The Veterans Administration's Medical Construction Program

GAO discussed the Veterans Administration medical construction program, focusing primarily on project justification, size, and cost. GAO concluded in recent audit reports that: (1) VA had not been effectively planning and coordinating the construction of nursing homes; (2) VA did not adequately consider local conditions or less costly alternatives before building new nursing homes; (3) changes during the design phase significantly increased the projects' costs; and (4) VA criteria for surgical facilities in new or replacement hospitals resulted in too many operating rooms. However, the VA construction program has changed significantly since the projects were first reviewed. Congressional concerns about the rate of cost growth has prompted: (1) Congress to enact legislation to control VA project growth beyond original cost estimates, and (2) VA to create the Advanced Planning Fund to enable it to provide the Congress with better cost estimates. Although it was too soon to fully evaluate the effectiveness of these actions during earlier audit reports, GAO believes that they should enable VA to submit better cost estimates to Congress and should provide an upper limit cost control on approved projects.