The project would create a 256-bed maximum-security expansion at the John Latorraca Correctional Center.
It would essentially replace the aging main jail in downtown Merced.
On Tuesday, the board unanimously approved a $1.35 million contract with a Sacramento company to manage the project.
Sheriff Vern Warnke has said conditions at both jails in the county have played a role in a series of recent escapes.
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