The New Hampshire Department of Transportation declared the contractor in charge of the Ledyard Bridge project in "default" late last week when workers from Midway Excavators, Inc., stopped showing up to work, and the state became aware the contractor may be in financial difficulty.
Midway may owe the town of Hanover and the company's subcontractors up to one million dollars according to an Aug. 2 article in the Valley News.
Department of Transportation Public Information Officer Bill Boynton said the state discovered last week that construction on the Ledyard Bridge was not progressing as it should have been.
"Midway had not been paying its bills to other suppliers," he said, and "would not give us a clear answer when we asked what their financial situation was."
In addition, the Midway workers were not showing up to the worksite or were leaving before their shifts were done. The situation eventually reached the point when Midway was not fulfilling the terms of the contract the company had with the state, Boynton said.
"It became clear there was a problem there," he said.
Midway also struck the town of Hanover with a financial blow. The company owes $50,000 to the town of Hanover for traffic control provided by police officers, according to Boynton.
Boynton said The Travelers Companies, the bonding company, "will have to make good on these bills for the project to proceed."
Hanover officials are also eager to see the Ledyard issues resolved so construction on West Wheelock St. can be completed. The road is torn up for sewer work in conjunction with the Ledyard project, he said.
On Friday, Commissioner of Transportation Leon Kenison sent a letter to Midway saying the state regarded the company in default of their contract with the state.
Once the letter was sent stating the contractor was in default, a ten- day period began which gives Midway "almost two weeks to get their act together and see if they will recover," he said.
Due to the Ledyard project's high cost of $11.2 million, the contractor is required to be insured by a business that will guarantee that the project will be completed.
Travelers, which is based in Hartford, Conn., is the company that insured Midway. "The bonding company [Travelers] is aware of the problems and is stepping in to complete the project," Boynton said.
He said the state is in "sort of a waiting period" now and the state is planning to meet with Travelers to work out a plan that would resolve the situation because the bonding company is the organization that would find a new contractor to complete the job.
There are still many unanswered questions about Midway, he said. Midway has not declared bankruptcy but the state is going ahead with the assumption that another company will complete the project.
Boynton said about 40 percent of the Ledyard project is complete and the construction workers from the subcontractor, Moores Marine Construction Corp., are still working on the steel portion of the bridge.
The state believes the Ledyard project will not be significantly delayed because of Midway's defaulting, Boynton said. "As of now we still expect the project to be completed on time and the scheduled completion date is October 1998."
"We believe the time lost is days and not weeks," he said.
The fate of the subcontractors is still up in the air, according to Boynton.
Boynton said his office is not looking for the Ledyard project to go through an open bid process for a new contractor because that will just slow down the construction.
