oversight

VA Health Care: Delays in Awarding Major Construction Contracts

Published by the Government Accountability Office on 1990-04-05.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                United States General Accounting   Office
                Report to Congressional Committees




April 1990
                VA HEALTH CARE
                Delays in Awarding
                Major Construction
                Contracts




GAO/HRD-90-91
  i
 L1     United States
Ci$!O
  I
        General Accounting  Office
        Washington, D.C. 20648

        Human Resources Division

        B-234874
  /
        April 5,199O

        The Honorable Barbara A. Mikulski
        Chair, Subcommittee on VA, HUD,
          and Independent Agencies
        Committee on Appropriations
        United States Senate
        The Honorable Bob Traxler
        Chairman, Subcommittee on VA,    HUD,
          and Independent Agencies
        Committee on Appropriations
        House of Representatives
        Public Law loo-404 appropriated the Department of Veterans Affairs
        (VA) funding in fiscal year 1989 for 18 major construction projects, each
        estimated to cost $2 million or more. The act required that (1) working
        drawings contracts for these projects be awarded by September30,
         1989, and (2) construction contracts be awarded by September30,199O.
        VA’S appropriation for fiscal year 1988 (P.L. 100-202) contained funding
        for 16 other projects for which construction contracts were to be
        awarded by September30,1989. The acts also required VA to report to
        both your committees and to GAO the projects that did not meet these
        time limits.

        On February 26,1990, VA reported that, as of September30,1989, work-
        ing drawings contracts for 3 of the 18 fiscal year 1989 projects and con-
        struction contracts for 4 of the 15 fiscal year 1988 projects had not been
        awarded as required. VA also reported that working drawings contracts
        or construction contracts had not been awarded by that date for 10
        other projects that were funded through appropriation acts in fiscal
        years 1984 through 1987. These acts also included contract award time
        limits and reporting requirements similar to those in Public Laws lOO-
        404 and 100-202:working drawings contracts were to be awarded dur-
        ing the fiscal year in which the project funds were appropriated; and
        construction contracts were to be awarded by the end of the following
        fiscal year. The acts require us to review the contracting delays for
        reportable projects for impoundment implications under the Impound-
        ment Control Act of 1974. As agreed with your offices, we also assessed
        whether VA reported all projects funded through these acts for which
        contracts had not been awarded by September30,1989.




        Page 1                       GAO/IlRIHO-91   VA Construction   Contract   Award &lays
                                                                                          t

                    B234874




Sbpeand             To assessthe impoundment implications of the contracting delays, we
                    interviewed staff within the VA Office of Facility’s Office of Management
M;%thodology        and Budget and staff in the Office of Project Managementto determine
                    the construction projects’ current status and the reasonsfor the delays.
                    We used this information to assist in determining impoundment implica-
                    tions of VA'S actions; that is, whether any officer or employee of VA had
                    ordered, permitted, or approved the establishment of a funding reserve
                    in lieu of awarding contracts as required by the acts.
                    To assessthe accuracy of VA'S report, we reviewed the appropriations
                    acts and VA'S prior report on projects delayed as of September 30, 1988,
                    to identify the universe of projects that were potentially reportable as of
                    September30, 1989. For the 60 projects identified, we reviewed
                    computer-generatedrecords of VA'S major construction projects to deter-
                    mine which projects had contract awards made on or before Septem-
                    ber 30,1989. We obtained copies of the award documents for the
                    33 projects for which VA records showed contracts had been awarded by
                    the end of fiscal year 1989 and traced the contract award dates to the
                    computer-generatedrecords. Finally, we matched our list of projects
                    that did not have contract awards to the list of projects that VA reported.

                    We conducted this review between January and March 1990, in accord-
                    ance with generally acceptedgovernment auditing standards.

                    We believe that VA'S February 26, 1990, letter to your committees and
Results of Review   the Comptroller General includes all projects that were required to but
                    did not have working drawings or construction contracts awarded by
                    September 30,1989. We also believe the contracting delays for the 17
                    construction projects included in VA'S letter do not constitute an
                    impoundment of budget authority under the Impoundment Control Act.
                    VA'S actions show no intent to refrain from using the funds.


