State wins partial settlement over vets home

Wednesday, Aug. 31, 2005 | 8:25 a.m.

CARSON CITY -- The state will receive a partial settlement of $500,000 for the problems that plagued the construction of the state veterans home in Boulder City, but it still faces a major suit by the fired contractor.

Addison Inc., which was pulled off the job after delays and cost overruns, is seeking $17 million, but the state claims the construction company owes it several million. It won't be settled until binding arbitration takes place in November, said Dan O'Brien, state Public Works manager.

However, the Public Works Board on Tuesday agreed to an out-of-court settlement with HCA-Harry Campbell Architect that must be approved by the Legislature. The Interim Finance Committee calls for CNA, the insurance company that carried an errors and omissions policy for the architect, to pay an estimated $600,000 to the state. In return the state will pay HCA $100,000 for work it claimed it did but did not get paid for. O'Brien said the state will continue suits filed by HCA against subcontractor architects. HCA will cooperate in the rest of the case against Addison, O'Brien said.

The Public Works Board met in closed session Tuesday to hear a report from its lawyer and then convened in open session to accept the settlement with HCA. Addison was awarded a $14.7 million contract in June 1999, with an original completion date set for May 1, 2000. But change orders pushed the construction back.

When the problems multiplied, the state pulled Addison off the job and hired another contractor, the first time Public Works has ever done that.

Addison filed suit claiming it was due millions of dollars for work it performed but was never paid for. The original project called for 112,000 square feet but that was reduced to 88,000 square feet because of budget limitations. O'Brien said that three arbitrators will hear the suit between the state and Addison. Those sessions could last five weeks. In other action, O'Brien said the suit is still pending over the outside tiles falling off the Sawyer State Office Building in Las Vegas. He said depositions are being taken.

In the meantime, he will go before the Interim Finance Committee to see what it prefers -- tiles or stucco -- to be placed on the outside of the building.

O'Brien, who said stucco would require more maintenance in the long run, favors tiles, but some legislators, during the 2005 session, liked the less-expensive stucco. Installing new tiles would cost slightly less than $10 million, but stucco would be about $1.5 million less, he said.

Also, the board authorized bidding for construction of military readiness center to house five Army National Guard units in Las Vegas. Bids on the $23 million project are scheduled to open Sept. 19th.