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Chairman Mike Coffman

Chairman Mike Coffman, Subcommittee on Oversight and Investigations

Good afternoon.  I would like to welcome everyone to today’s hearing titled “VA Construction Policy: Failed Plans Result in Plans That Fail.”

Providing veterans medical care is a core function of VA.  When VA does healthcare right, it can be second to none.  However, the process VA employs to build its healthcare facilities is abysmal and the result leads to delays for much needed care to veterans

The Government Accountability Office’s recent report noted that VA’s four largest medical-center construction projects have had an average cost increase of $366 million dollars and an average delay of thirty-five months.  One of the most distressing items in the GAO report is that VA failed to learn from its mistakes as it went from project to project.  I must add that many of these same issues have been identified by GAO in the past and we seem to be no closer to a better result.  

Unfortunately, it is not just major facilities that epitomize why VA’s construction policy is a debacle.  A little more than a year ago, this Subcommittee held a hearing on VA’s failure to perform due diligence and failure to inform Congress of project increases regarding the proposed clinic in Savannah, Georgia.  Based on subsequent correspondence with VA over the past year, I am not quite certain VA is getting the message that its construction program is dysfunctional and not in keeping with industry best practices or veterans’ expectations.

Not only is VA building facilities over budget and late, but it is also failing to pay the contractors for their work in a timely manner.  While ensuring taxpayer dollars are properly spent is of the utmost importance, VA must pay its bills on time.  Last week, I visited the Denver project and spoke directly with VA about prompt payment to contractors and subcontractors and was alarmed by VA’s response to the issue.   Under the Prompt Payment Act, and OMB’s guidance, a Federal agency is expected “to ensure that prime contractors disburse the funds that they receive from the Federal Government to their small business subcontractor in a prompt manner.”  The Prompt Payment Act also requires that the contractor certify that his sub-contractors are receiving payment commensurate with the work performed.  But as evidence shows, some contractors and subcontractors in these four projects have been waiting for months to be paid.

Moreover, the Small Business Act explains that it is “the policy of the United States that its prime contractors establish procedures to ensure the timely payment of amounts due pursuant to the terms of their subcontracts with small business concerns.”  VA’s failure to abide by the laws governing payment to its contractors is unacceptable and is a problem in need of an immediate fix.      

Given the number and variety of facilities VA has built over the last several years, it is disturbing to me that VA continues to employ policies and techniques that have repeatedly fallen short.  

I look forward to hearing from today’s witnesses regarding VA’s construction policy and how we can move forward to effectively and efficiently build medical facilities for our veterans.