are contrite. I know that this 
project spans three administrations and I don't even know how 
many secretaries it spans.
    My question to you is, so talk about firing and who we fire 
and we can't fire. I mean, that is of some interest to me, but 
it seems to me that is kind of a look back. I am worried about 
the structure of accountability going forward----
    Mr. Gibson. Yes.
    Mr. Takano [continuing]. And how we can get that 
accountability right. I mean, do you believe it is the role of 
a congressional committee oversight to get into the granular 
area of looking at change orders?
    I mean, I remember doing that as a board of trustees when 
we suddenly got all this bonding authority and we had billion-
dollar construction projects to manage. We had a big learning 
curve, but suddenly I had a bunch of change orders go across 
the board of trustees.
    But is that really the role of Congress and, if not, how 
are we going to try to get a handle on all this?
    Mr. Gibson. Sir, it is not the role of Congress. It is only 
because of our failure that you even find yourself having to 
ask the question. I think your comment is precisely spot on.
    Part of the accountability here is ensuring that we put in 
place the construction management practices and that includes 
early risk identification on a major project basis that will 
allow us to know very early on where we may be getting off 
track.
    I would tell you as I came into the Department after 
reading countless articles and hearing testimony and (GAO) 
studies and (IG) reports that I came in convinced that the 
construction management function at VA was entirely broken.
    What I found as I came in was that many of the practices 
that are reflected in a project like Denver have been changed 
over the past several years and that is not how we manage 
projects prospectively.
    Mr. Takano. Well, how do we----
    Mr. Gibson. I think we have got to earn back that trust.
    Mr. Takano. These projects seem to span a good deal of 
time.
    Mr. Gibson. Yes.
    Mr. Takano. And some by necessity, but how do we try to 
construct a structure of accountability that can span 
administrations, span secretaries? Do we need to create 
something like, you know, an inspector general for 
construction? I mean, somebody that has one person who can't 
diffuse accountability that Congress can go to and hold 
accountable? What are your thoughts on that?
    Mr. Gibson. Well, I would say at this point that one person 
is me.
    Mr. Takano. Okay.
    Mr. Gibson. And I would tell you anticipating a question 
later on, there has been a lot, you know, back and forth about 
the Construction Review Committee. That committee hasn't met 
since I was the acting secretary. I don't believe it is an 
effective decision forum. I don't believe it is the right forum 
for exchange of information. And I believe it does exactly what 
you just described, that it diffuses responsibility.
    So I wind up meeting directly with the head of Construction 
and Facilities Management every single week. I am involved 
directly with contractors. I specifically ask for feedback 
directly from contractors so that I know what is going on on 
our major projects.
    Mr. Takano. My time is coming close to running out, but I 
want to ask questions about other projects like that same 
article in the Denver Post asserts that there is a possible 
huge overrun, cost overrun in New Orleans. And I am concerned 
about this reprogramming of money from the $5 billion in the 
Choice Act.
    What projects stand to not be funded that are in the queue 
because of not only this project but other projects down the 
road? It is better for us to all have the bad news up front.
    Mr. Gibson. Sure. I understand. The New Orleans project is 
now over 70 percent complete. Stella and I were both on the 
ground there about 40 days ago meeting directly with the senior 
leadership of Clark/McCarthy Construction, the joint venture 
team there.
    Clearly the project in its very earliest days ran into a 
number of challenges and problems associated with site 
acquisition and site contamination. But since the dollars were 
appropriated by Congress for the construction of that contract, 
we have remained on time and on budget, over 70 percent 
complete with an expected completion date of next year.
    Mr. Takano. Well, I am interested in knowing going forward 
just how we propose to put forward a new structure of 
accountability that this committee can have confidence in, that 
the Congress can have confidence in. I want my colleague from 
Colorado to know that I am committed as I think most members of 
the Committee to do right by all our veterans including those 
in Denver and across the country.
    But we must start getting this accountability right and an 
effective accountability so that I don't have to worry about do 
I need to get into the granular level of asking the VA for 
these change orders.
    Mr. Gibson. I agree. We owe that to this committee. We owe 
it to the American taxpayer and to veterans. And I am hoping 
that the future state that you are describing is informed by 
the work that the Corps is doing right now as well as the work 
being undertaken by the independent third party under the 
Choice Act.
    Mr. Takano. Thank you, Mr. Chairman. My time is up.
    The Chairman. Thank you.
    Mr. Lamborn, you are recognized.
    Mr. Lamborn. Thank you, Mr. Chairman. Thank you for having 
this important hearing.
    Mr. Gibson, do you agree with Representative Coffman's 
legislation to turn over all future major construction projects 
away from the VA to the Army Corps of Engineers?
    Mr. Gibson. Currently we have got more than 50, quote, 
``major construction projects.'' Major construction goes all 
the way down to $10 million. I don't think it makes sense to 
pull the Corps in on every single project over $10 million.
    I do think it makes sense for the Corps to be our 
construction agent on construction of this kind of size and 
complexity and, frankly, on a number of other larger projects 
where between the Corps and VA we sit and look at the elements 
of that particular project and conclude that their expertise is 
best utilized there.
    Mr. Lamborn. Well, I will just say that my colleague, 
Representative Coffman, has been a leader on so much of this 
and has other proposals----
    Mr. Gibson. Yes, sir.
    Mr. Lamborn [continuing]. Like how to pay for this that 
we----
    Mr. Gibson. Yes, sir.
    Mr. Lamborn [continuing]. Need to seriously consider. And I 
don't even know where to begin. This is just beyond my 
comprehension how we got to this point. I am appalled and 
angry. I think all of us here are.
    How much have you considered and explored commonly-used 
methods to keep costs down like value engineering or 
constructability reviews or something I am familiar with as a 
layman on small residential projects that I have run 
downgrading plans midstream to less costly alternatives or 
deferring some of the construction until you have got the money 
later?
    You know, when I built a house, we said, oh, we will just 
finish the basement in the future and just left that out.
    Mr. Gibson. Many of the items you have discussed, in fact, 
are practices that we have adopted including constructability 
reviews that are undertaken at every single design stage for 
all major construction.
    We did look at value engineering, or I shouldn't say we, 
the Department looked at value engineering opportunities back 
in 2012, is that correct, 2013, value engineering opportunities 
back in 2013, many of which did involve material changes to 
scope on the project. And for that reason, they were not 
accepted.
    Mr. Lamborn. So the problem would have been worse, but I am 
just still amazed that we are at this point.
    What about the specific plan or possibility of the plan to 
have the parking on-site as opposed to keeping the shuttle 
going, which is currently the case, which is less costly?
    Mr. Gibson. Well, the two parking decks are the two 
structures that are virtually complete. They are the farthest 
along. And so, you know, as you look at this particular 
project, it is ultimately, assuming we build the CLC and the 
posttraumatic stress rehab facility, a 14-building complex and 
work is very substantially underway on 12 of those 14 
structures.
    So the ability even at a relatively early stage to go in 
and make major changes to design were fairly limited. That was 
the point I made in my opening remarks that we selected an IDC 
form of contract and then waited 15 months before we hired the 
contractor to come in and be involved in the process. And at 
that point, it was very difficult to make the kind of major 
changes that you are referring to.
    Mr. Lamborn. Thank you.
    Lastly, Mr. Caldwell, did I hear you correctly when you 
said it will still be several more months before you have the 
final cost analysis and timing analysis?
    Mr. Caldwell. Sir, the schedule for completion is 
associated with the cost for completion. In other words, those 
are related, so that assessment is ongoing. We expect that 
estimate to be completed in June to the point that we can have 
discussions with the contractor. We think that will give us a 
fairly tight estimate of what the cost to complete is at that 
point in time, so June.
    Mr. Lamborn. Okay. June. Okay.
    Thank you, Mr. Chairman. I yield back.
    The Chairman. Ms. Brown.
    Ms. Brown. Thank you. I am going to start with Mr. 
Caldwell.
    Next month, the VA will run out the authority to go forward 
with any additional funding. How important do you think it is 
for members of Congress to extend that authority and give them 
the additional authority that the VA needs to move forward? Or 
should we just stop this project and wait for the additional 
information?
    Mr. Caldwell. Ms. Brown, we know that if the project were 
stopped there would be an increased cost associated with the 
project, in addition to the potentially increased cost to 
complete when it would be restarted at some point in the 
future. It is not as simple for a project of this nature just 
to say, let's stop everything.
    There is a cost associated with the contractors picking up 
their tools and so forth, and closing up what they are doing 
and leaving the site. There is a public safety aspect of this 
to ensure that we don't leave any hazards there. There is the 
aspect of ensuring that the buildings are tight, so there is no 
deterioration of facilities that are already constructed, due 
to weather and so forth. So there is a lot of aspects of costs 
that would be incurred if the project would be stopped.
    And of course you know well that, unless the authorized 
amount for the project is increased, there is not an ability to 
spend additional funds on it in any case.
    Ms. Brown. Yes, I think it is important that everybody 
understand where we are with this project.
    The current estimate is at $1.73 billion to complete the 
project. Is that your estimation? Mr. Secretary I would like to 
hear your comments as well.
    Mr. Caldwell. Ma'am, let me clarify that the 1.73 appears 
to be----
    Ms. Brown. Is that the high side? That is what I want to 
know.
    Mr. Caldwell. That appears to be what the total costs of 
the project would be at the point when it is completed. Our 
estimated cost to complete the project is much less than that.
    Ms. Brown. Okay.
    Mr. Caldwell. This project, we have determined, has a 
complete design. So we are confident that everyone, us and the 
contractor, understand what the final objective is for 
completion of the project. The challenge that we have, that is 
the Corps of Engineers, in getting a final cost to complete is 
we are getting on a moving train, if you will, is the term that 
some have used. The construction is continuing as we talk. So 
as we determine what our final cost to complete is, to a large 
extent that will depend on how much work is being accomplished 
by the time we get to that point as well.
    Ms. Brown. All right. Secretary?
    Mr. Gibson. Yes, ma'am.
    Ms. Brown. Can you answer that question for me? What 
happens--well, I don't want to talk about--you need the 
additional authority to move forward; is that correct?
    Mr. Gibson. Yes, ma'am, we do. We need the additional 
authorization and we need additional funding in order to be 
able to bridge--even just to be able to bridge the period of 
time between now and when we would expect the Corps to have 
completed negotiation of a contract to complete the facility.
    Ms. Brown. What my colleagues have expressed to me is they 
want to make sure that as we move forward that, depending on 
where we take the funds from--not the authorization, the funds 
from--it doesn't affect other projects throughout the country.
    Mr. Gibson. Yes, ma'am.
    Ms. Brown. What comfort level can you give us?
    Mr. Gibson. Well, the plan--and we owe the committee a 
revised spending plan on the $5 billion--the expectation is 
that we would take all of the $830 million in funding from the 
portion of the $5 billion devoted to non-recurring maintenance 
and to minor construction, which would be scattered over many, 
many, many projects, very small projects scattered all over the 
country. That would leave about, round numbers, about a billion 
dollars in non-recurring maintenance and minor construction 
funding available still under the Choice Act funding.
    Ms. Brown. I have some concerns about taking the money from 
that particular pot. I know that is something we need to have 
discussions on. The feedback I am getting from around the 
country, is that VA has have many projects that they need 
additional spaces, are VA needs to hire additional physicians. 
I mean, Congress is doing what we need to do. I have a concern 
that Congress would jeopardize the entire VA to deal with this 
project, not that we don't need to deal with this project.
    Mr. Gibson. Yes, ma'am. I wish there were an easier answer 
and I am not aware of an easier answer for funding.
    Ms. Brown. Well, perhaps I will get additional time in 
another round.
    I yield back.
    The Chairman. Thank you very much.
    Mr. Coffman, you are recognized.
    Mr. Coffman. Thank you, Mr. Chairman, for holding this very 
important hearing. It is essential that the VA is held 
accountable and that this hospital gets built. Our veterans who 
have bravely served our Nation have waited years for its 
completion. It is essential that we come up with a deficit-
neutral solution that will not compromise veteran healthcare 
and holds the VA accountable.
    To do so, I have introduced a plan that uses VA bonuses to 
pay for the cost overruns on the hospital in Aurora. Mr. 
Gibson, you have called this plan, quote, ``a lousy idea,'' 
unquote, but the only lousy idea I have heard is allowing the 
VA to continue paying bonuses to bureaucrats who have overseen 
secret waiting lists, billions of dollars in construction cost 
overruns, and other travesties that have seriously endangered 
our Nation's veterans.
    This replacement facility is supposed to directly serve 
veterans across many states, including Montana, Wyoming, Utah, 
Colorado, and parts of five other states. But this isn't just a 
regional problem and, unfortunately, this is not the VA's only 
construction failure. The VA has a systemic pattern of 
failures.
    The bill I introduced, the VA Construction Accountability 
Reform Act, goes beyond the Rocky Mountain region and addresses 
the broader problems VA has with its major construction 
projects. The GAO recently found that the hospital construction 
project in Las Vegas was $260 million over budget. The hospital 
project in Orlando is $362 million over budget. A hospital 
project in New Orleans is $370 million over budget. And of 
course the Aurora, Colorado facility is more than $1 billion 
over budget. In fact, for over 30 years numerous GAO reports 
and Congressional hearings have detailed significant cost 
overruns, project delays, and a general lack of accountability 
in the VA construction program.
    In 1981, the GAO concluded the cost of new hospitals built 
during the 1970s averaged 58 percent more than their original 
estimates. In 1993, the GAO found that 40 percent of VA 
construction projects encountered cost overruns. In 2009, even 
before VA broke ground on the Aurora hospital, the GAO found 
that five projects had experienced a cost increase of over 100 
percent.
    Of each of these and many other occasions, just like today, 
the VA proudly announces some reform or initiative that will 
allegedly fix the problems. Unfortunately, it is clear that the 
results of those reports, hearings and reorganizations have 
consistently failed to improve VA's construction program. In 
fact, the problems have only gotten worse. As the Associated 
General Contractors of America has boldly stated, ``VA 
construction should be out of the VA's hands.''
    The bill I propose gets this hospital built for our 
nation's veterans and gets VA out of the construction business 
once and for all.
    The GAO has spoken highly of the Army Corps of Engineers 
and I believe it is the most qualified Federal agency to build 
VA's hospitals on behalf of American veterans and taxpayers. 
The Corps has successfully built a $648 million hospital at 
Fort Bliss, an $870 million hospital at Fort Belvoir, and it is 
my understanding that the Corps is planning to build a hospital 
for the government of Kuwait. Although I understand that the 
Corps may have some reservations about taking on a new 
responsibility, I believe that it is absolutely necessary and 
in the best interest of our taxpayers and veterans.
    I look forward to working with the Corps and the 
construction trade associations who support this legislation to 
ensure a responsible and effective transition of VA's 
construction authority.
    Mr. Gibson, given VA's well-documented failures in 
construction management that spans decades, why is VA qualified 
to build a lemonade stand, let alone a multi-million dollar 
facility? Mr. Gibson.
    Mr. Gibson. I see I have two seconds left for a response 
here, sir.
    As I have said before, my expectation is that we would ask 
the Corps to serve as our construction agent on our largest 
hospital construction projects. They have a great track record, 
as you point out, they have deep experience. They have gotten a 
lot of the experience over the last 10 or 15 years in that 
particular area. I don't believe it is the optimal solution for 
them to come in and work on all construction activity at VA, in 
part because of the large number of projects that are 
undertaken, many at a much smaller level.
    The Chairman. Thank you very much, Mr. Coffman. We will 
have a second round.
    Mr. Walz, you are next. Five minutes.
    Mr. Walz. Thank you, Mr. Chairman and Ranking Member for 
holding this, and thank you all for being here.
    My only glimmer of optimism, Mr. Gibson, is my personal 
faith in you. It is not very widespread right now and I am 
incredibly skeptical. I think Mr. Coffman showed great 
restraint in his angst and anger, and I think there is an 
appropriate place for this, because this is nothing new. The 
gentleman from Colorado has been speaking about this for years. 
There are many of you in this room heard us three years ago 
over with the Senate Joint Committee saying that the Corps 
needs to be involved or someone else. So I think it is 
appropriate.
    I can't help but thinking that someone should probably dust 
off Senator Proxmire's golden fleece, because it is one for the 
next decade on this thing, that is pretty clear.
    But those of us who care deeply for veterans know we need 
to get answers and we need to get this thing done. And the 
thing that is most frustrating to me, I have had the privilege 
and the honor of being here since 2006, and I went back to look 
at one of the first hearings that we had on this as it was in 
process.
    This is November of 2007 and here is the question that was 
