Congress Grills Contractor, VA About Troubled Orlando Project
Perplexed by continuing problems at a $300-million veterans hospital project in Orlando, Rep. Jeff Miller (R-Fla.) told officials with the Dept. of Veterans Affairs and contractor Brasfield & Gorrie, "I want answers," as he convened a U.S. House field hearing across the street from the troubled job site on Aug. 13.
Instead, the three-hour hearing of the House Committee on Veterans’ Affairs produced even more questions about the project and who would finish it. Throughout the hearing, VA officials largely refused to comment about a pending possible termination of the general contractor on the project, Brasfield & Gorrie. Meanwhile, the contractor’s CEO spent much of his testimony pointing fingers at the VA over continuing delays caused by design changes.
Both sides told the Florida politicians who took part in the hearing—including Sen. Bill Nelson (D-Fla.) as guest—that they were continuing to work together to get the project back on track; but the most notable unanswered question remained whether that would—or could—happen.
In a statement, Miller summarized: “It is clear from today’s hearing both VA and the contractor still have quite a long way to go to come together and figure out how to work together, which is what needs to happen.”
At the outset, VA’s Glenn D. Haggstrom, principal executive director of the Office of Acquisitions, Logistics and Construction, told the congressional committee that he could not discuss a key issue surrounding the project.
“We are unable to answer questions” about the pending possible termination of Brasfield & Gorrie, Haggstrom said. Haggstrom cited a desire not to interfere with the decision of the VA’s contracting officer, identified as Noella A. Bond by the contractor. Bond’s deadline for reviewing Brasfield & Gorrie’s response to the VA’s notice to cure—the term for an initial notice of intent to terminate—ended Aug. 9, but Haggstrom said the contracting officer’s decision was still pending.
Following up, Miller said he found it “perplexing” that the VA had issued a cure notice to the contractor in June, just shortly after making public statements that it was working in concert with the company to solve problems. Haggstrom responded by stating the decision wasn’t his, but instead was the sole discretion of Bond, who declined the committee’s invitation to testify. Pressured by Miller, Haggstrom admitted however, that he had been in contact with Bond about the decision.
Haggstrom testified that termination could delay the project by as much as eight months, but also said he didn’t know what the contracting officer's decision would be. That left open the possibility that further negative action against the contractor could again follow VA comments of cooperation.
Furthering the theme of ongoing cooperation, Brasfield & Gorrie CEO Jim Gorrie early in his testimony revealed that the two parties had come to a tentative agreement over expediting the project just one business day prior to the hearing, and pointed to a document as he did so.
Miller quickly asked to have the agreement entered into the testimony, but Gorrie deferred to Haggstrom, who asked that it not be allowed while the contracting officer was still reviewing it. And Miller adhered to Haggstrom's request.
The ongoing dispute centers on the two parties’ varying estimates for a final completion date, which continued to “float around” during the hearing, as Rep. Sandy Adams (R) noted.
In late July, the VA’s resident engineer for the project, Bart Bruchok, told Rep. John Mica (R) that the project could be completed by summer 2013. At the hearing, Bruchok testified that VA arrived at that estimated completion date with the input of an outside firm, HDR Architecture, using Brasfield & Gorrie’s “original logic” for the project. The VA estimates the project’s completion at 60%; B&G officials testified they felt it was closer to 45%.
“We firmly believe the summer of 2013 is achievable,” said Bruchok.
But the original plan for the project has changed significantly, countered Gorrie, who said the company’s current estimate for completion is instead November 2014—or about two years past the project's original target of October 2012. Pressed by the politicians, Gorrie said completion by November 2013 could be possible, but would require “a ton of effort.”
For starters, he continued, it would require pending approval of a tentative agreement, followed by timely completion of the project’s design, which remains ongoing due to continuing VA-initiated changes related to medical equipment and subsequent contractor change orders.
Calling the project “the furthest thing from normal” that Brasfield & Gorrie has ever encountered, Gorrie testified that at present, the contractor has more than $30 million in unresolved change orders. Additionally, he stated that the VA recently withheld $2 million from the contractor’s scheduled monthly payment “without discussion.”
“We’re out of a lot of money,” he said. “We would love to get a return on our investment, and we’re open to any possibility.”
Gorrie testified that the project could end up requiring a significant amount of additional funding to complete. But VA officials stated they hope the project can be completed without additional funding. Agency officials said that they have already transferred roughly $50 million from the Orlando project to other VA contracts because they felt the overall project was under budget.
