[House Hearing, 115 Congress]
[From the U.S. Government Publishing Office]




 THE DENVER REPLACEMENT MEDICAL CENTER: LIGHT AT THE END OF THE TUNNEL?

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

                                HEARING

                               before the

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

                     ONE HUNDRED FIFTEENTH CONGRESS

                             SECOND SESSION

                               __________

                      WEDNESDAY, JANUARY 17, 2018

                               __________

                           Serial No. 115-44

                               __________

       Printed for the use of the Committee on Veterans' Affairs
       
       
       
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                 U.S. GOVERNMENT PUBLISHING OFFICE
                
35-372                     WASHINGTON: 2019




         
                     COMMITTEE ON VETERANS' AFFAIRS

                   DAVID P. ROE, Tennessee, Chairman

GUS M. BILIRAKIS, Florida, Vice-     TIM WALZ, Minnesota, Ranking 
    Chairman                             Member
MIKE COFFMAN, Colorado               MARK TAKANO, California
BRAD R. WENSTRUP, Ohio               JULIA BROWNLEY, California
AMATA COLEMAN RADEWAGEN, American    ANN M. KUSTER, New Hampshire
    Samoa                            BETO O'ROURKE, Texas
MIKE BOST, Illinois                  KATHLEEN RICE, New York
BRUCE POLIQUIN, Maine                J. LUIS CORREA, California
NEAL DUNN, Florida                   KILILI SABLAN, Northern Mariana 
JODEY ARRINGTON, Texas                   Islands
JOHN RUTHERFORD, Florida             ELIZABETH ESTY, Connecticut
CLAY HIGGINS, Louisiana              SCOTT PETERS, California
JACK BERGMAN, Michigan
JIM BANKS, Indiana
JENNIFFER GONZALEZ-COLON, Puerto 
    Rico
                       Jon Towers, Staff Director
                 Ray Kelley, Democratic Staff Director

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                            C O N T E N T S

                              ----------                              

                      Wednesday, January 17, 2018

                                                                   Page

The Denver Replacement Medical Center: Light At The End Of The 
  Tunnel?........................................................     1

                           OPENING STATEMENTS

Honorable David P. Roe, Chairman.................................     1
Honorable Timothy J. Walz, Ranking Member........................     3

                               WITNESSES

Ms. Stella Fiotes, AIA, Acting Principal Executive Director, 
  Office of Acquisition, Logistics, and Construction, U.S. 
  Department of Veterans Affairs.................................     4
    Prepared Statement...........................................    39

        Accompanied by:

    Mr. Dennis Milsten, Associate Executive Director, Office of 
        Construction and Facilities Management, U.S. Department 
        of Veterans Affairs

    Mr. Ralph Gigliotti, FACHE, Network Director, VISN 19, 
        Veterans Health Administration, U.S. Department of 
        Veterans Affairs
Mr. Lloyd Caldwell, Director of Military Programs, U.S. Army 
  Corps of Engineers.............................................     5
    Prepared Statement...........................................    41
Mr. Andrew Von Ah, Director, Physical Infrastructure Team, U.S. 
  Government Accountability Office...............................     7
    Prepared Statement...........................................    42

                       STATEMENTS FOR THE RECORD

Patrick Murray, Associate Director, National Legislative 
  Service,Veterans Of Foreign Wars Of The United States..........    48
  
  
  
  

 THE DENVER REPLACEMENT MEDICAL CENTER: LIGHT AT THE END OF THE TUNNEL?

                              ----------                              


                      Wednesday, January 17, 2018

            Committee on Veterans' Affairs,
                    U. S. House of Representatives,
                                                   Washington, D.C.
    The Committee met, pursuant to notice, at 10:00 a.m., in 
Room 334, Cannon House Office Building, Hon. David P. Roe 
[Chairman of the Committee] presiding.
    Present: Representatives Roe, Bilirakis, Coffman, Wenstrup, 
Radewagen, Bost, Poliquin, Arrington, Higgins, Bergman, 
Gonzalez-Colon, Walz, Takano, Brownley, Kuster, Rice, Sablan, 
Esty, and Peters.

          OPENING STATEMENT OF DAVID P. ROE, CHAIRMAN

    The Chairman. Good morning and welcome to the one-half inch 
Washington blizzard this morning. Everybody trudged through the 
one-half inch of snow to get here this morning. The meeting 
will come to order. I want to welcome everyone to today's 
hearing, which is the seventh this Committee has held examining 
the construction of the new Rocky Mountain Regional Medical 
Center in Aurora, Colorado.
    The road to completing this hospital has been extremely 
long and bumpy. The groundbreaking ceremony was held in 2009. 
All told, the price tag is at least $2 billion. This situation 
must never happen again. But the finish line is near. Mr. 
Coffman, Mr. Congressman Perlmutter, and myself toured the 
medical center last week to see personally about this. Today we 
are here to discuss how near and take a close look at the 
facility that has been produced.
    The construction debacle changed the way VA builds 
hospitals. In 2015 Congress mandated that another expert agency 
take over management of all VA super construction projects, 
which is everything over $100 million. That agency is the Army 
Corps of Engineers. All available evidence suggests this was 
the right decision. In just over two years, the Army Corps has 
guided the project from less than 60 percent complete and mired 
in contractor disputes to 98 percent complete. VA has accepted 
all but one of the buildings, the diagnostic and treatment 
center. But the end of construction is merely the beginning of 
VA's activation effort.
    Activation is never easy and unfortunately in this 
hospital's activation the team must continue to correct design 
and construction errors. The design of this facility began over 
ten years ago. It has already been well established how 
architectural novel and extravagance drove up this construction 
cost. In addition to that, so much time has elapsed that the 
practice of medicine, building codes, and intended uses for the 
spaces have changed. It is deeply troubling that this new 
Aurora Medical Center doubles the square footage of the 
existing Denver Medical Center, but includes the same number of 
beds and actually reduces primary care capacity.
    There are also hundreds of errors individually but small 
which add up to a significant problem that must be corrected. 
Things like sink in an operating room, surfaces that can't be 
cleaned, inadequate air conditioning systems, voltage problems, 
and an entire data center that must be rearranged. There are 
also mistakes to be fixed at the end of the construction job, 
but I have to wonder whether the clinicians who will treat 
veterans in this facility have ever scrutinized its 
specifications.
    Even after the new medical center opens, VA must continue 
operating the old medical center because presently some of the 
primary care doctors and the PTSD residential rehabilitation 
facility have nowhere else to go. When Congress authorized this 
project and continued to authorize it through all its 
struggles, having two major VA hospitals six miles apart was 
never part of the deal. The local leadership expressed their 
commitment to closing down the old facility as soon as possible 
and recouping as much money for the taxpayers from the assets 
as they can. This Committee is going to make sure that that 
happens.
    H.R. 4243, the VA Asset and Infrastructure Review Act, 
which we reported out of Committee in November, would give the 
VA the tools it needs to expedite building a new PTSD rehab 
facility on the Aurora campus and cut through bureaucratic 
hurdles to dispose of the Denver campus. And I can tell you 
after visiting out there last week, this particular facility is 
a poster child for why we need VA asset review. If any of you 
all had any doubt about that, please make the trip to Denver 
and look. And it will absolutely reassure, it will make, give 
you peace, it did me, to know that we need to do this.
    Now is the time to add up what has been gained and lost in 
this experience. VA added a state of the art spinal cord injury 
treatment center. And I do want to mention, this truly is a 
state of the art. That was one of the most impressive parts of 
my trip, was this new spinal cord treatment center. It is 
going, there could not be a better one, I think, in the world 
maybe. And I know that the PVA, the Disabled Veterans, looked 
at this, helped design it, which I thought was really smart. 
And I want to commend the VA for this. And I think once it is 
implemented it will be really a state of the art facility for 
our injured veterans.
    Also the new imaging capabilities, amenities for patients, 
and a modern facility for the burgeoning veteran population's 
decades into the future.
    On the other side of the ledger, VA lost a significant 
amount of primary care space and must continue correcting 
defects potentially up to the day the doors open. And of 
course, successive groups of VA managers have spent a mind-
boggling amount of taxpayer money. That being said, I now yield 
to Ranking Member Walz for his opening comments.

      OPENING STATEMENT OF TIMOTHY J. WALZ, RANKING MEMBER

    Mr. Walz. Well thank you, Chairman Roe, and thank you all 
for being with us. We were just discussing earlier that I am 
entering my twelfth year in Congress and have the most amount 
of time here along with Chairman Roe. This project was approved 
before we got here. It has been here my entire congressional 
career. I mentioned it is older than my son Gus, who is 11. So 
again, with all due seriousness on this, we know, and again 
knowing what went wrong here, and the number of hearings we 
held here, some of them in prime time, over this issue, our 
responsibility of those of us sitting here now is about the 
lessons learned. And I would argue under Chairman Roe's 
leadership, and Mr. Coffman, and others, the way we have 
approached this has changed. The hand of Congress exercising 
its oversight authority has been much more present. It has been 
much more forceful. And for that, Mr. Chairman, I thank you. 
This is about fixing problems, not just complaining that they 
were there. And so I am grateful.
    We have been waiting over 15 years for this replacement 
hospital. Now it finally appears Colorado veterans will have 
the state of the art facility that they deserve. We are all 
intimately familiar, as I said, with the history of project 
schedule overruns. It is important we apply these lessons we 
have learned from this project and apply them to the Army 
Corps' model for project management to future VA super 
construction projects.
    Now that the facility will turned over to VA this month for 
activation, VA needs to ensure it is able to adhere to the 
activation schedule so veterans can start receiving care at 
their new facility later this summer. Today I hope we get 
assurances from VA that the staff and resources are there to 
open on time. I want VA to ensure it is working closely with 
the Army Corps to complete construction. My greatest concern is 
whether VA has the infrastructure in place to meet the needs of 
veterans in Colorado and its neighboring states. We know the 
veterans receiving their care at the Denver Medical Center 
experience some of the longest wait times in the country. Due 
to the significant cost overruns for this project, the much 
needed PTS residential treatment facility was not constructed 
and additional funds will be needed to build this facility on 
the Aurora campus. Seven primary care teams will continue to 
operate out of the existing Denver facility, along with the 
community living center for the next three years.
    Solutions are needed to address these significant 
infrastructure and capacity needs so that veterans do not 
continue to wait for their care. I hope the VA has come to 
prepared to discuss solutions today, prepared to work with 
Congress, the State of Colorado, and the City of Denver to 
address those needs.
    Thank you, Chairman Roe, for your leadership, and I yield 
back.
    The Chairman. I thank the gentleman for yielding. Now I 
would like to welcome our panel who are seated at the witness 
table. On our panel we have Ms. Stella Fiotes, Acting Principal 
Executive Director of the VA Office of Acquisition, Logistics, 
and Construction. She is accompanied today by Mr. Dennis 
Milsten, Director of Operations for the VA Office of 
Construction and Facilities Management. Ms. Fiotes is also 
accompanied by Mr. Ralph Gigliotti. And I would like to mention 
that when I picked up my rental car in Denver, this young man 
who rented me my car said, ``I think you are going to see my 
dad tomorrow.'' That would be Mr. Gigliotti, which tells you it 
is a very small world, Director of Veterans Integrated Service 
Network 19, which covers Colorado and neighboring states. We 
also have Mr. Lloyd Caldwell, the Director of Military Programs 
for the United States Army Corps of Engineers, and thank you 
for being here. And finally we have Mr. Andrew Von Ah, Director 
of Physical Infrastructure for the Government Accountability 
Office. I will ask your witnesses to raise your right hand.
    [Witnesses sworn.]
    The Chairman. Thank you. And let the record reflect that 
all witnesses have answered in the affirmative. Ms. Fiotes, you 
are recognized now for five minutes for your testimony.

                   STATEMENT OF STELLA FIOTES

    Ms. Fiotes. Thank you. Good morning, Mr. Chairman, and 
Members of the Committee. Thank you for the opportunity to 
update this Committee on the status of the construction of the 
new Rocky Mountain Regional VA Medical Center in Aurora. I am 
accompanied today by Mr. Dennis Milsten and Mr. Ralph 
Gigliotti.
    We are pleased that this facility will enable us to serve 
over 390,000 Colorado veterans and their families as we work to 
ensure that local veterans receive the VA services that they 
have earned and deserve. Upon opening, the Rocky Mountain 
Regional VA Medical Center will provide the same robust range 
of tertiary health care services that currently are available 
at the Denver VA Medical Center, with the addition of 
mammography and PET CT to its imaging services. The exception 
is the Post Traumatic Stress Disorder residential 
rehabilitation treatment program and seven patient aligned care 
teams that are currently slated to remain in the old facility. 
We are working, however, on options that will allow their 
relocation off the existing campus as quickly as possible to 
allow for ultimate closure and disposition of the old facility.
    The Rocky Mountain facility is also proud to be the latest 
spinal cord injury and disorder center within the VA system. 
This center will serve populations in Colorado, Utah, Wyoming, 
and parts of Nebraska and South Dakota. The SCI center will 
include both an outpatient clinic and inpatient unit, offering 
comprehensive multidisciplinary care for patients with spinal 
cord injury, multiple sclerosis, and amyotrophic lateral 
sclerosis.
    Lastly, the new facility will provide a much more up to 
date and positive veteran and family experience. This includes 
private rooms for patients with their bathrooms as well as 
space for family members to stay overnight, an intensive care 
unit with an 800-square foot waiting room suite, and all 
interventional services such as surgery and radiology to be 
located adjacent to pre-operative and post-operative beds to 
improve the coordination of care and efficiency of service 
delivery.
    I am pleased to tell you that the construction contract 
with Kiewit-Turner is 98 percent complete and 11 of the 12 
structures have been turned over for activation. VA and the 
United States Army Corps of Engineers are currently working 
through contract completion items and actively working with the 
contractor to bring this contract to an end as swiftly as 
possible. Activation activities are ongoing and the facility 
will open to serve local veterans in August 2018.
    The current activation schedule has the majority of 
installation, calibration, and testing of newly procured 
equipment being completed in May. This will enable the Denver 
Medical Center staff to complete over 40,000 staff hours of 
education, training, and orientation in late July. VA's current 
activation budget of $341 million provides sufficient funding 
to service the opening of this facility.
    During the Corps' construction management of the project, 
the contractor proposed to concentrate labor on completing and 
turning over the campus to VA building by building rather than 
a longer process of delivering it in full by the contract 
completion date of January 2018, which saved a substantial 
amount in KT overhead costs. KT is the contractor. 
Additionally, the Corps will not incur the estimated staffing 
costs they budgeted for the project and will be returning 
approximately $10 million of unused funds to VA.
    VA has worked diligently to improve the management and 
oversight of our major construction program by partnering with 
the Corps and incorporating lessons learned to ensure that the 
challenges faced on this project will not happen again. I'm 
here to tell you that VA today is doing business very 
differently than in the past. We are rethinking everything 
about how we will modernize our infrastructure to find ways to 
deliver much needed facilities smarter, faster, and at 
significantly less cost. Just one example is a recent project 
in Omaha, Nebraska where we have partnered with private donors 
and entities to deliver an ambulatory care center for our 
veterans in half the time and 30 percent cheaper than our 
traditional way of doing business. We are also looking at the 
next major projects to see how we can find smarter solutions, 
speed their delivery for veterans' use, and lessen the cost to 
taxpayers.
    In closing, VA is thankful for the work this and other 
Congressional Committees have done to help VA navigate the 
challenges this project has posed and for securing the funding 
necessary for its planned completion. VA remains committed to 
ensuring the project provides a facility where veterans will 
receive the best 21st Century health care in a manner where the 
department, Congress, veteran's service organizations, and 
local stakeholders work together for the benefit of our 
Nation's veterans.
    Mr. Chairman, this concludes my statement. Thank you for 
the opportunity to testify before the Committee. My colleagues 
and I would be pleased to answer questions from you and Members 
of the Committee.

    [The prepared statement of Stella Fiotes appears in the 
Appendix]

    The Chairman. Thank you for your testimony. Mr. Caldwell, 
you are now recognized for five minutes.