asked. ``In recent years, the VA has experienced significant 
cost escalation in construction of medical facilities. For 
example, the estimated construction of the new facility in 
Denver is almost doubled to $646 million. What are the causes 
of this increase and what steps have the VA taken to prevent 
such escalation in the future?''
    We were asking, we did it here over eight years, if I am 
the taxpayer, I think--again, my faith in you is strong, I know 
you are there, but I think we would be remiss in our job here 
if we believed in any way this isn't going to go further, it is 
not going to get fixed and it is going to happen again.
    So I would suggest, and this is more for my colleagues, I 
would suggest that--I agree with Mr. Gibson, I don't think the 
role of Congress is to look at these change orders, but I think 
it is our responsibility. And I think we should seriously 
consider, week-by-week, before a check is written, come up 
here, clean that table off and put the books out there, and get 
into this thing at the granular level. Because I for one know 
the situation we are in. Those veterans in Colorado need this 
hospital. I feel terrible for them that--I see a gentleman in 
the paper apologizing because he advocated for this hospital. 
It wasn't his fault. He did it and the Legion backed him up.
    So we are at this point now, we are not going to leave 
half-empty buildings. And we all know, I feel like this is the 
shakedown and you are going to get the money, but if I am going 
to give it, I want to know damn well where every dollar is 
going. So I don't know what the suggestion is, I don't know 
what the procedure is. I certainly agree it is not our role, 
but I am having great angst. And everything that has been said 
here is correct. We need to figure out things going forward, 
you need to do all that, but this is a big problem. And I 
understand the tough job you are in, but I feel like now we 
have got to do this.
    What would you suggest we do, Mr. Gibson? Because I trust 
your instinct on this, but my taxpayers are going to be asked 
to come up with a billion dollars more and that is on us now.
    Mr. Gibson. As I have said, it is unacceptable, 
unacceptable to this Committee, to taxpayers and to veterans.
    I think some of what we have seen historically in terms of, 
what I will call it, creep in time line and in cost oftentimes 
has to do with the fact that we in the past did not take the 
step of going to a 35-percent design with an identified site in 
place with costing and constructability reviews before we ever 
even come to Congress to ask for funding.
    You know, when you look at the history of Denver, I am 
astounded that the project has had more incarnations than I can 
count, going all the way back to the mid-1990s when we talked 
about buying the old Fitzsimmons Army Hospital from them, and 
each one of those had a cost associated with them that was 
based on somebody's rough back-of-the-envelope estimate.
    So even if we wind up working with the Corps in the future, 
we have got to get to the point where we have locked down 
requirements, we understand what it is in general terms that we 
are going to build, before we even come to Congress and ask for 
funding. And that has been part of our problem. It is not an 
excuse, it is not an excuse.
    Mr. Walz. We kept asking for collaboration with like 
University of Colorado and things. And I agree and I think we 
need to--but this is, I would suggest again, as I give my time, 
this is a point of leverage for this Committee, the power of 
the purse on this one. If you want things to be done 
differently, this is the moment.
    So I agree with what the undersecretary is saying, but I 
think this is the time for us to step forward, because this is 
on us now. Whether we are frustrated or not, we own this thing 
and we've got to figure it out.
    I yield back.
    Mr. Gibson. I think that one other point for the 
Committee's----
    Mr. Walz. Yes, sir.
    Mr. Gibson [continuing]. Consideration is that the Corps is 
going to be managing this project, not VA. And so part of this 
is a function of what the Committee's confidence is in the 
Corps to effectively manage the project.
    Mr. Walz. I agree and I would say this, which I do have 
great confidence, but I would suggest this too, I have Corps 
projects in my district that are having a little issue too. So 
I am not certain that that is the out on this. Again, the trust 
but verifying. We own this now and before we put our name on 
800, I would ask to use our leverage.
    I yield back.
    The Chairman. Thank you, Mr. Walz.
    Dr. Abraham, you are recognized.
    Dr. Abraham. Thank you, Mr. Chairman.
    Mr. Caldwell, I will ask you first. In the last few years 
in the Denver area, St. Anthony's, St. Joseph's, the University 
of Colorado, they have completed some private hospital projects 
and they have come in at a cost of under $2 million per bed and 
a cost of $350 to $750 per square foot. Now, we fast forward to 
this project here and the VA, and we are looking at over $10 
million per bed and over $1500 per square foot. Why the great 
disparity between what private can do and what the VA can do?
    Mr. Caldwell. Sir, I don't really have an answer for that. 
I think to answer that question would require some sort of 
exhaustive audit of decisions that were made long ago.
    Dr. Abraham. We are not doing that now?
    Mr. Caldwell. Sir.
    Dr. Abraham. Aren't we reviewing the VA's construction?
    Mr. Caldwell. We are not doing an audit of decisions and 
costs. What we are doing is looking at their processes and 
their policies and how they do business, and how those impacted 
this project. We are making comparisons with how Defense does 
business as a good business model for the same sorts of 
facilities.
    But that is looking at what are, and attempting to identify 
what are, best business practices in this business of designing 
and building medical facilities, and that is just different 
than looking at how decisions were made and how the funds were 
being----used
    Dr. Abraham. I might suggest we could maybe look in that 
direction.
    Deputy Under Secretary, do you have a comment, sir?
    Mr. Gibson. I just wanted to add one thought. In my opening 
statement, I ticked off four different things that I think 
contributed to the rise in the cost in this particular 
facility. I think the one other point of reference as you 
compare whether it is a VA facility or another Federal 
Government facility is that there are other construction 
requirements that we impose. Some of them are Federal 
Government requirements around facility hardening that add 
additionally to cost, others of those have to do with 
sustainability costs, the ability to operate without external 
power supply, the ability to operate without fresh water coming 
in in a disaster kind of situation, and that also adds 
materially to costs. And, quite frankly, I think we need to be 
looking at all of that.
    Dr. Abraham. Okay. Now, I am a little confused in your 
testimony and please just clarify. On this particular project 
in Colorado, is the Corps or is the VA the construction agent?
    Mr. Caldwell. Currently, the VA is the construction agent. 
At the point in time that a decision is made and the Congress 
approves the VA going forward with this project, the 
expectation is that the VA and the Corps will enter into an 
agreement at that time for us to become the construction agent 
to go forward.
    So, in other words, we will not award a contract. We are 
doing all of the preparatory work that would lead us to the 
point of being ready to award a contract, but we will not award 
a contract until the point that the VA authorizes us to do 
that, and at that point in time we become the construction 
agent.
    Dr. Abraham. Okay. And, Mr. Sloan, I would echo Mr. Walz's 
confidence in you and certainly Secretary McDonald. You all 
have----
    Mr. Gibson. Thank you.
    Dr. Abraham [continuing]. Met when we asked you to meet, 
and I also have confidence in you two for sure.
    But let's talk about moving money from the Choice to this 
project.
    Mr. Gibson. Yes, sir.
    Dr. Abraham. In my district, we have many, many veterans 
that are utilizing this Choice program, and so personally I am 
opposed to that particular aspect. And I guess the question is, 
if you don't get that money from the Choice program, where are 
you going to get that money from to shore up Aurora?
    Mr. Gibson. Two quick points. First of all, we are not 
touching any of the $10 billion that is funding the actual 
Choice program, delivery of care in the community. The portion 
we are talking about is the $5 billion that was provided to 
increase staffing and to improve facilities.
    Dr. Abraham. But that goes still back to the Veteran in a 
roundabout way.
    Mr. Gibson. It does. Absolutely, it does, yes. There is a 
consequence associated with doing that.
    Dr. Abraham. Right.
    Mr. Gibson. And I would tell you, I don't have a Plan D, if 
you will.
    Dr. Abraham. Okay.
    Mr. Gibson. So if we don't get the funding here, I don't 
know where we get the funding from.
    Dr. Abraham. Okay. Thank you.
    My time is up, Mr. Chairman. I yield back.
    The Chairman. Thank you.
    Ms. Kuster, you are recognized.
    Ms. Kuster. Thank you very much, Mr. Chairman. And thank 
you to the panel for being with us today.
    I share the bipartisan angst and this is really challenging 
for all of us. I was just looking at our side of the aisle 
here, seven out of nine of us are new within the last term. So 
this is something that we have to take on the accountability 
that my colleague Mr. Walz has directed.
    And I want to say, with all due respect to my colleague 
from Colorado, I am speaking on behalf of constituents and 
veterans across the entire country and certainly taxpayers 
across the entire country. So I think, you know, obviously we 
want to serve our western colleagues and constituents and 
veterans, but the trouble that I have is that taking this 
funding out of other construction. Most facilities are over 50 
years old, I know certainly the facilities in my area, and we 
have needs as well.
    And one of the questions that I have, and this is to learn 
going forward, how did we end up with a design that has an 
atrium, a lobby that is four football fields long? I think the 
quote in here is, ``perhaps the longest in the world for a 
healthcare facility,'' costing $100 million. Who is accountable 
for that decision?
    And, you know, I have a new role as ranking member on the 
Oversight and Investigation Committee and I guess I would like 
to say we do need--I don't want every change order, but I want 
to know when somebody is putting together a $100 million lobby. 
It is not that our veterans don't deserve the best, but let's 
focus the best on healthcare and, you know, let's not be going 
for architectural awards. So can you talk to me about that 
process?
    Mr. Gibson. I would be glad to. First of all, Bob McDonald 
and I both had the same reaction following our first visits 
to--Bob hasn't seen Denver yet, but he has been to Orlando, and 
his reaction there was the same as my reaction in Orlando and 
Denver.
    Ms. Kuster. I don't want to interrupt you, but can you tell 
me when Orlando is going to open? Because we just heard from 
Representative Brown about her 25-year experience with this 
and, you know, it would be great for her to be able to go to a 
ribbon cutting to serve her veterans.
    Mr. Gibson. We have actually made, working very closely 
with Brasfield & Gorrie, we made great progress. They have 
turned over virtually all buildings. We are actually already 
beginning to see some number of patients and we are looking I 
think at a couple of different dates for ribbon cutting. Do we 
have a date?
    Ms. Kuster. I think if you could lock down that, you would 
go a long way with pleasing this committee.
    Mr. Gibson. We need to give you a date----
    Ms. Kuster. Thank you.
    Mr. Gibson [continuing]. Soon.
    Ms. Kuster. Yes, and one that she can rely on.
    Mr. Gibson. I was down in Orlando visiting the project and 
meeting with the general contractor down there three weeks 
ago--is that about right?--with Stella.
    And really the other issue that we have been working in 
Denver is resolving some of the contractor disputes there and 
we have been working those amicably.
    Ms. Kuster. Well, let me ask you, would it be helpful if 
members of our Committee, and I guess I would ask the chair for 
this as well, if we were to visit these sites? Maybe this 
oversight committee, we could come on a more regular basis and 
sit down with you, so that we won't end up with $100 million 
atriums?
    Mr. Gibson. Well, let me get back to that--first of all, I 
think it is wonderful to visit. We actually are hosting a 
Senate Veterans Affairs Committee field hearing at the Denver 
site a week from Friday.
    Ms. Kuster. And I think we would----
    Mr. Gibson. So and I have----
    Ms. Kuster [continuing]. It would be great to get our 
committee out there as well.
    Mr. Gibson. And I have strongly encouraged that, because I 
think having an opportunity to see the project is very 
important.
    Back to my comments earlier about the form of contract that 
we use, Integrated Design and Construct. The whole idea is you 
bring the builder in at the very beginning, so that they are 
involved in the design effort. And it is that kind of 
constructability engagement very early on that helps you avoid 
what I am going to term extravagant features in facility 
design.
    The other thing, even where you don't use IDC, because we 
are not using that anymore, and so----
    Ms. Kuster. Yes, I think----
    Mr. Gibson [continuing]. We don't use that----
    Ms. Kuster [continuing]. That open-ended, open-pocketbook 
approach is a problem.
    Mr. Gibson. Imposing the constructability review by an 
independent construction agent at the 35-percent design stage 
and at additional stages along the way helps mitigate that 
risk.
    Lastly I would tell you, I look at these things on the 
front end. I have already looked at conceptual drawings for 
Louisville and the first thing that jumps off the page is 
functional design.
    Ms. Kuster. Good. Well, thank you very much.
    My time is up, but I will get to it in the next round, just 
say that I also don't want to take this out of the hides of 
hardworking folks in the Veterans Administration all across the 
country.
    So, thank you, Mr. Chair.
    The Chairman. Dr. Roe.
    Dr. Roe. Thank you all.
    Today is a significant day in America, it is April 15th, 
and a lot of hardworking taxpayers are sending checks off 
today. And where I live, the per capita income is lower than 
the average across the country. And it is embarrassing to me to 
go home and to look those folks in the eye who work as hard as 
they do and write the checks they do to see this big of a 
disaster, financial disaster.
    And let me tell you exactly why it is that way, it is 
because nobody at the VA is spending their own money. If you 
were, you wouldn't behave like this. And nobody would spend 
their own money like this.
    And Dr. Abraham said, look, you heard me say it before, I 
have been in the middle of a lot of medical construction, there 
is no way to explain this incompetence. There are obviously 
some architects who are going to retire and buy places in Vail 
a lot cheaper than this thing is costing. It is $1600 a square 
foot. That is astounding when you look at that.
    And we are caught up in this, we can't stop. You put us in 
the ultimate Catch-22. We don't want to go ahead and we can't 
quit. So that is exactly where we are and you have made us a 
part of it.
    And to Mr. Takano, I don't want to be a project manager. 
That is not my job. I have been a mayor, I wasn't the project 
manager of anything. We hired people to do that, we trusted 
them, they brought it in under budget. I am just one lowly 
Congressman out of 435, but as long as I am in the Congress I 
will never vote to see the VA do a major project again. That is 
just me, but I am not ever going to be involved in that again, 
to have to go home and explain it.
    And I agree with also what others have said. This is not 
your fault, Mr. Secretary. You are getting the brunt of this 
criticism. It is not your fault and I understand that. And 
certainly you have been in the private sector and have done a 
great job there. So I am not casting aspersions on you at all. 
But we are going to have to go out there and complete this 
project.
    And let me tell you what I did last night, I had a 
telephone town hall meeting. The second call I got was a 
veteran who can't be seen for 120 days. The third call I got 
was a veteran who had had four primary care physicians in the 
last year, because they can't find enough. To everybody's 
comment up here, we are taking money away. This billion dollars 
could have provided a tremendous amount of healthcare for needy 
veterans and deserving veterans, of which they are not getting.
    And now we are talking about, even though this is one-time 
money you are talking about in this $5 billion pot, it could go 
to other things. It could be redirected to patient care, to 
PTSD care. And I guess I didn't realize it had a four-football-
length atrium. Nobody on the planet who is spending their own 
money would have ever spent the money like that. You would have 
put it into examining rooms and bigger operating rooms and more 
functional ICUs, that is what you would have spent the money 
on.
    So I don't know how you prevent this. I mean, I have 
watched this fiasco unfold for the last six years. And I don't 
see how we do anything but go ahead and provide the resources 
to finish this, but I feel like I need a bath after this, I 
feel that bad. And I don't know how you explain to people, it 
hasn't been explained to me yet. And every single member, I 
want to associate my remarks with every single person who said 
a thing up here, I couldn't agree more with everything they 
have said. So I don't know what we do.
    I would like to go out and see it, just to see what it 
looks like and see what the project is. And I don't know who it 
was that said this, but a veteran--oh, maybe it was Mr. Walz--a 
veteran apologizing who brought this, one of the VSOs who 
brought it up, it is not their fault, it is not our fault.
    And so, anyway, I think that is where I am with this. I am 
past frustrated and to see this enormous amount of money being 
spent that could have been spent for patient healthcare. As a 
physician, I always look at it about how could I help increase 
the care? How much medicine could I have bought? Surgeries, 
veterans that are waiting. I met a veteran the other day still 
waiting three years to hear from a disability claim. Those are 
the kind of things we could do to really help people, which is 
what I thought we were, not to build monuments.
    So with that, I have editorialized and I have gotten it off 
my chest, sort of, I don't think it will ever be.
    I yield back.
    The Chairman. Thank you, Dr. Roe.
    Mr. O'Rourke.
    Mr. O'Rourke. Thank you, Mr. Chairman.
    Mr. Secretary, I have a number of questions, so I will 
start right into them without making a statement.
    Assuming we needed the $5 billion originally that was 
requested that was appropriated, why not ask for a new 
appropriation? Because if we really needed that money, then we 
are not going to fund something that you thought we needed. If 
we didn't really need that money, that brings up some really 
serious questions and concerns. Why not ask for a new 
appropriation?
    Mr. Gibson. I think in the fiscal environment that we are 
in right now the sense was that that was going to go nowhere. 
Just like the original idea of tapping into the $10 billion 
went nowhere.
    Mr. O'Rourke. Yes.
    Mr. Gibson. And so, again, this from our perspective is the 
least worst alternative that we have got in order to be able to 
