Congress Reaches Deal to Keep Construction Going on Massively Over-Budget VA Hospital

DENVER (AP) -- The Veterans Affairs Department averted a costly construction shutdown at its half-finished hospital outside Denver on Thursday, but it still has to persuade an angry Congress to come up with hundreds of millions of dollars more to complete the troubled project.

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A last-minute deal allows work to continue for three weeks while the VA tries to meet congressional demands for a scaled-back project that won't raise the federal deficit or take services away from veterans elsewhere.

Congress also wants the VA to fire those responsible for the massive cost overruns in Denver and make major internal changes to avoid a repeat - perhaps turning over responsibility for major construction projects to the Army Corps of Engineers.

"America's patience is running out," House Veterans Affairs Committee Chairman Jeff Miller warned Thursday after the deal was reached.

The ambitious, 184-bed medical center under construction in suburban Aurora is a collection of a dozen large interconnected buildings that would replace an old and overcrowded facility operating in Denver.

The new hospital is now expected to cost $1.73 billion, nearly triple the estimate the VA gave last year.

The VA said it was days away from hitting the project's spending limit, and that if Congress didn't raise the cap by Sunday, construction would stop. Contractor Kiewit-Turner estimated it would add up to $200 million to the cost to wind down the work and then crank it up again.

The deal reached Thursday raises the spending cap by $100 million, to $900 million. It doesn't give the VA any additional money but allows it spend funds that it has on hand.

"I am greatly relieved that we will have more time to negotiate a longer-term deal for the Aurora VA hospital," said Rep. Mike Coffman, a Republican whose district includes the new facility.

Democratic Sen. Michael Bennet said a shutdown would have been "the worst of all possible outcomes."

"We will continue to push for a long-term plan that includes accountability to make sure a calamity like this does not happen again and that this hospital is complete on time and on budget," Bennet said.

A shutdown appeared likely as late as Wednesday when House Speaker John Boehner said the funding cap wouldn't be raised until the VA came up with a plan to fund the project through to completion and agreed to significant internal changes.

Boehner relented Thursday and the short-term deal went through, Coffman said.

The VA has said it needs another $830 million to finish the project as designed. Hoping to appease Congress, the department offered to indefinitely delay a nursing home and a post-traumatic stress disorder clinic planned for the campus, saving about $55 million.

The VA wants to finish the project with money siphoned from a $5 billion fund Congress set up to resolve an embarrassing national scandal, long wait times for veterans to get health care. Republicans and Democrats balked, saying the VA needed to come up with a different funding plan.

"Veterans elsewhere cannot be forced to sacrifice just because of the catastrophe here," Sen. Richard Blumenthal, D-Conn., said during a Senate Veterans Affairs Committee hearing in Aurora last month.

Coffman suggested diverting the VA's multimillion-dollar bonus budget to the Denver hospital. VA Deputy Secretary Sloan Gibson called that "a lousy idea."

The reasons the hospital costs escalated so sharply have yet to be fully explained. The VA has said the plans weren't complete when work began, and VA construction executives tried to switch to a different type of design-and-build process too late.

At least two internal VA investigations are underway, and the department says all the key executives on the project have been replaced - some were demoted or transferred, and another retired one day after investigators interviewed him under oath. But no one has been fired, angering many in Congress.

Veterans are worried and feel caught in the middle.

"I know the VA's done a lot of bad things, and we're outraged over that," said Steven Rylant, president of the United Veterans Committee of Colorado, a coalition of veterans groups. "But making them accountable shouldn't keep us from getting a new veterans hospital."

This post has been updated.