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Fort Bliss hospital cost rises to $1.4 billion as years of troubled construction near end

William Beaumont Army Medical Center (TomStar81/WikiCommons)
October 20, 2019

The most expensive U.S. military hospital project currently under construction is nearing the finish line — three years late and more than $629 million over the original contract awards.

After six, troubled years of construction, the new, mammoth William Beaumont Army Medical Center complex in East El Paso is expected to be completed Nov. 15., with a price tag that’s ballooned to $1.4 billion, reported officials at the Army Corps of Engineers’ Fort Worth District office, which oversees the project.

The hospital complex was to be built for $740.4 million under the original construction contracts.

The six-building, 1.1 million-square-foot complex is located on 270 acres of Fort Bliss land at Spur 601 and Loop 375 in East El Paso.

The hospital isn’t scheduled to open until September 2020 because it takes several months to bring in medical equipment, furniture, conduct staff training and make moves from the old Beaumont, Army officials have said.

It originally was to open in April 2017.

Construction originally was scheduled to be completed in November 2016.

The project has been plagued by design errors and omissions, contract changes and time delays, according to an audit released in June 2018 by the U.S. Department of Defense Inspector General.

“This project has faced challenges both in design and construction that affected delivery timelines and budgets,” according to an Army Corps of Engineers statement. “This project has incorporated necessary design revisions to ensure delivery of a world class medical complex.”

U.S. Rep. Veronica Escobar, D-El Paso, said in a recent interview with the El Paso Times that she took a tour of the new hospital in February or March, shortly after she took office, and said officials told her that the delays and budget overages were the “result of procurement and (they) learned lessons as a result.”

“It’s shocking to me how over budget it is and how delayed the project is. It’s still mind boggling how procurement issues could have caused this,” Escobar said.

“I don’t know anyone was held accountable when the overages and delays occurred, and that’s unacceptable. We wouldn’t accept that at local government, but at the federal level, this is kind of routine,” Escobar said.

The hospital complex is being built by Clark McCarthy Healthcare Partners II, a joint venture of two huge, private contractors — Clark Construction Group of Bethesda, Maryland, a Washington, D.C., suburb, and McCarthy Building Companies of St. Louis.

It was designed by HDR Inc., a global architectural firm headquartered in Omaha.

Clark McCarthy and HDR spokespersons said all comments about the hospital project had to come from the Army Corps of Engineers.

‘Extraordinarily troubled’ project

Midwest Steel, a Detroit company that erected steel columns for the project alleged in a recently settled federal lawsuit against Clark McCarthy that the construction project was “extraordinarily troubled from the start.”

“There were major defects in the design, which impacted the schedule and greatly increased costs and time on the project” for Midwest Steel and other contractors, the lawsuit states.

Midwest Steel’s work was scheduled to last 16 months. Instead it spent 50 months, or just over four years at the site and “suffered significant losses on the project,” according to the lawsuit.

Clark McCarthy denied most of Midwest’s allegations and in a counterclaim asserted that the main steel contractor, W&W-AFCO Steel’s “performance and management failures contributed to Midwest’s untimely performance and further delayed the work progress of other trades, which needed the structural steel in place before they could begin their work” on the complex.

Midwest Steel, Clark McCarthy, W&W-AFCO, and several other companies named in the lawsuit, reached an out-of-court settlement in the lawsuit, according to an Aug. 28 court filing. The settlement is confidential, a lawyer representing Midwest Steel said, and no details are being released, except that each party in the lawsuit agreed to pay their own court and attorney fees.

Most expensive military hospital under construction

The project is the most expensive U.S. military hospital project currently being built in the world, according to a U.S. Department of Defense report sent to Congress in July. The only other project that comes close is a military hospital complex being built in Germany, with an estimated cost of $1.02 billion as of March 31.

The Fort Bliss hospital also is one of the most expensive construction projects in El Paso history, second only to the $5 billion Fort Bliss expansion, which involved constructing buildings, roads and other facilities over six years. The post expansion was completed in 2012.

Construction on the hospital buildings began in August 2013.

The construction workforce peaked at 1,100 workers in the summer of 2017. It was down to about 700 people in August, the Army Corps of Engineers reported.