do what we need to do, which is finish the project.
    Mr. O'Rourke. Last week, the AP reported that wait times 
for all intents and purposes have not changed, have not 
improved. There was a story in each one of our districts in El 
Paso, we were second and third in the state for wait times. 
Like Dr. Roe, I am hearing from constituents who still are not 
able to get in.
    You visited El Paso and I thank you for that. You called 
the conditions in our facility there unacceptable, in your own 
words. And yet you are going to take money from potentially 
facilities like those that serve the veterans that I represent. 
We are going to divert funds that could potentially be used for 
what I think is a more urgent crisis, which is seeing veterans 
who have mental healthcare needs, who have physical care needs, 
who are not being seen today. That to me is unacceptable.
    I would be much more inclined to support a new 
appropriation than to take money from veterans who need to be 
served in communities like mine and communities like those 
represented by others here. So I wanted to ask you that 
question and make that point.
    Mr. Caldwell and Secretary Gibson, I am not totally sold 
that the choice is a binary one, either we fund this to $1.7 
billion or we don't fund it and it just is left an empty shell. 
Are there any other partners that we could work with? I 
understand that when this was originally envisioned we were 
going to work with an academic institution and co-flag, co-
brand, co-locate a facility there. Why not explore that today?
    I mean, if I am only offered those two choices, you know, 
then perhaps we have to fund it, but I think there has got to 
be a more creative solution to this, it is not either/or.
    Mr. Gibson. As part of that process, we have actually 
engaged a firm to explore a number of different alternatives, 
including partnerships, including identifying other sites, 
including trying to refurbish the existing facility. We have 
got a preliminary analysis back that strongly indicates that 
completing the facility is the optimal choice. And once we get 
the final of that back, which we expect next week, we will 
provide that to the committee, so that you have got the 
opportunity to be able to see that. And it includes the option 
of looking at fee-in care out into the community instead of 
building a facility.
    Mr. O'Rourke. And I want to associate myself with all of my 
colleagues who praised your leadership and that of Secretary 
McDonald, I can't argue with that, but I also cannot leave it 
up to your discretion or the discretion of a future secretary 
to make some of these judgments. And so I have got to agree 
with my colleague from Colorado when he laid out the litany of 
past construction mistakes at the VA. The VA just should not be 
in this business.
    And so I would love your recommendation back to us or the 
secretary's recommendation on a dollar amount above which the 
VA should not be involved in design and construction and only 
the Corps of Engineers or some other third party.
    I would also like to hear some creative, innovative 
suggestions about maybe we should no longer be building stand 
alone veterans' facilities, maybe we should be forced to co-
locate. If somebody else had skin in this game, there is no way 
it would have gone to $1.7 billion, absolutely no way. That 
could have been a public partner, a private partner, they would 
not have allowed this to happen. The VA will do this because 
the VA has always done this. So I no longer trust the VA. It is 
not that I do not trust you, I do not trust the VA's ability to 
construct these facilities.
    In El Paso, with 80,000 veterans very poorly served in an 
inadequate facility with very long wait times, it is very hard 
for me to go forward without you coming back or this committee 
deciding on some very bold, honest changes to this system, and 
those that have been offered to date do not meet that mark. And 
with my colleague from Minnesota, this one is on us. The first 
800 million was on you, this 800 million is on me, any future 
overruns are on me. I will not allow it to happen.
    So I would love to work with you constructively, hear your 
ideas on how we do something a little bit more bold, make some 
more significant changes, acknowledge that we should not be in 
this business, and then I think we can work together. And I 
think there are some creative solutions to this that are out 
there and look forward to working with you on that.
    Mr. Gibson. Yes, sir.
    Mr. O'Rourke. Mr. Chair, I yield back.
    The Chairman. Thank you very much.
    Dr. Huelskamp.
    Dr. Huelskamp. Thank you, Mr. Chairman.
    I would like to jump in quickly with questions. I do have a 
lot of them and they follow after four years of earlier 
questions, Mr. Secretary. And I recognize that you have only 
been with the VA since February of 2014, but as I understand, 
in the time since then until Mr. Haggstrom retired with full 
benefits that he reported directly to you; is that accurate?
    Mr. Gibson. He did, yes.
    Dr. Huelskamp. And he testified that he briefed you and the 
secretary monthly on the status of the Denver project. And what 
did he tell you? Did he tell you these cost overruns were 
coming? Because he certainly didn't share them with the 
committee. And so I want to know, did he tell you or did he lie 
to you? And I just would like for you to share that with the 
committee.
    Mr. Gibson. I think the general sense that was being 
presented at the time was that there was a heavy reliance on 
the firm target price that was in the contract between KT and 
VA. And on that basis and the reliance on that contract 
interpretation, there was still this sense that, you know, it 
is going to be built for this amount.
    And I will tell you, as I waded into all of this, starting 
really in the summer, in June and July as the acting secretary, 
I began at that point to engage directly with the general 
contractors on all three of these projects, Orlando, New 
Orleans and Denver, all three. I began to become much better 
read in on these projects. So by the time we got to late 
summer, very early fall, actually before early fall, you know, 
in my mind the conclusion was there was no way that we were 
going to get this project built for $600 million.
    Dr. Huelskamp. Did Mr. Haggstrom ever admit that to you or 
was he still--on the day he retired with full pension, full 
benefits and also taking in $50,000 of bonuses during this time 
period, did he ever say, you know what, Mr. Secretary, we are 
going to have a massive cost overrun?
    Mr. Gibson. I don't recall that that was ever his 
conclusion. It was really----
    Dr. Huelskamp. Did he ever indicate to you this email from 
Mr. Gorospe and presumably others that, hey, we have got folks 
below me that I have to listen to and say, hey, they are 
predicting massive cost overruns four years ago, did he ever 
bring that to your attention?
    Mr. Gibson. No. And I would tell you, I also don't believe 
that that was in the evidence file that I reviewed when I was 
reviewing the case associated with Mr. Haggstrom, which I did 
the day after he was deposed. But there was other information 
that made it very clear that there were clear warnings about 
estimated disparities in what different parties thought it was 
going to cost to complete the project.
    Dr. Huelskamp. Absolutely, and I appreciate that. And I 
think I am going to term this the Haggstrom principle. We just 
had a hearing earlier this week in which whistleblowers, again 
three whistleblowers, and you might have seen the interchange 
and exchange numerous folks had with the VA representative. But 
we remain concerned that whistleblowers are targeted, they are 
intimidated and they are retaliated against.
    And here we have just the same week that probably the 
biggest cost overrun in the history of the VA, we have an 
email, I am looking at it here, that said this was going to 
happen. He said $500 million. I mean, he even low-balled the 
estimate on that, and apparently he was ignored. Not only was 
he ignored, he was fired, perhaps for that reason. And we look 
forward to the VA telling us what happened in that situation. 
He was fired. The guy that fired him, oversaw him, got a 
promotion, benefits, full bonuses. And so the VA seems to be 
punishing the whistleblowers, intimidating them, and then 
highlighting and giving bonuses to the guys who are screwing it 
up.
    Now, where is the accountability in that situation, Mr. 
Secretary, particularly with the Haggstrom principle?
    Mr. Gibson. In that situation, there was no accountability, 
period.
    Dr. Huelskamp. You did say Mr. Haggstrom was deposed, I was 
unaware of this. What was he deposed for? What is the 
situation?
    Mr. Gibson. As I mentioned in my opening statement, he was 
deposed as it relates to the Denver project on Monday the 23rd 
of March. I took the evidence binder home with me Tuesday night 
and Wednesday morning learned that he had retired.
    Dr. Huelskamp. Wow. Well, and I will direct you to his 
comments to the committee and to me. We talked a little bit 
about a bonus issue. Again, it is $54,000 worth of bonuses. He 
said, quote, ``I think you need to put those cost overruns in 
context.''
    And again, the cost overruns at that time were minimal 
compared to what we have learned here. And so we have a 
construction chief apparently covering this up. Again, retiring 
with full bonuses, full pension, and helping, it looks like, 
intimidate and retaliate against the guy that was exposing 
that. So that is the principle, the Haggstrom principle, that 
has to be changed.
    I look forward to learning some more, if we could, about 
Mr. Adelino Gorospe and hopefully he will come before the 
committee, but I would like to also hear from Mr. Haggstrom and 
hopefully will visit with the chairman. Maybe that is something 
that maybe he would come voluntarily. I guess that would 
probably not be the case, as the secretary talked at that 
deposition, but I look forward to that in the future.
    I yield back, Mr. Chairman.
    The Chairman. Thank you, Mr. Huelskamp.
    Ms. Rice, you are recognized.
    Ms. Rice. Thank you, Mr. Chairman.
    I would like to continue in the line of the issue of 
accountability that Mr. Huelskamp has raised, but I first think 
it is important for us to remember what is really important 
here. And I want to underscore a fact that is very disturbing 
that I see as a direct result of all of the shenanigans that 
are going on in the building of this facility. Community-based 
outpatient clinics near the Denver VA have some of the worst 
wait times in the entire country. Enough said right there.
    Now, after our last hearing, my colleague Mr. Walz and I 
sent a letter to Ms. Fiotes on March 20th, 2015 that said, in 
sum and substance, we were requesting a detailed account of 
what has been mishandled, who is responsible for the 
construction delays, and how the mismanagement of our 
constituents' hard-earned money has been allowed to continue 
for so long.
    On April 1st, I received a response from you, Mr. Gibson. 
And you talked about how the Administrative Investigation Board 
(AIB) AIB, the report, was not complete, so it was not 
available to be shared at this time. But in the paragraph above 
that you talked about how the AIB had interviewed four 
individuals on March 23rd, 2015, and on the 24th, and it 
included Mr. Haggstrom and three other individuals that you did 
not name.
    Can you please tell me the names of the three individuals 
that you spoke to on that day?
    Mr. Gibson. I did not interview them, the AIB interviewed 
them.
    Ms. Rice. Well, I understand that, but you were able to 
identify Mr. Haggstrom as one of the individuals who was 
interviewed. Who were the others?
    Mr. Gibson. That is because I had his sworn testimony in my 
evidence binder. I can't----
    Ms. Rice. Why did you not have the sworn testimony of 
anyone else?
    Mr. Gibson. It may not have been relevant to the case. In 
the course----
    Ms. Rice. Well, it----
    Mr. Gibson [continuing]. In the course of--there are 
hundreds, if not thousands of pages of evidence that are 
reviewed in the process of an investigation, particularly of 
this nature, but actually of any nature. What winds up coming 
to me when I am taking an action on a senior executive is the 
binder that basically takes and culls the relevant testimony 
that is relevant to the particular, what ultimately will become 
the charges that are levied and that are the basis for removal.
    Ms. Rice. Okay.
    Mr. Gibson. So I can't tell you offhand who the other three 
were.
    Ms. Rice. I just want to say, and I don't know if I can 
speak for Mr. Walz, but this was an insulting boilerplate form 
letter that contained absolutely no information and was 
nonresponsive to our request. And I am going to reiterate our 
request to get the information. I want to see the depositions, 
I want to see the testimony.
    So here is the issue. And again, you have said under the 
title of accountability, Mr. Gibson, ``The VA established an 
administrative investigation board,'' AIB, ``to look at the 
actions and processes that resulted in the current situation 
and the employees responsible for those actions and decisions. 
At this juncture while the investigation is ongoing, it is 
premature for VA to identify who may be subject to appropriate 
disciplinary action.''
    My question--now, by the way, I think this is curious, 
because you have already said that most of the people who were 
involved in this project prior to today's date have been 
removed. So I am not exactly sure why or maybe you don't see 
that as disciplinary action, but let me tell you my concern. We 
are not just talking about the possibility--well, it is obvious 
that there was clearly some negligence, waste, abuse, all of 
that, but I believe, and maybe this is my background, that it 
is very likely that there are criminal implications here.
    Now, I am going to tell you--you have made mention of the 
private sector before. This would never happen in the private 
sector. I am going to tell you what would happen in the private 
sector. If a similar project happened in the private sector 
like this and there were hundreds of millions of dollars 
wasted--because I think it is fair to say that it is wasted--
this is what would happen. They would make a very quick 
determination about criminality. Right? They would either 
prosecute or they would defer prosecution and then what they 
would do is they would institute a Federal monitorship.
    And that is what I, today, am going to ask this Commission 
to do. I think the VA needs to have a Federal monitorship. And 
what that is going to do is it is going to force the VA once 
and for all to change its practices, to get rid of the culture 
of putting the VA first and the veterans last. And that is the 
only way that we are going to know--I actually think this is 
maybe ripe for criminal review. Has there been a referral, a 
criminal referral to a local law enforcement agency by the VA 
regarding this case?
    Mr. Gibson. There has been absolutely no evidence of any 
criminal wrongdoing uncovered at any point in this 
(indiscernible)----
    Ms. Rice. And who is making that determination?
    Mr. Gibson. That gets uncovered by investigators and at any 
point I----
    Ms. Rice. Investigators who work for whom?
    Mr Gibson. The investigators work for VA.
    Ms. Rice. Okay. So what I am suggesting is a real law 
enforcement agency. The VA is not a general contractor, and 
they are not a law enforcement agency, so that is not a 
satisfactory answer. I do not think it is crazy to say that 
there could be some criminality here. And I can tell you that I 
will never vote for one more red cent to go to this project 
until once and for all someone sitting at that table can tell 
all of us why this happened. And I just have not heard it. So 
let me just talk----
    Mr. Gibson. Just out of curiosity, ma'am, what did you 
think my opening statement was?
    Ms. Rice. So let me talk about your opening statement 
because in the writing, your written statement, your final 
paragraph was, ``As we approach design in the future----
    Mr. Gibson. I am referring to my opening statement, ma'am--
--
    Ms. Rice. ``As we approach design in the future, VA's 
emphasis will be on clear up-front definition of requirements, 
functional design for easier use by veterans and staff, simple 
forms for more efficient and cost-effective construction, and 
standardization to the maximum extent possible.'' My question 
is why wasn't this paragraph--all of these standards, why 
weren't they a part of the original project?
    Mr. Gibson. Ma'am, I wish I could change history, but I 
cannot.
    Ms. Rice. No, no. I am not--I know you----
    Mr. Gibson. They weren't part of the construction----
    Ms. Rice. But I am asking you in the----
    Mr. Gibson [continuing]. Management practices.
    Ms. Rice [continuing]. In all of the reviews----
    Mr. Gibson. I have----
    Ms. Rice [continuing]. You have done on thousands of 
papers----
    Mr. Gibson [continuing]. I have acknowledged the----
    Ms. Rice [continuing]. Why----
    Mr. Gibson [continuing]. The weak management.
    Ms. Rice. Sir----
    Mr. Gibson. I have acknowledge----
    Ms. Rice [continuing]. I am asking you one simple question. 
I am asking you, in your opinion, why do you think that these 
standards were not employed in the original proposal, or under 
the original construct of how the VA operates?
    Mr. Gibson. I think part of the challenge for VA is they 
had not built a major hospital project in, I am going to say, 
17 years. That is the number that I am remembering. When we 
started with Las Vegas, and the organization frankly had lost 
the competency to be able to do that. The business had changed 
dramatically in the intervening years, and so what happened is 
we sort of caught the bow wave of Las Vegas and Denver and New 
Orleans and Orlando, and we weren't ready for it as an 
organization, and we bungled it.
    Ms. Rice. Okay.
    Mr. Gibson. We screwed it up.
    Ms. Rice. Okay. On quick thing.
    Mr. Gibson. We did not have those good practices in place 
at the time.
    Ms. Rice. I appreciate you accepting responsibility even 
though you were not responsible. But you also said that you 
made a point in your written submission that the VA has 
delivered 75 major construction projects valued at over $3 
billion successfully. You said this is not to diminish our 
serious concerns over the mistakes that led to the current 
situation on the Denver project, but only to emphasize that we 
have successfully managed numerous projects through our major 
construction program. It begs the question, why is Denver not 
one of your many success stories?
    Mr. Gibson. Because of the complexity, the scope, the scale 
of the project.
    Ms. Rice. Is that the largest project ever in VA history?
    Mr. Gibson. In cost it certainly is, and in square footage 
it probably----
    Ms. Fiotes. Second to New Orleans.
    Mr. Gibson. Second to New Orleans.
    Ms. Rice. I appreciate that. But that cannot be the only 
reason why it is not the most--it is not on the success list. 
Thank you, Mr. Chairman.
    Mr. Gibson. Well, the success list, major projects, as I 
mentioned earlier, include projects all the way down to $10 
million. We do those routinely and have been doing those 
routinely for decades. It is just building close to $1 billion 
hospital projects has not been something that VA has done in 
its recent past until these four projects.
    The Chairman. Thank you, Ms. Rice. Ms. Brownley.
    Ms. Brownley. Thank you, Mr. Chairman. I want to express 
what my colleagues have already expressed, their tremendous 
amount of angst and accountability that I feel at this moment 
in time without question. And I also want to reiterate that I 
feel like the only hope we have at this particular moment is 
