An Army Corps of Engineers report concludes that the poor choice and use of an unfamiliar contracting method was the primary factor in busting the budget of a veterans hospital in Aurora by a billion dollars.

The Corps report was released Thursday as Sloan Gibson, deputy secretary of the Department of Veterans Affairs, made his 10th visit to the construction site and again expressed confidence that the hospital will be completed.

The report cited the “myriad challenges” the Aurora VA hospital faced, from changing plans and designs to chaotic management and long delays in processing requests for change orders, which led to construction delays.

But “the single biggest driver of cost and schedule delays is unquestionably the fundamental mismanagement of Integrated Design and Construction (IDC) methodology,” the Corps reported, which resulted in a breach of the construction contract and a shutdown last December.

The Denver Post identified the IDC contract — a method the VA had never used to complete a major project — as a key problem three months ago. An investigation by The Post published in August, however, found there were other factors, including a 2011 agreement between the agency and its contractor making the VA responsible for a design that could be built for $604 million.

The project cost has soared to $1.67 billion, and the hospital is not expected to open for at least two more years.

In theory, the IDC contracting method is used to select a contractor early in the design phase to help review costs. But in Aurora, the VA hired its design team years before selecting Kiewit-Turner as the general contractor.

Hospital construction restarted soon after Kiewit-Turner won a contract breach case and shut down the site. But the project has survived ever since on short-term gulps of capital from a disgruntled Congress.

The clock is ticking again.

Congress provided enough money to get the hospital project through this fiscal year, which ends this month. But construction has been limping along with half the needed workers while the VA seeks $625 million to finish the job.

With 700 workers on site, “every day on the project, we give up a day” toward the completion date, Gibson said.

He said he is not worried about another shutdown, however, and had encouraging talks with leaders of congressional veterans’ committees.

The VA is proposing a completion plan that would not affect health services to veterans or existing projects, he said, and hoping that money specifically assigned to the Aurora VA hospital will be part of a continuing budget resolution in Congress.

“I think Congress understands the need to finish the project,” he said.

In its report, the Corps found that the VA’s choice of an IDC contract in Aurora was “compounded by an apparent lack of understanding of its complexities.”

Its report, dated June 8 but released Thursday, cited three other factors that helped push up the cost of the most expensive construction project in VA history:

• The project should not have been controlled 2,000 miles away in Washington, D.C. “The lack of delegated authority to the on-site project executive,” the Corps said, to manage all the moving parts of a giant undertaking “has proven adverse in the extreme to this project.”

• The project lacked discipline. “Both internal and external pressures continually shifting course on scope, size, etc., with little regard to schedule and cost shifts, have dramatically impacted project completion.”

• The project lacked an adequate staff. Those shortages “proved challenging to the extreme,” the report said, “in consideration of its vast size and major changes in scope across its timeline.”

Gibson said the VA embraces those findings and is working closely with Kiewit-Turner now. He challenged subcontractors to return to the hospital site once money is secured to complete construction.

“What veterans need,” he said, “is for the subcontracting community to step up.”

David Olinger: 303-954-1498, dolinger@denverpost.com or twitter.com/dolingerdp