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Miller Gorrie

Miller Gorrie, Chairman of the Board Brasfield & Gorrie

Ladies and Gentlemen,

I am Miller Gorrie, Chairman of Brasfield & Gorrie, a General Contractor that operates throughout the nation but primarily in the South.  Our annual revenue averages around 2 billion dollars; approximately 50% of our work is construction of healthcare facilities.  Last year we were the #2 general contractor in the nation in terms of healthcare revenues. We are the only contractor in the nation who has been in the top 3 for the past 15 years; for 6 of the last 15 years we were the #1 general contractor nationally in health care revenues.

We were selected to build the VA Hospital in Orlando on the basis of a competitive Best Value proposal, which means we submitted a proposal based upon what was purported to be a complete set of documents; our resume for health care construction was also considered. The VA awarded the contract to us after determining our proposal represented the overall best value to the Government in both price and technical factors.

The VA awarded 6 separate contracts to complete the overall facility and we were awarded 3 of the contracts – these included: the concrete frame, the garage & warehouse, and the hospital & clinic.  The total amount of our contracts for these 3 contracts was $336,375,189.

Not long after we began construction in October 2010, it became apparent that the drawings the VA provided to us were incomplete.  We had some hint of this during the bid process but our ability to request information about the documents was limited due to bid restrictions and time constraints of the VA bid process.

After beginning construction, we began asking for missing information.  In November 2010, we asked for key missing medical equipment information, since the contract required us to coordinate installation of the equipment with the VA.  Over the past two months we have begun to receive a considerable amount of information, however, as of today, we have not received all of the missing information regarding the medical equipment.

The original VA basis of design for the medical equipment at bid time was mostly discarded and the VA allowed the Medical Center User Group to change what they wanted.  Hence, we never knew what was going to be selected and more importantly, the architects did not know either. The architect could not put the details on the contract working drawings that we needed to construct the building and ensure that the spaces provided in the building were adequate.

We received the Notice to Proceed to begin work for the hospital & clinic 18 months ago. We have waited 18 months to receive a completed set of contract working drawings from which we can complete the project. Last week we received over 200 drawings which the VA represented to be the last of the contract drawings.  The VA was obligated to give us a completed set of documents before we began work but they did not.  The VA failed to provide the required medical equipment information. To compound matters, the electrical documents for the hospital were inadequate. The number of electrical drawings alone has increased from 889 originally issued to more than 2,700 today. Since the contract award for the hospital & clinic, the total number of drawings has increased from 4,532 to more than 10,000.  As a result of the lack of completed design for the  hospital, it was impossible to construct the hospital efficiently and therefore the entire project efficiently.

Rather than help us work through the process by extending the contract time and covering the added costs we are incurring, the VA has attempted to deflect the responsibility including their own Medical Center Agency. We have received only 114 days additional time for a job that has been impacted for 18 months. The critical path of the approved schedule for construction was put on hold for over 12 months of the past 18 months while the Architect completed the drawings and equipment necessary for construction.

Commencing in the spring of 2011, the lack of information began to seriously impact construction progress and we had to reduce our workforce over a period of months from approximately 1,000 to 500 as we had were ran out of areas where we could work either efficiently or where work wouldn’t have to be removed later due to changes in design.

Because the VA staff on site was limited and unable to resolve these issues, we requested a meeting with the Contracting Officer and Senior Contracting Officer in May, 2011.  This meeting did not result in any substantial change. We requested another meeting with the Senior Contracting Officer in August, 2011.  Our meeting request was denied.  We met again at the job site with both Contracting Officers in November, 2011, which also did not produce results.  By this time we were one year into the job, neither the equipment selection nor the design process was anywhere near complete.  We were not able to manage a workforce on the job efficiently as we had limited space to work; also, the work was suspended in major areas to allow for design completion.

In early January we requested a meeting with the highest levels of authority at the VA to ensure the facts of the project were heard.  As a result, on January 19, 2012, one of the Executive Directors of the VA issued a directive to the designers to complete the design by February 29, 2012. The designers accelerated the design process, so between January 19 and March 19, 2012, we received over 50 RFPs (requests for proposal) that contained over 950 new or revised drawings. According to the VA, the documents released on March 19th were supposed to be the last of the required design documents, but it is not.

After waiting 18 months to complete the project design, the VA is pressuring us to proceed. We have thousands of drawings to check for revisions.  After the review, the new materials and equipment shown on the drawings must be purchased, shop drawings checked and deliveries scheduled. These activities, which have already been completed once before, will require some time (8 to 12 weeks) to complete properly.  Also, the cost and time impacts of this added work will have to be settled.

The problems on this job are unprecedented in our company’s forty-eight year history.  These problems are different from anything that we have experienced on any jobs that we have constructed, including the first two packages of the Orlando VA project. On the hospital and clinic project, we were supposed to have completed documents to build by in August 2010; however, the drawings for this project were incomplete and under major revision until last week, March 19, 2012.

The VA’s process for resolving the changes, both time and money, has not been timely and must be corrected and improved. Our company and our subcontractors cannot be responsible for funding this project for the VA which is what is currently happening.

The exact amount of the time and money needed to resolve these issues has not been determined, but it is significant.

We need resolution of the above issue to avoid further cost and time impacts and to avoid irrevocable harm to contractors working on the hospital & clinic.