NORTH MANKATO — State transportation officials hope to save at least $2.6 million by splitting the Highway 14 expansion on North Mankato’s northwest side into two phases and handling the design work internally.

The project, originally expected to cost $18 million, suffered a setback when the lowest bid received on Aug. 31 was $23.6 million. The bids were rejected by the Minnesota Department of Transportation and new bids will be sought in March for the portion of the project slated to be done during the 2012 construction season, said MnDOT spokeswoman Rebecca Arndt on Friday.

MnDOT officials on Friday also laid out for the first time the details of the massive detour of Highway 14 traffic that will be required next year. The detour will end at the conclusion of the 2012 construction season and won’t be required in 2013, when the project will be finished.

Bids will be sought in the fall of 2012 for the 2013 work to complete the conversion of nearly two miles of two-lane highway into four-lane expressway and the addition of an interchange at Rockford Road (Nicollet County Road 41), Arndt said. Instead of asking the contractor to do the detailed design work for the project in a process known as “design-build,” the designs will be handled by MnDOT.

MnDOT officials, after reviewing the project for nearly a month, determined that some of the additional costs reflected in the $23.6 million bid were justified but not the entire amount. A tentative revised estimate shows that.

“It’s a very early, preliminary estimate — somewhere in the $20 million to $21 million range,” Arndt said.

The new estimate also reflects some potential changes in the design. The southernmost of three roundabouts — the one serving Pleasant View Drive — may become a traditional intersection.

The four-lane expansion might be shortened a bit, as well, stopping just east of County Road 6 instead of just past it, Arndt said. And changes to stormwater retention ponds may produce some savings.

Final decisions on changes will come only after consultation with the two local governments which are splitting about 25 percent of the project’s cost.

“We need to continue working with North Mankato and Nicollet County on these designs before the bid-letting in March,” she said.

Highway 14 west of Lookout Drive will close with the start of construction, likely in May. Work will include constructing embankments for the overpass at Rockford Road and the interchange ramps, digging ditches and drainage ponds and grading for the new section of four-lane — which will sit slightly north of the current alignment.

Either the eastbound or westbound lanes of the new expressway will be paved, and two-way traffic will flow on the new lanes when the highway reopens at the end of the construction season.

Until then, Highway 14 traffic will be detoured north onto County Road 6, using Lookout Drive to reconnect with Highway 14 on the east side of the construction zone, said Chad Fowlds, construction engineer for MnDOT’s Mankato-based District 7.

The detour will be a challenge even for drivers who don’t use Highway 14 but travel over it on Lookout Drive.

“There’s going to obviously be a lot more traffic on it,” Fowlds said. “We’re looking at ways to try to minimize the turn conflicts that occur at Howard Drive.”

The construction will also eliminate the current at-grade intersection with Rockford Road.

“People will have to find alternate routes, whether they use Judson Bottom Road or Pleasant View Drive,” he said.

When the detour ends late in 2012, County Road 6 will become a permanent dead-end just north of where it currently intersects with Highway 14.

The 2013 construction season will bring the paving of the second pair of lanes on the new expressway and the construction of the interchange bridge and roundabouts. Despite the decision to rebid the project, the estimated completion — by the end of the 2013 construction season — is unchanged.