you and your oversight, Mr. Secretary, in making sure that we 
move forward and move forward in a correct manner that is going 
to complete this project somehow, some way, successfully from 
this point forward.
    I will say one other point of optimism I probably should 
express is that I do have a level of confidence that the Army 
Corps of Engineers is not in the business of building Taj 
Mahals. I do not think they have a reputation of building Taj 
Mahals. They are engineers. I think they prioritize function 
over form, and I hope that that acumen will be built into this 
project.
    So I guess a very simple question that I have for you is at 
this moment in time with the estimation that you are saying to 
complete the project, do we have a complete design of the 
project?
    Mr. Gibson. Yes, ma'am, we do. And I am echoing one of 
Lloyd's comments, and the Corps' perspective, they also 
concluded that we have a completed design.
    Ms. Brownley. So we have a completed design and we know 
that complete design is not a Taj Mahal. It is a functioning 
hospital that is, you know, that does not have all of the gold 
plated sinks and everything else that might be included, or 
originally included. I am not saying that they had gold-covered 
sinks, but----
    Mr. Gibson. No.
    Ms. Brownley [continuing]. The atrium that has been spoken 
of.
    Mr. Gibson. Well, the completed design basically reflects 
the design, and so if you go out to the project and visit the 
project, all 12 of those buildings are up. The steel is up, all 
of the steel, or virtually all the steel, virtually all the 
concrete is hung. And so basically what you have got is already 
the existing frame of the project. My----
    Ms. Brownley. So----
    Mr. Gibson [continuing]. Earliest conversations with both 
the Corps and with KT were are there any plausible, meaningful 
value engineering opportunities that we should consider at this 
point in the project? And the answer from both parties was, 
``No. We are too far along and to try to enter into those now, 
you are going to wind up costing more money and costing further 
delay than you would save.''
    Ms. Brownley. It seems to me that I was not here for your 
earlier testimony, but my staff gave me a note saying that 
Director Caldwell talked about we won't have complete cost 
estimate for completing the Denver project, that they won't be 
able to happen for another two months. Was that accurate, it 
would be two more months before you could have the complete 
estimate?
    Mr. Caldwell. Yes, ma'am. Actually, the estimate probably 
will not be complete in two months, but it is going to be close 
enough that we really know that we can depend on it for our 
negotiations. But, yes, that is correct.
    Ms. Brownley. Well, doesn't that seem that we are following 
a path that we followed earlier by, you know, asking for an 
amount of money where we don't know what the final estimates 
are?
    Mr. Caldwell. Ma'am, the way the process plays out on any 
capital project is that the first estimate on which the 
programming and appropriations decisions are made are generally 
based on parametric estimates, that is based on your experience 
from similar projects in recent years in that locale. It is 
after the project is authorized and appropriations available 
that you begin the hard work of determining what the precise 
requirements are and the precise costs. So that is a normal 
process. The difference in this case is that because we are 
taking on the project in the mid-point, we are not using a 
parametric estimate for purposes of reprogramming. We have used 
an engineering estimate that was made about two years ago, and 
now we will be making our independent estimate to get that more 
precise estimate.
    Ms. Brownley. Thank you. And I just want to make one final 
comment in that I agree with Mr. O'Rourke. We should not have 
the only proposal to us be one that is binary, either this 
appropriation or not to complete the project, that there should 
be other solutions here that we can analyze and look at. So 
with that, I will yield back my time.
    The Chairman. Thank you very much. Ms. Titus.
    Ms. Titus. Thank you, Mr. Chairman. Thank you, Mr. Gibson, 
I am sorry you are always the one who has to take the brunt of 
this when you aren't responsible. But we appreciate your cool 
demeanor and expertise.
    Mr. Gibson. It is always a pleasure, ma'am.
    Ms. Titus. I am sure it is. Anyway, thank you for being 
here. At the risk of sounding like I am piling on, we are 
really being presented with a Hobson's choice here. We have 
either got to move forward with this project, finish it, and 
spend money that could go to other veterans' programs, or we 
either stop and waste the money that has already been spent 
that could have gone to other veterans' programs. It is not a 
very good choice, obviously. But it is one that we have to 
make.
    And so I am inclined to agree with Mr. O'Rourke in that if 
we go forward and spend this money, it has got to be 
accompanied by some real reforms, that we can say this will 
never happen again, because we have legislated, put in place, 
things that will prevent it from occurring. And so those two 
things have to go together. We can't just write another check 
and hope that whoever comes along next will do a better job.
    Now, having said that, I want to ask you again about Las 
Vegas. You know, I worry about it. And it has been mentioned 
several times here. We know that while Denver apparently got 
the big atrium, Las Vegas got an emergency room that was too 
small before it even opened. And so we have had to now go back 
in and build a second emergency room or department, and I am 
afraid that other parts of the facility are also going to turn 
out to be too small, because we underestimated the use. Usually 
you build a hospital and use increases two to three percent. We 
built that hospital in Las Vegas, use increased by 19 percent.
    Mr. Gibson. Yes.
    Ms. Titus. So I hope these other facilities that are part 
of this complex aren't also too small. But the thing that 
really bothers me is the timeline. When you gave me a timeline 
before in April of 2014, you said it was going to be fully 
operational by the middle of this summer. Now that timeline has 
slipped, and it is not going to be fully activated until next 
spring. Now, there has not been a nexus drawn between pushing 
the timeline for Las Vegas and taking the funds for Aurora, and 
I just want to be assured that that is not the case, first. 
And, second, that this timeline isn't going to keep getting 
pushed back as you focus all your energy and resources and 
efforts on this fiasco in Colorado.
    Mr. Gibson. Yes, ma'am. I would like to ask Ms. Fiotes to 
respond to the question on Las Vegas.
    Ms. Fiotes. Congresswoman, the delay in schedule that you 
are referring to is the difference between construction 
completion and actual activation. We always estimate an amount 
of time between when we turn over the facility and when the 
medical center is actually able to operate it fully. That 
timeline is anywhere between 90 to 180 days depending on the 
complexity. The facility itself, the construction will be done 
this summer.
    Ms. Titus. Well, that is good to know. Well, thank you very 
much. All right. But let's work on some of those reforms that 
we talked about to go hand in hand with this----
    Mr. Gibson. Yes, ma'am.
    Ms. Titus [continuing]. Increased----
    Mr. Gibson. Yes, ma'am.
    Ms. Titus [continuing]. Funding. Thank you.
    The Chairman. Thank you very much. Mr. Secretary, I asked 
in the pre-hearing, questions for the record, what, if any, 
alternatives had been considered to re-purpose funding from 
other major and minor construction projects and/or Department 
programs, initiatives to move forward with the Denver project 
without requesting additional funding. And the answer I got 
back was all funding available in the VHA major construction 
program that will not adversely impact ongoing or previously 
funded projects has been identified and reprogrammed to the 
Denver project. Now, I hear that you are also looking at other 
alternatives. Re-purposing leasing--I think I heard you say 
that. And, if so, you made news.
    Mr. Gibson. I am sorry. I did not follow the last part.
    The Chairman. Are you talking anything other than full 
completion of the project?
    Mr. Gibson. No.
    The Chairman. Okay.
    Mr. Gibson. Absolutely not.
    The Chairman. Full completion? Okay.
    Mr. Gibson. Yes, sir.
    The Chairman. I misunderstood. I got another question. I 
sent a letter on the 19th of March to the Secretary basically 
asking for minutes from the construction review counsel. I have 
yet to receive a response. I would direct your attention to the 
testimony that was given from Ms. Fiotes on the 25th of March 
of last year, where she says, ``In addition to closing GAO 
recommendations, VA has worked diligently to address and close 
all the recommendations identified through the VA Construction 
Review Counsel, which was established in 2012, chaired by the 
Secretary to serve as a single point of oversight in 
performance in accountability.''
    And it goes on to say, ``Through the CRC and the VA 
Acquisition Program management framework that provides the 
continual project review throughout the project's acquisition 
life cycle, VA will continue to drive improvements in the 
management of VA's real property capital programs.''
    And then Mr. Hagstrom testified to the Committee on April 
22nd of last year on this particular project. ``Both the VA 
Secretary and Deputy Secretary are briefed monthly on the 
status of this project as part of our Construction Review 
Council meeting.'' It then goes on to talk about the primary 
purpose of the Council, and then I think I heard you say--
somebody has said--the Council has not met?
    Mr. Gibson. I believe the Council met maybe one time in 
July or August, if I am recalling--correct me. Is that right? 
And so since that time, since Secretary Shinseki's departure, 
other than that one occasion, the CRC has not met.
    The Chairman. Why would two people from senior leadership 
of VA come and testify to this Committee that it meets monthly? 
And then how hard is it to answer a question as to where the 
minutes are if the----
    Mr. Gibson. It is----
    The Chairman [continuing]. The answer--wait--the answer to 
the question is, ``There are no minutes because there were no 
meetings.''
    Mr. Gibson. Subsequent to June or July, whenever that last 
meeting was June, July, or August, there have not been any 
additional meetings. Prior to that time, it had been meeting 
regularly on a monthly basis. I am aware of your request and 
have inquired, and I am told that there are no minutes. There 
are, however, decks that were used, presentation decks, that 
were maintained, and we have provided those to our general 
counsel for their review before turning the material over.
    The Chairman. So I am to believe something that is designed 
to protect the expenditure of taxpayer money on projects to 
hopefully prevent the spending of a billion dollars more than 
was originally budgeted, to make sure that there are 
appropriate safeguards in place, and nobody took minutes? I 
mean, what is it, just a gaggle?
    Mr. Gibson. First of all, I am told that there were no 
minutes kept. The meeting was a very structured meeting. It 
included sometimes upward of 40 or 50 people in the room. As I 
mentioned earlier, I did not, from my perspective, view it as a 
constructive forum, either for the exchange of information or 
for making timely well-informed decisions.
    The Chairman. Was there anybody from outside VA that is 
part of that review council?
    Mr. Gibson. I don't believe so. Correct me if I am wrong? I 
don't believe so.
    The Chairman. So, Ms. Fiotes, your testimony then at the 
time was accurate that there were monthly meetings that were 
going on----
    Ms. Fiotes. Yes, Congressman, there were monthly meetings 
going on until the time frame that Mr. Gibson just mentioned, 
the summer of last year.
    The Chairman. Okay, staff, I apologize, I haven't reviewed 
this yet. Staff just provided it to me. But this is a document 
entitled ``VA Construction Review Council Activity Report dated 
2012 November,'' and in it there is a complete recollection of 
major construction, Denver Medical Center, as of May 16th. The 
purpose of the CRC meeting on the Denver replacement was to 
review and improve--I mean, so how do you create a document 
like this if there is no minutes taken?
    Mr. Gibson. Yes, if that is what I think you are referring 
to, I have seen a transcript actually, a transposed transcript 
of one meeting from 2012. And I am assuming that is a part of 
what you have in your hand.
    The Chairman. And so there were minutes taken at a meeting 
at some point?
    Mr. Gibson. It was actually a transcript of a recording of 
the meeting.
    The Chairman. But then there was never--it was never, 
ever----
    Mr. Gibson. No.
    The Chairman [continuing]. Recorded again?
    Mr. Gibson. No.
    The Chairman. Any idea----
    Mr. Gibson. It was not.
    The Chairman [continuing]. Managerially why would you 
record one and then not----
    Mr. Gibson. I----
    The Chairman [continuing]. Record anymore?
    Mr. Gibson. It would be pure speculation on my part.
    The Chairman. Okay. And again, this is the first I have 
seen of it, and that is what it appears it is. Ms. Brown, you 
are recognized.
    Ms. Brown. Thank you. Mr. Secretary, I just want to clarify 
one thing. On the Orlando opening, do you have a date for us?
    Mr. Gibson. May 26th.
    Ms. Brown. All right. So at this time, Mr. Chairman, I 
would like to invite you and any of the other members that 
would like to come to that opening.
    The Chairman. Thank you.
    Ms. Brown. And all of the former members that have worked 
over the 25 years of this project to attend. All right. Now, I 
have asked if our Democratic Members would like to go to 
Denver? I am asking the staff to get with you because I think 
it is important that we go and see a project that has gone out 
of proportion.
    You can talk about it all you want to but unless you go and 
visit with these projects and sit down and talk to the VA and 
talk to the construction team, you really will not get a good 
feel, I did that with Orlando, and I am coming to the end of 
that project. I am hoping that some of you will find it in your 
busy schedule to go to Denver so that we can learn from that 
experience that will help us with the rest of these projects 
throughout the country.
    Now, Mr. Secretary, we are at a, critical time, we probably 
need to at least authorize additional funds and authority to 
move this project forward. Once again, where are we going to 
get the resources; and there are some concerns about using that 
$5 billion that was supposed to be to help with veterans' 
facilities and accommodations throughout the country.
    Mr. Gibson. As I mentioned earlier, we owe the Committee a 
revised spend plan on the $5 billion as part of the support for 
the request.
    Ms. Brown. And I would also like to know out of that $10 
billion, how much of it have we used for the Choice Program? 
How many veterans have been served out of the Choice Program?
    Mr. Gibson. I have not seen the most recent numbers on 
appointments from the program. I can tell you the total 
obligations thus far right at $800 million, under the $10 
billion portion of the program.
    Ms. Brown. And out of the $5 billion, where are we?
    Mr. Gibson. Out of the $5 billion, $109 has been obligated, 
but----
    Ms. Brown. $109 million?
    Mr. Gibson. $109 million out of the $5 billion. But one 
quick word--two words of caution. One, about 40 percent of the 
total $5 billion has been planned for non-recurring maintenance 
and minor construction, which has a lead time associated with 
requirements definition and the FAR-based contracting process. 
So from the time we basically release the funds to the field, 
we are still in that portion of the process. So not much 
actually obligated yet on the construction side, non-recurring 
maintenance and minor construction.
    On the staffing side, I am told that we have already hired 
roughly 2,500 additional staff. The obligation--I am learning 
about Federal accounting here--the obligation is actually 
recorded at the time the payroll is processed. So it is not a--
you don't obligate the full year of salary at the time you 
bring somebody on. You obligate it in pieces twice a month.
    Ms. Brown. We have had lots of discussions about major 
projects and smaller projects. Where would you find the 
separation, because I do think that the VA should be able to 
have the ability to make some decisions as far as particular 
smaller projects in, small communities. We don't need the Army 
Corps--I mean, Army Corps got a full plate, and we have to 
figure out--what portion to give the Corp.
    Mr. Gibson. Yes, ma'am.
    Congress actually stipulates a $10 billion--excuse me--$10 
million threshold, above which is deemed to be a major project. 
And so that is a level that hasn't changed in a long time. So 
it is, from our perspective, a relatively low threshold, which 
is why you see us at any point in time with 50 or 60 ``major 
construction projects under way at any point in time.''
    Ms. Brown. There was a facility problem down in Miami. VA 
had two small projects, and when you put them together, it 
became one big project. I felt that the Secretary should have 
the authority to do that because it was costing us more money 
trying to get it resolved.
    Mr. Gibson. I fear that what has happened over the years is 
that there are too many instances where we design a project 
right up to the $9,999,000 amount, and really if we were doing 
what we really needed, we would do more than that. But the 
perception is that that adds materially to the time frame to be 
able to get a project completed or approved and funded.
    Ms. Brown. I am hoping you will come back to us as soon as 
possible with a method as to how we are going to come up with 
additional----
    Mr. Gibson. Yes, ma'am.
    Ms. Brown [continuing]. Funding that you need.
    Mr. Gibson. Yes, ma'am.
    Ms. Brown. I yield back the balance of my time.
    The Chairman. Thank you. Mr. Coffman, you are recognized.
    Mr. Coffman. Thank you, Mr. Hagstrom. Ms. Brown, just one 
point, the----
    The Chairman. You just called me Mr. Hagstrom.
    Mr. Coffman. No, no. Oh, no. I did not? Build anything 
lately?
    The Chairman. This hearing is adjourned.
    Mr. Coffman. Ms. Brown----
    The Chairman. We are out of here.
    Mr. Coffman [continuing]. The threshold that I use in the 
legislation is the major construction and we leave VA to do the 
minor below the $10 million. And that is defined in statute, 
the $10 million threshold. Yes?
    Ms. Brown. Because when you were talking, I was wondering 
where do you stand on this authorization, because if you do not 
have the funding, it is going to stop your project?
    Mr. Coffman. That is right. The number has to be increased.
    Ms. Brown. It--will. You didn't mention that in your 
comments.
    Mr. Coffman. I said the hospital has to be built. The 
authorization is clearly part of it.
    Ms. Brown. No, no, no, sir. I didn't hear it.
    Mr. Coffman. I did say that. Thank you. I am reclaiming my 
time. On January 21st, Mr. Gibson, you testified before this 
Committee. And you said, I'll quote, ``I have direct''--this is 
on January 21st--``I have directed that an administrative 
investigation board be convened to examine all aspects of the 
Denver project to determine the facts that led to the current 
situation and gather evidence of any mismanagement that 
contributed to this unacceptable outcome.'' And so obviously at 
the head of all of this is Mr. Hagstrom. But Mr. Hagstrom 
wasn't interviewed until March 23rd, by your testimony, and 
then he was allowed to retire on March 24th. I mean, why the 
