Contract clash threatens to delay Las Vegas Mob Museum

Las Vegas’ planned Mob Museum is supposed to chronicle the influence of organized crime on Southern Nevada and the law enforcement effort to drag criminals into courts. But the next phase of construction might have to wait on a very different, and possibly very long, court fight.

An $11.5 million contract has two contractors at odds in a fight that has serious implications for the city, and not just because it involves one of Mayor Oscar Goodman’s high-profile downtown projects.

The city is in protracted litigation with one of the contractors over a separate project.

Furthermore, City Council members criticized city staff for inadequate bid specifications, worrying that disputes like this one will increase because of intensifying competition for construction work.

The contract was scheduled to be awarded today to APCO Construction. After a lengthy hearing on a protest filed by Flagship Construction Co., a competing bidder, the matter was rescheduled for July 1.

But some expect the fight to continue beyond that date.

“I suspect litigation may flow from this,” said City Attorney Brad Jerbic.

Mayor Pro Tem Gary Reese was even more pessimistic.

“We’re going to have a project here in the city of Las Vegas that’s going to be detained for a couple of years,” he said.

Mark Ferrario, an attorney for Flagship, complained about the bid process, saying a first set of bids in which Flagship was the low bidder shouldn’t have been thrown out as “nonresponsive,” or not meeting bid requirements.

That allowed competing bidders to see the others’ offers, he said.

He also argued that APCO hadn’t adequately disclosed its history of litigation, including a long-running dispute with the city over tennis courts the company built at the Amanda and Stacy Darling Memorial Tennis Center.

Kathy Rainey, the city’s purchasing and contracts manager, said the first set of bids didn’t attract enough bidders because the specifications were too restrictive.

Rainey told the council that APCO wasn’t required to list all of its legal squabbles, just the ones on projects like the Mob Museum, which is a retrofit of a historic building.

Ferrario disputed that interpretation of the bid rules, and even some City Council members found the language unclear.

“That would be news to me,” Ferrario said. “You can’t simply dismiss it.”

John Mowbray, representing APCO, urged council members to approve the bid, noting that Flagship’s bid was $12.6 million.

“Those are significant dollars,” he said. “The city staff has vetted all the protests. They were found to be without merit.”

State law requires a contract to go to the lowest bidder that turns in a complete bid and demonstrates the qualifications to complete a project.

The Mob Museum, formally known as the Las Vegas Museum of Organized Crime and Law Enforcement, will be located inside the 1930s-era former courthouse on Stewart Avenue downtown, across the street from City Hall.

Its $50 million price tag is being funded by a mix of private donations and grants. The bulk of the money would come from city Redevelopment Agency bonds used to boost development downtown.

The museum is expected to open in 2010, and work on exhibits is continuing, city spokesman Jace Radke said.

The contract at issue today included removing hazardous materials, a seismic retrofit, interior remodeling and historic restoration.

Even the prospect of a vote presented unusual circumstances.

Goodman recused himself from the discussion and did not vote because he shares an interest with APCO in the Apex Industrial Park.

Councilwoman Lois Tarkanian said the city’s dispute with APCO prevented her from being objective, and Councilman Ricki Barlow was absent.

That meant the four remaining council members, including freshly sworn-in Stavros Anthony, all would have had to vote in favor to award the bid.

Councilman Steve Ross said imprecise bid documents could lead to a rash of disputes reaching the council as companies get more aggressive about securing work.

“We have got to get better documents,” Ross said. “This isn’t new. You cannot keep putting this council and the mayor in this situation.

“We need to know everything. … We’ve got to find a better way to do this, especially in this economy.”


Contact reporter Alan Choate at or 702-229-6435.