Summary: Between fiscal years 1985 and 1992, the Department of Veterans Affairs (VA) received nearly $4 billion to build and modernize facilities; cost overruns during this period totaled more than $224 million. Although VA has tried to strengthen its construction program, the costs of the program are still too high because (1) factors affecting demand for VA health care services, such as incomes and insurance coverage of local veterans, are not considered in determining the need for VA construction; (2) less costly alternatives to VA construction, such as joint ventures with military facilities and use of state and local resources, are given short shrift in planning VA construction projects; and (3) projects exceed program needs, containing too many beds, too much space, or too costly designs. Also, projects increasingly receive construction funding before design development is complete and adequate cost estimates are developed. GAO believes that because of the likelihood of national health care reform, VA should consider limiting construction of additional acute care capacity until future demand for VA health care services can be determined.