                  STATEMENT OF LLOYD CALDWELL

    Mr. Caldwell. Mr. Chairman and Members of the Committee, 
thank you for the opportunity to appear before you on behalf of 
Lieutenant General Todd Semonite, the Chief of Engineers. I 
provide leadership for the execution of the U.S. Army Corps of 
Engineers engineering and construction programs in support of 
the Department of Defense and other agencies of the Federal 
government.
    Today we have been asked by the Committee to testify on the 
subject of the Denver replacement medical center in Aurora, 
including the Corps' accounting of construction costs known to 
date and ancillary construction activities. In addition, I will 
provide information pertaining to the Corps' lessons learned.
    While the Corps has the lead in construction execution of 
the Denver hospital, the VA remains responsible for project 
requirements, resourcing, and facility transition to full 
operations. In December of 2014, the VA and the Corps entered 
into an Economy Act agreement to allow the Corps to assess the 
Denver hospital project. Subsequent modifications to that 
agreement and a new agreement provided the Corps the funding 
and the authority to transition the project's construction 
agent responsibility to the Corps. During construction the 
Corps and the VA have collaborated well, and have collaborated 
with the staff of the House Veterans Affairs Committee to 
provide transparency of the completion status, ongoing 
activities, changes, and expenditures associated with the 
project. Additionally, VA and the Corps have provided quarterly 
briefings to the Committee staff on the project's completion 
status.
    Our contract provided a target value for completion of the 
project of $570.75 million, including in addition to that, we 
have a contingency for unforeseen conditions which we held in 
the amount of a little over $14 million, for a total estimated 
construction value of $585 million. With the construction now 
98 percent complete, our current estimate anticipates that upon 
final completion we will have expended about $555 million for 
the construction, resulting in about $30 million being returned 
to the VA. Additionally we anticipate returning $10 million 
from the government and contract oversight and audit costs that 
we had estimated. This will result in a total of approximately 
$40 million being returned to the VA from the original $625 
million which was provided to the Corps for the project. The 
construction is on schedule for substantial completion of all 
buildings this month.
    There will remain ancillary construction activities for the 
project which fall in two categories. One is punch list items 
and the other is modifications to address current medical 
facility requirements. Punch list requirements are routine with 
any construction requirement. They involve typically minor work 
remaining for construction or completion that the contractor 
must finalize to be in full compliance with the contract. These 
punch list items should not delay the occupancy and use of the 
facility.
    The second category typically involves emergent 
requirements which are necessary to ensure the new facility 
complies with current codes and practices that may have evolved 
over the course of construction. These emergent requirements 
will be a contract action separate from the Kiewit-Turner 
contract. We anticipate completing these requirements using the 
same government team currently on the project but with a new 
contract. We are currently targeting to have this work 
completed by the summer of 2018. We made the decision to 
address these emergent medical requirements by a new contract 
since this course of action requires clarity and transparency 
to completion of the project and ensures finality in completion 
of the larger contract. The decision allows the current 
contract to concentrate on completing their contract 
requirements.
    As part of our process, we review our project execution to 
identify lessons learned. While this project is not complete we 
have been recording lessons learned. One significant lesson 
learned is the value of consistent senior executive review of 
the project. The senior executive review group for this project 
is comprised of senior leaders from the VA, the contractor, and 
the Corps. This group met regularly on the project to provide 
guidance. This commitment at the senior levels of all 
stakeholders helped to ensure that the entire team remained 
focused on the success of the project and achieving our 
collective goals. At the completion of the project the final 
package of lessons learned will be formally documented and 
published.
    We are pleased to be nearing completion of the project and 
believe that the completion of the hospital will be a great 
source of value to the veterans in the region. Mr. Chairman, 
this concludes my statement. Thank you for allowing me to be 
here today to discuss the work and I'll be happy to answer any 
questions.

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

    The Chairman. Thank you, Mr. Caldwell. Mr. Von Ah, you are 
now recognized for five minutes.

                   STATEMENT OF ANDREW VON AH

    Mr. Von Ah. Chairman Roe, Ranking Member Walz, and Members 
of the Committee, thank you for the opportunity to discuss our 
March 2017 report on VA major construction projects which 
reviewed the Denver Medical Center project among others. We 
have previously reported and testified on VA's struggles in 
managing the Denver project. The project's substantial cost 
increases and schedule delays are well known to this Committee 
and the audience here today.
    While the Army Corps of Engineers has an agreement with VA 
to oversee completion of major construction of the Denver 
project, which is scheduled to finish this month, VA is 
responsible for activation, which is the process of bringing a 
facility into full operation. Activation is scheduled to 
continue through this summer. My remarks today are based on our 
2017 report, which highlighted several opportunities for 
improvement in VA's management of these projects, particularly 
with respect to activation, and follow up on our 
recommendations from July 2017 to January of 2018.
    In our 2017 report we made two recommendations related to 
activation of the VA facility, rather the Denver facility, that 
VA, one, deliver a reliable activation cost estimate for the 
Denver project; and two, clarify policies on integrating 
construction and activation activities. VA agreed with these 
recommendations and has been taking steps to implement them.
    First with respect to activation cost estimates, we found 
in 2017 that VA had minimal documentation supporting its 
estimate of the cost of activation for the Denver project, 
which we therefore found to be unreliable. The most recent 
estimate we received for the Denver facility is $341 million. 
With minimal documentation, we recommended that VA develop and 
document an activation cost estimate for the project that is 
reliable and conforms to best practices as described in GAO's 
Cost Estimating and Assessment Guide. The lack of a reliable 
estimate can make it difficult for VA to manage its budget and 
also poses difficulties for Congress which relies on it to make 
appropriations decisions.
    In July 2017 VA provided us with new documentation on its 
estimate. We analyzed this information and found that it did 
not meet best practices. Of the four characteristics of a 
reliable cost estimate, Denver's activation estimate partially 
met two and only minimally met two others. Specifically we 
found that it's unclear how VA is developing a good picture of 
the estimate's sensitivity to risk. A sensitivity analysis is 
important so decision-makers have an idea of how close to the 
point estimate they can expect the project to be. VA has 
provided comments on our assessment concurring with some of it 
and identifying additional information for us to consider. 
While VA has made improvements in its documentation of the 
estimate since our report, such as documenting discussions with 
management and including more detailed information, we still 
cannot find that the current estimate meets the characteristics 
of a reliable estimate.VA officials also indicated they are 
taking steps, such as developing training and providing GAO's 
Cost Estimating Guide to staff in an effort to improve 
activation estimates going forward.
    With respect to the activation schedule, we found in 2017 
that VA's policies were not clear or consistent on how to link 
construction and activation schedules to form an integrated 
master schedule for the entire project. For the Denver project, 
in part because of the lack of clarity and consistency in 
policy, we found that certain activities and milestones in 
these schedules were not aligned with each other. For example, 
we found three different dates for the same milestone in the 
existing schedules in March of 2017.
    In response to our recommendation VA has clarified its 
policy documents, which we have reviewed and verified, and 
reinforced that all projects develop and maintain an integrated 
master schedule that includes and links all construction and 
activation activities. Moreover, VA officials indicated that 
they have worked with the Corps to resolve inconsistencies in 
linking construction and activation activities for the Denver 
Medical Center. This and other actions VA is taking with 
respect to cost estimating, as well as tracking change orders, 
if fully implemented should improve VA's ability to manage its 
projects going forward.
    Mr. Chairman, this concludes my oral statement. I'd be 
happy to address any questions you or Members of the Committee 
may have. Thank you.

    [The prepared statement of Andrew Von Ah appears in the 
Appendix]

