The Arizona Department of Administration has awarded a contract to McCarthy Building Cos. to construct the $34.5-million Arizona State Civil and Behavioral Hospital. The 200,000-sf hospital will be built on the campus of the Arizona State Hospital, which is at the northeast corner of 24th and Van Buren streets in Phoenix. Ground breaking is set for August, with a completion date of fall 2002.

The project is the first office project to be built under the auspices of a new law passed last year that allows public municipalities and entities to select design-build teams based on qualifications and value, rather than on bid price alone. Late last year, a parking garage in downtown Phoenix was built using the same award process, but the hospital will be the first building that has been awarded under the design-build system.

Proponents of the new law, House Bill 2340, expect that public buildings will be better designed and ultimately cheaper--with no change orders and no lawsuits--with the new award procedure. Many general contractors that in the past have eschewed public works projects because the award was based solely on a competitive bid, are now expected to compete for state, county and city jobs.