gap?
    Mr. Gibson. What we had been working to do is to request 
and receive approval for a detailee with appropriate subject 
matter expertise from another department in the Federal 
Government. We have been unable to secure that at this point. 
In the meantime, we moved ahead with the AIB based upon the 
resources that we had at our disposal. So that was really the 
heart of the delay.
    Mr. Coffman. When is the AIB expected to be completed?
    Mr. Gibson. The honest answer is I don't know. I will tell 
you that what I have directed on this AIB--normally what we 
would do is we would charge an AIB to look at a series of 
issues, and they would go all the way through their work and 
complete their final report and then we would consider actions. 
What I have directed on this one is, I want them looking at 
certain elements of this, because we have got such a large and 
complex activity. And as they have sufficient evidence to be 
able to support taking a disciplinary action, that we move 
ahead on that while the AIB is still operating.
    Mr. Coffman. The fact that he is gone, what disciplinary 
action can you take?
    Mr. Gibson. Against Mr. Hagstrom, none. But the AIB now 
proceeds looking at other individuals that were involved in 
various manners with the project at various levels.
    Mr. Coffman. When was the first person deposed?
    Mr. Gibson. I don't remember the answer to that. I am 
sorry.
    Mr. Coffman. How many people have been fired that are in 
leadership positions on major construction projects in the VA, 
on these major hospital construction projects?
    Mr. Gibson. I am not aware that any senior level officials 
have been fired.
    Mr. Coffman. Each one is hundreds of millions of dollars 
over budget, years behind schedule, and nobody has been fired, 
except for we know a whistleblower has been fired.
    Mr. Gibson. Unacceptable.
    Mr. Coffman. Unacceptable. This is overwhelming. This is 
overwhelming. Just incredible. Mr. Chairman, I yield back.
    The Chairman. Thank you. Mr. Walz?
    Mr. Walz. Well, thank you again. And I think the question--
again I am like so many here, we are kind of within--I am 
deeply concerned. I think Mr. O'Rourke's point was on this is 
is I would just suggest to you Mr. Gibson maybe go back with 
the Secretary. I just think for accountability purposes it may 
be right to come for a request to this committee, for an 
appropriation request, because I am very uncomfortable with the 
proposal that's been put forward.
    I see it, especially coming out of the Choice Program, why 
would we not enhance the Choice Program in and around the 
Denver proposal here with--because we know the wait times are 
even higher because they are waiting to get into this delayed 
facility.
    It just seems to me that it is very hard to not talk to my 
constituents that because of these problems it is delaying care 
for veterans. Do you have a suggestion for me on this? I mean, 
I am just--because I understand it has to be built, and I am 
going to stand because this is about veterans and giving you 
the authority to get it done, but I just think it needs to be a 
clean break from what we have done.
    Mr. Gibson. I think, first of all, the fact that we have 
requested that the Corps come in and take over as the 
construction agent on this particular project. Certainly, what 
has been provided at this point is really the formal part of 
the request for funding. We owe this Committee additional 
information, as I have described earlier, detail on the changes 
in the $5 million spend plan, any additional detailed 
information that we can possibly provide.
    I alluded earlier to the review that the Corps of Engineers 
is doing at our request, looking at all four of these projects, 
advising us on things that they believe went wrong from a 
policy and practice standpoint in these projects, and how we 
can operate more effectively.
    And then secondly, at Congress's direction there is an 
independent review being undertaken of the entire construction 
project--or process--or construction program at VA as part of 
the Choice Act, and that report, that final report, is due to 
Congress in September.
    So, frankly, I think under the circumstance if we are 
talking about a project, the management of which is going to be 
turned over to the Corps of Engineers, and in the meantime what 
we are going to be doing is going through two different 
independent reviews of our major construction activity to 
figure out how do we best operate in the future.
    Mr. Walz. And those results will be in front of us?
    Mr. Gibson. That (indiscernible), that's fine.
    Mr. Walz. And those results will be in front of us----
    Mr. Gibson. Absolutely, yes.
    Mr. Walz [continuing]. Before we are asked to spend any 
more money?
    Mr. Gibson. I'm sorry?
    Mr. Walz. Those will be in front of us before we are asked 
to appropriate more money----
    Mr. Gibson. No, sir, they won't be.
    Mr. Walz [continuing]. For this?
    Mr. Gibson. They won't be. The only way that happens is if 
we shut down construction on the project.
    Mr. Walz. What does that mean?
    Mr. Gibson. And Mr. Caldwell has already responded.
    Mr. Walz. Yes, a little bit. That guarantees that it opens 
later or?
    Mr. Gibson. What happens is you start moth balling the 
project. And so there are material additional costs that you 
wind up incurring.
    Mr. Walz. No, I understand.
    Mr. Gibson. You wind up incurring delay. I met two weeks 
ago in Denver with 40 or 50 of the largest subcontractors, not 
just the general contractor, but subcontractors. And I got to 
tell you if there is another walk-off on this project, they are 
not coming back. And so just the threat, just the threat that 
there is not going to be funding for this project makes it that 
much harder for the general contractor to be able to get these 
subs----
    Mr. Walz. No, I agree and I feel for them too, but I just 
think for all the Members to recognize it is pretty clear on 
this, you are going to vote for this before you hear any--and 
have anything in writing on a guarantee that it is going to be 
done and it is a devil's deal, it is a tough one, and I 
appreciate exactly what you said. I think----
    Mr. Gibson. It is going to be done by the Corps.
    Mr. Walz. Yep. And I think you articulated it very well.
    Mr. Gibson. That is your confidence on the $800 million. 
Look, I am not any happier about this than anybody.
    Mr. Walz. No, I know.
    Mr. Gibson. I am profoundly embarrassed, I am upset, I am 
angry. I get it, I understand that. At the end of the day, 
though, I believe we have to finish this facility. I think it 
is best from where we are it is the right thing for veterans, 
and I believe it is the best outcome for taxpayers, and we owe 
you that analysis----
    Mr. Walz. I do not disagree with you on that, Mr. Gibson. I 
just think that this is our time to leverage changes. I don't 
disagree with that analysis and to try and get there.
    Mr. Gibson. I think there is an opportunity to do that in a 
very informed fashion over the coming, however many--five 
months, however many that is, I haven't counted to September.
    Mr. Walz. Yep. Well, I appreciate that. Thank you, Mr. 
Chairman.
    The Chairman. (Indiscernible) Does the Administration 
support a deficit neutral solution to this current problem?
    Mr. Gibson. The Administration supports the proposed 
funding using a portion of the $5 billion in Choice. And if 
that translates into a deficit neutral proposal, then that is--
the answer is yes.
    The Chairman. Thank you. Dr. Abraham.
    Dr. Abraham. Pointing in, I guess, on Dr. Roe's comments, 
the average veteran in my district, his average income is 
equivalent to 20 square feet of this proposed. And I have 
looked while we have been talking, it is about the center of 
this horseshoe here, much less a four football field atrium.
    So the question is internally in the VA--I understand there 
are problems or there are issues with firing an employee in the 
Federal system, but has the VA internally come up with some 
objective paths to take if they see an employee, a contractor, 
an individual go off target, off radar, to reassign or just to 
get them out of that area of operation?
    Mr. Gibson. I am going to ask one of you two to answer the 
question.
    Mr. Milsten. Yes, we have done a number of things to look 
at how employees perform. We have looked at if on the--
especially on our critical projects, if the project leaders on 
that project identify employees that are problematic, rather 
than leaving them there for that supervisor to take the 
disciplinary action, I have had the discussions with the 
regional offices that we reassign those people to somebody who 
has the time to take the appropriate documentation, work 
assignment process, and manage that so that we don't bog our 
already overtaxed project managers trying to deliver these 
projects in these trying times with also managing those 
performance issues. So we have told them----
    Dr. Abraham. We are getting ahead of discussion, but has 
anything yet to be actually put in place?
    Mr. Milsten. Have we actually removed somebody like that?
    Dr. Abraham. Exactly.
    Mr. Milsten. No, we have not. None of the project directors 
have come back and said there is a problem employee that I 
don't have time to get rid of, assign him somewhere where they 
do have time to get rid of him.
    Mr. Gibson. But I would tell you that actually, shortly 
after Stella arrived in early 2013, her sense immediately was 
that we needed to make changes on the ground in Denver. And in 
fact, that is exactly what we did.
    Dr. Abraham. But not only Denver, but all the--New Orleans 
and all the----
    Mr. Gibson. We have made changes. We made changes in 
Orlando, we made changes in New Orleans as well?
    Mr. Milsten. No.
    Mr. Gibson. Not New Orleans but Orlando.
    Ms. Fiotes. Not New Orleans but Orlando, yes, we did.
    Dr. Abraham. Okay. Mr. Caldwell, one question for you. Is 
the Corps the construction agent, that term, on any other VA 
projects to date?
    Mr. Caldwell. Sir, I am sorry, can you clarify, is Turner--
--
    Mr. Gibson. Is the Corps. Is the Corps construction agent 
on----
    Dr. Abraham. Yes, is the Corps designated as the 
construction agent on any other VA project as of this date?
    Mr. Caldwell. Yes, sir, I think it is fair to say. And, 
although we may not have used that terminology, we have served, 
and are serving, on that--in that capacity on a number of other 
projects. I think we----
    Dr. Abraham. But doesn't that designation allow you certain 
priorities?
    Mr. Caldwell. It establishes that we have a responsibility 
to make decisions.
    Dr. Abraham. Right.
    Mr. Caldwell. Understanding what the, in this case, 
understanding what the VA's requirements are, then it--we are 
then in a position to determine how to best meet those 
requirements as opposed to having the agency that identifies a 
requirement also telling us how to meet that requirement. If 
you understand the----
    Dr. Abraham. I do.
    Mr. Caldwell [continuing]. The distinction that I am 
attempting to make.
    Dr. Abraham. I do.
    Mr. Caldwell. We have I think, the number is about 78 other 
projects currently underway with the VA. Most of those are 
minor construction. A number of the projects around the country 
that are less than $10 million, but in and of themselves are 
standalone projects we have executed with good success for the 
VA.
    We also have an agreement with the Cemetery Administration 
to manage their minor construction projects all over the 
country, and that is going well.
    Dr. Abraham. Okay, thank you. Mr. Chairman, I yield back.
    The Chairman. Thank you very much. Mr. O'Rourke.
    Mr. O'Rourke. Thank you, Mr. Chairman. I wanted to offer a 
couple of ideas on which I would like to work with you and with 
the Secretary, the other Members, VSOs, really anyone who is 
interested. One is that any significant change order, and we 
could work together to define that, must be funded through a 
new appropriation. It is just too easy to take money that has 
already been appropriated and redirect it. And that does not 
improve accountability. In fact, I think it lessens it. It 
doesn't improve transparency, it lessens it.
    Imagine having to defend a $1 billion appropriation on the 
floor of the House. With everything that we have learned today 
it would be a very painful experience. But I think in the 
interest of the taxpayer and accountability and transparency it 
is one that we should have to go through as painful as today 
has been. So I think that is an idea we should at least 
explore.
    And I, for one, will not be able to vote to move 20 percent 
of the $5 billion that has been appropriated for a specific 
purpose to cover up a mistake that the VA has made. I think 
that should be a new appropriation request that should be 
defended and argued by the VA and those who support it.
    I think that everything over $10 million, if that is the 
threshold that we agree upon, but maybe that should be lowered, 
should be built, designed, and overseen by the Army Corps of 
Engineers or some other party, not the VA. As you said, and I 
agree with you, the VA, for a long time, was just not in the 
business of building these large capital projects. And that 
might provide some of the explanation for the failures with 
this, for Orlando, for New Orleans, for others. So having 
learned that, let's do something different and not rely on the 
judgment or discretion of the Secretary, but instead in statute 
force that to be the case going forward.
    And I do think there is some wisdom to pursuing joint use 
facilities, joint ownership facilities, joint located 
facilities. Again, I think some other partner with skin in the 
game is going to provide additional accountability. We are 
going to get greater use out of that facility. We have made a 
virtue of this necessity in El Paso. We can't get $1.7 billion, 
we can't get $600 million, we can't $50 million, so we are 
working with Texas Tech, University of Texas at El Paso, 
University Medical Center, Tenet, to see if we can bring all 
partners together at a facility, and maybe refer some of that 
care out there. I know that is very controversial. I know that 
we will get opposition from some VSOs, from some veterans, but 
this current model is just not sustainable. It is not 
affordable.
    I read that Secretary McDonald is right now trying to hire 
28,000 unfilled positions within the VA. We have critical 
positions in El Paso in psychiatry, psychology, primary and 
specialty care that are unfilled. We just cannot--let's just 
admit it, we cannot continue with this model and expect 
anything different. And that is after we just appropriated $15 
billion. And AP reported, as I said earlier last week, that the 
wait times have not changed since then.
    So I want to explore those ideas with the Committee, with 
you, Mr. Secretary, with Secretary McDonald, and with the VSOs. 
And I think there are other great ideas that have been brought 
up today. But as Mr. Walz said, we can't--this isn't about 
Aurora, this isn't about another $1.1 billion. This is about 
the future of the VA. And we cannot leave this crisis with 
simply re-purposing existing appropriations, or even a new 
appropriation, without some structural fundamental systemic 
change in how we do business.
    And I think you and the Secretary, in the 20 months that 
remain, have an excellent opportunity to transform the VA. And 
you and Secretary McDonald with his experience in the private 
sector, maybe better than anyone else before, to make some very 
difficult but very bold decisions that are necessary now. And 
so let's not allow this opportunity, or this crisis, to go to 
waste. And so I, for one, I think I have heard from my 
colleagues on this Committee, are willing to work with you and 
certainly under the leadership of our Chairman, who I think has 
just been outstanding on this issue. I think we can come up 
with something. And as painful as all this is, something good 
can come out of it.
    So those are three suggestions that I would like to start 
with and offer. And I am sure we have got more from my 
colleagues. So I will include these in a formal letter to you 
and to the Chairman, and then would love to get your response 
back on it, and perhaps some suggestions that you all have.
    Mr. Gibson. We look forward to working with you, 
Congressman. I would tell you just very briefly, the question, 
or the issue, surrounding the involvement of the Corps, we 
agree, the only question is where do you draw the line? And, 
again, we have got, at any point in time, 50 or 60 projects in 
the $10 million plus range and a very, very small number. You 
know, you look at the last 20 years and we have had four 
projects of this kind of scope and scale that we are talking 
about. So clearly there is a role for the Corps here and we 
embrace that.
    Secondly, I just, you know, a project of this--even a 
project of much smaller size, what would be the average number 
of change orders you would expect to see? Hundreds?
    Mr. O'Rourke. I tend to put change orders into the cost 
category as opposed to the number. And I look for cost growth. 
It is within the contingencies of the project which would be 
less than five percent on new construction and less than about 
seven and a half percent on renovation.
    Mr. Gibson. In the course of establishing--in their numbers 
that they have come up with, there is a piece in there for 
contingency. And in the $130 million portion that we have, 
there is actually a piece in there for management reserve that 
is intended to be able to accommodate some of those ordinary 
course. When you are doing a multi-hundred million dollar 
project you are going to have change orders, that is going to 
happen. And, frankly, it is already a challenge to be able to 
process those and not delay construction. And I can just tell 
you, if we are coming in here every time we got a change order, 
then we are going to grind all construction to a halt.
    Third, the issue of partnerships. I think you understand 
the very different approach that Bob and I have taken about 
trying to embrace strategic partnerships. But I would also 
remind all of us that this particular project went through at 
least four incarnations where we were looking at different 
stages of partnerships with the University of Colorado, 
partnerships with DoD, you know, then back to Colorado, then 
back to DoD, and those aren't always easy to accomplish.
    In fact, the emergency room in Las Vegas is--if I am 
recalling correctly--had originally intended to be using some 
shared facility in another location. And as a result we wound 
up under-designing the ER when that basically fell through. So 
we----
    Mr. O'Rourke. I appreciate your responses to that, but it 
cannot be the end of the conversation because your responses 
imply that those three ideas are non-starters, or there is not 
more to them. And so you have satisfied no one today with your 
explanation of what the VA is going to do going forward. I am 
trying to offer three that, you know, I can support and work on 
with you. I do appreciate the response. I think we need 
something a little bit more formal and some concession on your 
part that you are willing to rethink some assumptions that you 
have made going forward.
    Status quo will not work. I will not support, as many of my 
other colleagues have said, another dime towards construction 
projects without some additional accountability or reform 
within the VA. And so I am offering three--if these don't work, 
give me some others that are better.
    Mr. Gibson. I understand.
    The Chairman. Mr. Huelskamp.
    Dr. Huelskamp. Thank you, Mr. Chairman. Secretary Gibson, I 
want to follow up a little bit on the Construction Review 
Council because that seemed like a good idea. I didn't know it 
existed and apparently it didn't exist very long. But 