                    Various programmatic considerations causedthe contracting delays,
                    according to information provided by VA officials. The most common rea-
                    sons cited for delays were (1) changesin the projects’ scopeor design or
                    (2) receipt of bids that exceededthe funds available. VA has awarded or
                    expects to award contracts for 14 of the 17 projects by September30,
                    1990. Information on the 17 projects, VA’S estimated award schedule,and
                    the primary reasonsfor the delays in awarding the contracts for the
                    projects is provided in appendix I.




                    Page2
   I



                     Last year,’ we found that VA’S report to your committees was incomplete
VA Ihplemented GAO   becausetwo projects were not reported although VA had not awarded
Recc@unendations     contracts for the primary construction activity for which the funds had
   I                 been appropriated. VA did not report one project becausea contract had
                     been awarded for preliminary construction activities (site preparation).
                     VA excluded the other project becauseit had received an additional
                     appropriation of funds during the year in order to pay higher than
                     anticipated costs.We concluded that VA’S actions had circumvented the
                     purpose of the act’s reporting requirements and recommendedthat VA
                     changeits reporting policies.
                     In November 1989, VA’S Office of Facilities issued new guidelines for
                     reporting delinquent major construction projects to GAO and your com-
                     mittees. These guidelines state that, in order to meet established time
                     limits, contract awards must be for the primary activity for which funds
                     were appropriated. For projects that have received additional funds
                     with no change in scope,the guidelines state that the original time limits
                     will be maintained. However, for projects that received additional funds
                     becauseof a change in scope,the new time limits established by the
                     appropriations act providing the additional funds will be used to deter-
                     mine whether a project is reportable. We believe these guidelines pro-
                     vide a reasonableframework for deciding which construction projects
                     should be reported to your committees.

                     We are sending copies of this report to the Secretary of Veterans
                     Affairs; the Director, Office of Management and Budget; and other inter-
                     ested congressionalparties. Copies also will be made available to others
                     on request. If you have any questions regarding this report, please con-
                     tact me on (202) 276-6207.Other major contributors to this report are
                     listed in appendix II.




                     David P. Baine
                     Director, Federal Health
                       Care Delivery Issues


                     ‘VA Health Care: Delays in Awarding Major Construction Contracts (GAO/HRD-89-76, Mar. 31,
                     1989).



                     Page 9                               GAO/HRD-90-91    VA Construction   Contract   Award Delays
Aripendix I

l!@jor Construction Projects for Which
@ntracts Were Not Awax-dedas of
eptember 30,1989
                         Type of project: Kitchen modernization; satellite dining area addition
Bkooklyn (St. Albans),
N)zwYork                 Type of contract: Working drawings/construction
                         Time limit: September 30, 1986/September30, 1987

                         VA   estimated award: Fiscal year 199O/fiscal year 1990
                         Reasonfor delay: Changesin design; selection of new architect

                         Type of project: Fire/safety and patient privacy improvements
Chicago (West Side),
Illinois                 Type of contract: Construction
 II                      Time limit: September 30, 1987
                         VA   estimated award: Fiscal year 1991
                         Reasonfor delay: Bids exceededfunds available

                         Type of project: Renovatetwo buildings
Chicago (West Side),
Iflinois (Phase 2)       Type of contract: Construction
                         Time limit: September30,1987

                         VA   estimated award: Fiscal year 1991
                         Reasonfor delay: Bids exceededfunds available

                         Type of project: Fire/safety improvements
Cleveland
(Brecksville), Ohio      Type of contract: Construction
                         Time limit: September 30,1987
                         VA   estimated award: Fiscal year 1990
                         Reasonfor delay: Changein state licensing laws delayed beginning of
                         asbestosabatement work


                         Page 4                        GAOjHRIMO-91   VA Construction   Contract   Award Delays
                        4’pe*     I
                        Major consauction  Pro&an for Which
                        Contra&   Were Not Awarded as of
                        September 80,1989




                        Type of project: Clinical addition; renovate building 2; spinal cord injury
Dal@, Texas             center addition
                        Type of contract: Working drawings

                        Time limit: September30,1989
                        VA   estimated award: Fiscal year 1990
                        Reasonfor delay: Scopechange;Office of Management and Budget
                        approval of the number of beds

                        Type of project: Researchrelocation and consolidation; clinical labora-
East Orange, New        tory expansion
Jersey
                        Type of contract: Construction