    The Chairman. Thank you for your testimony. And I will now 
recognize myself to begin the questioning. And I want to start 
by saying that I think there is a dedicated group of, there are 
a dedicated group of people in Denver, Colorado who are mission 
focused on getting this hospital open and providing this 
incredible new facility for our veterans out there. We met 
with, Mr. Coffman and I met with, and Mr. Perlmutter, with the 
Chief of Staff, with the Chief of Nursing, with the VISN 
Director, with the Chief of Surgery, Chief of Nursing. And just 
to give you an idea of how these folks are already thinking, 
this building is laid out a little different than any hospital 
I have ever seen. It is 1,100 feet long. So I would recommend, 
Mr. Coffman, that you donate some Nikes, or New Balance, I am 
sorry, from your district for people to walk in. And just to 
give you an idea that the Chief of Nursing and the physicians 
and the nurses had already started thinking, we are going to 
have to use, our Code Blue is going to have to be different 
because it is so far to get from one end of it to another. They 
will have to have a different way to do Code Blue. So they are 
already thinking ahead about how they provide quality care for 
our veterans.
    When you look at the facility, and I just want to go over 
this very quickly before I ask any questions, when this 
facility was laid out, what we got was this, a facility that is 
1.2 million square feet as opposed to 600,000 square feet of 
the previous facility. We got four more ICU beds. We got less, 
nine less medical beds, the same rehab beds, less psychiatric 
beds, of which we need more of and a facility, a psychiatric 
facility that is going to have to be modified because of design 
errors that are there. They did add the spinal cord injury, 
which I have already talked about. PTSD, which we know is a 
critical part of the VA's mission, was not even included in 
this. The VA had to buy an additional building for 
administrative offices. In this 1.2 million square feet there 
were no administrative offices, or at least none that I saw. 
And primary care rooms, where we examine patients, went from 60 
to 34. So we actually lost primary care, which is where our 
care is being given. It actually may be and our PAC teams are 
going to have to stay at the old facility, with an aging 
boiler. So we are going to have to keep the facility open. It 
will not be three years. It will be more like five years, I can 
tell you, before you can design and build other facilities. 
That is the minimum amount of time you are going to have to 
keep it open. And if it does stay open, there is an estimate 
that there would be $350 million worth of work that would have 
to be done to a campus that you are going to get rid of. Now 
that, none of this makes a lot of sense.
    So I bring that up just to sort of give you a CliffsNotes 
version of where we are. And Ms. Fiotes, I appreciate you and 
Mr. Milsten coming out to Colorado to tour the new medical 
center with us. And how do you assess what is good and what is 
problematic about the Aurora facility's design? And what do you 
attribute, and to what do you attribute the problems?
    Ms. Fiotes. Thank you for the question, Congressman. I 
think that the design, we can all agree, was probably more 
complex than it needed to be. The design was prepared a long 
time ago. Requirements have evolved over time and that probably 
is part of the reason that the capacities are smaller right 
now, including in the primary care, patient aligned care teams, 
which were not in existence when the building was originally 
designed. They were introduced later and because of the 
additional space that they take have actually reduced the 
capacity of the new clinical space in comparison to the old 
facility.
    So going forward we have learned much from this design that 
we would not replicate in any future designs. I believe a more 
compact design would have resulted in a more efficient, 
functional hospital and probably at a lesser cost.
    The Chairman. Thank you. Mr. Gigliotti, does the new 
facility meet all of your needs and your employees' needs?
    Mr. Gigliotti. The new facility is short, as you stated, on 
primary care space. So there will be seven primary care teams 
that will be left behind at the current facility. We are 
actively identifying, working with a brand new Loveland, 
Colorado community based outpatient clinic that opens up this 
April. We're looking at expanding the footprint in Aurora for a 
community based outpatient clinic that we already have there. 
And then we're looking at adding another community based 
outpatient clinic in the metro area. We're also working closely 
with the Veterans Benefits Office. We have comp and pen in our 
CBOCs in Colorado Springs and Golden, and we're looking to work 
with them to take comp and pen out of those clinics so that we 
can have more room for PAC teams so that those seven teams can 
go into the community and that we could dispose of the building 
quickly.
    The Chairman. Well my time is expired. But I do, would like 
to say that if we do the asset review, you will be able to take 
those assets, and there are, they are going to be a lot when 
you add that VA property, and reinvest that back into VA. I 
think that makes a lot of sense. Mr. Walz, you are recognized.
    Mr. Walz. Well, thank you. And I would like to reiterate, I 
agree with the Chairman on the asset review piece and I think 
it does give us opportunities. There's obviously some 
differences of how we get there. But this is a highlight of why 
that should be.
    I would say, Mr. Caldwell, to you, we were looking back, as 
early as 2010 I think Chairman Miller, myself, and some of us 
who were here at that time, Chairman Roe, were advocating that 
your involvement was needed. That you are construction people 
as opposed to VA. So I am grateful you are there. But once your 
original construction with K-T is complete, as we heard there 
is final contracts with another contractor to, just those 
remaining items such as code upgrades. Will this impact the 
cost of construction and the schedule for opening the facility?
    Mr. Caldwell. So there is obviously a cost associated with 
that new contract. I can, we are in the process of developing 
that cost estimate. I can tell you we think it's in the order 
of, let's say, between $5 million and $10 million for that 
contract. But it will not delay the opening of the facility. 
The plan is to have that contract awarded within the next 
couple of months, have them working in April, and have them 
completing by the end of June or early July. So we believe it 
will support the opening of the hospital.
    Mr. Walz. Very good. Thank you. And I would like to take a 
minute now, I am going to ask the next question based on some 
things in the Denver Post. If any of us needs a reminder of the 
importance of a free and professional press in this country, 
the service that was done to our veterans and to taxpayers of 
Colorado, and to this country, by the folks at the Denver Post, 
I would like to highlight Daniel Brenner and Mark Matthews' 
work in that. We followed that here, and those are things that 
came up, and the partnership in helping us get that has been 
incredibly important. And this week they indicated trying to, 
and they are right to ask these questions, the hiring of staff 
at the medical center, and do you have sufficient staff for the 
medical center to open? Are there challenges with the tight 
labor market? And give us the timeframe on that of making sure 
that those FTEs are in place when we go?
    Mr. Gigliotti. So we are on target for the opening this 
summer. We have 421 FTE to be hired for the new project. We've 
already hired 257. 118 positions still to be hired support the 
spinal cord injury center that was referenced earlier. That 
will not open until 180 to 200 days after the opening of the 
facility and that's in concert with the PVA. They want to make 
sure the hospital is up and running and seamless and working 
well and then we will open up the spinal cord injury center 
approximately six months after that.
    So Denver is a difficult labor market. Unemployment rates 
are around three percent, which is very low. But we are making 
excellent progress. We are confident that we will be able to 
meet the staffing needs. But if for any, anything arises that 
we are not able to, we have other tools available, contracts 
and other types of staffing, until we're able to actually hire. 
But we are confident we'll meet the staffing needs to open up 
by August.
    Mr. Walz. We have had a lot of hearings in here and talked 
about some of the burdens to be being able to quickly hire 
folks, some of the problems that are there. Are you 
experiencing just the usual bureaucratic hurdles, if you will?
    Mr. Gigliotti. I would summarize it that way, yes sir.
    Mr. Walz. Maybe when we are done with this those are maybe 
some lessons learned on what we can do here with what you are 
doing to help us with that. This to Mr. Von Ah, what progress 
has VA made in addressing GAO's recommendation on activation 
cost estimates? Because if there is anything here, we are 
pretty browbeat by projected estimates and then coming back to 
us over and over and over. And I just want to make sure that it 
appears like there could be some pitfalls here that get us into 
that same thing.
    Mr. Von Ah. Absolutely. Thank you for the question, 
Congressman. VA has taken a number of steps. I would 
characterize it as early steps in the process of building the 
capacity to do good cost estimation for activation. There's 
training that's been talked about. They've provided the Cost 
Estimating Guide that GAO has developed to their staff in an 
effort to get people up to speed on how to do good cost 
estimation for activation. So I would say that they are 
definitely taking steps in that direction.
    As far as the current Denver activation estimate, that's 
something that is already done and complete and we don't have 
any concerns at this point of whether they're going to not meet 
the schedule and costs that they've put forth. But we still 
look back at that estimate and say that that wasn't a reliable 
estimate from our perspective, based on the lack of a risk and 
uncertainty analysis.
    Mr. Walz. Thank you. I would like to thank all of you, 
though. Over the last 12 to 18 months the communication and the 
transparency of helping us get this has really been great and I 
am grateful for that. I yield back.
    The Chairman. I thank the gentleman for yielding. I now to 
Mr. Coffman for five minutes.
    Mr. Coffman. Thank you, Mr. Chairman. Mr. Von Ah, when you 
look at the activation plan of the VA, I think it was found to 
be inadequate by your analysis. And so we have, I led the fight 
to strip the VA of their construction management authority. I 
wanted $10 million. VA put out $250 million. The number that we 
settled down, settled on, was $100 million. I think that is 
unfortunate. I think it needs to go down further. But that is 
only for the construction management phase. That number, $100 
million, does not include activation.
    Mr. Von Ah. Right.
    Mr. Coffman. So it seems like we have the same sort of 
mismanagement problems when it comes to activation that we had 
for construction management under VA supervision. Is there any 
precedent, I mean, does the Army Corps of Engineers or does GSA 
or anybody else do activation as part of the construction 
management for an agency, in an agency relationship?
    Mr. Von Ah. Right. The scope of our work didn't cover that. 
I'm not--
    Mr. Coffman. Sure.
    Mr. Von Ah [continued]. --sure if that's the case or not. 
So we could look into that and get back to you, Mr. Coffman.
    Mr. Coffman. Let me go to the Army Corps of Engineers, does 
anybody else, when you do other hospitals for other agencies, 
like for the Department of Defense, do you do the activation? 
Or does the United States Army or the Air Force or whoever you 
are doing it for do the activation?
    Mr. Caldwell. Mr. Coffman, Congressman Coffman, that 
function is typically handled by the medical departments and we 
restrict ourselves to that area that we have expertise, which 
is really in the design and construction. We do on occasion 
assist with the initial outfitting--
    Mr. Coffman. Mm-hmm.
    Mr. Caldwell [continued]. --and transition of the facility 
because that may involve purchasing equipment, furniture, and 
other kinds of supplies. So we do assist the activation in that 
regard.
    One of the things that we and the VA are working together 
on for the other hospitals that we expect to assist them on, 
and are assisting, will be an activation plan. So that we can, 
early in the life of those projects, can identify what the 
requirements are, what the respective parties and stakeholders 
will bring to that plan to ensure that it comes together 
effectively.
    Mr. Coffman. I just want to say the fact that Ms. Fiotes is 
here today, and some of the other players, that have their 
fingerprints all over this $1 billion in cost overruns, is a 
signal to me that the VA has not changed. And so whatever we 
can do to strip their authorities in terms of construction 
management, in terms of activation, I think is necessary. I 
mean, Ms. Fiotes, you said that, I am not clear on what your 
explanation is in having gone, in the planning process of 
having 34 primary care examining rooms when the existing 
facility has 60 and cannot accommodate seven PAC teams, seven 
primary care teams in the new facility requiring us to keep 
part of the old facility open. Can you really explain how that 
number, 34, was devised?
    Ms. Fiotes. I will try, Congressman, although the PAC teams 
and the 34 and 60 were not in existence when the project was 
designed, which was what I tried to explain. When the design 
was developed, 2009, 2010, there were no PAC teams. At the 
time, the medical center and the construction entities believed 
that the project was sized to accommodate the necessary primary 
care clinics. As time evolved, the patient aligned care teams 
came into existence. They take up more space than the regular 
clinics do. And that has resulted in--
    Mr. Coffman. Well that is still not an explanation. I mean, 
the fact is that you have X number of primary care personnel, 
no matter how they are arranged. You had that much capability 
in terms of exam rooms. And you have almost half the number 
here.
    Ms. Fiotes. Again, we are talking about a design that was 
developed many years before the construction was completed.
    Mr. Coffman. So then we are in, in 2009 and 2010 we are a 
Nation at war in Afghanistan and Iraq and you all cannot amend 
that plan?
    Ms. Fiotes. I cannot answer that, sir. I wasn't there.
    Mr. Coffman. Well you--so then and why was PTSD not 
included in the initial project?
    Ms. Fiotes. I believe PTSD was taken out of the scope of 
the project before the final appropriation authorization.
    Mr. Coffman. Do you know why?
    Ms. Fiotes. I do not recall exactly.
    Mr. Coffman. I just do not know how you cannot have answers 
to these questions and be in the position that you are in. I 
mean, that absolutely makes no sense.
    Ms. Fiotes. Again, Congressman, I am going by what I have 
heard, not what I experienced. I believe the PTSD was removed 
at the time of the authorization appropriation to bring the 
cost down.
    Mr. Coffman. Well how about this--
    The Chairman. The gentleman's time has expired.
    Mr. Coffman. Oh, I am sorry.
    The Chairman. We are going to have a second round. Mr. 
Takano, you are recognized for five minutes.
    Mr. Takano. Well I just want to mention for the record that 
two and a half to three years ago, this Committee authorized 
additional funds to complete the replacement facility. And at 
that time this Committee, and by a quick count of nine of us 
who were here on the Committee at that time, this Committee 
decided to reduce the scope of the facility by not funding the 
PTSD inpatient or the assisted living facilities. So to act 
shocked that part of the old facility will still need to be 
used moving forward is ridiculous. We knew what we were doing, 
and now we decide do we invest the money so we can move 
everything to the new campus? Or do we keep the status quo and 
continue to use it as a political pawn? That being said, what 
are the plans for expanding the Aurora facility to include 
these services?
    Mr. Gigliotti. So the PTSD is, Deputy Secretary Gibson in 
one of his last acts as Deputy Secretary notified four corners 
that because this is a replacement hospital, it's the first 
true replacement hospital to move since Detroit in the 1990s. 
And because it's a replacement hospital he made the 
determination in coordination with general counsel that PTSD 
should move over to the new site and notified four corners and 
there was no objections. We went out for a minor project. 
Unfortunately when the bids came in for that it was over the 
minor threshold. It came in about $3 million over the $10 
million threshold. So we have our process for trying to get it 
into a major. So that is one thing.
    The second piece is the community living center. Currently 
the veterans that were in our community living center are being 
seen in the community. We follow them. The care is going very 
well. That is also in our SCIP process for a long term solution 
of building a community living center on the campus at 
Fitzsimmons.
    Mr. Takano. Well my question is in order to complete a PTS 
residential treatment facility and community living center that 
were deleted from the project, what are the plans for the VA to 
expand the Aurora facility and include these PTSD treatment? 
Are they priority projects? What is the estimated cost of each 
of these future projects?
    Mr. Gigliotti. So we were hopeful that the cost for the 
PTSD would be below the $10 million threshold. It came in 
higher. It is a priority. The care will be rendered at the 
existing medical center site now. If we have to go into an 
emergency lease scenario while we're awaiting funding for the 
PTSD if we're able to excise the current, we will do that.
    Mr. Takano. So it is above $10 million, you are saying?
    Mr. Gigliotti. It came in above $10 million.
    Mr. Takano. So $10 million, $11 million? Around there?
    Mr. Gigliotti. Thirteen million.
    Mr. Takano. Thirteen million. So that is what we need to 
find in order to fund, because the Committee made its previous 
decision. So are other plans or solutions being developed to 
ensure facilities available for PTS residential treatment, are 
available for PTSD residential treatment, eight primary care 
teams, and the community living center beyond the next three to 
five years?
    Mr. Gigliotti. Yes. So the, all of those will be being 
given at the current site and that was the three-year time 
period that was referenced. If we are able to divest ourselves 
of the hospital, which is our intent, then we will find space 
in the community to offer those services while we look for a 
permanent solution.
    Mr. Takano. And will some facilities continue to be located 
in the current Denver Medical Center campus? Or will additional 
construction take place on the Aurora campus?
    Mr. Gigliotti. Initially it will be on, PTSD, CLC will be 
done on the, and the seven PAC teams will be done on the 
current campus and we will be looking for solutions in the 
metro Denver area for community based outpatient clinics and on 
the current campus PTSD and CLC will ultimately end up there.
    Mr. Takano. Well, thank you. Will the opening of the new 
Aurora VMAC decrease wait times for veterans in the community 
and at what rate?
    Mr. Gigliotti. So because of the PAC model we're looking 
for efficiencies of through put to be able to get more veterans 
in. We have PAC at the current facility but the physical 
constraints don't let us operate PAC as the model was intended. 
The current design will allow that. So we anticipate some 
efficiencies but it would be hard to state exactly because the 
metro area continues to see growth and we have to address the 
seven PAC teams.
    Mr. Takano. Thank you. I yield back, Mr. Chairman.
    The Chairman. I thank the gentleman for yielding. It is 
difficult to argue that this Congress did not provide the money 
when this is over $1 billion over budget. And by the way, 
passage of Asset Review raises that $10 million to $20 million. 
You would be able to go right ahead with it. So that is another 
reason we need to do this. Mr. Bost, you are recognized.
    Mr. Bost. Thank you, Mr. Chairman. And I was going to ask a 
question. I am going to go ahead and send my question just in 
writing concerning some personnel hiring practices and things 
like that. With that, I would like to yield my time to 
Representative Coffman.
    Mr. Coffman. I thank the gentleman. First of all, Mr. 
Takano, what our conversation was about was that PTSD was not 
included in the initial plan for the hospital. So it was after 
the fact that a stand-alone building was added for Post-
Traumatic Stress Disorder. And in the negotiations to get the 
$1 billion for those cost overruns, there were two buildings 
that had not broken ground yet. One was the CLC, the community 
living center, and the other one was for PTSD. As part of the 
negotiations to get the $1 billion, those had to be scrapped 
and now we are going to get them put back in. So my question 
was, as an Iraq War veteran, how is it in 2009 and 2010 that we 
broke ground for a project without PTSD? Without a plan for it? 
And that is certainly the case.
    The, Ms. Fiotes, under your leadership the new Rocky 
Mountain Regional VA Medical Center construction project has 
been plagued with excessive cost overruns, a four-year schedule 
delay, and overall mismanagement of the project. When did you 
become aware of the variances in the project's scope, schedule, 
or cost that put the project at risk of completion as 
originally planned? In other words, when did you in working on 
this project realize that it was getting out of control? That 
it was not going to be on time? That it was not going to be on 
budget?
    Ms. Fiotes. Congressman, I joined the VA in January of 2013 
and over the next few months became familiar with the project, 
visited the site, talked with the contractor, of course talked 
with our teams. I heard varying versions of cost increases and 
schedule delays. And at the time that we were looking for ways 
to move the project forward and keep progress on the 
construction going. The contractor filed a claim with the 
Civilian Board of Contract Appeals. And from that point on we 
were in a position where the VA had taken the stance, with 
advice from general counsel, its then general counsel that the 
contractor was obligated to deliver the facility for $610 
million based on a supplemental agreement they signed in 2011. 
That was the VA's position. That was the position that I was 
relaying to you as well.
    Mr. Coffman. But you knew that was not correct, that the 
project at that time, given all the change orders, could not be 
built for that amount.
    Ms. Fiotes. That, that is not accurate, sir.
    Mr. Coffman. Well I, I disagree with that. The--so what is 
the total number, who can answer this question, so the total 
number of personnel is now going to be in the new hospital, is 
now going to be 3208? Am I correct in that?
    Mr. Gigliotti. That sounds correct, sir.
    Mr. Coffman. Okay. So we have an increase in personnel, a 
dramatic increase in personnel. We have got double the square 
footage. But in effect we have less capability. I mean, there 
are some things that are added, like spinal cord. But in terms 
of the primary care outpatient, obviously a tremendous reduced 
capacity in that. Am I correct in that?
    Mr. Gigliotti. It is less PAC teams than we currently have 
functioning now, yes.
    Mr. Coffman. Okay. And so what is, so essentially right now 
until you get these new CBOCs built, these new outpatient 
clinics built, the Aurora one I think the lease is coming up, 
am I correct in that?
    Mr. Gigliotti. That's correct.
    Mr. Coffman. And so you're going, is it a plan to build a 
new facility or lease a new facility?
    Mr. Gigliotti. So the plan would be, we would go out for 
bid and see which of those would occur. What's available in the 
marketplace, there would be a market study, either use an 
existing or do some kind of build. And that would be in the 
Aurora and then also in the southern part of the metro area.
    Mr. Coffman. So in the southern part, and so that could be 
a lease or that could be built as well?
    Mr. Gigliotti. Correct.
    Mr. Coffman. So how long do you think this entire process 
will take? And will that have to, would that require a new 
appropriation? I suspect if the $20 million figure is approved 
in terms of redefining major construction management projects, 
then I suspect that you could go ahead then, I mean, based on 
our appropriation, correct?
    Mr. Gigliotti. Right. And it would be part of our SCIP 
process and it gets competed against other clinic designs and 
desires across the country.
    Mr. Coffman. And how, so you need those to, so the Aurora 
facility you would expand and have additional PAC teams there. 
And then you would have, and then obviously this in the 
southern metropolitan area, this new outpatient clinic, would 
then absorb the remainder of the PAC teams?
    Mr. Gigliotti. That would be the intent. And then also, as 
I stated earlier, working with VBA to move comp and pen to 
another location would free us to be able to put a couple more 
PAC teams in both Colorado Springs as well as Golden.
    The Chairman. The gentleman's time is expired. Ms. 
Brownley, you are recognized for five minutes.
    Ms. Brownley. Thank you, Mr. Chairman. I had just a more 
global question, I guess, in terms of things that still need to 
be done. We have talked about a lot of them. We have talked 
about the movement of the old facility and when that is going 
to happen, the PTSD facility, etcetera. So I am just, I am 
wondering if is there a timeline by which you are following to 
get to, you know, certain dates. And if there is, is that 
something that is out there and published that is, all of us 
can see?
    Mr. Gigliotti. We are looking to do a movement of the 
outpatient services from the existing facility to the new 
facility on July 28th. We are looking to remove the remaining 
inpatients from the current facility to the new facility August 
4th. So those are the timelines that we are working--
    Ms. Brownley. Understood. That timeline, I understand, 
because it is in print and I can read it.
    Mr. Gigliotti. Okay.
    Ms. Brownley. What I am looking for is beyond the August 
opening date in terms of closing the old hospital, when the 
PTSD facility is going to get done, is there a printed timeline 
that VA has agreed upon, all of its contractors have agreed 
upon, that can be shared with the Committee? So that clearly on 
this project accountability has been an issue. And moving 
forward now we want to have the tools to, for you to hold 
yourself accountable and for us to hold you accountable.
    Mr. Gigliotti. Right. So we're looking after approximately 
18 months and then--
    Ms. Brownley. Is it a printed timeline?
    Mr. Gigliotti. I'm not--
    Ms. Brownley. Or is it one that you are, you know, you 
think that is what it is going to be, and that is what you are 
planning on, but is there an agreed upon that everybody is 
working towards?
    Ms. Fiotes. Congresswoman, I think that because of some of 
the unknowns, including the minor threshold and the ability to 
construct the new PTSD, the timelines are somewhat estimates at 
this point. That's why the number of three to five years has 
been put out there. I can tell you that we are collectively 
looking for solutions to allow us to do it sooner rather than 
later. We do want to get out of this facility but it does take 
some time, not knowing when we're going to be able to build the 
new PTSD, not knowing exactly when we're going to get the new 
clinic space in our existing clinics.
    Ms. Brownley. Can you give me a timeline when you might be 
able to have completed those to know with certainty when things 
can get done?
    Ms. Fiotes. I don't think we can give you a timeline with 
certainty right now.
    Ms. Brownley. Can you give me a timeline to get to 
certainty now? Is it going to take you a year? Is it going to 
take you three years? Is it going to take you five years? That 
is all I am asking.
    Ms. Fiotes. No, it is not going to take us five years to 
get to a timeline.
    Ms. Brownley. Not five years. Will it take you one year?
    Ms. Fiotes. I anticipate we will have a much better 
understanding of the timeline in the next six to 12 months.
    Ms. Brownley. Thank you. I want to yield the balance of my 
time to Mr. Takano.
    Mr. Takano. Thank you, Representative Brownley. For the VA 
and the GAO, my understanding is that the PTS residential 
treatment facility was part of the original design prior to 
2010. Is that correct? It was part of the original design prior 
to 2010?
    Ms. Fiotes. I am not sure that it was part of the original 
design. I know that at some point before 2009-10, there had 
been an effort to minimize the size and scope of the facility 
and at that point I think the PTSD was initially not included 
in the design. At what point it got reinserted, I will be 
honest with you I don't know.
    Mr. Takano. Could I hear from--
    Mr. Milsten. I know when it was reinserted and that's when 
we came back with the estimate--oh. Sorry. That's, we--
    Mr. Takano [continued]. --When was it reinserted?
    Mr. Milsten. It was reinserted when we came back to the 
Congress looking for the authority to continue and the money 
for the overrun for bringing in the (indiscernible) and 
completing it. We put it in the estimate at that time. That's 
what drove us to the estimate that I delivered to you that was 
$1.73 billion at one point. And in consequence, in subsequent 
negotiations that and the CLC, along with a couple of other 
minor things, were taken out of that number that got us down--
    Mr. Takano. Okay. So I would ask if you could go back and 
reexamine the history and my understanding is that it was 
originally part of the scope prior to 2010, and then it was 
descoped from the contract from when we, when they were trying 
to get the costs down. So it was a matter of money, not 
necessary planning, that has left us without a PTS residential 
treatment center.
    Ms. Fiotes. We will provide that. We will take that back 
for the record.
    Mr. Takano. Thank you. I appreciate it.
    The Chairman. I thank the gentleman for yielding. Vice 
Chair Mr. Bilirakis, you are recognized.