apparently there were nine meetings, is that correct, of this 
Construction Review Council? I guess, let me direct to Ms. 
Fiotes who was, I guess, at these council meetings?
    Ms. Fiotes. I was at those council meetings from the time I 
arrived in January of 2013 at the VA, and they continued. They 
started up again. They had initially had very frequent meetings 
in 2012 that resulted in the report that I think you were 
holding before, Mr. Chairman, with the findings. Those were the 
findings that I had mentioned in my testimony that we addressed 
by taking several measures in the construction program.
    And then subsequently, some time in 2013--I believe around 
the middle of 2013--we started again with regular Construction 
Review Council meetings monthly. And those continued until 
approximately the summer of 2014. So for a period of about a 
year we had almost monthly meetings. There might have been one 
or two that were missed.
    Dr. Huelskamp. Okay. There are nine referenced in the 
activity report from November of 2012. And I guess Secretary 
indicated that----
    Ms. Fiotes. Those were before 2012. Those were in 2012, I 
am sorry.
    Dr. Huelskamp. Right. And the Secretary did indicate that 
one of these meetings was recorded, but there were no minutes 
taken. I would like to request any recordings, written 
materials, verbal materials of other meetings. Are we aware, 
Ms. Fiotes, you were there, any of these?
    Ms. Fiotes. I would have to ask Mr. Milsten to respond. I 
was not at the VA in 2012, I don't know about those meetings.
    Dr. Huelskamp. Oh, okay.
    Mr. Milsten. Yes, sir. There was one meeting, at least one 
meeting, that was recorded in total and that is--it just so 
happens to be that it is also the Denver project that 
recently----
    Dr. Huelskamp. Yes, you got lucky on that one.
    Mr. Milsten. Yes, sir.
    Dr. Huelskamp. But no others recorded?
    Mr. Milsten. To the best of my knowledge, the contract 
didn't work to have the recorder come in. There were no minutes 
taken. The presentations were the record that was elected to 
stand for the meeting. And----
    Dr. Huelskamp. If I might interrupt, I only have a little 
bit of time left. The write-up from the recorded media May 9th 
of 2012, it is similar in detail to the write-ups for every 
other meeting. So who wrote up the meeting without any minutes?
    Mr. Milsten. I did. I recollected them from the 
presentations that I had sat through.
    Dr. Huelskamp. Nine meetings, and you wrote it up after 
they were over, and months later, in the----
    Mr. Milsten. Yes, sir.
    Dr. Huelskamp. Well, that is incredible. But I want to 
double check. You are saying you are not--that none of the 
other meetings were recorded?
    Mr. Milsten. I will have to go back and confirm that.
    Dr. Huelskamp. Did you take meeting notes in order to----
    Mr. Milsten. I took notes on the slides that were being 
presented so that I would have something to go back and create 
this record.
    Dr. Huelskamp. Okay. Well, I would ask you to provide those 
to the committee.
    Mr. Milsten. I did not retain them, unfortunately.
    Dr. Huelskamp. Well, I would like to--any emails? Did you 
email anybody about these meetings?
    Mr. Milsten. I am sure I have some draft--emails of the 
draft report going around.
    Dr. Huelskamp. Okay. And so there were 40 people at these 
meetings and you are the only one that took any record and that 
was destroyed, and not kept, and you did this fully from memory 
this entire report since----
    Mr. Milsten. I had those when I was writing the report in 
2012, I did not keep them after that.
    Dr. Huelskamp. Okay. Well, if they are in an email, they 
are on some server. You didn't use a private email server, did 
you?
    Mr. Milsten. No, sir.
    Dr. Huelskamp. That's a serious question.
    Mr. Milsten. No, sir.
    Dr. Huelskamp. I wanted to double check on that.
    I want to follow up on one other question, and Mr. O'Rourke 
made reference to it, I have not seen any response from the VA 
about the AP report that came out last week that indicated that 
the wait time goals were severely behind in terms of--or way 
behind in your goals. Is the AP report accurate, Mr. Secretary?
    Mr. Gibson. The AP report is accurate. It is out of 
context. They make a reference, for example, to 890,000 
veterans who waited more than 30 days over a seven-month period 
of time. They are absolutely right. There were 31 million 
veterans that were seen in less than 30 days, and the vast 
majority of those in less than 2 weeks.
    There are countless--they refer to the four and a half 
percent increase in the number of completed appointments during 
that period of time. That happens to add up to two million 
additional appointments for veterans.
    And so part of the frustration for us--I am not pleased, we 
have still got too many veterans waiting too long for care. But 
the other thing that I do know is that we are improving access. 
I was in Phoenix with----
    Dr. Huelskamp. Thank you, Mr. Secretary, for the story. But 
you are improving access even though 232,000 of those 
appointments involved a delay of longer than 60 days?
    Mr. Gibson. Correct.
    Dr. Huelskamp. Is that an improvement?
    Mr. Gibson. I don't know what the statistic was previously. 
The point that I am making here is that access is improving. 
Part of what we are seeing--and I was going to make the point 
with the illustration in Phoenix. We have hired 300 additional 
people in Phoenix since June of last year. What we have seen in 
the meantime, their wait times have actually gone up, which 
gives me great concern. What we have seen is the number of 
primary care patients year over year, you are looking at the 
seven months from June through December, up 13 percent, 
specialty care patients up 15 percent, mental health patients 
up 29 percent in one year.
    As we work to improve access to care, what we find is 
increasing demand. We saw the same thing that was in 
Wilmington, North Carolina. Three months ago we built an 80,000 
square foot healthcare center there. About a year and a half 
earlier in the first year that it was open, a 14 percent 
increase in unique patients coming there for care. I think 
Congresswoman Titus mentioned the increase in patients coming 
in Las Vegas following the opening of that particular facility.
    Dr. Huelskamp. And I am out of time. I appreciate that. If 
you could put that response to the AP report.
    Mr. Gibson. Sure, would be glad to.
    Dr. Huelskamp. (Indiscernible). The report is accurate, you 
believe it is out of context, but the----
    Mr. Gibson. Yes, sir.
    Dr. Huelskamp [continuing]. Claims that nearly 20 some--20 
plus percent of those appointments are delays of longer than 60 
days which is well over the goal that--is a higher goal than 
what----
    Mr. Gibson. That happens to be .79 percent of completed 
appointments during the time period they looked at.
    Dr. Huelskamp. That is not what the report says. It says 
nearly 894,000 medical appoints completed, nearly 232,000, that 
is approximately two out of nine of these involved delays on 
the----
    Mr. Gibson. And the 232,000 is .79 percent of total 
completed appointments. The 800, almost 900,000, over 30 days 
is 2.--I am going to round it--I believe 2.8 percent of total 
completed appointments during that period of time. That is my 
point about context. You know, the fact of the matter is----
    Dr. Huelskamp. You know what----
    Mr. Gibson [continuing]. 97 percent----
    Dr. Huelskamp [continuing]. Mr. Secretary, if I might say, 
I don't care about context. I am worried about the veteran that 
waited 61 days, or 90 days, or 120 days, and you and I both 
agree on that. It is not working, and I will say this that----
    Mr. Gibson. It is not. That is not acceptable. I agree with 
you that it is not acceptable.
    Dr. Huelskamp. These hearings have generated incredible 
demand for veterans that gave up years ago on this system. They 
gave up and said, ``We are not even going to try that.'' They 
come up to me and say, ``Well, Congressman, should I go try to 
get an appointment now? I gave up years ago.'' So we said, 
``Well, give it one more chance.'' And now we are saying that 
they got one more chance, they are still going in waiting 60 
days, and they are going to walk out and say we are not doing 
that again. And let's not see that happen. I appreciate the 
response to the report. Thank you.
    Mr. Gibson. Yes, sir.
    Dr. Huelskamp. Yield back.
    The Chairman. Ms. Rice.
    Ms. Rice. Thank you, Mr. Chairman. Mr. Gibson, are you 
aware of any legal impediment to you, or someone in your 
agency, sitting down more informally than this with members of 
the Committee so that we can understand the content of the 
depositions that have been taken thus far?
    Mr. Gibson. The honest answer is I don't know.
    Ms. Rice. Yes, I don't know either that is why----
    Mr. Gibson. We will explore that.
    Ms. Rice. Would you?
    Mr. Gibson. But I will tell you, I routinely have informal 
visits, and Bob even more than me, with members of Congress on 
all manner of topics. And so I would be delighted to come sit 
down with you, and any other member of Congress, to talk about 
how things are proceeding with the AIB. And, whether or not 
that involves sharing sworn testimony and depositions, and 
things, I don't know about that, I will have to do the homework 
on that for you.
    Ms. Rice. And I will too, but you probably have in--I am 
sure you have in-house counsel that probably----
    Mr. Gibson. We do.
    Ms. Rice [continuing]. Knows the answer to that.
    Mr. Gibson. We do.
    Ms. Rice. But if there is any way that that could be done, 
I think that would go a long way to making people on the 
committee feel better about going forward.
    So Mr. Walz asked you whether we would have--this report 
would be done by the time we vote on the request. And you said 
no.
    Mr. Gibson. Which report are we referring to?
    Ms. Rice. The AR report, right?
    Mr. Walz. Yes, the analysis before we go forward.
    Ms. Rice. Right.
    Mr. Gibson. Yes, the two reports that I alluded to, one the 
Corps of Engineers is working on a review of these four large 
hospital construction projects in the broader practices and 
policies that we are operating by today. We expect that report 
in May. Then under the Choice Act there was one of the 12 study 
streams that has been established, and work is well under way 
already by an independent third party that we don't have any 
control over whatsoever, independent third party that is doing 
a comprehensive review of the entire construction program.
    And that is due--all of those reports are due to Congress 
in September. Those are the reports that the independent 
commission, comprised of 15 individuals--three appointed by the 
President, and then three each appointed by the Speaker of the 
House, the Minority Leader of the House, the Majority Leader of 
the Senate, and the Minority Leader of the Senate--those 15 
receive those reports, and the Commission produces a set of 
findings and recommendations that are based upon all of that 
review that--of all of those 12 reports, in addition to 
Congress receiving the reports directly.
    Ms. Rice. Can you give an actual dollar figure for how much 
it would cost to do the mothball? If you were not to be able to 
get the money before the present money runs out?
    Mr. Gibson. It is not simply just going in and figuring out 
what it takes to weatherize, what it takes to secure the 
facility. My point earlier is what happens when the Corps of--
if and when the Corps of Engineers negotiates an agreement with 
KT, and as a result of that, they wind up--KT goes to their 
subcontractors and the subcontractors say I don't want to work 
on that project, it has already been stopped twice.
    Ms. Rice. Right. No, I understand that.
    Mr. Gibson. That was the purpose of me going out. I went 
out, as did the Corps of Engineers, and we both spoke directly 
with KT to the subcontractor community, their 40 or 50 largest 
subcontractors, trying to basically instill confidence in them 
to commit to the project, and we have got to keep this thing 
going.
    Ms. Rice. No, I understand that, I was just----
    Mr. Gibson. The idea is to get it finished for the best 
value we can.
    Ms. Rice. I was just curious because I think it is 
important to say, okay, if we took step one, if we chose 
choice, if we made, you know, the first choice we go down this 
road this is what it is going to cost and if we go down this 
road this is what it is going to cost. So you can see if while 
there would be a delay in time if you were to go through the 
mothball and as we go through all of this, at the end of the 
day it might not result in such a high price tag as going down 
the other path, but I don't know that, that is why I asked if 
you could put a dollar amount on that.
    And just out of curiosity, my last question. Have you 
brought in a forensic accountant to go through the books on 
this project?
    Mr. Gibson. Dennis, can you help me on that one?
    Mr. Milsten. I assume--well, let me ask a question, a 
little clarifying question. Do you mean the books that the 
contractor has kept for the cost of the project or do you mean 
our----
    Ms. Rice. I'm talking about----
    Mr. Gibson. Internal expenditures.
    Ms. Rice. Every single money in, money out.
    Mr. Gibson. Again, for us or for the contractor?
    Ms. Rice. Both. I guess my question is I think that this 
just calls for bringing in a forensic accountant so you can see 
where the money went.
    Mr. Milsten. We can show where all our money went when it 
goes to the contractor. We have done some initial cost analysis 
on the contractor's books to see where they were spending 
money. Bringing in a forensic accountant is something that 
could be done at a later date possibly.
    Ms. Rice. Why would you do it at a later date?
    Mr. Gibson. Could I suggest this ma'am?
    Ms. Rice. Okay.
    Mr. Gibson. What I'd like to do is come sit down with you 
and walk through, give you some examples of what a payment 
request looks like, what supports the payment request, how that 
is reviewed by the contracting officer who is independent of 
the project executive and give you some sense of how that 
process works.
    Ms. Rice. I would love that.
    Mr. Gibson. Okay.
    Ms. Rice. I would love that. But at the end of the day none 
of us, I mean, I don't think--I am not an accountant--and I 
think that a project like this, this size, if you talk--you 
know, as I was trying to make the point before, Mr. Secretary, 
this would never happen in the private sector because every 
penny is accounted for because they have shareholders or they 
have a, you know, board that they have to worry about making 
and--giving an explanation to. So I just thought we should 
think about maybe bringing in an outside forensic accountant to 
do a real deep dive on the expenditure of every dollar so that 
you can learn lessons going forward.
    Mr. Gibson. Let us walk you through how expenditures are 
documented really in the ordinary course.
    Ms. Rice. That would be great. Thank you very much.
    Thank you, Mr. Chairman.
    The Chairman. Ms. Titus.
    Ms. Titus. Thank you, Mr. Chairman. I would like to go back 
to the question I asked that was answered by Mr.--I'm sorry, 
Ms. Fiotes about the push back--the slippage of the timeline. I 
think you told me the construction wouldn't be finished this 
summer, but it won't be activated until next spring. Well, that 
doesn't do the veterans any good if it is not activated. They 
are not getting the service.
    But beside that point, I have got here in my hand, the 
activation timetable that you all gave us in April of 2014 and 
then the activation timeline you gave me in February of 2015, 
and this is what slipped, the activation timeline is what 
slipped, not the difference between construction and 
activation. And maybe I didn't make myself clear when I asked 
about that, but I have got it right here, so maybe you can get 
together with us afterwards and explain to us why the 
activation has slipped. So we can talk about that offline.
    Ms. Fiotes. I will look into that.
    Ms. Titus. Yes, thank you. So I have got it and we can look 
at it. Also I would like to ask--I have just learned, it has 
kind of come to my attention sitting here as we have listened 
to some of this ad nauseam, that the VA itself has estimated 
that the veteran population in the Denver area is expected to 
decline--decline--by 25 percent over the next 10 years. Now, we 
are going to be spending an extra billion dollars while that 
population is declining and we can't even get a bigger 
emergency room while the population is growing?
    Mr. Gibson. Yes, the veteran population isn't declining 25 
percent anywhere in America over the next 10 years.
    Ms. Titus. This is supposedly came out of a VA report that 
we have got a copy of.
    Mr. Gibson. The veteran population in general, as you look 
across the country, is in gradual decline. What you see that is 
counter to that is what's happening to increasing enrollments 
and increasing utilization of VA. I don't think I mentioned 
this point earlier, so if I did, forgive me.
    When I went back and looked, from 2009 to 2014 the number 
of patients that we are caring for, veterans that we are caring 
for, in the eastern Colorado healthcare system has increased 31 
percent, a 31 percent increase in patients in eastern Colorado 
in five years.
    So, yes, there is a decline, a very gradual decline, in the 
veteran population on a year-by-year basis. I don't know, in 
some submarkets it may be going the other way just because of 
demographic trends. But nowhere are we seeing a 25 percent 
decline in veteran population.
    Ms. Titus. Well, it seemed strange to me too, but it is in 
this report right here that we got, so maybe you can take a 
look at it and explain to us what this report means because it 
says very clearly in the VA report that the Denver population 
is declining.
    I don't know. I came in here thinking that I was just going 
to hold my nose and vote for this appropriation. But after 
listening to all this testimony, I have kind of come to the 
conclusion that this is just a billion dollar earmark for Mr. 
Coffman's district at the expense of veterans in Nevada and 
across the country.
    So unless we know specifically where this money is coming 
from, it is not coming out of our veterans' hide and that we 
put in some place some reforms, I am going to vote no on this.
    Mr. Gibson. We owe the committee a detailed spend plan on 
the--revised spend plan on the $5 billion. Yes, ma'am.
    Ms. Titus. Thank you. Mr. Chairman?
    The Chairman. Thank you very much, Members. I appreciate 
your attendance Mr. Secretary and don't give up. We want to 
work with you. We say it all the time. I have told Secretary 
McDonald the same thing. We have to get this right. There is no 
alternative. And I am not just talking about the Denver 
debacle. I am talking about many, many other issues.
    But I would go back to what Ms. Titus was just referring 
to. There is a graph, a table, that your folks have provided 
that shows a 25 percent decrease over the next two decades.
    Mr. Gibson. Yes, it is over 20 years.
    The Chairman. But it is still a 25 percent in----
    Mr. Gibson. It is, yes. That is in the veteran population. 
But the same chart you see the increase in enrollees that is 
happening during that same period of time. So again, the 
veteran population is declining everywhere. But what we see is 
the percentage increase in enrollees and those that are coming 
to VA for care. And that also is compounded by the fact that 
the veteran population is getting older. And so therefore, the 
care needs and more chronic conditions per veteran.
    The Chairman. Thank you very much, Members.
    [Whereupon, at 1:10 p.m., the subcommittee was adjourned.]

