Santa Clara County

Santa Clara County Officials Bring Back Construction Company They Fired to Finish Hospital Job

Santa Clara County on Friday has made a deal to finish the stalled multi-million hospital building project at Valley Medical Center, whose pricetag has soared more than $150 million past its original pricetag.

NBC Bay Area first reported two weeks ago a deal was in the works with Turner Construction, the company officials blamed for delays in the first place.

Now, in what might seem like an unlikely turnaround, county officials confirmed to NBC Bay Area on Friday they are bringing back Turner to finish the job the company started about five years ago before being booted off the site last year. The original pricetag was slated to be roughly $300 million. The revised contract puts the final price tag at more than $466 million.

Santa Clara county executive Jeff Smith said he is satisfied with the deal.

"This is a very crucial project for us," he said. "We need that space (168 beds) for our patients and all along the county has wanted to have a predictable cost, a predictable time line and make sure we get the project completed as soon as possible."

NBC Bay Area broke the story last August reporting the new hospital building would not make a publicly announced September 2015 public opening.

The story revealed the project was not close to being ready with inside pictures that showed unfinished rooms with no beds and weather damage.

Details of the revised contract, obtained by NBC Bay Area, require that Turner return under different terms.

County officials told NBC Bay Area the delay meant the loss of 168 hospital beds and the expansion of its intensive care, physical therapy and maternity units. They estimated it was costing the county around  $100,000 a day in lost revenue.

The new deal calls for the county to pay Turner a so-called "all inclusive lump sum settlement payment" of $85 million. The payment is to settle and resolve both sides for costs, claims and, crucially, disputes which includes lawsuits. An evaluation by the Boldt Company released earlier this month projected the cost to complete the project would be at least $126 million.

"Obviously we are not real happy about (the $85 million)," Smith said, "but given the fact that it was bid on during the bottom of the economy and we're now at the top of the economy, it's probably reasonable."

Turner will also pay its subcontractors from the lump sum.

The deal also calls for, what amounts to, guaranteed timetables and "firm completion dates" for the project which was a major stumbling block in previous talks.

If all goes as planned, Turner will restart work immediately upon settlement.

County board president Dave Cortese also said he was pleased.

"The best part of this agreement besides helping the patients is getting the litigation over with," Cortese said. "Construction litigation is sometimes the worst kind of litigation. It's the equivalent of a business 'divorce' and you really hate to get into that especially with taxpayer money involved."

The earlier evaluation done by the Boldt Company prior to the settlement projected a completion date around February to April 2017.

Officials say they the two sides will meet over the next few weeks to determine a revised completion date.

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