    Mr. Bilirakis. Thank you, Mr. Chairman. I appreciate it so 
much. And thank you for your testimony today as well. I have 
one question and then I am going to yield the rest of my time, 
submit my questions and yield the rest of my time to Mr. 
Coffman. But again, to follow up on what Ranking Member Walz 
said, that asked this particular question of Mr. Gigliotti, 
with regard to the staff positions, I understand you said that 
over 250 were filled out of the 421. My question is, do those 
numbers include vacancies that already exist at the current 
facility?
    Mr. Gigliotti. They do not, sir.
    Mr. Bilirakis. They do not. How many vacancies exist in the 
current facility?
    Mr. Gigliotti. I do not have the exact number but I think 
the vacancy rate, not counting the 421, is approximately ten 
percent.
    Mr. Bilirakis. Okay. Next question, why are we having 
trouble filling these vacancies? I know you answered the 
question but be more specific. And which vacancies are we 
having trouble filling? I mean, you know, this, I know Colorado 
is not Florida but it is pretty darn nice to live in. And so in 
any case if you could answer that, I would appreciate it.
    Mr. Gigliotti. Sure. So there is a multitude of reasons. 
One is the three percent unemployment rate in the metro Denver 
area. That is basically there is no unemployment. Individuals 
can go work wherever they want. It is a growing health care 
market, so health care professionals have choices all over 
metro Denver without having to move. They can just go from job 
to job. So it's very important for us to use the tools we have 
available, not only to recruit but to retain the staff. The 
mission attracts a lot of our workforce. So the one area that 
we've made major improvement in was nurse pay. Our nurse pay 
lagged in Denver and then we have been very aggressive in the 
last two years with nurse salary rates, making sure they are 
comparable to the community's rates. So we've been able to 
recruit and retain more. But that is still an area that we are 
looking to hire more. In, of the 421, some of the positions 
we're still recruiting for are nurses. We've hired about 20. We 
still have 20 more to go for new nurses for the new facility. 
So that's a key area of concentration for us.
    Mr. Bilirakis. Very good. If you need any more tools, do 
not hesitate to contact us. Because I think it is pretty 
desirable to work for the VA. I will yield the rest of my time 
to Mr. Coffman. Thank you.
    Mr. Coffman. All right. I thank the gentleman. Is it not 
true that you also lack an HR director? Is that true to 
facilitate the hiring?
    Mr. Gigliotti. We, no, we have a--
    Mr. Coffman. You have it?
    Mr. Gigliotti. Yes, we have a new--
    Mr. Coffman. Because I think there was, I thought there was 
in the GAO report?
    Mr. Gigliotti. It could have been--
    Mr. Coffman. Let me refer to Mr. Ah.
    Mr. Von Ah. That may have been at the time but I am not 
sure of the current status of that.
    Mr. Coffman. And when did you, when is that person been on 
board?
    Mr. Gigliotti. Fairly recently, within the last six months.
    Mr. Coffman. Within the last six months. Okay. The, just 
still, I am just stunned that just in terms of the knowledge of 
the history of the project, is either intentionally lacking or 
that you actually do not know these answers. As to the design 
questions, it seems like anybody who would go on this project 
from a managerial standpoint would have the situational 
awareness in terms of what the evolution of this project was 
and where the pitfalls were in this project. So I am very 
surprised. But I can certainly remember the controversy on the 
PTSD issue, that in fact the, it was not included in the 
initial design. It might have been taken out early. But when 
they broke ground there was not a PTSD facility within it. And 
I can remember being called by the media, they said what do 
you, as a Member of Congress, what do you think about this 
issue? And so I think it was the combination of congressional 
pressure along with the VSOs that got the stand alone facility 
that was later unfortunately deleted when we had to get the $1 
billion in cost overruns done. And when do you anticipate 
having the PTSD, that stand alone building, or I understand 
there might be an emergency lease to get them out of Building 
38 in the old hospital? Where are we at with the PTSD 
residential?
    Mr. Gigliotti. So, currently it is in Building 38. Until we 
know what we are going to do from disposal of the existing 
hospital, it will stay there. If we are not able to get the 
approximately $13 million, you know, through the major project 
in time, currently, now, that would be a major--if we are not 
able to get that in time when the current building is excised, 
we will have to enter into an emergency lease space for the 
PTSD program until we are able to go onto the campus with PTSD, 
which is our desire.
    Mr. Coffman. So when do you anticipate the--I'm sorry, when 
do you anticipate the stand-alone PTSD facility or is that in 
the planning process now?
    Mr. Gigliotti. I think a lot of it is contingent on when we 
devolve ourselves from the current facility and that I don't 
know the timeline yet.
    Mr. Coffman. Okay.
    The Chairman. The time is expired.
    Ms. Kuster, you are recognized for 5 minutes.
    Ms. Kuster. Thank you very much, and thanks for being with 
us.
    I think you can tell, this is painful for all of us. And as 
I said several years ago in the hearing, I remember an exchange 
with my colleague Mr. Coffman that, although I do care a great 
deal about veterans in the Denver, Colorado area, my veterans 
in New Hampshire and particularly, right
    now, Manchester, New Hampshire have a significant problem 
with the facility that serves the veterans in New Hampshire. 
And all of us also represent the taxpayers. So we are 
constantly making decisions on serving veterans with the 
highest level of care at a price that our taxpayers can afford, 
frankly.
    So we are shocked and we continue to be how these decisions 
got made to go from over 60 units for serving primary care down 
to 34. I don't understand what the plan was from the very 
beginning.
    So I want to try to zero in here on the questions about 
what your plan is now to make sure that after the taxpayers 
have spent $1.6 billion that veterans in Colorado won't have 
longer wait times. Frankly, it sounds to me as though they 
will. So can you walk us through--and I have read the report in 
the Denver newspaper and I am trying to understand the response 
that was given to the minority staff--it seems to me that the 
plan is to move primary care outside of this facility, that it 
is not intention that it goes into the new, $1.6 billion 
facility, but in fact it gets moved to other areas outside of 
the Denver metropolitan area, because apparently this facility 
has been built that is not adequate for the needs of Denver 
veterans, Colorado veterans. Can you walk us through precisely 
what the plans are and where you will need additional 
facilities, whether rented or otherwise, to serve veterans in 
Colorado?
    Mr. Gigliotti. Sure. Thank you.
    There will be 12 primary care teams in the new hospital. 
There will be--
    Ms. Kuster. Twelve, I'm sorry to interrupt, but as compared 
to--
    Mr. Gigliotti [continued]. --Twenty now in the old.
    Ms. Kuster. Okay. So, clearly, I am just doing basic math, 
you will not be able to serve as many veterans in the new 
facility as were served in the old facility?
    Mr. Gigliotti. Right.
    Ms. Kuster. Can we just get that for the record straight?
    Mr. Gigliotti. That would be correct.
    Ms. Kuster. Okay. Where will they be served and what will 
you be asking the Congress to fund in addition to the $1.6 
billion facility?
    Mr. Gigliotti. So the remaining teams will stay at the 
current hospital in Building 38--
    Ms. Kuster. Indefinitely?
    Mr. Gigliotti. Not indefinitely, until the decision is made 
on what to do with the current facility. Our desire is to get 
out of that facility.
    Ms. Kuster. In the meantime, we will have to pay for both 
facilities, everything will be doubled in cost?
    Mr. Gigliotti. We believe we can take away the clinic--or, 
excuse me, part of the physical plant and have it independently 
run. So the whole facility, the 600,000 square feet, will not 
be operational. It will just be focused on Building 38, one 
building.
    Then we have a desire to increase the primary care capacity 
at Aurora. We have a primary care clinic now. As Congressman 
Coffman stated, that lease is due to expire; we are looking to 
go into a larger one.
    Ms. Kuster. So this is separate from the brand new 
facility? This is--
    Mr. Gigliotti. It is separate from the brand new facility.
    Ms. Kuster [continued]. --a separate lease that would be 
required?
    Mr. Gigliotti. Right. We already have an approved lease, a 
new community-based outpatient clinic in Loveland, Colorado, 
which is north of the northern suburbs, and that is scheduled 
to open in April. And we believe that will have some of our 
patients wanting to go there and not have to drive through 
Denver traffic. Then we have in Colorado Springs and in Golden, 
we are working with VBA to move comp-and-pen out of those two 
areas. If that occurs, that will allow us to place some of 
those primary care teams that are left behind at the old site 
into those existing sites.
    And because our market is growing, Denver is still growing 
at a phenomenal rate and trying to stay ahead of that growth, 
we are looking at our high-concentration areas of veterans and 
an area that we need to get a clinic in is in the Southern 
Denver metro area.
    Ms. Kuster. Well, my time is up. Can I just say, for the 
lessons learned, that the next time we decide to build a 
facility we take into account when we are at war in two 
different countries with veterans that we have learned have 
significantly complex medical, including mental health and 
physical health, et cetera. So I would just like that added to 
the lessons learned as we spend the taxpayers' dollars and try 
to serve the veterans.
    I yield back.
    The Chairman. I thank the gentlelady for yielding.
    In the South, we have a saying, ``A blind pig finds an 
acorn every once in a while,'' and I think that is what 
happened here. Through no design or plan whatsoever, the VA has 
less capacity on this huge campus, but it is going to force 
them to go ahead and put the CBOCs out--a very expensive way to 
do it, I might add, but the CBOCs need to be--and they showed 
us, actually, the last briefing we had was the demographics of 
the Denver area and where the veterans are. And so I think 
putting those clinics where the veterans are makes a lot of 
sense and not having everybody coming on that big, huge campus. 
You can't believe how far it is from the parking lot to where 
they have got to go.
    So we have said this, and I have heard Ms. Brownley say it 
and others on the Committee, many times about we need to--and 
myself--put the care where the veterans are, not make them 
come, like he said, through the Aurora traffic and Denver 
traffic to get there. So, all in all, it may actually work out 
as a positive.
    Mr. Poliquin, you are recognized.
    Mr. Poliquin. Thank you, Mr. Chairman.
    Ms. Fiotes, when you have any kind of construction process, 
I understand that you will have disputes with subcontractors. 
How many judgments and settlements has the VA paid to 
subcontractors for this project?
    Ms. Fiotes. I would have to take that question for the 
record, sir. I don't have that number.
    Mr. Poliquin. What do you mean, you don't know?
    Ms. Fiotes. I don't have that number available.
    Mr. Poliquin. Has the VA finalized all of its settlements 
with its contractors?
    Mr. Milsten. Yes, sir. The original contract, all of the 
settlements have been made with the prime contractor. On the 
interim contract that we had that spanned--
    Mr. Poliquin. Okay, they have all been settled?
    Mr. Milsten. They have all been settled.
    Mr. Poliquin. Okay, but we don't know how much this is 
total, correct?
    Mr. Milsten. I don't recall the--
    Mr. Poliquin. Okay. My staff--
    Mr. Milsten [continued]. --exact number and the--
    Mr. Poliquin [continued]. --will be in touch with Ms. 
Fiotes after this hearing to get that number from you.
    Does the VA have any management reserve or contingency 
funds, Ms. Fiotes, remaining for this project?
    Mr. Milsten. Yes.
    Ms. Fiotes. I will let Mr. Milsten answer that.
    Mr. Poliquin. This is not a tough question.
    Mr. Milsten. Yes, yes, sir, we do.
    Mr. Poliquin. You do have contingency funds?
    Mr. Milsten. Yes, sir.
    Mr. Poliquin. How much?
    Mr. Milsten. We have got about 6 and a half million dollars 
of that. That is the 5 and a half million dollars that we are 
using to fund the completion items that have been identified 
earlier.
    Mr. Poliquin. Thank you.
    Mr. Caldwell, do you over at the Army Corps have a 
contingency fund remaining for the completion of this project?
    Mr. Caldwell. Sir, we do have funds remaining from the 
funds that were set up for the original construction.
    Mr. Poliquin. Do you have a contingency fund remaining?
    Mr. Caldwell. Those can be used as contingency funds.
    Mr. Poliquin. So you do. How much is it?
    Mr. Caldwell. Sir, we expect that there is going to be 
about $40 million available.
    Mr. Poliquin. Okay. Mr. Von Ah--thank you--Mr. Von Ah, in 
2016, the VA told Congress that there was $55 million in 
recurring costs and $341 million in one-time costs to activate 
the facility, and today we are hearing the activation cost is 
341 million. What the heck happened to the 55 million?
    Mr. Von Ah. Yeah, the 55 million, it turns out, is not part 
of the activation costs.
    Mr. Poliquin. Where is it?
    Mr. Von Ah. Those are the--that was at the time the 
estimate for the incremental additional staff salaries and 
services provided at the new facility over and above what is 
moving over from the old facility.
    Mr. Poliquin. Thank you.
    Mr. Chairman, I am going to yield the rest of my time to 
Mr. Coffman, whose district encompasses this facility.
    Mr. Coffman. I thank the gentleman.
    Mr. Von Ah, to what extent did the fact that the VA did not 
use professional, I think they call it, medical equipment 
planners in the process, to what extent did that drive cost?
    Mr. Von Ah. The focus of our 2017 report was not exactly on 
that question but, again, I think from our perspective we 
looked at exactly what sorts of processes they have in place 
for estimating costs and certainly didn't meet the criteria 
that we have in place.
    Mr. Coffman. Mr. Caldwell, how significant is--I believe 
that the Army Corps of Engineers utilizes medical equipment 
planners when it builds a facility from the start. Obviously, 
you took this over very late, but could you comment on that?
    Mr. Caldwell. Sir, we do have medical equipment planners, 
we do that in conjunction with the medical departments where 
their expertise resides.
    I will tell you that, in this business of medical 
facilities, the technology is constantly evolving. So one of 
the constant challenges that we have on virtually every major 
medical facility is the fact that, by the time we have gone 
from design through construction, there have been technological 
changes that have to be accommodated.
    Mr. Coffman. So the fact that this construction project has 
been 4 years behind schedule, how much did that delay drive 
additional cost in terms of what we have been discussing?
    Mr. Caldwell. Sir, I can't give you a number on how that 
affected it, but it is likely that whether it would have been 4 
years after the project would have been completed or 4 years 
after the start of construction, in either case there would 
have had to have been changes made to upgrade to current 
medical equipment at that point.
    Mr. Coffman. So the problem is rooms are configured that no 
longer comports with the technology in the lapse of time, codes 
have changed, and those factors are going to drive cost?
    Mr. Caldwell. Yes, sir, there is an added cost associated 
with that typically.
    Mr. Coffman. Okay. Oh, on the question about your HR 
director, isn't that person just an acting HR director and 
there is a question about qualifications?
    Mr. Gigliotti. I will have to look into that, sir.
    Mr. Coffman. Well, is it or not? I mean, is that person the 
acting HR director and does not fit the qualifications of an HR 
director?
    Mr. Gigliotti. My impression was that that individual--that 
the Denver facility has a permanent HR chief. Let me take a 
look--
    Mr. Coffman. I yield back.
    Mr. Gigliotti [continued]. --and we will get it for the 
record.
    The Chairman. I thank the gentleman for yielding.
    Mr. Sablan, you are recognized for 5 minutes.
    Mr. Sablan. Thank you, Mr. Chairman. I actually had no 
intention to speak. But say in the past 20 years, maybe one of 
the witnesses could answer, in the past 20 years, how many 
facilities did the Department build, open and operate? New 
ones, new ones.
    Ms. Fiotes. To my knowledge, the VA has built four major 
hospitals in that timeframe: the Las Vegas, Denver, Aurora, 
Orlando, and New Orleans. And numerous other specialty 
facilities, such as poly-trauma facilities and others.
    Mr. Sablan. CBOCs?
    Ms. Fiotes. CBOCs are typically done as leases, not as our 
own construction, but yes.
    Mr. Sablan. And how many of those four major facilities 
were done on time, according to schedule, and consistent with 
the estimate?
    Ms. Fiotes. I believe that they all had schedule delays.
    Mr. Sablan. And the cost overruns or--
    Ms. Fiotes. I am looking to my colleague for Las Vegas, 
because that was finished before I arrived. For the other 
three, yes, they did.
    Mr. Sablan. Okay.
    Mr. Milsten. And the Las Vegas did not have a cost 
increase. There were increases to the contract, but within the 
appropriated and authorized funds that were provided, not after 
we came back for additional funds.
    Mr. Sablan. All right. Thank you very much.
    I yield back my time.
    The Chairman. Dr. Wenstrup, you are recognized.
    Mr. Wenstrup. Thank you, Mr. Chairman.
    I am not sure who may want to answer this, but has there 
been any attempt in the existing facility to try and sell some 
of the buildings that may be scheduled for demolition rather 
than demolishing them? Has there been an outreach attempt? I 
hear the economy is good in the area, you know, unemployment is 
low. So is there any attempt to sell the existing buildings?
    Ms. Fiotes. Congressman, we have just engaged with the 
General Services Administration to conduct what they call a 
target asset review. That is the first phase, if you will, of a 
real estate due diligence that we must follow in the Federal 
Government before we can take any action on existing Federal 
property.
    The target asset review identifies the property boundaries, 
identifies value constraints due to environmental liabilities 
or historic encumbrances, it identifies also potential interest 
from private or public entities in use of the facility. And, 
ultimately, it begins to shape an informed decision about the 
highest and best use of the property.
    This target asset review has just been completed, is my 
understanding from GSA, and it will be followed by an appraisal 
by a professional of the property value, and at that point in 
time we will be able to consider options for disposal, 
exchange, or other disposition.
    Mr. Wenstrup. And I am also curious too, you know, it is a 
pretty active market, are people reaching out and inquiring? I 
mean, it is not necessarily--real estate isn't necessarily a 
one-way street, you know, people look for potential. So has 
there been any outreach to take a look at these facilities and 
have they had the ability to take a look at them?
    Ms. Fiotes. There may be outreach. We have to follow 
certain processes within the Federal Government--
    Mr. Wenstrup. I think that would be--
    Ms. Fiotes [continued]. --and I think that this is the 
first phase in--
    Mr. Wenstrup [continued]. That doesn't mean people can't 
inquire, regardless of what the process--
    Ms. Fiotes [continued]. I am not--
    Mr. Wenstrup [continued]. --of the Federal Government--
    Ms. Fiotes [continued]. --personally--I am not--
    Mr. Wenstrup [continued]. --and that is really my question.
    Ms. Fiotes. --personally aware of any inquiries.
    Mr. Wenstrup. And also when it comes to the CBOCs and 
community outreach, has there been a market assessment? Because 
that is kind of key, you know, are we going necessarily where 
we need to be and, at the same time, do we necessarily have to 
build a new facility, a new CBOC, et cetera, if there is some 
former clinic or something in the area that could be used.
    Mr. Gigliotti. So, as far as a market assessment goes, we 
do know where the veterans live in the metro Denver area with 
higher concentrations. So that is what we are looking at and 
then both of those would be on the table, which would be most 
cost-effective, either an existing building or have to build 
one.
    Mr. Wenstrup. Thank you.
    I yield my time to Mr. Coffman.
    Mr. Coffman. I thank the gentleman for yielding.
    Who can answer this question, how long have you known--I 
mean, literally, you have had to have known for years, let me 
just put it that way, that you didn't have the capacity in the 
new hospital to fit all of the primary care capability from the 
old hospital, and yet you are testifying today that you have no 
definitive plan as to how to address that issue. And can 
anybody explain to me--well, first of all, can you tell me when 
you knew that the plan for the new hospital didn't support the 
plan for the new hospital didn't support the plan for the old 
hospital in terms of outpatient capability?
    Mr. Gigliotti. So I became Network Director in 2012 and was 
made aware that the design was set and that our plan to deal 
with that, as we have articulated, was if we added the Golden 
clinic, we added an expanded Colorado Springs clinic, we got 
approval and are activating a Loveland, Colorado clinic, we 
opened up an Aurora clinic, and so that was the plan was to 
offset that by those clinics.
    The population growth in Denver, coupled with the PACT 
model, compromised our, you know, ability to successfully meet 
that total issue. So that is why we are looking at expanding 
Aurora and then looking at Southern Denver.
    Mr. Coffman. How many PACT teams--I have seen two numbers, 
I have seen 17 and I have seen 20--how many PACT teams, again, 
do you have right now?
    Mr. Gigliotti. So we have, it would be 20, seven or eight 
remaining and twelve going over.
    Mr. Coffman. And how long have you had 20 PACT teams?
    Mr. Gigliotti. We have added PACT teams probably less than 
a year. A PACT team is 1200 veterans and the growth in the 
Denver area has been more than 1200 veterans a year.
    Mr. Coffman. Well, how is it they are just bringing this to 
public light now? I mean, Friday was the first time I have been 
briefed on having to keep primary care capability at the old 
hospital, and why is it just coming to light now?
    Mr. Gigliotti. Well, like I said, I got there in 2012, the 
plan was in place with what I stated, it is a challenge. I 
thought we have been transparent on the issue of the challenges 
with the PACT team capacity at the new facility. I will have to 
look into that, sir, if we haven't been transparent, but my 
assumption was we were with all the briefings we have done with 
Congressional Representatives and with the United Veterans 
Coalition.
    Mr. Coffman. It was certainly clear on the PTSD issue, but 
not on the PACT team issue, and I am just surprised that there 
is no definitive plan in the works, because it is going to be 
very, very expensive to keep this old hospital open. I mean, it 
is really beyond its service life and so that is going to be an 
extraordinary cost. And even if you--and so you are going to 
have to maintain now the first floor of the old hospital from 3 
to 5 years, is the estimate that I have from you--
    The Chairman. The time is expired.
    Ms. Esty, you are recognized for 5 minutes.
    Ms. Esty. Thank you, Mr. Chairman. I want to thank the 
Chairman and Ranking Member for holding today's important 
hearing, and I want to thank our witnesses for joining us.
    As you are hearing from all of us, we are deeply concerned 
about the time this has taken and the cost overruns, because 
these funds are to go to serve our veterans. So now we are 
looking at a facility that is over cost, way late, and we are 
going to have two facilities open.
    So there are two issues I would like to address with you, 
one has to do with the customer service for the veterans who 
are now going to have to figure out which of two facilities 
they go to and if you have figured out how you are going to 
deal with that. You are talking about World War II veterans, 
you are talking about Korea veterans, who now are going to have 
to figure out where their appointments are. I see massive 
opportunity for confusion. So that is one and just a brief 
answer on that.
    With the other--and I apologize for having been out, but I 
am also vice Ranking Member of the Transportation and 
Infrastructure Committee, I serve on the Water Resources 
Subcommittee, and so we deal with the Corps all the time. So I 
have questions about what have we learned from this in specific 
about how are we going to do delivery of projects faster? 
Because if we take so long, that is how we wind up in part with 
the project being completed not meeting the needs that we then 
have. If it takes 15 years to do a project, at the beginning 
you have a certain set of needs you are trying to meet, at the 
end of it you aren't even meeting those needs.
    And so the delivery time is incredibly important. So I was 
in fact just in a Subcommittee, you know, powwow about that 
issue, what we can do on streamlining.
    And so I want more specifics, both from you, Ms. Fiotes, 
and from you, Mr. Caldwell, about specific lessons that we have 
learned from this that will be implemented with Corps 
involvement on supervision and construction of VA facilities, 
because I heard general remarks, but not specifics like these 
are three things other than that executives ought to be 
involved. Well, yes, executives ought to be overseeing projects 
and holding people's feet to the fire, but that is construction 
101. And I say this as the daughter and granddaughter of civil 
engineers who worked on Army Corps projects.
    So, first, it looks like we have you ready to T up on the 
customer service.
    Mr. Gigliotti. Sure. We have 60 activation teams of 
employees working on all the logistics and that issue you 
raised about notifying and working with our veterans, that will 
be with the remaining PACT teams, that is part of what they are 
doing. So they will be communicated with, they will know that 
they will be remaining back at the current site, and they will 
be kept abreast throughout the entire process.
    Ms. Fiotes. Thank you for that question, Congresswoman. And 
let me just state for the record, I share those concerns. This 
is a project that none of us want to have happen ever again and 
so we have many lessons learned. The causes have been analyzed 
and we have taken those reviews and assessments to heart, and 
we have put in place new policies, new procedures at the VA to 
make sure that we don't make these mistakes, and just very 
briefly let me summarize.
    So, clear definition of the requirements up front. One of 
the issues found with this project was that it took way too 
long to nail down what kind of project it was going to be, it 
took years of back and forth. So, clear definition of the scope 
and the requirements.
    And then clear control of the scope and of changes. And we 
have put processes in place not just within the Office of 
Construction and Facilities Management, but at a higher level 
within the VA to ensure that any scope changes receive the 
appropriate review and approval and budgetary consideration. 
And where there are issues of non-agreement, that the issues 
are raised to the Deputy Secretary.
    Risk-informed acquisition strategies. Clearly, the 
acquisition strategy on this project was not the appropriate 
one and that cost us dearly. We have now put in place a very 
structured and disciplined way of making decisions about our 
acquisition strategy.
    Disciplined governance, and that part of it is what Mr. 
Caldwell mentioned before about engagement about the senior 
executives, but also, importantly, roles and responsibilities 
and clear lines of decision authority for the projects.
    And, finally, adequate resources. Clearly, we were found to 
be understaffed and under-resourced in the execution of this 
project from the beginning, and that is a lesson we have 
learned. We have developed a staffing model, so for the 
projects that we will continue to execute we have the 
appropriate staff, both contracting and engineering, to see the 
project to fruition.
    Mr. Caldwell. Madam, thank you. There are so many places 
you could go with your question about how to expedite projects 
and let me touch on just a few.
    And I have got to say, the point I made earlier about 
senior level involvement is not a throw-away idea. That is 
something that is critically important to ensure that both the 
contractor and the other stakeholders are unified in their 
objectives as opposed to getting cross with each other in 
nonproductive ways. So it does help us cut through issues if 
things are working well.
    From a construction agent's standpoint, when we are doing 
work for the Department of Veterans Affairs or doing work for 
another defense agency, early involvement by the construction 
agent is critically important to define the scope of the 
project and to determine how that project will be executed. And 
in that process determining what are the mission critical-
requirement dates that have to be met, so that you can set up 
an acquisition strategy that will help you achieve those.
    Another thing is funding. And when you talk about civil 
works, although I am not in my current job responsible for 
civil works, I can tell you that one of the chronic problems 
that we have in civil works projects has to do with the 
continuity of funding to take that job to conclusion. The 
concept applies--
    The Chairman. Mr. Caldwell, could you wrap this up? We have 
other Members and she has exceeded her time significantly.
    Mr. Caldwell. It applies as well to other projects as well.
    The Chairman. I thank the gentlelady for yielding.