Out with the old, in with the new

The six-building complex includes the seven-story, 135-bed hospital, two six-story clinic buildings, administration building, clinical investigation, or research, building with labs and central utility building with power generators. All the buildings, except for the research building are in one connected complex.

It’s replacing the 47-year-old, 12-story, 670,024 square-foot, 115-bed Beaumont hospital now located on Fort Bliss land at 5005 N. Piedras St., in North Central El Paso.

About 2,000 people, including about 1,000 civilians, work at the hospital — a number that is expected to stay about the same at the new campus, reported Amabilia Payen, a spokeswoman for the hospital.

Also, about 1,000 people, including about 600 civilians, work at several Beaumont clinics. Some specialty clinics will be in the new hospital complex, and other clinics will remain in various areas on Fort Bliss, Payen said.

Construction contracts total $740.4M

Congress in 2010, authorized construction of the new hospital with incremental funding totaling $966 million, which was later reduced by $50 million.

However, the original construction contracts for the hospital complex came in much lower at a total of $740.4 million, which includes Clark McCarthy’s $648.9 million contract award to build the main, six-building complex, according data from the Army Corps of Engineers.

The $740.4 million total does not include contracts for design, construction phase services, and commissioning efforts, but the Army Corps of Engineers did not immediately provide those contract amounts after those were requested by the El Paso Times.

Part of the increased cost of the hospital project comes from the Army Corps of Engineers’ agreement to pay Clark McCarthy $142 million for construction design changes and time delays, including delays caused by contract changes requested by the Army Corps of Engineers, according to the Department of Defense Inspector General’s audit. Some of the delays were related to interior framing issues and seismic tests done to insure the buildings are earthquake proof, according to the audit.

“Changes arose from a variety of causes,” including differing site conditions, design, equipment selection, and changes requested by the Army, according to a statement from the Army Corps of Engineers.

Buildings’ exteriors completed

Ninety-four percent of the hospital was finished by May, according to the DOD report sent to Congress in July.

The buildings’ exteriors are completed, except for some final touches that could be seen being worked on Wednesday. Some landscaping work was being done outside the complex’s main entrance.

The El Paso Times was given a tour of the outside of the complex. But Corps of Engineers and William Beaumont officials declined requests by the Times to look inside the complex, and take photos of the ongoing interior work.

The complex has a massive exterior with architectural touches incorporating a lot of brown stone and glass. The main entrance’s signature is a large, glass-walled rotunda.

Troop growth fueled hospital plan

The new medical complex is needed because of the aging, land-locked, current Beaumont hospital and because of the addition of thousands of soldiers to Fort Bliss in recent years, Army officials have said. Fort Bliss went through a $5 billion expansion over a six-year period, ending around 2012.

When the new hospital complex was in the planning stages, the number of military personnel stationed at Fort Bliss rapidly grew. It increased from 15,512 in 2006, when Fort Bliss expansion began, to 29,000 in 2013, when construction of the new hospital began — an 87% increase in seven years, Fort Bliss officials reported.

That growth has slowed in recent years. The military personnel population grew just under 14 percent from 2013 to the current population of about 33,000.

The number of military families in El Paso tied to military personnel at Fort Bliss more than doubled from 20,722 in 2006 to about 44,000 in 2013. The number of military families in El Paso has since decreased to about 42,000 in 2019.

$400 million sought for new VA clinic

Costs associated with the new Beaumont hospital may not end with the facility’s completion.

Congresswoman Escobar said at her Aug. 3 town hall meeting that she plans to work hard to secure $400 million in federal funding to build a new Veterans Affairs medical clinic next to the new hospital. The current VA clinic is located next to the old Beaumont hospital, and there are no funds to move it.

Land and underground utilities are in place at the new hospital site for the VA facility, but no plan or funding were ever put in place to put a new VA clinic there, Escobar said in an interview.

“Those of you who know about the new hospital and are eagerly awaiting the opening of the hospital have told me you want to see the existing VA moved adjacent to the hospital so people don’t have to drive from one end of the military installation to the other,” Escobar said at the meeting.


© 2019 the El Paso Times