                        Time limit: September 30, 1985
                        VA   estimated award: Fiscal year 1990
                        Reasonfor delay: Bids exceededfunds available


                        Type of project: Clinical improvements; mental health and behavioral
Indianapolis, Indiana   sciencecenter addition
                        Type of contract: Working drawings

                        Time limit: September 30,1989
                        VA   estimated award: Fiscal year 1990
                        Reasonfor delay: Scopechange




                        Page 5                            GAO/HUD-99-91 VA Construction   Contract   Award Delays
                       Appendix I
                       Major C43nhuction  Project8 for Which
                       Contracts Were Not Awarded as of
                       September 90,1989




 &ons, New Jersey
                       Type of contract: Construction
                       Time limit: September30,1986
  I                    VA   estimated award: Fiscal year 1990
                       Reasonfor delay: Bids exceededfunds available

                       Type of project: Central air conditioning
 [bdison, Wisconsin
                       Type of contract: Construction

                       Time limit: September 30, 1989
                       VA   estimated award: Fiscal year 1990
                       Reasonfor delay: Design was delayed becausepreliminary plans not
                       completed until fiscal year 1989

                       Type of project: Fire/safety improvements
Milwaukee, Wisconsin
                       Type of contract: Construction
                       Time limit: September 30, 1988
                       VA   estimated award: Fiscal year 1990
                       Reasonfor delay: Difficulty finding small businesscontractor

INewington,
 Cjonnecticut          Type of contract: Working drawings
                       Time limit: September 30,1989
                       VA   estimated award: Fiscal year 1990
                       Reasonfor delay: Scopechange due to medical center mission change


                       Page 6                              GAO/EIRD99-91   VA Construction   Contract   Award Delays
                             Appendix I
                             war     Cknwtruction Projects for Which
                             Contracts Were Not Awarded aa of
                             September SO,1989




                             Type of project: Electrical distribution systems
        ar Bluff, Missouri
                             Type of contract: Construction
                             Time limit: September 30, 1987
                             VA   estimated award: Fiscal year 1990
                             Reasonfor delay: Cost limit increase requested from the Congressin fall
                             of 1988, still pending on September 30,1989

                             Type of project: Nonstructural seismic corrections
Sari Xego, California
   !1                        Type of contract: Construction
                             Time limit: September 30,1987

                             VA   estimated award: Fiscal year 1992
                             Reasonfor delay: Major asbestosabatement work required

                             Type of project: 120-bednursing home
Sti Francisco,
California                   Type of contract: Construction
                             Time limit: September 30,1985
                             VA   estimated award: Fiscal year 1990
                             Reasonfor delay: Bids exceededfunds available




                             Page 7                                GAO/HRD-99-91   VA Construction   Contract   Award Delays
                      Appendix I
                      Major Construction Projecta for Which
                      Contracts Were Not Awarded as of
                      Beptember 30,1989




  I
                      Type of project: Master plan and phase I development
S~I/IJoaquin Valley
National Cemetery,    Type of contract: Construction
California1           Time limit: September30,1989
                      VA   estimated award: Fiscal year 1990
                      Reasonfor delay: Problems with land acquisition delayed design


                      Type of project: Renovate two buildings and the chiller plant
WLCO,Texas
                      Type of contract: Construction
                      Time limit: September 30,1989
                      VA   estimated award: Fiscal year 1990
                      Reasonfor delay: Project divided into four phases

                      Type of project: RelocateVA regional office to VA grounds
Wichita, Kansas
                      Type of contract: Construction
                      Time limit: September30,1989

                      VA   estimated award: Fiscal year 1990
                      Reasonfor delay: Working drawings not completed until June 1989




                      ‘This project was identified as the Northern California National Cemetery in our previous report
                      (GAO/HRD-89-76).



                      Page 8                                   GAO/IiRD-90-91   VA Construction   Contract   Award Delays
 Ap’&$tdix II
   l




 Maljor Contributors to This Report


                    Paul R. Reynolds, Assistant Director, (202) 233-5281
Hu&xn Resources     Frank C. Ackley, Evaluator-in-Charge
Division,           William A. Schechterly, Senior Evaluator
Wdhington, D.C.

                    Carlos E. Diz, Attorney Advisor
Offtce of General
Codnsel,
Wdhington, D.C.




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