Dive Brief:
- Turner Construction and Santa Clara County, CA, have agreed to stay together for the sake of the Valley Medical Center, the Silicon Valley Business Journal reported. The deal includes a change order to Turner for $85 million and $28.5 million in previously locked funds, bringing Turner’s net contract to $176.5 million and total project costs with fees to an estimated $560 million.
- Santa Clara County has agreed to drop its lawsuit against Turner in exchange for the company resolving all subcontractor claims and CEO Peter Davoren personally monitoring the project, including regular sit-downs with county CEO Jeff Smith.
- Turner should be able to nail down a timetable for completion in about one month, and Smith told the Business Journal the project should be complete in approximately 14 months.
Dive Insight:
The cooling of hostilities between Santa Clara County and Turner comes four months after county officials threw Turner off the project — for claims of chronic delays and cost overruns — and brought in Boldt Construction for an independent project assessment. Boldt, which estimated total project costs of $600 million, pointed to the strained relationship between Turner and the county as a contributing factor to the project’s derailment.
"The Boldt report was helpful, because it showed the toxic nature of the relationship and the process that contributed to the delays and the costs," Smith told the Business Journal.
Smith said the contract with Turner now contains fixed costs. The company is bringing new field staff onto the project, and subcontractors will be much more involved in the building process. And, according to the Business Journal, although Smith realizes there’s still no guarantee that the project will run smoothly now, he is optimistic.
Smith said the additional money to pay for the medical center will come from a fund intended to cover demolition of the previous main hospital building — as much as $60 million that the county will have to find elsewhere.
