Bringing Design-Build to the VA

by Louis J. Jenny  |  December 19, 2013

Working to bring Design-Build Done Right to the U.S. Department of Veterans Affairs (VA) has been one of DBIA’s goals for some time.  To that end, we’ve been working with both officials at the VA and with Congress, which has responsibility for overseeing and funding the VA and its projects.  And while the VA has faced challenges with its portfolio of construction projects – which have been overwhelmingly design-bid-build (43 of the 50 largest contracts) – we are beginning to see some hope for design-build taking hold.

First a little background, the VA has been coming under increasing pressure from Congress and others to improve their project delivery. There have been recent internal VA and Government Accountability Office (GAO) reports that have been very critical, documenting serious delays and cost overruns in medical facility construction and other projects. At a recent House committee hearing, Chairman Jeff Miller (R-FL) pointed to:

“…the many failures and deficiencies that have plagued VA’s major medical facility construction and leasing initiatives and led to significant cost increases and substantial delays in many important medical center projects.”

A GAO report issued this last spring looked at the VA’s four largest medical center projects and found that cost increases ranged from 59 percent to 144 percent, with total cost increases of nearly $1.5 billion. Of the 50 ongoing VA projects, 23 are experiencing cost increases over initial estimates, ringing up a whopping 77 percent average increase in costs. None of these were design-build. In fact, of the 50 projects only four are design-build but all four of these are either on budget or estimated to produce savings when completed.

In a sign that the VA is taking their challenges seriously, the Secretary of Veterans’ Affairs Eric Shinseki established the Construction Review Council in early 2012 to oversee their real property capital-asset program. To be sure, the establishment of the Council is encouraging, but what they found is not. In November of last year, the Council issued an internal report that, according to GAO:

“…found systemic deficiencies in a range of areas, including defining requirements, estimating costs, designing and scoping the project, managing the contract, overseeing the program, and activating completed projects. The analyses revealed that the challenges identified on a project-by-project basis were not isolated incidents but are indicative of systemic problems facing VA.”

Craig Unger, the Chair of DBIA’s Federal Sector Outreach Committee, and I met with key congressional staff earlier this year and discussed what design-build and DBIA can do to help the VA. It was an excellent meeting. Further, it led to the recent introduction of H.R. 3593, the VA Construction Assistance Act, which among other things directs the VA “to the extent practicable, use design-build process to minimize multiple change orders” for construction or alteration of major VA medical facilities.

The VA Construction Assistance Act is encouraging not just because of the language, but because it is a bipartisan bill introduced by two key members of the Veterans Affairs Committee in the House. This means it has a good chance of being considered. In fact, the committee plans on having a hearing on the bill in spring 2014. (The vast majority of bills introduced don’t even get that far.)

Craig and I also met with officials at VA’s office of Construction and Facilities Management to discuss design-build best practices and had a constructive dialogue. No doubt, there was some hesitancy with design-build around the room, but my sense is this was a minority. What was clear was an understanding that the VA has serious challenges and is looking for solutions. We’ve been following up with them and exploring helpful DBIA education options.

The VA is an immensely important department. Its mission statement says it all:

“To fulfill President Lincoln’s promise ‘to care for him who shall have borne the battle, and for his widow, and his orphan’ by serving and honoring the men and women who are America’s veterans.”

It is second only to the Department of Defense in sheer size, speaking to the importance we give to taking care of our veterans. Today, while the VA has a lot of work to do, we are seeing signs that perhaps there will be improvement coming. DBIA is working diligently to ensure design-build is part of the solution

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