Army health building upgrade canceled after questions raised about cost estimates

Introduction

Tricare Management and the U.S. Army did not properly plan a project using $15.7 million in stimulus funds to modernize electrical, mechanical, and plumbing systems at a research building, and the company cancelled the project after questions were raised about cost estimates, a Defense Department inspector general report found.

The money, part of the Pentagon’s total $7.2 billion from the 2009 economic stimulus law, was to be spent on replacing 40-year-old utilities on the third floor of the Center for Health Promotion and Preventive Medicine research building at Aberdeen Proving Ground in Maryland.

Both Tricare and Army officials failed to plan the project and its cost to ensure the stimulus funds would be spent appropriately, the inspector general said. Instead, they used a 2007 document that estimated utilities upgrades for the entire building’s 67,000 square feet would cost $17.5 million. When asked for supporting documentation in December 2009, Tricare’s paperwork cited a cost of $15.7 million to renovate 22,400 square feet on the third floor but omitted the methodology “used to generate costs, benefits, and risks of any viable alternatives,” the report said.

A few months later, in April 2010, Tricare cancelled the project because of soaring costs for structural repairs and mechanical and electrical upgrades on lower floors of the building. “However, by cancelling the Recovery Act project, TRICARE Management Activity officials made $15.7 million in Recovery Act funds available for other projects,” the report said.

Tricare is the health care program used by active-duty service members, National Guard members, and their families. Tricare contracts with Health Net Inc. to supply health care services for northern U.S. states.

Following are other new watchdog reports released by the Government Accountability Office (GAO), various federal Offices of Inspector General (OIG), and other government entities.

FINANCE

* Utah-based Centennial Bank failed in March, costing the federal deposit insurance fund an estimated $52.7 million, and some of its weak underwriting practices with residential construction loans “are the subject of ongoing investigative activities.” (OIG)

* U.S. Agency for International Development underpaid local hires in Iraq for overtime and severance and retirement pay, and the errors were mostly blamed on inaccurate payroll computing. (OIG)

NATIONAL SECURITY

* Despite the United States spending $411 million in 2010 to curb corruption in Afghanistan, “overwhelming reports of corruption continue” and half of all Afghans encountered bribery last year involving an estimated $2.5 billion in payments. (Congressional Research Service)

HEALTH

* Preventing new infections should be the focus of a long-term U.S. response to HIV/AIDS in Africa, even as African governments struggle in the short-term to allocate scarce antiretroviral medicines. By 2020, more than 30 million Africans will be infected, but drug treatment will be available only for about 7 million of them. (Institute of Medicine)

TRANSPARENCY

* The U.S. Supreme Court will hear arguments tomorrow in the first of three cases on Freedom of Information Act issues this session. Milner v. U.S. Dept.of Navy challenges whether explosive and ammunition safety maps used by the Navy are exempt from FOIA. Arguments are scheduled on Jan. 19 for FCC v. AT&T to determine whether the FOIA exemption for personal privacy extends to corporations. And Schindler Elevator Corp. v. U.S. ex rel. Kirk, which does not yet have a date scheduled for arguments, will decide an individual can sue under the False Claims Act and keep part of the proceeds if the fraud disclosed in a government FOIA response. (Department of Justice)