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LOS ANGELES, CA -McCarthy Building Cos. Inc. broke ground on a project at Olive View-UCLA Medical Center that will be delivered under a guaranteed maximum price agreement, the first such contract for the Los Angeles County Department of Public Works that the Newport Beach, CA-based contractor is aware of. The $32 million project encompasses replacement and expansion of the hospital’s emergency services and acute care units with construction of a single-story, 41,000-square-foot addition to the existing facility.

“We are increasingly seeing public entities explore alternative delivery methods, since they help to control costs while producing a higher quality project,” says Steven Mynsberge, executive vice president and healthcare business unit leader for McCarthy. “Under our contract, we’re helping keep the project on-budget by working with the county to keep costs low and ensuring that we won’t go over a set amount.”

As part of the GMP process, McCarthy provided the bids for each subcontractor so the county could verify that the company received competitive pricing, since subcontractor work makes up for approximately 80% of the total contract value.

According to McCarthy project manager Michael Wiggins, with a GMP contract, the owner receives cost savings when the project comes in under budget, but is protected from cost overruns. In addition, the contractor’s books are open to review by the owner. “Most public agencies have been exploring alternatives to the hard bid approach,” he tells GlobeSt.com. “We commonly use this type of agreement for private work and believe that it is fair for both McCarthy and the owner.”

Designed by Langdon Wilson Architects, the emergency department building will connect to the existing hospital. The facility will include 51 exam rooms, a radiology suite with fluoroscopy, general radiology, and CT scan rooms, and registration and support areas. Adjacent to the new emergency department, the acute care unit, which will be dedicated to the treatment of tuberculosis, will include 15 negative pressure isolation rooms.

Olive View-UCLA Medical Center is a county-operated hospital located at 14445 Olive View Dr. in the Sylmar district of the northern San Fernando Valley. Built in 1987, the main facility includes 377 beds and provides outpatient, surgical, obstetric/gynecologic, and psychiatric services. The hospital is host to a number of residency programs and is affiliated with the University of California, Los Angeles.

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