    Mr. Higgins, you are recognized for 5 minutes.
    Mr. Higgins. Thank you, Mr. Chairman.
    We have shared from both sides of the aisle on this 
Committee great concerns regarding this project. This is a 
bipartisan Committee. I thank the Chairman and the Ranking 
Member for their leadership, and I thank the panel for 
appearing today.
    The Department of Veterans Affairs is making a concerted 
effort to modernize the VA methods of care and to transition to 
an outpatient model. We need fewer in-patient beds in distant 
facilities and more accessible health care services closer to 
where the veterans reside, yet we hear today that the Eastern 
Colorado Health Care System will be in the unique and 
undesirable position of operating both the new Aurora Medical 
Center and the Denver Medical Center it is supposed to be 
replacing.
    How long after the opening of the Aurora Medical Center can 
we expect the Denver Medical Center to close?
    Ms. Fiotes. As we mentioned earlier, Congressman, we really 
don't know that specifically. We are targeting sooner rather 
than later, but some of it will depend on the opportunities 
that exist for disposal of the old facility, as well as the 
opportunities to provide those services that will be left 
behind at other locations.
    Mr. Higgins. I represent the district in the southernmost 
part of Louisiana. So, like my colleague Ms. Esty, I also have 
a great deal of interaction and experience with the Corps.
    So my question for the Corps, sir, much of the difficulty 
of the VA that has been encountered regarding construction can 
be attributed to the complex and expansive design that no 
longer reflects modern standards of care, how would you 
recommend allowing for future flexibility in blueprints and 
plans? Is there a way that the VA can better manage the 
construction of a project, as my colleague suggested, that 
takes many years and requires regular updates to keep up with 
nationwide trends? How can the Corps help us streamline future 
projects, so that we don't encounter this type of gross 
mismanagement again?
    Mr. Caldwell. Congressman, I think that the Corps and the 
VA have already reached a milestone, and I will say it was in 
conjunction with guidance from this Committee and other 
Congressional Staff Members, to assist us in ensuring that we 
understood what the scope of projects are. It is critically 
important when a construction project is being designed and 
constructed that we understand with some precision what 
Congress has authorized and how that entire project will come 
together, especially if it is being executed in multiple 
phases.
    So one of the things that together we have done, is 
determine that on these future projects that we are working 
together on, that we are going to have a clear definition of 
what the scope is, a clear understanding, we believe, with the 
Congress about what that scope is, so that we can work together 
effectively to achieve that.
    Mr. Higgins. That is an encouraging answer. If my colleague 
Mr. Coffman would like, I would certainly yield the balance of 
my time, Mr. Chairman.
    Mr. Coffman. I thank the gentleman.
    Mr. Gigliotti, you stated that you have been transparent in 
this entire process, and I want to argue that you haven't been 
transparent and that the VA hasn't been transparent, because of 
the fact that in all the hearings we had the issue of keeping 
the old hospital open to house primary care outpatient services 
was never discussed, was never brought forward by the VA. So 
this whole notion that you have been transparent is absolutely 
false and because you all have known for years. But I think the 
embarrassment of having these incredible cost overruns and 
having to come back to Congress with that was not going to be 
complicated by another issue, so I think it was intentionally 
kept away from the Congress.
    And let me just say that, thank God--I think Ms. Esty had 
questions about how do we do better next time--let me tell you, 
the VA, by the wisdom of Congress, will never build another 
hospital again on its own, it has been stripped of that 
authority, and I think it needs to be stripped of more 
authority.
    I yield back.
    The Chairman. I thank the gentleman for yielding.
    General Bergman, you are recognized for 5 minutes.
    Mr. Bergman. Thank you, Mr. Chairman.
    Good morning, folks. Thanks for being here.
    There are two ways to make the above-the-fold in the 
newspaper, you know, and I didn't really know what the above-
the-fold in the newspaper meant until about a year ago, but I 
do now, and the point is usually it is the negative that gets 
the first chance to be above the fold. You know, backwards 
congratulations to this project--not anyone in particular, but 
this project for being above the fold for much too long a time.
    In the spirit of the timing of the season here, we are 
towards the end of the professional football season and today 
we are looking at game films of this weekend's games, so we can 
tell exactly what occurred at what point that caused an 
outcome.
    Now, I am going to ask a question rhetorically, there is no 
need to answer this: do you know the difference between a 
lesson learned and a lesson observed? Pure and simple. You 
didn't learn anything if you just observed it.
    So, having said that, in the military we are very, very big 
on lessons learned, so that we do not repeat in any way, shape, 
or form the mistakes. What is the plan to collate the data, 
because I have heard a couple of different people say we are 
doing this, we are doing that, what is the plan, the overall 
plan to collate the data of this entire experience in such a 
way that anyone, whether it is someone within the VA, someone 
within the Army Corps, someone within GAO, someone within 
Congress, someone anywhere can view the game films, if you 
will, as it relates to the Denver VA project? Is there an 
overall game plan right now to put all of this together, so 
that it does not repeat itself in the future?
    Mr. Caldwell. Sir, speaking for the Corps of Engineers and 
from the point in time that we became involved, we have been 
collecting lessons learned. We have held a number of workshops, 
we have brought in a number of people, including from the DVA, 
Department of Veterans Affairs, as well as from across the 
Corps, people that will be involved in the future VA contracts 
to learn what we can from this project. So those have been 
workshops and at the same time we have been recording the 
lessons learned.
    At a point in time when we are completed with this project 
and that point in time will be--it is imminent and it will be a 
few months beyond--we will refine those lessons and we will 
publish them, so that they are available both within the VA, 
within the Corps, as well as to the Committee or anyone else 
that would have an interest to have those.
    I can't speak to how far we go back. I am speaking from the 
point in time that the Corps of Engineers became involved. But 
I think that, as we work together, it is likely that what we 
will do is to identify some of the lessons that caused this 
project to get into the circumstance that it was in when we 
became involved, we will work with our colleagues to do that.
    Mr. Bergman. So just to make sure I understood what I 
thought I heard you say, the Army Corps has accepted 
responsibility for overall lessons learned on this project, 
whether it is construction, whether it is design, whether it is 
placement, whether it is consideration of clinical outcomes 
based upon old hospital, new hospital, veterans' waits, et 
cetera, et cetera. So did I hear that the Army Corps has got 
the dot?
    Mr. Caldwell. Sir, I did not intend to say that. What I 
intended to say is that we will take--
    Mr. Bergman. So you are going to take your part or a 
certain part. I guess what I am asking you collectively, as a 
group and I don't care, plan a meeting time, and then tell one 
member a different meeting time, they miss the meeting, you 
elect them and they got it. There is a little humor in there.
    Okay. The point is, don't segment this out to the point 
where someone doing something future, especially here in 
Veterans' Affairs where we are trying to figure out all the 
pieces and parts and what went wrong. One last analogy, and I 
know my time has expired. As a pilot, whenever there is an 
aviation incident, think about how airplanes are pulled out of 
the depths of the ocean and reassembled, that is what we are 
talking about, that is what we need to do going forward.
    And, I'm sorry, I yield back, sir.
    The Chairman. I thank the gentleman for yielding.
    Let's see, Miss Gonzalez-Colon, you are recognized.
    Miss Gonzalez-Colon. Thank you, Mr. Chairman.
    I know the Aurora facility has undergone multiple budget 
changes and completion dates, plus most of the staff has 
changed throughout this process, has transitioned out of the 
VA. How will you say that, will this be one of the problems, 
the transition of those employees, the turnover staff will be 
one of the problems or not?
    Ms. Fiotes. I am not sure I understood your question, 
Congresswoman. The transition of which staff?
    Miss Gonzalez-Colon. Most of the staff has changed and has 
transitioned out of the VA during all that process; that is 
correct or not?
    Ms. Fiotes. Yes. Do you mean--
    Miss Gonzalez-Colon. Yes.
    Ms. Fiotes [continued]. --the VA staff--
    Miss Gonzalez-Colon. Yes.
    Ms. Fiotes [continued]. --on the project? Yes.
    Miss Gonzalez-Colon. Did that affect the whole process, yes 
or no?
    Ms. Fiotes. I don't believe so.
    Miss Gonzalez-Colon. Okay, you don't believe so. So you 
don't understand that the VA have staff turnover on the 
facilities?
    Ms. Fiotes. The staff turnover on the project team was not 
that significant. I thought you were talking about the turnover 
to the Army Corps of Engineers, that transition. I am not sure, 
that's why I asked for a clarification.
    Within the VA, the project team was fairly consistent for a 
length of time.
    Miss Gonzalez-Colon. So staff turnover was never a problem?
    Ms. Fiotes. I did not say that staffing was never a 
problem, but turnover in particular was not the issue. I think 
this lack of sufficient staffing and some of the project 
leadership was not adequate for that project.
    Miss Gonzalez-Colon. Thank you.
    With that, I will yield the rest of my time to Mr. Coffman.
    Mr. Coffman. I thank the gentlelady.
    Mr. Von Ah, in a 2017 GAO report, it cites on page 8, ``In 
our March 2017 report, we found VA's policies were not clear or 
consistent in the way that they require VA to link construction 
and activation schedules to form an integrated master 
schedule.''
    Could you elaborate on that and your concerns or GAO's 
concerns about VA's ability to execute an activation plan?
    Mr. Von Ah. Sure. Our concerns at that time were, we found 
when we looked at--the integrated master schedule at the time, 
as well as the construction schedule and the activation 
schedule--as we looked at all three of them, many of the dates 
didn't match up where they should have matched up, so they were 
misaligned. We didn't have a huge amount of documentation 
regarding the activation schedule at that time, but just the 
fact that those dates misaligned was the basis for our 
recommendation.
    When we looked back at VA's policies regarding that, it was 
not clear what should have been aligned or how these schedules 
should work together.
    Since then, VA has changed their policies, so that they do 
clarify exactly what they mean by this delivery date or this 
delivery date, and have worked with the Army Corps to put that 
together in an integrated master schedule. So, at this time, we 
don't have significant concerns about their ability to do that 
going forward.
    Mr. Coffman. Ms. Fiotes, when can you have a copy of your 
activation plan to this Committee and to my office?
    Ms. Fiotes. Congressman, I would have to ask my colleagues 
to answer that. I don't have the activation plan.
    Mr. Coffman. Have you read the activation plan, Ms. Fiotes?
    Ms. Fiotes. I have not.
    Mr. Coffman. Who can respond to that?
    Mr. Gigliotti. Sir, yes, we do have an activation plan, we 
can share that with the Committee.
    Mr. Coffman. When can you share it with the Committee?
    Mr. Gigliotti. This week. We have it, so--
    Mr. Coffman. Okay.
    Mr. Gigliotti. And, Congressman, on that earlier comment, 
if I could, on the human resource director, I misspoke. The 
individual is coming on in February, we believe, I believe from 
what I have been told, the current acting is qualified.
    Mr. Coffman. Mr. Von Ah, is that an issue that you all 
looked at?
    Mr. Von Ah. I'm sorry, what was the question?
    Mr. Coffman. Concerning the qualifications of the current 
acting human relations--I mean human resource person?
    Mr. Von Ah. The qualifications was not something we looked 
at, no.
    Mr. Coffman. Okay. Mr. Chairman, I yield back.
    The Chairman. I thank the gentleman for yielding.
    Mrs. Radewagen. Thank you, Mr. Chairman. I too want to 
welcome the panel.
    I have a question for Ms. Fiotes. How was the allocation of 
beds and floor space in the new facility determined?
    Ms. Fiotes. I can't answer that question, Congresswoman. 
The design predates my arrival at the VA.
    Mrs. Radewagen. Mr. Gigliotti, I have the same question for 
you: how was the allocation of beds and floor space in the new 
facility determined?
    Mr. Gigliotti. I'm sorry, I don't know that either. The 
project was designed before I got to my position.
    Mrs. Radewagen. Thank you, Mr. Chairman. I yield back my 
time to Mr. Coffman.
    Mr. Coffman. Thank you.
    Ms. Fiotes, when did you start working, directly or 
indirectly, on this particular construction project?
    Ms. Fiotes. January of 2013.
    Mr. Coffman. January of 2013. And when were you given 
essentially a promotion, albeit acting?
    Ms. Fiotes. I was asked to be acting and have been Acting 
Principal Executive Director since April of 2017.
    Mr. Coffman. And whose place did you take in that position?
    Ms. Fiotes. Mr. Greg Giddens.
    Mr. Coffman. Okay. I am just--how can you, as a 
professional--I mean, you have either not answered or evaded a 
number of questions today that are very basic to this 
particular construction project, and so I am just absolutely 
amazed at your lack of professionalism in not understanding the 
origins of this project and how you could assume leadership 
over something that you seem to go out of your way not to 
understand. Could you answer that?
    Ms. Fiotes. What was the question?
    Mr. Coffman. Well, just tell me, I am just stunned at your 
lack of knowledge on this project, that anything that occurred 
the day before you got there somehow you don't know. It is the 
difference between your saying I am not responsible for and I 
don't know, but there seems to be an awful lot you just don't 
know. So I guess I can understand how this project got in the 
condition that it is. I mean, if none of you seem to know, have 
any real understanding of why it was designed the way it was, 
you know, it is just stunning.
    I guess you are right, there is no explanation on your part 
for your answers or your lack of answers today to the questions 
that have been presented to you.
    So, for the record, I would like an explanation on how we 
got to going from 60 beds to 34 beds. For the record, I want to 
know why PTSD was taken out of the initial plan of the 
hospital; not the standalone, but the initial plan of the 
hospital. For the record, I want to know when you all became 
aware that PACT teams would have to be left at the old 
hospital. And, for the record, I want to know when you brief 
Congress on all these facts.
    I yield back.
    The Chairman. I thank the gentleman for yielding.
    I think everyone has had an opportunity. I am going to have 
a second round, because of the importance of this. We are going 
to limit the second round to a couple of minutes and I will 
yield myself now 2 minutes of time.
    Let me just summarize what I think I have learned in this. 
Number one, the initial design build is a bad idea. I think 
design, bid, build, and include the people who are going to be 
working in that building and in that facility, because I think 
you would have had a much different facility if you had done 
that, instead of start designing it as you are building it. 
This was a train wreck. So I would do that and I would include 
the people who are going to be working there every day.
    Secretary Shulkin said this past year when he was 
testifying here that his primary goal this year was to reduce 
veteran suicide. And so what did we do? Mr. Coffman and I 
attended in that Building 38--and you all, some of you all were 
there--we had a town hall for those veterans in that PTSD 
facility and they had nothing but great things to say. And Dr. 
Wahlberg, who is in charge of that facility, apparently has one 
of the best outcomes of any in the country in that facility, 
and to have sort of left that out when that is a primary goal 
of VA.
    And I think the other, when we look at the construction 
cost of this, I looked at a hospital that we built, it has been 
about 8 or 9 years ago in my hometown, so about $1 million a 
bed, so we have about $120 million in a 120-bed hospital. In 
this facility--and it is a more complex facility, this was a 
community hospital--it looked like it is about 13 million per 
bed, is what we have in this facility, if you look at 150 beds 
and $2 billion. So an enormous cost and we just cannot afford 
that.
    So one question, very quickly, that I want to get answered 
on the record--two things, very quickly.
    One, Ms. Fiotes, do you believe that the Committee's 
legislation, H.R. 4243, the VA Asset and Infrastructure Review 
Act, would help you vacate the Clermont campus?
    Ms. Fiotes. It would help in terms of raising the threshold 
for the minor construction, yes, it would.
    The Chairman. And what about reinvesting the money back in 
the VA, not to the general fund?
    Ms. Fiotes. Absolutely, Mr. Chairman.
    The Chairman. Thank you.
    And, Mr. Caldwell, very quickly, why do we have a second 
contractor who doesn't know anything about the building that is 
going to come into the building to finish up all these 300-plus 
minor things or minimal things that have to be done and we 
don't have a contractor yet? And we know the unemployment rate 
is very low in Denver and we also know that the building trades 
have moved in these areas, for instance, Texas. And we are 
finding problems just getting sheet rock where we are at home 
now and the cost has gone up for all this, I know the sheet 
rock is up 25 percent in our town and we can't find anybody to 
put it up.
    So why are we not using the original contractor who knows 
all about this building, where every plug is, getting a second 
contractor we don't have and expect it to be done by August?
    Mr. Caldwell. Sir, there were several reasons that we made 
that decision. One is, we thought it was important that we 
ensure the prime contractor, Kiewit-Turner, focus on completing 
the work that they were responsible for. We did not want to 
distract them with beginning to add things to the job.
    In addition to that, the things that--
    The Chairman. Let me interrupt you there. Isn't that what 
their job was to do this, like the contractors laid out? I 
mean, maybe I am confused--
    Mr. Caldwell. Well, not the added things. We are talking 
now about adding things to them.
    And the other factor was the cost associated with using 
that very large contractor and the general conditions costs 
that we are incurring on a daily basis for having that 
contractor on the project site. So the longer that we add--the 
more we add work to them and the longer we extend them on the 
job, the Government would be responsible for those general 
conditions, which are going to be or would have been much 
larger than they would be with this smaller contractor.
    The Chairman. Well, are you confident that we can get 
somebody in here to do all this? Because you cannot open that 
building at 98 percent--
    Mr. Caldwell. Yes, sir.
    The Chairman [continued]. --it has got to be 100 percent.
    Mr. Caldwell. Yes, sir. We have good confidence that we can 
do this. We are using an 8A, a small business firm, as our 
acquisition strategy permits us to go to a firm that has a 
proven track record that we can depend upon. And so we are 
confident that we can pull this together.
    The Chairman. Thank you.
    I now yield to Mr. Coffman.
    Mr. Coffman. Thank you, Mr. Chairman.
    I think, first of all, that all the last four projects, to 
include this one, major construction hospital projects, the VA 
in each project has been hundreds of millions of dollars over 
budget and years behind schedule. This just happens to be the 
worst and, unfortunately, it is in my community.
    This project I think is an affront to the veterans who have 
made tremendous sacrifices in defense of our country in not 
getting the kind of state-of-the-art care, given the fact that 
this hospital is so late in terms of its schedule, and it is an 
affront to the taxpayers of the United States that have had to 
pay for this.
    And I can tell you, I am very disappointed, you know, 
President Trump ran on the fact that he was going to clean up 
the Veterans Administration. I think he has certainly made 
progress, but this is an area that is very critical and I see 
no change, I see absolutely no change. It is the same--those 
that have their fingerprints on this hospital, I mean, it is 
virtually the same bureaucratic incompetence and culture of 
corruption.
    And so I will ask Dr. Shulkin and ask the President to 
clean house, and that is what he should have done from day one 
and it hasn't been done.
    I yield back.
    The Chairman. I thank the gentleman for yielding.
    General Bergman, you are recognized.
    Mr. Bergman. Thank you, Mr. Chairman.
    And I am just going to reiterate, we have got a chance here 
to not repeat history and the only way we are going to do that 
is if we are not laying blame here, we are looking objectively 
at what occurred and what we do, all of the stakeholders--and 
someone does have to have the lead, by the way, whether it is 
the Army Corps or somebody else--someone, I would suggest, do 
that should be within the VA. Okay? It is your business, it is 
your business. So, please take for action the fact that this 
situation needs to be objectively looked at, totally in such a 
way that those who would potentially in the future not have any 
clue what happened here can read about it, study it, and not 
repeat it.
    I yield back, Mr. Chairman.
    Mr. Milsten. Sir, I would add that we are taking the lead. 
We are the one that is going to consolidate them, but beyond 
consolidating them, to get back to the point that you made, one 
of the processes that were put in place is that at all of our 
stage gates on these projects, when we sit down with the Corps 
and do the reviews, that we positively review the lessons 
learned and record for the record how they are accomplished on 
this project, on the project of the future.
    So it is not we are going to learn, we are looking at that 
process that says, if this is what we learned here, how are we 
applying it on this project, and my project teams will record 
positively how they have evaluated that lessons learned in that 
future project.
    Mr. Bergman. So then we will at some point, as Members of 
Congress or anyone else for that matter, be able to review what 
you all created.
    Mr. Milsten. Yes, sir, you will.
    Mr. Bergman. Very good. Thank you.
    Mr. Von Ah. Mr. Bergman, I would also just add that GAO is 
following up on all of our recommendations regarding this 
project and others that we have made over the years, and we 
have ongoing projects that also look at other aspects of VA's 
construction.
    Mr. Bergman. Well, this is an opportunity for us to excel. 
I mean, truly, this is bad, but we can make it good for the 
second time.
    Thank you, sir.
    The Chairman. I thank the gentleman for yielding back.
    And I want to thank our panel for being here today and I 
want to thank you for touring us through the facility last 
week. It was very informative to me.
    And, with that, I will yield to Mr. Walz for any closing 
comments that he may have.
    Mr. Walz. Again, well, thank you all for being here, and 
thanks to the Chairman.
    And maybe segueing from General Bergman, I think that 
starting several years ago under the leadership of then 
Chairman Miller and transitioning to Chairman Roe, the 
ownership of this Committee had started to change at asking for 
things. I remember in 2015, we sat in this room and that is 
when I was asking, quite unrealistically, but out of 
frustration that every change order should come to here and we 
should sign off on it, because we have ownership in it and I 
was getting tired of being blamed for things that were outside 
of our ability to provide that oversight. So I think what the 
General is bringing up is a good point.
    I would also like to say and recognize the leadership of 
Mr. Coffman. It is undeniable, he is a friend and champion of 
veterans; his frustration is justified and understandable. I 
mentioned earlier, we have been getting a little more feedback, 
but he is absolutely right, we had no idea on these PACT teams 
staying over there; that took us blind-sided, it was 
unacceptable. That should be a lesson learned and that 
frustration is real and I thank him for continuing to hold all 
of us accountable on that piece.
    So if we can get this thing through, the bottom line is 
improved care and access for our veterans. We can't let it go. 
It is a continuing journey, not a destination. We are 
scheduled, I believe, for August 11th.
    I would again use General Bergman's references looking at 
game field and, as a Vikings fan, there is a hopefulness of 
what can happen, but there is a flip side to that coin: there 
are Saints fans out there that everything seemed certain and it 
was not certain.
    So I would caution all of you and I know you will not raise 
those toasts to what has to be done. This system was broken, 
there is much more work to be done. Our focus in the short term 
is getting that facility up, functioning, and getting quality 
care for our veterans. So I encourage all of you to continue on 
with that. You can rest assured that this Committee, certainly 
under the leadership of Chairman Roe and the doggedness of Mr. 
Coffman, isn't turning away on any of this.
    And, with that, I yield back.
    The Chairman. I thank the gentleman for yielding.
    And, in closing, I think you can sense from Members up here 
a great frustration. And I think what humanizes it, when Mr. 
Coffman and I sat down with those veterans in the PTSD unit and 
listened to their stories, I then left and went to Castle Rock 
with Mr. Buck and spoke to over 200, a standing-room-only crowd 
of veterans who were there, who had served this country from 
Iraq and Afghanistan all the way through Vietnam, and some even 
Korean War veterans that were there, and when you look at those 
men and women that have served this country, you understand why 
we are doing this and why it is.
    And sometimes I think in these kind of projects we forget 
who we are doing this for and it is for the patients who have 
served this country. And I don't want us to lose sight of that 
and I think that is why there is some frustration, because we 
as Representatives, Mr. Walz, all of us, go home and meet 
people whose needs are not being met and I think that is--I 
think I am correct there and that there is light, I think, at 
the end of the tunnel, hopefully in August of this year. After 
planning this facility since the 1990s, we now have an end in 
sight, and it is a concrete goal and I appreciate VA's 
willingness to set this goal.
    Transparency has not always been the operative principle, I 
think we have heard that over and over today. And, as we have 
discussed this morning, many challenges persist and meeting 
this activation schedule will in no means be easy, but the 
veterans have waited long enough. And this Committee will keep 
a close eye on the activation process throughout the year.
    And I will also say that that move, I have gone from an old 
hospital to a new medical center, I have made that transition 
where you move patients, and that will require a tremendous 
amount of planning on the hospital staff's part. I do not 
believe there was ever a time in the Government or in the 
private sector when a 10-year $1 billion hospitals were a 
workable model, much less a 10-year $2 billion hospital. And 
the size of the capital need of the VA is enormous, I think it 
is $50 billion, and if we double it on everything it will be 
$100 billion. While Congress and this Committee specifically 
have repeatedly demonstrated a willingness to allocate 
resources, we will never be able to solve the problem if we are 
not able to get value for the dollars we invest.
    Modern medicine is also increasingly agile, and flexibility 
and adaptability are more important than ever, and I am afraid 
VA's experience with this hospital design has demonstrated the 
risks of obsolescence. At the end of the day, I hope that all 
involved have learned lessons from the mistakes that were made 
and will carry those forward.
    Without a doubt, putting the Army Corps of Engineers in 
charge was the right response to the problem that confronted us 
in 2015. I am encouraged by what the VA and the Corps have 
achieved working together. Taking over a construction project 
when it hit rock bottom is significantly different from 
managing it from the outset and preventing problems before they 
develop; those are different challenges. It seems the Army 
Corps' involvement is necessary, but not sufficient for its 
success.
    And we have heard some good testimony today about how we 
prevent these problems that have occurred in the past repeating 
themselves. A repeatable model incorporating the lessons 
learned must be developed and carried forward on future 
projects.
    Finally, we must all focus as much attention on stewardship 
of the property VA already has as on flashy, new construction.
    I want to again thank you all for being here. And I will 
probably make, as Mr. Coffman will, another trip to Denver to 
see how this process is going, and hopefully get it on schedule 
and get it there, and open it up and hand the keys to the 
medical people in August of this year.
    I ask unanimous consent that all Members have 5 legislative 
days in which to revise and extend their remarks.
    Without objection, so ordered.
    The meeting is adjourned.

