Arbitrators rule against state in veterans home construction suit

A panel of three arbitrators has ruled against the state of Nevada in its battle over construction of the Southern Nevada Veterans Home.

Public Works Board Manager Dan O'Brien said the total award against the state is $9.9 million.

Of that total, $5.4 million is attorneys fees, litigation and arbitration costs. But that total doesn't include the several million in costs the state has incurred fighting the case.

The veterans home project, begun in 1998, was the subject of a running battle between the state and its architects and the contractors. State officials complained about shoddy work and missed deadlines. Contractors complained the state and the architects were constantly changing plans on the fly and refusing to listen to the issues raised by contractors at the job site.

Finally, in 2001, the state fired Addison Inc. and hired Metcalf Builders to finish the project.

After that, everyone sued.

According to arbitrators, the delays in building the veterans home were caused by the state and its architect, Harry Campbell & Associates, not by the contractor and his subcontractors. They found the project plans were at best three quarters completed when the job went to bid and cited literally hundreds of plan changes during construction.

"The vast majority of those change orders, which were required by the (public works board), were the result of errors and omissions by the (board) design architect, HCA," the ruling states.

The ruling charges that public works and HCA basically ignored a list of 65 concerns and recommendations submitted by the state Health Division as well as 26 issues raised by the state Fire Marshal's Office before construction.

Public works and the architects were warned seven months before construction began about structural design deficiencies in the plans that Addison said could cause cracking of the walls. Those cracks began appearing before construction was completed and were among the complaints the state raised before firing Addison from the project.

"At the time the plans were put out for bid, the (public works board) knew that there were issues and items raised by the State Fire Marshal and the Health Division that needed to be resolved prior to their approval of the plans."

Those deficiencies and the resulting change orders, arbitrators said, caused the delays in the project.

O'Brien said the state hasn't decided what steps to take next.

"Needless to say I'm disappointed," he said. "Everyone knows how frustrated the state was five years ago in trying to get the contractor to finish."

He said he still believes the state had an excellent case.

"However, the arbitrators didn't see it that way," he said. "They laid all the blame on the deepest pockets, which is the state of Nevada."

The ruling comes at a bad time for the state, which doesn't have enough money in its emergency accounts to pay the judgment.

• Contact reporter Geoff Dornan at gdornan@nevadaappeal.com or 687-8750.