CARSON CITY – A lengthy legal dispute with the contractor who built the first phase of the Carson City freeway bypass has been recommended for settlement at a cost to the state of nearly $14 million.

The Nevada Department of Transportation is recommending that the Board of Examiners approve the mediated settlement with Ames Construction at its meeting Tuesday.

The $13.6 million proposed settlement is far less than the $40 million sought by the company.

Carson City bypass. / Photo courtesy of NDOT.

The protracted dispute over the work became controversial when some members of the state Transportation Board, including Gov. Brian Sandoval, questioned the legal fees and expenses incurred in defending against the lawsuit that have totaled $6 million.

Despite the concerns, the board in January approved an updated contract with the legal firm of Watt, Tieder, Hoffar & Fitzgerald to take the case to mediation in February and bring the total legal costs to the $6 million figure.

The rates charged by the legal firm’s attorneys are as high as $340 an hour for the senior partner, but members of the board were told the rates were not excessive and had not changed since the dispute first began in 2008. The total costs include expert witnesses.

The February mediation led to the proposed settlement that the Board of Examiners, made up of Sandoval, Attorney General Catherine Cortez Masto and Secretary of State Ross Miller, will review at the meeting.

In a summary of the proposal, it says: “Both parties desire to avoid the cost and inconvenience of continued litigation and mutually settle any and all claims without admission of liability or fault.”

The $70 million contract for the first 3.5-miles of freeway bypass was awarded to Ames in 2003. The segment of the freeway opened in February 2006.