Lawmaker Wants to Ban All VA Bonuses Until Troubled Construction Project is Finished

A new House bill would prohibit the Veterans Affairs Department from awarding any bonuses until a nearly $2 billion VA hospital in Colorado is up and running.

Republicans and Democrats are outraged over the troubled construction of a new VA medical facility in Aurora, a project that’s been beset by schedule delays and is hundreds of millions of dollars over budget. Rep. Mike Coffman, R-Colo., on Wednesday introduced legislation that would tie the completion of the project to employee bonuses, prohibiting the department from awarding them until the facility is finished and fully operational. That is slated to happen in 2017.

“The Aurora VA hospital is approximately $900 million underfunded and 2.5 years from completion,” wrote Coffman spokesman Tyler Sandberg by email. “With the bonuses suspended for 2.5 years at $360 million per year that gets us to exactly $900 million, which means the hospital can be finished in a deficit-neutral manner.” The Aurora facility originally was supposed to be done by May 2015 at a cost of $630 million. It is now on track to cost the government a total of $1.73 billion.

VA has $360 million authorized for bonuses in fiscal 2015; however, the department is the second largest in the federal government with more than 300,000 employees. Between fiscal years 2012 and 2013, VA reduced the average amount of individual performance awards for its career senior executives from $12,010 to $9,159. Of its 346 career senior executives in fiscal 2013, about 63 percent received a performance award.

“Rather than improving the quality of VA health care, bonus money has fueled corruption by incentivizing the sort of misconduct which led to the ongoing ‘secret waiting list’ scandal,” Coffman said in a statement.

Glenn Haggstrom, the former senior executive in charge of construction nationwide at VA, retired from the department effective March 25. In a statement, VA officials said the problems with the construction of the Aurora medical center were “unacceptable” and that Haggstrom “had recently been relieved of any decision-making in the Office of Construction and Facilities Management.” 

Haggstrom, who earned an annual salary of $181,497 in 2014 according to a federal pay database, reportedly earned nearly $64,000 in bonuses since 2007. As of Thursday, it appeared that the VA had taken down Haggstrom’s online bio on the department’s website. Assistant Secretary for Operations, Security, and Preparedness Kevin Hanretta will oversee VA’s Office of Acquisition, Logistics, and Construction until the department finds a permanent replacement.

Haggstrom retired with his full retirement benefit, which angered some members of Congress.

“Though Glenn Haggstrom may have tried to do a good job at VA, he certainly did not succeed,” said House Veterans’ Affairs Committee Chairman Rep. Jeff Miller, R-Fla. “What’s most disappointing about this situation, however, is that Haggstrom left on his own terms – with a lifetime pension – even though any reasonable person would conclude that he should have been fired years ago.”

The House earlier this month passed a bill designed to address similar situations, by giving the VA secretary the authority to claw back bonuses of employees found to have engaged in misconduct. The legislation does not specify criteria that would be grounds for ordering a repayment, giving the secretary broad discretion. 

In addition to the bonus ban until the Aurora facility is open for business, Coffman’s bill would increase the current spending cap on the project -- $880 million – to enable the Army Corps of Engineers to complete construction. The Army Corps of Engineers last week took over the project from VA. Coffman’s legislation also would prohibit the VA from building medical facilities costing more than $10 million in the future, and would put the Army Corps of Engineers in charge of those projects.

Another provision directs the Government Accountability Office to review VA’s internal investigation into the Aurora project, requiring the watchdog “to establish when senior VA officials knew about the excessive cost overruns and the reasons that information was withheld from Congress,” according to Coffman’s press release.