Co-op project not endangered by Baybutt’s failure to pay

Wednesday January 9, 2013

BRATTLEBORO -- Even though some of the subcontractors who worked on the Brattleboro Food Co-op building haven’t received full payment for the work they’ve done, Project Manager Tom Appel said they all "took ownership" for the project and gave it their best.

"All the subcontractors have been performing wonderfully," he said. "We have a wonderful project and it’s 99 percent done and done well to the credit primarily of the subs, 20 to 30 of them, who worked on the project."

Scott McKusick, the clerk of the works, agreed with Appel.

"Many of the subs went above and beyond, even with delayed, late or partial payments," said McKusick. "A huge number of them kept on working. They went out of their way to help the owner."

A number of subcontractors working with Baybutt Construction, of Keene, N.H., have reported they have not been paid on projects they have been working on around the region. Phone calls to Baybutt headquarters were not returned for comment.

Appel and McKusick both said Baybutt’s problems became apparent in late summer of 2012, when subcontractors started complaining about not receiving payment. About that same time, Baybutt stopped submitting requisitions to McKusick.

Normally, said Appel, subcontractors submit 30-day invoices to the general contractor, which combines the collected invoices into a single requisition that is presented to the project owner for payment.

"Then you expect the money to go back through to the subcontractors," said Appel. "That’s how the system is supposed to work."

But that’s not what happened in this case.

"Subcontractors had contacted us saying they have not received all the money they have requisitioned through the project," said Appel.

Co-op General Manager Alex Gyori said he has received a number of calls from subcontractors about non-payment by Baybutt.

"We had seen signs along the way, but we didn’t think it would go this far," said Gyori.

"We had heard they were on the ropes," said Bob Stevens, of Stevens and Associates, the civil engineer on the project. However, he said, most of Stevens and Associates fees were paid directly by the owners of the project and not through Baybutt.

Despite the payment problems, Gyori, like Appel and McKusick, said the subcontractors turned in quality work.

"We expect at the end of this process that everyone will be paid," he said.

Because money was withheld, said Appel, the Co-op and its partner in the project, the Windham Windsor Housing Trust, are well positioned to pay for any work that needs to be completed.

The Windham Windsor Housing Trust did not return two phone calls for comment.

Appel also said he was confident the "punch list," would be completed. A punch list is a list of items that need to be finished up before a project can be officially declared complete.

"The project completion is not in jeopardy," he said. "We have the money to pay for the punch list items."

On any high-dollar project, a performance and a payment bond should be part of the contract. A payment bond protects the Co-op against claims filed against it by subcontractors for compensation not received, he said. A performance bond is a surety bond issued by an insurance company or a bank to guarantee satisfactory completion of a project by a contractor.

Appel was quick to point out that Baybutt’s failure to pay its subcontractors doesn’t affect the financial integrity of the Co-op or the Windham Windsor Housing Trust.

"The subs are going to the bond company with their claims," said Appel. "It’s up to the bond company to evaluate the claims and to work with the subs to come to a fair settlement."

Even though the project paid out money to Baybutt that didn’t make it into the hands of the subcontractors, Baybutt won’t owe money to the Co-op or the Housing Trust, said McKusick, because the owners paid for a scope of work.

It was up to Baybutt to work out the details with the subcontractors and suppliers, said McKusick.

He said final payments to the subcontractors can be made in a couple of different ways.

"In one scenario, the project turns over all the money to the bond company," he said. "Or it could be the bond company deals with past due and we deal with current amounts."

McKusick had worked with Baybutt when it rehabilitated the Daly Shoe building on Birge Street for the Windham Windsor Housing Trust, a project that was completed in 2007.

"I feel bad for the people who work for Baybutt, the field personnel, who by and large did a pretty good job," he said. "People will be losing their jobs."

Bob Audette can be reached at, or at 802-254-2311, ext. 160. Follow Bob on Twitter @audette.reformer.


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