    [Whereupon, at 12:03 p.m., the Committee was adjourned.]



 
                            A P P E N D I X

                              ----------                              

                  Prepared Statement of Stella Fiotes
    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 new Rocky Mountain Regional VA Medical Center in 
Aurora. I am accompanied today by Mr. Dennis Milsten, Director of 
Operations, of the VA Office of Construction and Facilities Management; 
and Mr. Ralph Gigliotti, Veterans Integrated Service Network 19 
Director.
    We are pleased that this facility will enable us to serve over 
390,000 Colorado Veterans and their families, as we work to ensure that 
local Veterans receive the VA services that they have earned and 
deserve. The Denver VA Medical Center currently provides a robust range 
of tertiary health care services and the replacement campus will 
provide all of these same services upon opening. The only exception to 
this is the relocation of the Post Traumatic Stress Disorder (PTSD) 
Residential Rehabilitation Treatment Program, which will remain at the 
Denver facility until such time as its replacement structure can be 
built. In addition, the new campus will add mammography and PET/CT to 
its imaging services.
    The Rocky Mountain Regional VA Medical Center is also proud to be 
the latest Spinal Cord Injury and Disorders (SCI/D) Center within the 
VA system. This center will serve Veteran populations in Colorado, 
Utah, Wyoming, and parts of Nebraska and South Dakota. The SCI/D Center 
will include both an Outpatient Clinic and Inpatient Unit, offering 
comprehensive, multi-disciplinary care for patients with SCI, Multiple 
Sclerosis (MS), and Amyotrophic Lateral Sclerosis (ALS). The SCI Center 
will offer a full range of inpatient and outpatient services, including 
Physical Therapy, Occupational Therapy, Psychology, Social Work, 
Nutrition, Assistive Technology, Therapeutic Recreation, Pool Therapy, 
and Urology assessment. The facility will be able to accommodate 
ventilator-dependent patients, and have separate indoor and outdoor 
space for recreation, community re-entry, and training.
    Lastly, the new facility will provide a much more up-to-date and 
positive Veteran and family experience, as illustrated below. The 
following is a summary of some of these significant improvements to the 
delivery of health care to our Veterans:

      Patients will now have private rooms, which include their 
own bathrooms, as well as space for family members to stay overnight.
      All interventional services, such as surgery, 
bronchoscopy, and interventional radiology, will be located on the same 
floor of the Diagnostics and Treatment building. These complex services 
are also adjacent to the pre-operative and post-operative beds, which 
will improve the coordination of care and efficiency of service 
delivery.
      The new operating rooms will also have Operating Room 
integration.
      There is a sky bridge that connects the operating rooms 
to the Intensive Care Unit, which will allow for ease of movement for 
those patients requiring an overnight stay following a procedure.
      The intensive care unit will also have an 800-square-foot 
waiting room suite, which will emphasize family support.

