Investigators find ‘gross mismanagement’ tripled cost of Aurora VA hospital

AURORA, Colo. -- Federal investigators say “gross mismanagement,” delays and lax oversight by the Department of Veterans Affairs added millions of dollars to the cost of the Aurora VA hospital.

The report from the Office of Inspector General released Wednesday said that former senior VA official Glenn Haggstrom knew the project would go over budget, but didn’t tell lawmakers when he testified before Congress in 2013 and 2014.

“This was a failure of government at every level within the VA,” Sen. Cory Garnder said.

The 82-page report concluded, “The Denver project’s escalating costs and schedule slippages are primarily the result of poor business decisions, inexperience with the type of contract used, and mismanagement by VA senior leaders.”

RELATED: Office of Inspector General report

In other words, if the VA hadn’t mismanaged the project, it could have been completed much sooner and at about half the cost.

The report alleges Haggstrom failed to tell Congress during testimony before the House Committee on Veterans’ Affairs Subcommittee on Oversight and Investigations about the budget shortfalls and instructed other senior VA leaders to keep the information quiet.

According to the report, Haggstrom knew in January 2013 the project was going to go over budget. However, he testified in May 2013 and April 2014 that the project was still within its $800 million budget.

“A less generous assessment is that Haggstrom intentionally misled Congress -- he lied," Rep. Mike Coffman wrote in a letter to the Department of Veterans Affairs Office of Inspector General.

Coffman and other lawmakers are calling for a criminal investigation of Haggstrom and others involved in the project.

“To this day, the department’s handling of the replacement Denver VA medical center continues to be a case study in government waste, incompetence and secrecy, Rep. Jeff Miller, chairman of the House Committee on Veterans' Affairs, said in a statement.

"This report makes two things abundantly clear: There are many more people responsible for the biggest construction failure in VA history than the department has led the public to believe, and it is possible that former VA construction chief Glenn Haggstrom or other employees committed perjury in hiding information regarding the project’s cost overruns during congressional testimony."

The VA is under new leadership and says it takes full responsibility for the mistakes made in Colorado, and has made changes to ensure this does not happen again.

“VA has owned the mistakes that were made throughout this project,” Deputy Secretary of Veterans Affairs Sloan Gibson said. “We did not wait for this report or others like it before implementing significant changes in policy and management in order to get this project back on track.”

The hospital remains under construction and is expected to cost nearly $1.7 billion, nearly triple the estimate in 2014.