Late last week, Congress passed a $625 million appropriations bill that will clear the way for the completion of the new Veterans Affairs (VA) hospital in Aurora, Colorado. The VA projected the original construction costs for the hospital at $605 million and anticipated that the hospital would open in 2015. The final construction cost for the troubled project is now $1.7 billion, nearly three times more than the original cost estimate, and the hospital is not anticipated to open until 2017.
While it’s tempting to blame all of the project’s problems on mismanagement by the VA, there are numerous other reasons, some of which are detailed in this Denver Post article, that contributed to the project’s failure. Specific reasons include the type of construction contract used, poor construction management by key VA personal, unrealistic cost estimates, and late/misunderstood design changes. While all of these reasons impacted the project’s budget, it is readily apparent that a lack of communication, transparency, and leadership permeated the project.
It’s convenient to think that these problems are isolated to government projects; however, there have been numerous private projects that have encountered similar issues over the last few years. To help avoid these issues, private developers need to examine what happened with the VA hospital and come up with protocols that insure transparent development processes that foster communication and leadership.
Note, the author or this article briefly worked for one of the design firms involved in the VA hospital, but had no direct project involvement.