    The construction contract with Kiewit-Turner (KT) at the new 
location is 98 percent complete and 11 of 12 structures have been 
turned over for activation. VA and the United States Army Corps of 
Engineers (USACE) are currently working through contract completion 
items and actively working with our contracting partners to bring this 
contract to completion as swiftly as possible. Activation activities 
are ongoing and the facility will open to serve our local Veterans in 
August 2018.
    The current activation schedule has the majority of installation, 
calibration, and testing of newly procured equipment being completed in 
May 2018. This will enable the Denver Medical Center staff to complete 
over 40,000 staff hours of education, training, and orientation in July 
2018. We are currently on schedule to complete relocation of the 
existing patient services by August 2018. We will be monitoring the 
remaining construction activities as we coordinate the ongoing 
activation process with facility completion.
    VA's current activation budget for this project is $341 million, 
which covers activity from 2013 to 2020. This budget includes $2.6 
million to serve as contingency fund. The activation budget has been 
adjusted annually based upon current needs for respective fiscal year 
(FY) obligation plans. However, the overall activation budget is still 
on track with the planned $341 million, per the data table below. 
Project obligations and planning are summarized as follows:

      To date, we have spent 53 percent of the total amount, 
with 2.75 years remaining in the plan. All High Tech-High Cost 
equipment for the new facility was procured in prior years.
      FY 2017 costs included the procurement of furniture, 
equipment, and low voltage systems ($45 million).
      FY 2018 costs will involve equipment leases and service 
contracts ($20 million).
      Recurring (staffing) expenditures have occurred in each 
year since FY 2013 and have been increasing yearly, as hiring ramps up 
to staff the new facility.

    The subsequent years of the plan will involve operating and 
recurring staffing costs, which will support the new operations and 
pave the way for the Medical Center's budget to undergo annual 
programming as part of VA operations.
    During the USACE construction management activities for the 
project, VA minimized all user-requested design, equipment, and 
functionality changes. This provided an opportunity for KT to propose 
to USACE that labor would concentrate on completing and turning over 
the facility to VA building-by-building, rather than a longer process 
of delivering it in full at a later date, which saved a substantial 
amount in KT overhead costs. Additionally, USACE has not incurred the 
staffing costs that USACE budgeted for the project, and will be 
returning approximately $10 million of unused staffing funds to VA. We 
also note that about $6 million in settlements were saved with 
subcontractors from the original contract and the interim contract.
    Based on the decision to turn over building-by-building, VA is now 
in the process of working with USACE to let a ``completion contract,'' 
to address code requirements, necessary equipment changes and process 
modifications that have changed throughout this project, at a lower 
overhead cost. It is common on complex projects like this one, to defer 
items that can be more cost effectively and efficiently handled through 
a follow-on contractor. This completion contract is estimated to cost 
about $10 million and will be funded from savings realized on the 
project. USACE will coordinate with VA as it contracts for and manages 
the completion contract. The overall goal under that contract will be 
to reach project completion as soon as possible.
    In August 2017, VA initiated a Targeted Asset Review with the U.S. 
General Services Administration (GSA) to assess the existing property, 
and also initiated a market survey in December 2017. VA currently 
expects to receive the results for the Targeted Asset Review in early 
February. The objective is to leverage the property to maximize 
benefits to VA, Veterans, and our Nation's taxpayers.
    VA plans to keep the existing hospital in service until the PTSD 
building can be completed at the new campus. VA is currently reviewing 
options to expand this capability at the new replacement facility. 
Additionally, seven Patient Aligned Care Teams (PACT) will remain at 
the current facility to serve Veterans until VA conducts further 
analysis on how to optimize their impact for local area care based on 
where those PACT teams can continue to function. There will also be 
limited support service such as police, food service, and facility 
maintenance at the current hospital, until all services are relocated.
    In closing, VA is thankful for the work this and other 
Congressional Committees have done to help VA navigate the challenges 
this project has posed and to secure the funding necessary for its 
planned completion. And despite those challenges, VA remains committed 
to ensuring the project provides a facility where Veterans will receive 
convenient 21st Century health care in a manner where the Department, 
Congress, Veterans Service Organizations, and local stakeholders work 
together for the benefit of our Nation's Veterans.
    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 other Members of 
the Committee.

                                 
             Prepared Statement of Lloyd C. Caldwell, P.E.
DENVER REPLACEMENT MEDICAL CENTER CONSTRUCTION PROJECT, AURORA COLORADO
    Mr. Chairman and Members of the Committee, thank you for the 
opportunity to appear before you on behalf of Lieutenant General Todd 
Semonite, the 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) and other 
agencies of the Federal Government.
    The Corps fully 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. The Corps has significant capabilities and 
experience delivering medical facilities for our service members and 
veterans. We understand the link between the technical capabilities we 
provide to enable vital health care for our veterans.
    DOD's construction program utilizes designated Construction Agents, 
of which the Corps is one, that 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 mission we execute for the Nation, and the Corps' capabilities 
are uniquely developed to deliver both defense and non-defense 
infrastructure. 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 
the necessary authority for the Corps to assist other federal agencies, 
to include the Department of Veterans Affairs (VA), with any design and 
construction requirements.
    Today, we have been asked by the Committee to testify on the 
subject of the Denver Replacement Medical Center in Aurora, Colorado 
(Denver Hospital), including the Corps' accounting of the total 
construction costs known to date and any ancillary construction 
activities. In addition, I will provide information pertaining to the 
Corps' lessons learned as related to the Denver Hospital.
    While the Corps has the lead role in the construction execution of 
the Denver Hospital, VA, as the project proponent, remains responsible 
for project requirements, resourcing and facility transition to full 
operations, as well as the activation budget and timeline and planning 
for the existing medical center's continued use or decommissioning.
    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 and a new agreement 
provided the Corps the necessary funding and authority to transition 
the project's construction agent responsibility to the Corps.
    Upon completion of the initial Corps assessment, we identified a 
preferred course for procurement as a Fixed Price - Incentive Firm 
Target contract. This contract was awarded on October 30, 2015, after 
lengthy negotiations with the contractor, and it has demonstrated 
effectiveness in cost and time savings, due to numerous factors, not 
the least of which has been a dedicated team consisting of the Corps, 
VA, and the Contractor working towards the goal of timely, cost 
effective delivery of a quality facility.
    During construction, the Corps and VA have collaborated with each 
other, and staff from the House Veterans Affairs Committee to provide 
transparency of the completion status, ongoing activities, changes and 
expenditures associated with the project. Additionally VA and the Corps 
provided quarterly briefings to Committee staff on the project's 
completion status.
    Our contract provided a target value for completing this project of 
$570.75 million, with contingency for unforeseen conditions held in the 
amount of $14.25 million, for a total estimated construction value of 
$585 million. With the construction now 98 percent complete, our 
current estimate anticipates that upon final completion, we will have 
expended approximately $555 million for construction resulting in 
approximately $30 million being returned to VA. Additionally, we 
anticipate returning $10 million from the government and contract 
oversight and audit costs. This will result in a total of approximately 
$40 million being returned to VA from the original $625 million 
provided to the Corps via Interagency Agreement. Construction remains 
on schedule for substantial completion of all buildings this month.
    Upon completion of the new facilities, there will remain ancillary 
construction activities for the Denver Hospital, which fall into two 
categories; punch list items and modifications to address current 
medical facility requirements. Punch list requirements are routine with 
any construction project, and involve minor work remaining for 
correction or completion that the contractor must finalize to be in 
full compliance with the contract. These punch list items will not 
delay project occupancy and use.
    The second category typically involves emergent requirements 
necessary to assure the new facility complies with current codes and 
practices that may have evolved during the course of the construction. 
These are relatively minor as compared to the total project 
requirements.
    These emergent requirements were identified and validated by VA, 
and will be a separate contract action from the contract with Kiewit 
Turner. We anticipate completing these requirements using the same 
government team currently on the project but with a new contract. The 
time required to complete this contract action is still under review 
but we are currently targeting to have this remaining work completed by 
the summer of 2018. It is normal that medical facilities require 
modifications to address emergent requirements. The Corps and VA made 
the decision to address these emergent medical requirements via a new 
contract. This course of action provides clarity and transparency to 
completion of the project and assures finality in completion of the 
larger contract. This decision also allows the current contractor to 
concentrate on completing their contract requirements.
    As part of our process the Corps reviews our project execution at 
various stages and identifies lessons learned. The lessons learned help 
to determine if quality objectives have been met, enable us to identify 
root cause(s) for quality objectives not met, and help us to formulate 
strategies to improve performance during ongoing execution of current 
or future projects. While this project is not yet complete, lessons 
learned are being continuously recorded.
    For example, one significant lesson learned is the value of 
consistent Senior Executive Review of the project. The Senior Executive 
Review Group for this project was comprised of senior leaders from VA, 
the Contractor's organization, and the Corps. This group met regularly 
to receive project updates from the team on the project and to provide 
guidance. This commitment at the senior levels of the organizations of 
all stakeholders helped to ensure that the entire team remained focused 
on the success of the project and achieving our collective goals. At 
the completion of the project, a final package of lessons learned will 
be formally developed and documented.
    Finally, while we are pleased to be nearing completion of this 
important project, we are also keenly aware of the trust the Committee 
has placed in the Corps. We appreciate the partnership that has 
developed during this project between the Corps and VA. We believe that 
the completion of the Denver Hospital will be a source of great value 
to the veterans in the region, and will validate the trust that you 
have placed in the Corps and the VA to bring it to completion. We are 
committed to working with VA for final completion of the Denver 
Hospital, and to continue this partnership and collaboration on future 
VA major construction projects.
    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.

                                 
                  Prepared Statement of Andrew Von Ah
VA CONSTRUCTION

Actions Taken to Improve Denver Medical Center and Other Large 
    Projects' Cost Estimates and Schedules

    Chairman Roe, Ranking Member Walz, and Members of the Committee:

    I am pleased to be here today to discuss the Department of 
Veterans' Affairs (VA) management of medical facility construction 
projects costing $100 million or more, particularly the Denver VA 
Medical Center, \1\ and other matters.
---------------------------------------------------------------------------
    \1\ VA's Denver VA Medical Center is actually located in Aurora, 
Colorado, near Denver.
---------------------------------------------------------------------------
    As you know, VA has pressing infrastructure needs and has struggled 
to make progress addressing them. VA operates one of the largest health 
care systems in the country with 1,376 sites in 2017. However, many 
facilities were built decades ago and were designed for an inpatient-
driven health care system that does not align with VA's current 
wellness approach, which emphasizes outpatient and specialized care 
that, according to VA, served 6.26 million of the 9-million enrolled 
veterans in 2016. VA has endeavored to design and construct new 
facilities to replace its aging infrastructure with the intent of 
improving veterans' health care. However, we found substantial cost 
increases and schedule delays for VA's largest medical-facility 
construction projects in 2013, finding that four of the largest had 
experienced a total cost increase of nearly $1.5 billion. \2\ These 
overruns included the Denver VA Medical Center, which, at the time, had 
experienced a 144 percent project cost increase. As a result of these 
cost increases and schedule delays, Congress mandated that VA outsource 
management of certain projects costing $100 million or more. As a 
result of these mandates, \3\ VA contracted with the U.S. Army Corps of 
Engineers (USACE) to manage construction of the Denver project as well 
as the others that Congress specified. Nevertheless, VA continues to 
manage other projects costing $100 million or more that Congress has 
not specified should be outsourced. While cost increases and schedule 
delays at VA's medical-facility construction projects can occur for 
many reasons, such as unforeseen site conditions, management issues 
also play a part.
---------------------------------------------------------------------------
    \2\ GAO, VA Construction: Additional Actions Needed to Decrease 
Delays and Lower Costs of Major Medical-Facility Projects, GAO 13 302 
(Washington, D.C.: Apr. 4, 2013).
    \3\ Provisions related to three laws enacted in 2015 collectively 
require VA to contract with other federal entities to provide full 
project management services for the design and construction of certain 
then ongoing construction projects with a total estimated cost of $100 
million or more as well as such construction projects Congress 
authorizes in the future. See, Pub. L. No. 114-58, Sec.  502, 129 Stat. 
530, 537-38; Pub. L. No. 114-92, 129 Stat. 726, 1020 (2015); and Pub. 
L. No. 114-113, 129 Stat. 2242, 2691-92 (2015). The explanatory 
statement accompanying Public Law 114-113 specified seven ongoing 
projects for which VA was directed to outsource design and construction 
management. These seven projects are in Alameda, CA; American Lake, WA; 
Livermore, CA; Long Beach, CA; Louisville, KY, San Francisco, CA; and 
West Los Angeles, CA.
---------------------------------------------------------------------------
    This testimony (1) provides an update on VA's Denver project and 
selected other projects reviewed in our March 2017 report and (2) 
discusses VA's progress toward addressing the recommendations in that 
report. \4\
---------------------------------------------------------------------------
    \4\ GAO, VA Construction: Improved Processes Needed to Monitor 
Contract Modifications, Develop Schedules, and Estimate Costs, GAO 17 
70 (Washington, D.C.: Mar. 7, 2017). VA concurred with the 
recommendations we made our report.
---------------------------------------------------------------------------
    To address these objectives, we reviewed our March 2017 report and 
obtained and reviewed documentation and interviewed VA officials on the 
status of the Denver project and our selected projects at VA's major 
medical-facilities, as of January 2018, and the steps VA has taken to 
address recommendations in our March 2017 report. We did not assess the 
extent to which USACE or VA is following best practices for cost 
estimates or schedules on projects initiated since our 2017 report. 
Detailed information on the scope and methodology used in our issued 
reports and testimony statements can be found in those products. We 
conducted the work for this statement in accordance with generally 
accepted government auditing standards. Those standards require that we 
plan and perform the audit to obtain sufficient, appropriate evidence 
to provide a reasonable basis for our findings and conclusions based on 
our audit objectives. We believe that the evidence obtained provides a 
reasonable basis for our findings and conclusions based on our audit 
objectives.

Background

    We have previously reported on significant cost overruns on VA's 
major medical-facility projects, as well as VA's weaknesses in managing 
these projects. Specifically, in our 2013 report, \5\ we made three 
recommendations to improve VA's management of its major construction 
projects, and VA took actions to address those recommendations as 
described below: \6\
---------------------------------------------------------------------------
    \5\ GAO 13 302.
    \6\ ``Major construction projects'' are those estimated to cost 
more than $10 million. Of VA's 25 major construction projects, 22 are 
estimated to cost $100 million or more.

    1. Integrate medical equipment planners in the design and 
construction of medical facilities to better integrate medical needs 
with the design of the facilities: In response, VA issued a policy memo 
providing guidance that medical equipment planners be assigned to 
medical-construction projects costing $10 million or more to better 
integrate medical needs with design and construction of facilities. \7\ 
During our 2017 work, VA officials at project site locations indicated 
that this had improved VA's capabilities for medical facilities' 
planning, including equipment planning.
---------------------------------------------------------------------------
    \7\ Department of Veterans Affairs, Office of Construction & 
Facilities Management, Architectural Design Manual (Aug. 1, 2014).

    2. Improve VA's communication with contractors to clarify roles and 
responsibilities, especially for change orders: \8\ In response, VA 
implemented procedures to address our finding that a lack of clear 
communication with contractors contributed to project delays and cost 
increases. During our 2017 work, contractors at the three selected 
projects we reviewed that VA managed told us they had established good 
working agreements with VA's Office of Construction and Facility 
Management.
---------------------------------------------------------------------------
    \8\ Change orders are used to process changes to a project's 
design.

    3. Issue and take steps to implement guidance on streamlining the 
change-order process based on the findings and recommendations of the 
Construction Review Council: \9\ In response, VA took steps to 
streamline its change-order approval process including establishing 
processing time frames for change orders on construction projects and 
authorizing more people to approve change orders. However, our 2017 
work found further room for improvement with regard to VA's tracking of 
change orders, as I will discuss later in this testimony.
---------------------------------------------------------------------------
    \9\ In April 2012, the Secretary of Veterans Affairs established 
the Construction Review Council to serve as the single point of 
oversight and performance accountability for the planning, budgeting, 
execution, and delivery of the VA's real property capital-asset 
program.

Cost Increases and Schedule Delays Persist at Major Medical-Facility 
    Projects; However, USACE Expects to Finish Constructing the Denver 
    Facility Within Its Estimated Costs and Meet the Project's 
---------------------------------------------------------------------------
    Construction Schedule

    While VA had taken steps to improve its management of major 
construction projects, some VA major medical-facility projects we 
reviewed for our March 2017 report continued to experience cost 
increases and schedule delays. For example, in 2017 we found that the 
Denver project's costs increased another 100 percent over the estimated 
cost of the project since our previous report. See table 1 for the most 
recent available information on five projects we examined for our March 
2017 report. These five projects, among the most costly projects, are 
in different phases of construction and represent a mix of projects 
managed by USACE and VA; thus, this information cannot be generalized 
to sites agency-wide.

    Table 1: Changes in Costs and Completion Time Frames between 
November 2012 and December 2017 for Selected Department of Veterans 
Affairs' (VA) Medical-Facility Construction Projects

    (a) The Louisville project did not have estimated completion dates 
available in November 2012 or December 2017.
    (b) VA expects the cost estimate for the Palo Alto project to 
increase.
    (c) The St. Louis project did not have an estimated completion date 
available in November 2012.


