- The Washington Times - Tuesday, June 3, 2014

The Department of Veterans Affairs’ leasing program for its many outpatient clinics has been plagued by delays and cost overruns, federal investigators say, common complaints the agency has faced under increased scrutiny over the past several weeks.

The Government Accountability Office, Congress‘ chief watchdog, has long targeted problems with the agency’s attempts to construct its own medical centers and hospitals. But the watchdog said in a report released Tuesday that the leasing program has problems of its own — with delays on average of 3.3 years and added expenses of millions of dollars per project.

“Similar to VA’s largest medical-center construction projects, we found that its major leasing projects have experienced substantial delays as well as cost increases,” the GAO said in a report released Tuesday.

The agency’s efforts to lease and open new medical centers have been plagued with delays, the GAO said, ranging from 6 months to, in one instance, more than 13 years. Likewise, the cost for rent has been growing: The amount the VA pays for just the first year of rent grew by nearly 60 percent for all buildings — an increase of $34.5 million a year.

The increases in rent could have “long-term implications,” the GAO said, “because the department must pay the higher rent over the lifetime of the lease agreement.”

The reason for almost all of the delays — 94 percent — was because VA officials made late or last-minute changes to what they needed and what they expected from the spaces they were leasing, the GAO said.


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The agency was sometimes “late in submitting space requirements” or would change “space requirements and thus the scope of the project,” thereby “necessitating a redesign that affected the schedule.”

The VA agreed there were delays but said many of the delays reflected factors beyond its control or changes in the original plan and mission for an individual site.

“Many lease delays resulted from influences external to VA’s leasing process and out of VA’s control,” a response form the agency said.

“As delays to a lease project occur, VA’s Veterans Health Administration re-evaluates and updates the design and space program to ensure the contemplated lease project will meet VA’s latest requirements and optimally serve veterans,” the agency continued.

GAO inspectors acknowledged that the VA has taken steps to address the problems identified in previous audits, including the creation in 2012 of a “Construction Review Council” to oversee the agency’s network of buildings, leases and construction.

The Council is starting to rework the way leasing is conducted, including requiring designs to be completed earlier in the process to help avoid delays and budget increases. They also said they would provide clearer information to Congress on the cost of each project.

But investigators say broader change may still be needed, pointing to a leased medical facility in Austin, Texas, as an example of what can go wrong.

The plan had originally called for 85,000 square feet and 400 parking spaces. But during the bidding process, the VA officials decided — without telling Congress — that they wanted to find an additional 100,000 square feet and 800 parking spaces. That sent the project back to the drawing board and ballooned the cost by 219 percent, from $6.2 million to $19.8 million.

GAO investigators said VA staff were often working with old and outdated information on leasing procedures and the VA’s needs.

“Without current guidance, stakeholders may have difficulty knowing with whom to coordinate, and projects could continue to experience delays and cost increases resulting from late-stage design changes,” investigators said.

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