$13.6M Settlement OK’d With Nevada Freeway Contractor

April 5, 2012

The Nevada Board of Examiners approved a $13.6 million settlement with the contractor of the first phase of the Carson City bypass, ending a legal dispute that officials said could have cost more than three times the agreement amount if the case had gone to court.

Ames Construction Inc. had sought $40 million in a lawsuit.

The settlement, reached with the help of a mediator, came after the state Board of Transportation in January approved an updated contract with a law firm handling the suit and to take the case to mediation, resulting in legal fees of around $6 million.

Ames Construction was the low bidder at around $70 million in 2003 to build the 3.5-mile freeway segment from Fifth Street to East Lake Boulevard. The freeway opened in 2006.

Richard Nelson, assistant director for the Nevada Department of Transportation, said contract changes added to the overall cost, as did high staff turnover on the project.

Nelson said the contractor lost about $18 million on the job, and by the time the dispute had gone to mediation, the contractor’s claim had grown to about $48 million plus interest. Settlement approval by the Board of Examiners, made up of Gov. Brian Sandoval, Attorney General Catherine Cortez Masto and Secretary of State Ross Miller, brings the total project cost to around $90 million.

Sandoval, who questioned the legal fees two months ago, said the amount still “seems like a lot of money to me,” but that the settlement was in the best interest of the state to avoid even higher litigation costs. He said he was pleased with the outcome.

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