                                APPENDIX

             Prepared Statement of the Chairman Jeff Miller

    Good morning. The Committee will come to order.
    Welcome to today's Full Committee oversight hearing 
entitled, ``Denver VA Medical Center: Constructing a Way 
Forward.''
    I cannot imagine a better day to hold this hearing than 
today--tax day.
    As millions of Americans prepare to send their hard-earned 
taxpayer dollars to Washington by midnight tonight, we gather 
here to discuss the myriad of ways those dollars have been 
wasted by the Department of Veterans Affairs (VA) over the last 
several years in Aurora, Colorado.
    Discussions surrounding the construction of a replacement 
Denver VA Medical Center in Aurora date back to 1999.
    In the ensuing fifteen years, the project has been marked 
by failures, delays, and mismanagement that culminated in VA's 
recent announcement that an additional eight hundred and thirty 
million dollars [$830M] in funding and a total authorization of 
one point seven three billion dollars [$1.73B]--triple the 
original authorization--is needed by mid-May in order to 
continue progress on the project.
    As if that wasn't enough, VA recently informed the 
Committee that Denver has a significant space need of more than 
five hundred and fifty thousand [550K] gross square feet that 
is, ``above the space that will be provided in the new medical 
center.''
    To simplify all of that for you, the Denver project has 
been discussed for fifteen years, is a billion dollars over 
budget, several years behind schedule, and--on the day it 
opens--will apparently be too small.
    At a Full Committee hearing on Denver in January of this 
year, Congressman Roe stated that this project is a ``FUBAR on 
steroids.''
    I could not have said it better myself.
    But while Denver represents a historic construction 
catastrophe for the Department, it did not come without 
warning.
    Three years ago, this Committee held a series of hearings 
about the replacement medical center project in Orlando, 
Florida, that uncovered serious deficiencies with VA's major 
medical facility construction management and oversight.
    Admittedly, the problems in Orlando yesterday are different 
from the problems in Denver today.
    But, they should have signaled a light-bulb moment for the 
Department and served to usher in an era of improved VA 
leadership surrounding construction projects.
    Instead, VA failed to heed the Committee's calls for action 
then, allowing Denver to balloon into the billion dollar budget 
debacle it is now.
    Deputy Secretary Gibson agrees with me, noting in his 
prepared testimony that ``course correction opportunities were 
missed'' in this project.
    Yet, to add insult to injury, none of the VA executives 
involved have been held accountable.
    None.
    This is inexcusable.
    Glenn Haggstrom, a former VA construction executive who 
played a key leadership role in the Denver project, was 
recently allowed to retired.
    But make no mistake--failures of this magnitude represent 
systemic problems above and beyond the work of a single person 
and much more house cleaning and top-to-bottom reform is needed 
before we can even begin to consider whether VA is competent to 
manage a construction program.
    However, the question at hand remains--what do we do about 
Denver where, depending on who you ask, the project is either 
sixty-two percent complete, fifty percent complete, or forty 
percent complete?
    I have heard press reports over the last two days that 
indicate that VA is considering allocating a portion of the 
five billion dollars ($5B) provided for staffing and space in 
the Choice Act to the Denver project.
    Then--with no forewarning or comment--VA emailed Committee 
staffers at six-forty three (6:43) p.m. last night draft 
construction authorization language that would increase the 
authorization for the Denver project to one-point seven three 
billion dollars ($1.73B), amend the authorization to include a 
psychiatric residential rehabilitation treatment program, and 
allow unobligated Choice Act funds to be used to fund the 
completion of the Denver project.
    No supporting details were provided.
    We have received no official or unofficial word from VA 
about whether or not this is true.
    Last year, VA indicated that there were critical staffing 
and space shortages throughout the VA health care system that 
limited veteran access and required additional funding.
    I had then--and still have now--serious doubts about the 
need and justification for those dollars.
    Nevertheless, Congress provided emergency funding, per VA's 
request.
    With the language sent late yesterday evening, VA officials 
are communicating that they would now rather avoid identifying 
savings that undoubtedly exist in the Department's one-hundred 
and sixty three billion dollars budget ($163B)--the second 
largest in the Federal government--by instead utilizing money 
that they claimed just eight months ago was needed to increase 
access across the country.
    And all to complete a bloated construction project that 
includes a glass concourse that covers the length of three and 
half football fields and would now apparently also include a 
psychiatric residential rehabilitation treatment program that 
has never been discussed previously and is not listed on the 
reprogramming worksheet VA provided three weeks ago to support 
the need for additional funding..
    Over the last several weeks I have asked VA--via letters to 
the Secretary and pre-hearing questions for the record--to 
provide key demographic, workload, and cost-benefit data, 
identify potential alternatives, and locate possible funding 
sources within the Department's vast budget.
    I have also asked for meeting minutes from VA's 
Construction Review Council in order to learn who among VA 
senior leadership was aware of the problems in Denver yet 
failed to take advantage of the ``course correction'' 
opportunities that Deputy Secretary Gibson is going to testify 
about.
    The responses I have received have been either non-existent 
or inept for a project with cost overruns exceeding a billion 
dollars.
    Veterans across the country should be appalled that VA 
allowed this project to get so out of hand.
    I am appalled on their behalf.
    Forwarding a last minute proposal absent supporting detail 
or justification and simply stating, like the Department does 
in their prepared testimony, that ``VA takes full 
responsibility for the situation in Denver'' is not enough to 
convince me that VA leaders have done the necessary work to 
identify what went wrong and how to fix it.
    It may be that allocating a portion of Choice Act funding 
to complete the Denver project is the best option for moving 
forward.
    I am not closing the door on that possibility or on the 
proposal that VA sent last night.
    But, I cannot, in good conscience, advocate wasting hard-
earned taxpayer dollars by throwing good money after bad 
without receiving much more information from VA.

                                 

      Prepared Statement of Corrine Brown, Ranking Minority Member

    Thank you, Mr. Chairman.
    Today, we start the process of figuring out how to fix the 
mess in Denver.
    I know from painful experience with my Orlando facility 
what it means to wait for years for a facility to be completed 
and to open. I know what the veterans in Colorado are feeling 
waiting for their facility to open.
    There will be time another day to figure out who should be 
blamed. Today, we must focus on how we fix the mess we have.
    We have been told that VA will reach its authorization 
level next month. We have been told by VA that the only good 
option is to more than double this authorization level and come 
up with an additional $900 million in order to complete this 
project.
    Let me be clear--this Committee, at the end of the day, 
will take care of our veterans in Colorado like we take care of 
all of our veterans across the country.
    But in order to do this, and to make sure that actions we 
take in regards to Denver do not unduly harm veterans in other 
areas of our country, we must have an honest discussion as to 
what our options are, and a timeline of what we must do, as a 
Committee, and as Congress.
    I look forward to having this frank discussion today, and 
working with the VA and our veterans to fix this mess. What are 
all of our options?
    I also look forward to beginning to figure out how we make 
sure that this does not happen again, where veterans have to 
wait years and years for a promised facility and taxpayers are 
on the hook for hundreds of millions more than planned.
    Thank you Mr. Chairman, and I yield back the balance of my 
time.

                                 

               Prepared Statement Lloyd C. Caldwell, P.E.

