Construction firm says VA breached contract, abandons project

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Construction firm says VA breached contract, abandons project

At first blush, a contract to build a Veterans Administration hospital would seem to be a wonderful, lucrative opportunity for a construction company. But if the government does not competently oversee the project, delays can add up, costing the company time and money, and leading to major headaches.

A 2013 report by the Government Accountability Office accused the VA of poor management of at least four construction projects around the country. The GAO said that the VA allowed the projects to fall behind schedule and balloon over budget.

A fifth troubled VA project has caused the construction firm to walk away and accuse the agency of material breach of contract. In a letter to the VA, Kiewit Turner said it could no longer afford to try to keep the project afloat.

In the letter, Kiewit Turner said it has spent $100 million out of its own pocket to try to keep construction moving forward. The company told the VA that despite its “extraordinary efforts” to work with the government agency, it considered the agency to be in breach, and the company said it was ceasing work on the hospital.

The local congressman agreed that the VA had mishandled the project. He said he has introduced a bill to have the Army Corps of Engineers oversee VA construction jobs from now on. The bill passed the House and is awaiting a vote in the Senate, the lawmaker said.

Any construction project can sour, though a well-made contract can fend off a lot of problems later on. If litigation is necessary, having an experienced attorney can make a big difference.

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