Santa Clara Valley Medical Center Upgrade

On behalf of the residents, taxpayers and patients in Santa Clara County, our organization is calling on you to take responsibility and accountability for the construction debacle at Santa Clara Valley Medical Center.

We are the Silicon Valley Ethics Roundtable, a diverse group of involved citizens with backgrounds in business, non-profits, and government. We volunteer our time identifying and spotlighting ethical issues impacting our community.

Under 2008 Proposition A, voters approved a measure to raise and invest public funds to upgrade Valley Medical Center to meet seismic safety standards mandated by the State. A contract was awarded to Turner Construction Company for $290,000,000 to construct Bed Building 1, a 168 bed facility, a part of the upgrade program, with a completion date of December 2012. In September 2015, when the contract price had increased to $381,000,000, the County terminated the Turner contract.

The County engaged Boldt Construction Company to assess the reasons for the delays and cost overruns. Boldt reported that the County, not Turner, was responsible.

In 2016 the County entered into a revised contract with Turner for an additional $85,000,000 with a target completion by mid-2017. The project will therefore cost at least $466,000,000 or $176,000,000 over the original contract price and will be completed at the earliest 54 months later than planned. That is a 61% increase in the cost – and the project will take more than twice as long to complete.

There are significant ethical issues related to the County’s mismanagement of the project. The County has not been transparent. For over seven years, as the costs spiraled, the extent of the overruns and delays was not shared with the public. Furthermore, the County’s Independent Citizens’ Oversight Committee reportedly was also kept in the dark in direct contradiction of the legal requirements of the voter-approved bond measure,

The four and a half year delay in completing the project has exposed the most vulnerable patients, including maternity and traumatic injury cases, to overcrowding in unsafe facilities. To the extent that there are insufficient funds in the Bond proceeds to complete the program, the burden will fall on County taxpayers.

Clearly the County Board of Supervisors is responsible.
• The Board should identify those staff members who mismanaged the project and take appropriate action.
• The Board should develop staffing assignments and procedures to ensure the project will be completed without further overruns and delays and explain how this will be accomplished.

Santa Clara County Board of Supervisors, May 18, 2016 page 3

• The Board should develop and implement procedures to professionally manage future construction projects for Valley Medical Center and for other County entities.

The Board should provide a full and complete accounting of the total cost of Bed Building 1 including all construction costs, architecture/engineering fees and other expenses.


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