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    When USACE took over the Denver the project in August 2015, it 
estimated that completing construction would cost $585 million. We 
found that the cost estimate substantially met the characteristics of 
reliable cost estimates identified in the GAO Cost Estimating and 
Assessment Guide. \10\ According to USACE, it currently expects to 
complete the Denver project at a cost of less than the $585 million 
estimate.
---------------------------------------------------------------------------
    \10\ GAO, GAO Cost Estimating and Assessment Guide: Best Practices 
for Developing and Managing Capital Program Costs (Supersedes GAO 07 
1134P) GAO 09 3SP (Washington, D.C.: Mar. 2, 2009). Specifically, on a 
scale from ``fully meets'' to ``does not meet,'' for four 
characteristics of a cost estimate, we found the USACE estimate to 
substantially meet all characteristics. The estimate was comprehensive, 
well-documented, accurate and credible. See GAO 17 70 p. 20-21 for 
further information on these characteristics.
---------------------------------------------------------------------------
    Further, according to VA officials, they expect construction of the 
Denver project to be complete in January 2018. \11\ While in our March 
2017 report we found that the USACE construction schedule to complete 
the Denver project in January 2018 was not reliable, USACE decided not 
to revise it because doing so would have been costly and disrupt 
progress on the project. USACE officials explained they would have 
followed best practices if they had initiated the project. However, 
they stated that the Denver project presented a unique situation 
because USACE began managing the project when it was about 50 percent 
complete.
---------------------------------------------------------------------------
    \11\ We did not independently verify the remaining construction 
schedule to confirm this completion date. While the VA expects the bulk 
of the construction to be complete by January 2018, VA officials stated 
that certain construction activities will continue beyond January under 
a new contract that USACE will award and manage. USACE and VA expect 
that the cost of this work will still result in keeping the overall 
project within USACE's total $585 million cost estimate.

VA is Working on Improving its Management of Change Orders and 
---------------------------------------------------------------------------
    Estimated Project Costs and Schedules

VA Has Improved Data Collection of Timeframes for Change Orders, but it 
    Is Unclear How VA Will Use this Information to Improve Project 
    Management

    In our March 2017 report, we found the following limitations 
related to change orders, or changes to a project design:

    1. VA did not collect the necessary information to determine 
whether efforts to streamline the change order process have in fact 
been successful.

    2. VA did not collect sufficient information to categorize and 
monitor the reasons change orders occur.

    3. It was unclear how VA plans to use this information to monitor 
whether change orders are approved within VA guidelines.

    For example, three of the five VA sites we selected for our 2017 
report kept some information on processing time frames, but it was 
incomplete and inconsistent. Further, the monitoring process was done 
manually by the regions, according to VA officials. We thus recommended 
that the VA establish a mechanism to monitor the extent that major 
facilities' projects are following guidelines on change orders' time 
frames and design changes.
    Since then, VA has implemented changes to its system that captures 
information on time frames for approving changes and, according to VA, 
the reasons for the changes. This improvement should allow VA to track 
change orders that are still open and how long it takes to close them, 
and the extent to which VA's guidelines for these timelines are being 
adhered to. It should further allow VA to identify and track the 
reasons why changes occurred, such as whether a change resulted from a 
design oversight, an unforeseen condition discovered during 
construction, or some other reason. VA officials also stated that they 
have developed guidance that discusses how to track and report change-
order time frames and the reasons for the change orders, and how this 
information will be used going forward. While VA has yet to provide 
documentation, if fully implemented, these mechanisms should improve 
VA's accountability and allow for more informed decision-making by 
Congress and VA. \12\
---------------------------------------------------------------------------
    \12\ These mechanisms do not apply to change orders for the Denver 
project, since it's being managed by USACE, which has its own change 
order process.

VA is Improving its Activation Processes; However, it Has Not Produced 
---------------------------------------------------------------------------
    a Reliable Estimate for the Denver Facility

    In our March 2017 report, we found that VA had minimal supporting 
documentation for its estimate for the cost to ``activate''-the process 
of bringing a facility into full operation-the Denver Medical Center, 
and as such determined that the activation estimate was unreliable. 
\13\ While the USACE is under contract with VA to manage the 
construction of the Denver project, VA is responsible for activating 
the Denver facility and has estimated that this process will cost $341 
million. \14\ With minimal supporting documentation of this estimate, 
we recommended that VA develop an activation cost estimate for the 
Denver project that is reliable and conforms to best practices, as 
described in the GAO Cost Estimating and Assessment Guide. Without a 
reliable estimate, it is difficult for VA to make funding decisions for 
activating various facilities. Further, the lack of a reliable estimate 
poses difficulties for Congress, which relies on this estimate to make 
annual appropriations decisions.
---------------------------------------------------------------------------
    \13\ Activation includes activities such as purchasing and 
installing furniture and medical equipment and hiring new staff for the 
facility.
    \14\ VA continues to expect activation to cost $341 million.
---------------------------------------------------------------------------
    In July 2017, VA provided us with additional documentation on its 
activation cost estimate. We analyzed this information and found that 
the estimate did not meet best practices. Specifically, the VA Denver 
hospital's activation cost estimate partially met two (comprehensive 
and credible) and minimally met two (well documented and accurate) of 
the four characteristics of a reliable cost estimate as described in 
the GAO Cost Estimating and Assessment Guide. In December 2017, VA 
provided comments on our analysis, concurring with some of GAO's 
assessments and identifying additional information for us to consider. 
While we cannot find that the current estimate meets or substantially 
meets all of the characteristics of a reliable estimate, VA has made 
improvements in the documentation of the estimate since our report. VA 
officials also indicated they are taking steps such as developing 
training and going forward will be providing staff GAO's Cost 
Estimating and Assessment Guide to improve activation estimates.

VA Has Taken Steps to Clarify Its Policies on Linking Construction and 
    Activation Activities with the Integrated Master Schedule

    In our March 2017 report, we found VA's policies were not clear or 
consistent in the way that they require VA to link construction and 
activation schedules to form an integrated master schedule. The 
integrated master schedule is an important element for ensuring the 
successful and timely completion of these projects. Although VA and 
USACE officials at the Denver project provided a construction schedule, 
an activation schedule, and an integrated master schedule, we found 
that certain activities and milestones in these schedules were not 
aligned with each other across the three schedules. This lack of 
alignment may be because, although VA required an integrated master 
schedule, many of its policies on developing an integrated master 
schedule were not clear or consistent. For example, VA's policies used 
conflicting and undefined terms to describe the activities an 
integrated master schedule should cover. Without a fully integrated 
master schedule, VA could have encountered additional delays in 
completing the project. We thus recommended that VA clarify policies on 
integrating schedules.
    In response to our recommendation in our March 2017 report, VA 
clarified various policy documents in June 2017 and reinforced that all 
projects develop and maintain an integrated master schedule that 
includes and links all construction and activation activities. VA also 
has updated its policy to require USACE to comply with the requirements 
related to integrated master schedules. VA provided documentation of 
these changes which we reviewed and found that the clarifications 
addressed our recommendation. Moreover, VA officials indicated that 
they have worked with USACE to develop an integrated master schedule 
linking construction and activation activities for the Denver Medical 
Center and agreed to provide documentation. These actions should help 
VA avoid schedule delays and better manage its major construction 
projects.
    Chairman Roe, Ranking Member Walz, and Members of the Committee, 
this completes my prepared statement. I would be pleased to respond to 
any questions that you may have at this time.

GAO Contact and Staff Acknowledgments

    If you or your staff have any questions about this testimony, 
please contact Andrew Von Ah, Director, Physical Infrastructure team at 
213-830-1011 or [email protected]. Contact points for our Offices of 
Congressional Relations and Public Affairs may be found on the last 
page of this statement. GAO staff who made key contributions to this 
testimony are Cathy Colwell (Assistant Director), Brian Bothwell, 
Antoine Clark, Lynn Filla-Clark, George Depaoli, Geoff Hamilton, Jason 
Lee, Nitin Rao, and Malika Rice.

    This is a work of the U.S. government and is not subject to 
copyright protection in the United States. The published product may be 
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from GAO. However, because this work may contain copyrighted images or 
other material, permission from the copyright holder may be necessary 
if you wish to reproduce this material separately.

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                 SUPPLEMENT TO ANDREW VON AH STATEMENT
Why GAO Did This Study

    VA and USACE are nearing completion of the Denver Medical Center, 
which is intended to improve health care to veterans in that region. 
This project has suffered from substantial cost increases and delays 
resulting not only from unforeseen circumstances but also from 
mismanagement. In response, Congress mandated that VA outsource 
management of certain projects costing $100 million or more. VA 
contracted with USACE to manage construction of the Denver project, 
among others. VA continues to manage other major construction projects.
    In March 2017, GAO reported on opportunities to improve the 
management of Denver and other VA construction projects. Specifically, 
GAO recommended that VA: (1) establish a mechanism to monitor change 
orders; (2) develop a reliable activation cost estimate for the Denver 
project, and (3) clarify policies on integrating schedules. VA 
concurred with our recommendations. This statement discusses, among 
other objectives, VA's actions to address these recommendations.
    The statement is based on GAO's March 2017 report (GAO-17-70), 
additional documentation VA provided to address GAO's recommendations, 
and selected updates on the Denver Medical Center as well as other 
major VA projects.

VA CONSTRUCTION

Actions Taken to Improve Denver Medical Center and Other Large 
    Projects' Cost Estimates and Schedules

What GAO Found

    The Department of Veterans Affairs (VA) is taking actions to 
implement GAO's 2017 recommendations related to project management, as 
described below. However, in some cases VA has yet to fully implement 
these actions.
    Change orders: In 2017, GAO found that VA did not track: (1) how 
long it took for change orders-changes in a project's design-to be 
approved and whether that amount of time met VA's guidelines, or (2) 
the reasons for those changes. Since then, however, VA has started 
tracking the time frames. Additionally, VA told GAO it is tracking the 
reasons for those changes as well as developing guidance on how to use 
this information and agreed to provide documentation. This step does 
not affect change orders for the Denver project (see photograph), which 
is managed by the U.S. Army Corps of Engineers (USACE) but, if fully 
implemented should improve VA's management of other projects.
    Cost Estimate for Activating Facility: In 2017, GAO found that the 
most recent cost estimate of $341 million for activating, or bringing 
the Denver Medical Center into full operation, had minimal supporting 
documentation. Although VA is improving its cost estimation process for 
activation in response to our recommendation, the Denver estimate does 
not yet meet or substantially meet the characteristics of a reliable 
activation cost estimate.
    Integrated Master Schedule: In 2017, GAO found that certain 
activities and milestones from Denver's construction and activation 
schedule were not aligned with its integrated master schedule-the 
schedule intended to link construction and activation activities. 
Without a fully integrated master schedule, VA could have encountered 
additional delays in completing the project. GAO recommended VA clarify 
its guidance on linking schedules. VA said it has since aligned its 
construction and activation schedules for the Denver project and agreed 
to provide GAO documentation. VA has clarified its guidance and is 
working with USACE to ensure this clarification occurs on other 
projects.
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                       Statements For The Record

                             PATRICK MURRAY
    WITH RESPECT TO

    ``The Denver Replacement Medical Center: Light at the End of the 
Tunnel?''

    Chairman Roe, Ranking Member Walz and members of the Committee, on 
behalf of the men and women of the Veterans of Foreign Wars of the 
United States (VFW) and its Auxiliary, I want to thank you for the 
opportunity to present the VFW's views on the Denver Medical 
Replacement Center.
    The Denver Replacement Medical Center in Aurora, Colorado, has been 
an embarrassment for the Department of Veterans Affairs (VA) for years, 
and its completion date does not mean the end of the struggle for this 
project. Overdue and over budget is simply not enough to describe how 
badly this project was mismanaged. Without the voices of local veterans 
and their representatives in Congress, this hospital project would 
still be floundering.
    Major construction on the hospital is set to be completed this 
month, with the majority of the building work coming to an end. This 
does not mean the project is complete by any means, there is still 
millions of dollars' worth of work to be done. The major construction 
milestone can sound misleading as some may think the work is done, but 
there are still months ahead of this project before they can start 
operating fully.
    In the next six months, VA has to fully stock the hospital with 
furniture and medical equipment which will cost hundreds of millions of 
dollars. Even though substantial completion will be reached this month, 
the building will still not be ready to receive significant numbers of 
patients until this summer.
    Activation and startup costs are typical for every project, but 
every additional dollar spent on the Aurora hospital continues to erode 
public trust for an already extremely expensive project. Supplying the 
hospital with equipment, testing and approving the equipment, and 
staffing the facility are all part of typical startup costs. 
Transparency in all the additional time and money needed for the actual 
completion of the project is one important step in regaining the 
public's trust in how tax dollars are spent.
    The Aurora hospital project was mismanaged from the start and is a 
clear indication that the VA construction division is not up to speed 
with innovative and progressive construction practices. Many have 
stated that the leadership of this project lied to Congress and the 
public about the progress and costs associated with the hospital from 
the beginning. It took the U.S. Army Corps of Engineers to take over 
control of the project for any significant headway to be made toward 
completion. VA and Congress must make certain this is not allowed to 
occur again and that those responsible are held accountable.
    For future VA major construction projects to succeed, the personnel 
within VA managing those projects need to be empowered to be decision 
makers on the ground and be given the authority to make changes to stay 
ahead of schedule and under budget. The VFW has been an advocate for VA 
construction to fully embrace the Integrated Design-Bid-Build (IDBB) 
process for all projects. Until they do so, construction projects like 
Aurora will continue to hit unnecessary pitfalls like they have in the 
past.
    IDBB allows contractors, designers and owners representatives to 
come together in the early stages of the entire project in order to 
avoid conflicts during the building process. By integrating the early 
phases of the project, designers and the contractors building the 
hospital can easily navigate conflicts and changes that would typically 
stall progress during key phases of the project. Avoiding having to 
redo work that does not fit for the staff using the facility saves 
costs to the tax payer.
    Small issues like electrical outlets needing to be replaced in 
Aurora due to incompatibility with the types of patients being seen in 
certain clinics, could have been avoided if the end users had input 
from the beginning. Having to go back and redo work-in-place only adds 
to the already staggering cost of the facility. The IDBB process helps 
reduce overall time and cost of any project by overlapping early phases 
of the project and bringing all stakeholders to the table in order to 
get the work done right the first time.
    Projects like Aurora should never have reached the level of 
mismanagement that it did, but once the waste and abuse of government 
money was fully brought to light, Congress stepped in and demanded 
change. A shining example of Congress getting it right is 
Representative Mike Coffman who was one of the leaders in demanding 
change and accountability for the Aurora project. The VFW shares Mr. 
Coffman's frustrations with the project, and are happy to see members 
of Congress taking the right approach to correcting the problems 
associated with it.
    Another key voice in calling out the problems associated with this 
project are the local veterans themselves. Nobody knows their own 
communities better than the people living in them. Whenever issues that 
involve honesty and transparency arise it is important to listen to the 
voices most affected by them. The VFW's local leadership has been 
extremely vocal about this project since the beginning. With such a 
large veteran community surrounding the hospital, there are thousands 
of local area veterans that will benefit once the hospital obtains 
fully operational status. That is why the combination of local 
leadership, with that in Congress are so integral in making future 
projects a success.
    The VFW has called on VA to reform its construction process so 
facilities can be delivered on time and on budget. Previous errors must 
be corrected to ensure the issues in Aurora, Colorado, never occur 
again. However, Congress and the Administration must not ignore the 
growing capital infrastructure needs of the VA's health care system. 
When VA asked its Veteran Integrated Service Networks to evaluate what 
they need to improve its facilities to meet the increased outpatient 
demand, VA determined that ``improving the condition of VA's facilities 
through major construction projects (96) accounted for the largest 
resource need. \1\'' Yet the Administration's major construction 
request for the Veterans Health Administration is 36 percent less than 
FY 2017 and 85 percent less than actual expenditures in FY 2016. Aurora 
must not deter Congress and VA from continuing to invest in major 
projects like this in the future in order to continue providing world 
class care to our veterans.
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    \1\ Department of Veterans Affairs 2018 Budget and 2019 Advance 
Appropriations Requests, Volume IV: Construction, Long Range Capital 
Plan and Appendix. Long Range Capital Plan, page 8.3-8.
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    Another area of major concern for the VFW is the lack of a 
comprehensive replacement plan for the existing services offered at the 
original Denver hospital. The new Aurora facility has less primary care 
services offered and substantially less PTSD services. The original 
hospital will need to remain open for years to keep serving primary 
care patients, and there is currently no plan to have a replacement 
PTSD facility built on the new Aurora campus. VA needs to provide an 
accurate and transparent plan for making sure the new facility offers 
better support for veterans, and does not represent a step backward. It 
is unacceptable for VA to invest almost two billion dollars in a new 
facility that does not offer the same measure of care as the hospital 
it is meant to replace. New VA hospitals should be expected to meet 
current demands, and have the capacity to address future needs as well.
    While the Aurora hospital project will remain in the memory of 
those associated with it for years to come, we hope it also serves as a 
reminder of why getting it right the first time is the best case 
scenario. Transparency is an absolute must in all future projects in VA 
construction, and bringing in all key stakeholders as early as possible 
will help mitigate unnecessary cost overruns and ensure the timely 
completion of future projects.