Summary
An inspector general review found that a project to replace a Veterans Affairs hospital in Palo Alto, California, is severely over budget and behind schedule. The project, originally budgeted for $450 million, is now expected to cost around $1.6 billion and finish in 2036, more than 21 years late. The cost increases and delays are mainly due to weak management practices between 2009 and 2017.
Key Facts
- The hospital project began in 2009 to replace buildings at risk of collapsing in an earthquake.
- The initial budget was $450 million, but it has now tripled to approximately $1.6 billion.
- The project's completion has been pushed back to 2036, over 21 years later than planned.
- As of early 2025, about $458.8 million was spent out of the $472 million allocated by Congress.
- An additional $907 million is needed to finish the project.
- The inspector general identified weak management as a key reason for the cost increases and delays.
- The Veterans Affairs department introduced new management procedures in 2017, but these were not applied effectively to this project.
- The inspector general recommends the VA evaluate whether to continue the project and integrate it into the management framework.
