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Law requires firm owned by disabled veterans to build long-delayed NY cemetery

By JERRY ZREMSKI | The Buffalo News, N.Y. | Published: July 27, 2019

WASHINGTON (Tribune News Service) — The federal government wants a company owned by disabled veterans to build a veterans cemetery in Pembroke, but even some veterans worry that requirement is complicating a project that's already lingered for a decade without a shovel touching the ground.

Dan Rider, a Navy veteran and construction engineer with his own small business in Buffalo, is among those concerned. He fears the government's preference for companies owned by disabled veterans likely made the cemetery project more expensive, and maybe even delayed it.

"I wish Washington would stop trying to help me," said Rider, who has nearly 40 years of experience in heavy and marine construction businesses.

Officials at the Department of Veterans Affairs say unexpected expenses caused the $10 million cost overrun that will delay the opening of the cemetery in Pembroke a year, to early 2021. They declined to speculate whether they could have received lower bids if all construction companies had been allowed to compete for the cemetery contract.

Rider and others in the construction industry say the program in question – the federal Service-Disabled Veteran-Owned Small Business or "SDVOSB" set-aside – is a laudable attempt to help veterans that doesn't always work well in practice.

Created by an act of Congress in 2006, that program strictly limited bidding on the cemetery project to companies owned by veterans disabled during their time of service.

The Department of Veterans Affairs first solicited bids for the Pembroke project last year. Only three companies bid. All are from outside Western New York.

There's an obvious reason for that, Rider said.

"I’ll bet there aren’t more than a dozen or so SDVOSB firms in this country capable of handling a contract like the Western New York National Cemetery, and they probably already have all the work they can handle," he said.

Most businesses owned by disabled veterans aren't in the construction business, and most aren't nearly big enough to pull off a project like the Pembroke cemetery, several sources said.

"There's not a lot of those kind of companies that exist in Western New York that would have the ability to bond that kind of project," said longtime Buffalo veterans advocate Patrick W. Welch.

Major local companies like Pinto Construction Services aren't owned by service-disabled veterans. Pinto has been in business nearly a century and has worked at Forest Lawn and just about every major cemetery in the region. But on the Pembroke project, Pinto could only hope to be a subcontractor for a company owned by disabled veterans.

James Panepinto, the company president, praised the intention behind the law that aims to boost businesses owned by veterans wounded in service to their country. But he said the law has some unintended consequences.

"This is just my personal opinion, but do I think it limits competition and increases the price? I do," Panepinto said.

When the VA examined the bids that came in for the Pembroke project last year, the best of them was $10 million over budget. That meant the VA had to delay construction for a year and go to Congress to seek more money.

"The technical requirements and market conditions, such as the costs of construction materials and labor, increased from the time the money was appropriated in 2015 and when VA solicited offers originally in 2018," said Timothy A. Nosal, a Department of Veterans Affairs spokesman.

The agency didn't design the project until after it got money for it from Congress, so only then did the VA realize that it would cost more than had been projected.

"Not only was the original cost of this project underestimated, but moving a natural gas pipeline and environmental permitting have contributed to the delay," said Jennifer Brown, a spokesman for Rep. Chris Collins, the Clarence Republican whose district includes the cemetery site. "Our office has been assured that the requirement to use a Service Disabled Veteran Owned Small Business has not caused the delay nor increased the cost estimate."

But even if it did, the VA contends it could not do anything about it.

Under the law, so long as there are at least two companies owned by disabled vets that are capable of doing a project, the VA has to limit bidding to such firms, said Les' Melnyk, a spokesman for the VA's National Cemetery Administration.

That's why the agency limited the bids to such companies last year, and did the same in the current round of bids, which is supposed to culminate in the hiring of a contractor later this year.

Concern about the disabled-vets-only policy seems to have registered with the Pembroke cemetery's chief congressional advocate, Senate Minority Leader Charles E. Schumer, a New York Democrat

“Senator Schumer has requested a briefing from VA officials on their plans to begin construction and expedite the cemetery’s development and this will be among the concerns that he will raise during the briefing,” said Allison Biasotti, Schumer's spokeswoman.

Given that the VA indicated the law is tying its hands, James B. Neider, a longtime veterans advocate from the Batavia area, said there's an obvious solution: tweaking the program to open up the bidding to all contracting companies owned by veterans, not just those owned by disabled veterans.

"You know, it's sort of like a common-sense thing," Neider said. "Of course, then again, we're dealing with the federal government."

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