Boldt: Cost of delayed CA hospital project could double initial estimates to $600M

Dive Brief:

A status report on the delayed Valley Medical Center expansion in Santa Clara County, CA, prepared by Boldt Construction and presented to the county in November, indicates it will take as much as $126 million to complete the beleaguered project, the Silicon Valley Business Journal reported after obtaining a copy of the report through a Public Records Act Request.
Santa Clara county has already paid ousted contractor Turner Construction $347 million, with another $34 million left to be billed. Those amounts do not include $56 million paid in architect’s fees and $37.6 million for the construction manager, which brings the estimated total for the facility to $600 million, more than double the original $290 million contract.
Boldt’s report also revealed the project had water damage on multiple floors, showed evidence of mold and had perhaps been home to rodents and stray cats. This section of the report, the Business Journal reported, centers around Boldt’s finding of an incomplete building envelope and a lack of temporary protection. County officials said this problem was rectified after they received the report, but the damage will have to be assessed and most likely remediated.

Dive Insight:

The county said it fired Turner in September due to what it called unacceptable delays and issues of work quality, although Boldt’s report did not lay blame for the cost overruns and delays on Turner.

The original cost of the hospital was funded in full by a taxpayer bond measure, and the county is now faced with the problem of how to pay for the extra work. County Executive Jeff Smith said the estimated costs to complete the work were higher than expected, but he is hopeful those costs will come down after the new contract is negotiated.

Smith said he was "encouraged" that Boldt’s report reflects the project is approximately 90% complete and that most of the work done so far is of acceptable quality. He told the Business Journal the report "confirmed the belief that it’s basically sound and needs some modifications to be started up again, but won’t require a complete redo."

However, Smith’s comments might be a little too optimistic, as the Business Journal noted Boldt’s report found that although 19 of 19 vaults and 90% of underground pipe had been installed, inspectors found "a number of engineering deficiencies,” primarily related to bracing and anchors.

Boldt said a key factor in getting the project up and running again is to resolve outstanding subcontractor claims. If that can’t happen, the Business Journal reported, it’s unlikely that the existing subs will return to the job. The remaining work could realistically take 16 months, but that could be reduced by two months if crews worked six days a week, according to Boldt.

Santa Clara County filed a lawsuit in September against Turner for breach of contract and negligence after the county alleged Turner defaulted on its contract. The county is asking for a reported award of "tens of millions of dollars," but Turner filed a counter-complaint for "the county's wrongful actions and to recover amounts lost by Turner and its subcontractors due to the county's actions."