Estimated read time: 4-5 minutes
SALT LAKE CITY — Plans to build new facilities to provide long-term medical care for veterans in Utah and Idaho have encountered significant barriers from the Department of Veterans Affairs, and a very patriotic piece of legislation.
The Build America, Buy America Act requires federally funded infrastructure projects to use construction materials and products manufactured in the U.S. It became effective for loans and grants in May of 2022, but some plans were caught in the transition, receiving approval for federal grants with a budget calculated before the act was passed, only to be told they will have comply to new regulations that increase project costs by millions or lose funding completely.
"BABAA, as a whole, is a great idea," said Mark Tschampl, Idaho's chief administrator for veteran services. But he said projects in his state are "dead in the water" unless the VA grants a waiver to those projects, exempting them from the rules that changed after their grants were submitted and approved.
Funding for the construction of a new veterans home in Boise and the renovation of two others in Pocatello and Lewiston were approved for funding before May 2022, when the new regulations took effect. Tschampl said he was told for over a year that the VA would give blank waivers for these projects.
In October of 2023, Tschample said his office was informed it would not be receiving waivers, despite the fact it qualified for the exemptions outlined in the legislation. The new requirements increased the project cost by an estimated $30 million, or 28% of the estimated budget.
In Salt Lake City, a project to build a new veterans home was submitted for federal grant funding in March 2022. It was approved and placed on a priority project list for 2023.
Jeff Hanson, who oversees the operations of the four Utah veterans homes, said that the project was badly needed. At 81 beds, the Salt Lake facility is the smallest and oldest among the state's homes, despite servicing the largest market. Hanson said the semi-private rooms, built more like hospitals, are "a dignity issue" for current veterans and became a safety concern during the pandemic.
According to Hanson, inflation and the new requirements imposed by the Build America, Buy America Act pushed the estimated $59 million project over budget by about $19 million, with construction cost cutting on top of that. Without a waiver from the VA, project officials were sent scrambling to secure additional state funds.
"We've worked really hard to keep our project on the tracks," Hanson said. The group worked with nursing staff, veteran residents, state reps and the company that runs the home to design a "beautiful building in a nice location," he said, and it's "disappointing" to have to engineer costs out of the original design.
"We worked it into our project, as painful as that has been," he said.
VA's waiver refusal
Why is the VA refusing to provide waivers for projects that were approved before the act was passed? That is the million dollar question, according to Tschampl, because "most federal agencies previously granted waivers to BABAA for projects that predated the legislation's enactment."
"Nobody really knows why the VA is targeting these waivers and not issuing them," he said.
The VA did not respond to requests for comment on the matter.
There are three different types of waivers outlined in the act. A "public interest waiver," a "nonavailability waiver" for materials that can't be reasonably sourced from the U.S., and an "unreasonable cost waiver," where the project cost increases by more than 25 percent. Tschampl said his projects qualify for all three exemptions and were still denied.
A congressional delegation from Idaho has spoken out against the VA's decision and introduced legislation to force the VA to provide these waivers and put pressure on the federal agency. They say projects in at least 13 states are currently affected.
The National Association of State Veterans Homes sent a letter to representatives saying "many states will have to cancel vital construction projects and, as a result, thousands of aging and disabled veterans would lose the opportunity to receive high-quality, long-term care in a state veteran home" if waivers are not received.
Tschampl said that in response to the political pressure, the VA has begun considering nonavailability waivers for individual items in a construction project. After a great deal of time and research into alternative products, those in Idaho will be submitting a waiver application for every item they can prove cannot be sourced in the U.S.
They don't have time to wait for the law, he said. "By that time, they'll be dead in the water."
