An engineering firm that drew criticism for its work on the collapsed Interstate 35W bridge continues to receive city contracts in Minneapolis, where leaders have not shared Gov. Mark Dayton's hesitation in giving the firm more business.

Last week, the Minneapolis City Council authorized city staffers to negotiate a contract worth up to $1.2 million with URS Corp. The California-based firm will study the feasibility of running streetcars versus other transit options on Nicollet and Central Avenues in Minneapolis.

In 2007, URS was a consultant studying the state-owned 35W bridge in Minneapolis when the bridge collapsed, killing 13 people. Victims of the bridge collapse sued URS, accusing it of failing to spot structural problems, and in 2010, URS agreed to pay $52.4 million to settle the lawsuit without admitting any fault.

The firm also designed the Martin Olav Sabo Bridge, a bicycle and pedestrian bridge in south Minneapolis that has been closed since a set of cables broke loose in February. A report on the causes of that failure is expected in the coming weeks.

Earlier this month, a Dayton spokeswoman said the governor had "very strong concerns about the state doing business with URS" as the company seeks a contract worth up to $100 million related to the Southwest Light Rail line. Dayton's office later said he would meet with the company and consider its extensive experience.

URS is also bidding to design the new Stillwater Bridge over the St. Croix River.

In the past five years, the city has awarded URS about two dozen contracts worth more than $9 million in total. One of the most significant -- nearly $5 million -- involved design and construction management of transit lanes on Marquette and 2nd Avenues downtown between 2008 and 2010.

City Council President Barb Johnson said she does not have concerns about URS doing business with the city, calling it a "responsible company."

"The mayor has confidence in his public works director in selecting appropriate vendors," an aide to Mayor R.T. Rybak, Andy Holmaas, said Wednesday.

Public Works Director Steve Kotke said the streetcar contract is quite specialized and not many firms can provide the necessary expertise. Only two firms submitted proposals.

"They [URS] are and have been a reputable consulting firm that the city has used on a number of projects over the years," Kotke said. "And our experience -- my experience with them has been good."

Most of the streetcar contract -- about $900,000 -- will be paid for with federal dollars.

A URS spokesman declined to comment.

Eric Roper • 612-673-1732 • Twitter: @StribRoper