WECT Investigates: VA reduced rent payments at Wilmington Clinic

WECT Investigates: VA reduced rent payments at Wilmington Clinic
Inspector General has completed investigation of bidding process for VA Clinic that led to exceedingly high rent payments to private company. (Source: WECT)

WILMINGTON, NC (WECT) - The Wilmington VA Clinic has come under scrutiny for the last year due to issues that initially began with contaminated water, and eventually led to concerns about significant waste of tax money.

After extensive news coverage and pressure from Congressman Walter Jones, we're finally getting answers to some questions that help explain how your tax money is being spent.

Water contamination prompts financial questions

In March of 2015, an internal plumbing issue in the newly built facility rendered the water at the VA clinic unsafe to drink according to local health officials, prompting the VA to suspend some patient services.

After the issue dragged on for months without resolution, and veterans grew increasingly frustrated with their inability to get medical care in the dental, GI, and other VA departments impacted by the water problem, we began asking more questions. The VA told us they were at the mercy of their landlord to fix the plumbing issue causing heavy metal contamination in the water.

Then, WECT began asking questions about money. Many viewers were surprised to learn the clinic was being leased from a private company, and not purchased outright.

After extensive public records requests, WECT learned the VA is locked into a 20 year lease with a private, Wisconsin-based company that owns the Wilmington VA Clinic. With rent set at almost $300,000 a month for the clinic, taxpayers will spend more than $68 million in rent over the life of the contract.

Commercial real estate brokers say the rate the VA is paying for the clinic is about twice the going rate for prime medical office space in Wilmington. So we asked for a copy of the lease to see if it included any extras that might explain the high rental rate. By and large, it did not include additional services to explain the elevated rental cost.

VA provides new answers

Congressman Walter Jones' office just received a letter from the VA which answers some of the remaining questions that went unanswered for the last year. His office forwarded us a copy of that letter so we could share the findings with our audience. The letter reads in part:

"VA abated rent payments for the time period in which we were unable to use portions of the building due to lack of potable water. VA is also gathering necessary information to potentially submit a claim to the Lessor to recover other expenses incurred by VA due to the water problems."

While we still don't know the amount of the discount, taxpayers may be pleased to know that they appear to have received some financial relief due to the water problems that inconvenienced patients.

Congressman Jones also pressed for answers as to why the VA was spending so much to lease the clinic. The letter says they received six offers from companies vying to build the clinic.

"With respect to the cost amounts of the offers received, VA is prohibited from releasing the cost proposals submitted by offerors in response to the requirements of solicitation for a competitive proposal…However, VA makes every effort to obtain the greatest amount of competition during the procurement process to facilitate reasonable rental rates and obtain the best value for the Government," the letter to Congressman Jones explains.

Congressman Jones responds

"There's public money being spent, therefore there should be sunshine for the taxpayers, but also for members of Congress and their staff, and we're having the same problem with sunshine that you are having and the public," Jones said Wednesday. "So we're just trying to not imply that anything is improper…but the taxpayers, it's their money that's being spent to help veterans and they should be able to get access to the information of what is being spent."

The letter explains that federal law prohibits the disclosure of the bid details. Jones says his office is working to verify that is what the law says.

"I don't understand, the public, why they are denied the bid process. If that's in the law, it really needs to be reviewed to be honest with you," the letter reads.

The letter included some attachments which had to be sent separately on a CD. They had not yet arrived when this story was published, but If they provide additional financial information which helps answer our questions, we will update this story with that information when it becomes available.

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