VA Construction:

Contract Award Delays

HEHS-98-188R: Published: Jul 10, 1998. Publicly Released: Jul 10, 1998.

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Stephen P. Backhus
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Pursuant to a legislative requirement, GAO reviewed the Department of Veterans Affairs' (VA) construction contracting delays, focusing on whether these delays had impoundment implications under the Impoundment Control Act of 1974.

GAO noted that: (1) VA's December 12, 1997, letter to the House and Senate Appropriations Committees correctly and accurately identified 10 awards for which VA did not award a construction documents contract or a construction contract by September 30, 1997; (2) GAO identified six more awards that it believes VA should have reported as delayed, including: (a) both a construction documents and construction contract for the final phase of the clinic addition/renovation in Ann Arbor, Michigan; (b) construction contracts for the first and second phases of the medical school relocation/renovation in Mountain Home, Tennessee; (c) a construction contract for the third and final phase of the bed tower construction/renovation in Mountain Home, Tennessee; and (d) a construction contract for the third and final phase of the ambulatory care addition/renovation in Pheonix, Arizona; (3) GAO believes that these six phased construction project award delays should have been reported because they are part of the primary purpose for which the funds were appropriated and each contract award exceeds the dollar threshold for major construction; (4) GAO believes, however, that none of the contracting delays for the 16 contracts constitute impoundments of budget authority; (5) in GAO's view, VA has shown no intent to refrain from using the funds appropriated; (6) more specifically, information VA provided to GAO indicated that legitimate programmatic considerations caused the contracting delays; (7) VA cited several reasons for delays including: (a) changes in project scope; (b) funds appropriated for projects before VA had completed design work; (c) insufficient funds appropriated for the scope that VA planned; and (d) completion of construction of a building(s) required before renovation could begin; (8) VA made 4 of the 10 reported delayed awards after September 30, 1997; (9) by October 1998, VA expects to award four more construction documents contracts; and (10) for the six additional awards that GAO identified as being late, VA has awarded or will award the contracts by February 1999.

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