    Mr. Chairman and Members of the Committee, thank you for 
the opportunity to appear before you again on behalf of 
Lieutenant General Thomas Bostick, Chief of Engineers. I 
provide leadership for execution of the U.S. Army Corps of 
Engineers (Corps) engineering and construction programs in 
support of the Department of Defense (DOD), other agencies of 
the Federal Government in the United States and around the 
globe.
    The Corps fully recognizes the importance of the service of 
members of the armed forces, the support of their families, and 
the service of our veterans, in sustaining the strength of our 
nation. We understand the vital link between the goals of their 
service and missions and the technical capabilities we provide, 
from consultation to delivery of infrastructure. As I have 
testified at prior Congressional hearings, the Corps has 
significant construction management capabilities and experience 
delivering medical facilities for our service members and 
veterans. Today, we have been asked by the Committee to testify 
on the subject of completing the construction of the Denver 
replacement medical center in Aurora, Colorado (Denver 
Hospital). My testimony will address actions we are taking in 
partnership with Department of Veterans Affairs (VA) to 
complete construction of the Denver Hospital--a unique 
undertaking--as well as other support.
    DOD's construction program utilizes designated Construction 
Agents, of which the Corps is one; who procure and execute 
design and construction of projects to deliver the Department's 
infrastructure requirements authorized by law. The Corps is 
also known for the Civil Works projects it executes for the 
Nation, and the Corps' capabilities are perhaps uniquely 
developed to fulfill both military and civil engineering 
responsibilities. Interagency collaboration is an important 
element of the Corps' work, and the Corps provides interagency 
support as a part of its service to the nation. The Economy Act 
(31 USC 1535) provides necessary authorities for the Corps to 
assist the VA with any construction requirements, from minor to 
major construction, to include completion of the Denver 
Hospital.
    In December 2014, the VA and the Corps entered into an 
Economy Act agreement to allow the Corps to assess the Denver 
Hospital construction project. Subsequent modifications to this 
agreement have provided funding and the authority to prepare 
for the award of a new Corps contract to complete the 
construction. We are currently working with VA to develop a new 
agreement that would allow the Corps to award the new contract 
and transition the construction agent responsibility to the 
Corps to manage the new contract. A team of technical experts 
has visited the site and reviewed the completed work and 
contract documents. The Corps is using teams of professionals, 
including from the Northwestern Division, Omaha District, 
Huntsville Engineering and Support Center, and Corps 
Headquarters to undertake the steps that will lead to award of 
the new construction contract as well as manage the contract 
through to completion. We have identified a preferred course 
for acquisition, issued a Notice of Intent to negotiate and 
award a sole source contract to Kiewit-Turner, and we have 
requested approval for the acquisition strategy. As we work 
towards a new contract award, we continue to assess the 
detailed requirements of this project and plans for completion 
with the VA, taking into account the fact that construction is 
still continuing under a separate VA contract with Kiewit-
Turner.
    The Corps provided a preliminary estimate for completing 
construction at Denver, which was one component of the 
increased authorization requirements reported to Congress by 
the VA. The VA combined the Corps' estimate with other VA costs 
for completing the project. The preliminary estimate was 
appropriate to inform the increased authorization requirements. 
Meanwhile, we are developing an independent estimate suitable 
for negotiation of the new contract.
    As the actions for a new Corps contract are proceeding, the 
Corps is also advising the VA on the management of the VA's 
interim construction contract with Kiewit-Turner. This approach 
continues progress on the project while the Corps prepares to 
assume construction agent responsibilities.
    While the Corps will assume a major role in the 
construction of the Denver Hospital, the VA, as the project's 
proponent, is still responsible for project requirements, 
resourcing and facility transition to full operations. By using 
our project delivery process, we are confident that the Corps, 
acting as Construction Agent, can complete construction of the 
Denver Hospital for VA and meet the needs of our veterans.
    There are currently three lines of effort associated with 
the Corps' support to the VA's major construction program, 
which includes completion of the Denver Hospital project as the 
construction agent. We are also undertaking a review to 
identify lessons learned from the Denver Hospital and three 
other major projects which may be used by VA to assess their 
organizational structure, processes and controls. In addition, 
we are engaging with VA leadership in discussion regarding the 
application of best practices and project execution in their 
program.
    In other efforts, we continue to provide assistance to VA 
to execute multiple minor construction and non-recurring 
maintenance projects for the Veteran Integrated Service 
Networks and the VA's National Cemetery Administration.
    Our relationship with VA is strong and is growing. We are 
committed to working with VA as Construction Agent to complete 
the Denver project and to continue our partnership and 
collaboration on future major medical construction projects and 
identify best business practices. We continue to be prepared to 
support the VA with its major capital program.
    Mr. Chairman, this concludes my statement. Thank you for 
allowing me to be here today to discuss the Corps' capabilities 
and our work to assist VA. I would be happy to answer any 
questions you or other Members may have.

               Prepared Statement of Mr. Sloan D. Gibson

    Good morning, Mr. Chairman and Members of the Committee. 
Thank you for the opportunity to update the Committee on the 
status of the construction of the replacement medical center in 
Denver. I am accompanied today by Ms. Stella Fiotes, Executive 
Director, and Mr. Dennis Milsten, Director of Operations, of 
the VA Office of Construction and Facilities Management.
    The Department's main priority regarding the Denver project 
is to complete the facility without further delay, and to do 
that while delivering the best possible value to taxpayers 
given the difficult circumstances. Our commitment to completing 
this project, which is intended to serve over 390,000 Colorado 
Veterans and their families, has never wavered, and current VA 
medical facilities and programs in the area continue to ensure 
that no Veterans or their families go unserved.

Background

    I think it is important to review the events that brought 
us to where we are today. I would like to highlight some key 
events that directly shaped the current status of the project.
    The replacement of the existing Denver VA Medical Center 
began as an idea between the University of Colorado and VA to 
construct a shared facility. The project went through a 
protracted development period that included a concept to build 
a shared facility with the Department of Defense. VA requested 
design funds in fiscal year (FY) 2004, with an estimated 
project budget of $328.5 million. In 2004, then VA Secretary 
Principi set forth the requirement for a stand-alone VA 
facility on the Fitzsimmons campus. VA developed a plan for a 
1.4 million square foot facility in 2006, then revised that 
plan to 945 thousand square feet, and subsequently requested 
appropriations for an $800 million project in 2010 with final 
funding being requested and received in 2012.
    VA retained the services of an architect engineer firm (AE) 
to complete a design with an Estimated Construction Cost at 
Award (ECCA) of $582 million. The original acquisition strategy 
for the project was to complete 100 percent design and then 
solicit construction proposals to build the project. This 
strategy was changed to use a different contract mechanism, 
known in the Industry as ``Early Contractor Involvement,'' to 
bring the contractor onboard early to participate in the 
design. This change in acquisition strategy, intended to 
expedite project delivery by overlapping early phases of 
construction with completion of the design, was a decisive 
moment in the life of the project. The timing and 
appropriateness of this specific delivery method underlie many 
of the ensuing issues with the management of the project. VA 
entered into a contract in August 2010 with Kiewit-Turner (KT) 
to perform design, constructability, and cost reviews. This 
contract also provided an option to award the construction of 
the facility to the contractor.
    At the time of the 2010 contract award, the design had 
progressed to a point that limited the opportunity for the 
contractor to influence the design and cost. The contractor 
provided pre-construction services and amid attempts at cost 
reconciliation with the designer, the contractor maintained 
that the project was over budget and could not be built for the 
established ECCA. The parties negotiated for a period of 
approximately six months to arrive at a construction contract 
price but differences remained. Feeling the need to finally get 
to construction award for the project, VA and the contractor 
executed an option on November 11, 2011, to build the 
replacement hospital, which became known as Supplemental 
Agreement 07 (SA-07). The total design was not 100 percent 
complete at the time; it was at what was deemed an ``enhanced 
design development or roughly 65% stage.'' SA-07 stated that VA 
would ensure that the design produced would meet the ECCA of 
$582.8 million and that the contractor, KT, would build the 
project at the firm target price of $604 million, which 
included pre-construction services and additional items. This 
was the next and probably most critical point in the project's 
evolution. VA's promise to ensure that the design produced met 
the ECCA became the centerpiece of diverging interpretation and 
conflicts between VA and the contractor. Course correction 
opportunities were missed because of the fundamentally 
different interpretation of SA-07, poor project and contract 
management, and the increasingly strained relationships among 
the parties.
    KT filed a complaint with the Civilian Board of Contract 
Appeals (CBCA) in July 2013 that further cemented the differing 
perspectives on the interpretation of the contract and 
ultimately the cost of the project. Despite the less-than-
optimal business environment during the year-and-a-half of 
litigation, construction quality and progress were maintained. 
In December 2014, VA was found in breach of contract for 
failure to provide a design that met the ECCA, and KT began to 
demobilize from the project site. VA entered into immediate 
negotiations with KT to stop the demobilization, recognizing 
the hospital was approximately 50 percent complete. 
Subsequently, VA entered into an interim agreement with KT to 
continue the project, and with the United States Army Corps of 
Engineers (USACE) to assess the project, and to manage all the 
pre-award activity related to the follow-on contract. VA 
intends to enter into a separate agreement with USACE to 
execute a new construction contract and to complete the 
facility once we have obtained the necessary authorization and 
funding.

Options and Costs for Completion of Project

    After the decision by the CBCA, VA identified two primary 
courses of action. The first was to allow KT to continue 
demobilizing and have VA assume maintenance of the site, update 
the construction contract documents, and re-compete the 
contract for the remaining work. The second option was to re-
establish a contractual relationship with KT for continued 
construction of the medical center. The option to re-compete 
the project represented a potential 18-to 22-month delay, 
involving closeout of the existing contract and development and 
award of a new contract to finish the job. While this work was 
ongoing, VA would also need to engage several contractors to 
maintain the site and preserve the work accomplished to date. 
In addition, VA would have to recognize the bidding climate for 
this project would not be advantageous, and a premium would be 
applied by subcontractors to cover perceived risk. These 
factors would have served to increase both the length of time 
to complete the project and its ultimate cost.
    The second option of retaining KT leveraged their current 
knowledge of the project, presence on the site, and existing 
relationships with subcontractors. It reduced delays that could 
have impacted construction warranties and provided the best 
option for protecting the existing construction. Finally, 
resuming work with KT put over 600 workers back on the job, and 
also best protected the significant investment already made in 
this project. In the days immediately following the 
demobilization, this option represented the clearest path to 
achieving the two main goals stated above. For this reason, it 
is the path that VA chose.
    On March 17, 2015, VA notified Congress that the total 
estimated cost for the Denver Replacement Medical Center 
project would be $1.73 billion. This is an authorization 
increase of $930 million to complete the project and requires 
additional funding of $830 million. The new authorization level 
reflects input from USACE on the required cost to complete the 
project. USACE has had access to all design documents and VA 
staff relative to the Denver project. The USACE team included 
subject matter experts in cost contracting, acquisition, 
construction management, design management, and cost 
engineering. The team also looked at the cost to administer the 
construction. USACE was provided access to all estimates of 
construction, cost paid to-date, and modifications executed. 
USACE also examined the original contract as well as the 
interim contract to assess cost and completion progress.
    USACE used all this information to form their assessment of 
the cost to complete the effort. Their estimate included a 
contingency and cost to manage the construction. USACE 
estimates a need for an additional $700 million following the 
close out of the original and interim contracts. USACE has 
established a June 2015 target to award a new contract for the 
completion effort.
    VA added the cost necessary to continue the interim 
contract through June 2015, additional funds for closing out 
the original contract and funds for completing the post-
traumatic stress disorder residential treatment facility. This 
totaled $130 million in addition to USACE's construction 
completion estimate. The money currently on the project of 
$899.8 million, plus the $700 million and the $130 million, 
drive the $1.73 billion estimate for the project. We look 
forward to working with Congress to identify additional funding 
sources to complete the Denver project.

Accountability

    VA established an Administrative Investigation Board to 
look at the actions and processes that resulted in the current 
situation and the employees responsible for those actions and 
decisions. At this juncture, while the investigation is 
ongoing, it is premature for VA to identify who may be subject 
to appropriate disciplinary action. VA intends to hold any 
individuals found to have acted negligently accountable for 
their actions. As previously discussed during the hearing in 
January 2015, USACE is also conducting a broader, detailed 
examination of VA's major construction program to identify gaps 
and improve management processes, structures, and controls in 
project oversight and delivery. We expect USACE to complete 
their review and report their findings in May 2015. In the 
interim, we changed the reporting structure within the 
Department so that the Office of Construction and Facilities 
Management reports directly to me to ensure continued 
visibility and accountability in real time.
    In addition to the review of the four large hospital 
projects by USACE, an independent third-party organization is 
conducting a comprehensive assessment of the entire VA 
construction program as part of the Choice Act legislation and 
will report their findings to Congress by September 2015.

The Future of VA Construction

    Over the past two years, VA has significantly changed the 
way it conducts business, but more work remains to be done. 
Unfortunately, many of these changes take time to show specific 
results, and were too late to affect the Denver project.
    To help ensure that previous challenges are not repeated 
and to lead improvements in the management and execution of our 
capital asset program as we move forward, VA will continue to 
adopt best-management practices and controls that focus on 
these lessons learned:

         Incorporating integrated master planning is 
        essential to ensure that the planned acquisition closes 
        the identified gaps in service and corrects facility 
        deficiencies.
         Requiring major medical construction projects 
        must achieve at least 35-percent design prior to cost 
        and schedule information being published and 
        construction funds requested.
         Implementing a deliberate requirements control 
        process, where major acquisition milestones are 
        identified to review scope and cost changes based on 
        the approved budget and scope. Any significant changes 
        in project scope or cost need to be approved by the 
        Secretary prior to submission to Congress.
         Institutionalizing a Project Review Board 
        (PRB). VA worked with USACE to establish a PRB for VA 
        that is similar to the structure at the USACE District 
        Offices. The PRB regularly provides management with 
        metrics and insight to indicate if/when a project 
        requires executive input or guidance.
         Using a Project Management Plan to outline a 
        plan for accomplishing the acquisition from planning to 
        activation to ensure clear communication throughout the 
        project.
         Establishing of VA Activation Office to ensure 
        the integration of the facility activation into the 
        construction process for timely facility openings.
         Conducting pre-construction reviews--Major 
        construction projects must undergo a 
        ``constructability'' review by a private construction 
        management firm to evaluate design and engineering 
        factors that facilitate ease of construction and ensure 
        project value.
         Planners into the construction project teams--
        Each major construction project will employ medical 
        equipment planners on the project team from concept 
        design through activation.

    These improvements are being applied to our ongoing and 
upcoming major construction projects. Depending on the stage of 
development, some projects like the Denver Replacement Medical 
Center did not have the full advantage of these improvements.
    In the past five years, VA has delivered 75 major 
construction projects valued at over $3 billion that include 
the new medical center complex in Las Vegas; cemeteries; 
polytrauma rehabilitation centers; spinal cord injury centers; 
a blind rehabilitation center; and community living centers. 
The New Orleans replacement facility is currently on schedule, 
and is anticipated to be completed in the fall of 2016. This is 
not to diminish our serious concerns over the mistakes that led 
to the current situation on the Denver project, but only to 
emphasize that we have successfully managed numerous projects 
through our major construction program. VA takes full 
responsibility for the situation in Denver, and we will 
continue to review our major construction program and the 
details of this project to improve our performance.
    In closing, each day, VA is moving toward its goal of 
improving and streamlining our processes to increase access to 
our Veterans and their families. I am personally committed to 
doing what is right for Colorado veterans, and completing the 
Denver project without further delay and to do that while 
delivering the best possible value to taxpayers given the 
difficult circumstances.
    Mr. Chairman, this concludes my statement. Thank you for 
the opportunity to testify before the Committee today. My 
colleagues and I would be pleased to respond to questions from 
you and Members of the Committee.

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