Alameda County supervisors took another major step toward the massive Highland Hospital replacement project when they awarded a contract that could be worth as much as $431 million to an Oakland-based contractor.

The contract, which was approved unanimously, calls for Clark Design/Build of California to try to issue at least 60 percent of its subcontracts to local businesses and 20 percent to certified small businesses.

Although Clark officials said that would not be an issue and that they should surpass those goals, supervisors asked for frequent updates to try to make sure money is being kept locally.

The project is the largest county investment in health care facilities in Alameda County history.

"We're building a $650 million hospital for this county — that's a really good thing," said Supervisor Scott Haggerty after a lengthy public hearing Tuesday.

Last year, the supervisors approved the project to replace the acute care tower at Highland Hospital in Oakland.

The total project cost is estimated at $660 million.

The replacement project calls for a nine-story tower that will house 160 beds — replacing the current inpatient facility with a new, seismically sound facility that will comply with state laws.

County officials say the historic front-entry grounds, the administration building and three wings of the original hospital will be preserved but several historic campus buildings — including three

Construction is scheduled to begin this year and to be completed in 2017.

The supervisors also approved entering into a letter of credit with Union Bank of California for $100 million to help finance the project. The county will pay for the majority of the project through commercial paper followed by bonds.