Bond Issue Raised at Unity
Unity — New Hampshire state officials are reviewing whether the firm that is undertaking a portion of the construction of the new Unity elementary school is required to post a performance bond, a move which the contractor said he cannot afford and which he said would only drive up costs and drag out the project through the current school year.
Jeff Blaney, an administrator with the Bureau of School Approval and Facility Management at the state Board of Education, said Monday that the board is acting on an inquiry from two Unity residents to determine whether the contractor of the Unity School needs to take out a bond as is normally required under New Hampshire law.
But Scott Vaughn, the Unity architect who initially stepped forward to design the new elementary school and using his construction firm, Third Dimension, to do some of the work, said his small business cannot financially afford a performance bond and he would be forced to bid out the remaining work to subcontractors.
“This would be a disaster,” Vaughn said. “It would keep every Unity kid in Claremont to the end of the school year and lock the project down for a considerable amount of time. It could hold off completion of the school to spring of next year.”
Vaughn expects that the issue will be addressed at tonight’s School Board meeting beginning at 6:30 in Unity Town Hall.
So-called performance bonds are typically issued by a bank or insurance company on large construction projects to ensure that the contractor completes the job and does it to the required specifications.
Blaney confirmed that he received a request from Unity residents Brenda Consentino and Craig Shute, a former School Board member, to look into the bond requirement. Neither could be reached for comment Monday.
Blaney said he has referred the matter to the Attorney General because he could not be certain whether a performance bond is required under the circumstances or whether the absence of one would jeopardize state construction aid for the project.
Construction on the new Unity School building is about 75 percent complete, Vaughn said.
Though a work has been halted while approval for the window installation method is under review, Vaughn hopes construction will be completed by the end of the calendar year. About 115 Unity students in grades K-8 have been temporarily relocated to the Claremont Middle School and Disnard Elementary, where they began classes Monday.
If a bond is required, Vaughn said he would have to find others to finish the work, including window installation and Sheetrocking, and that would raise costs.
“It would add about $300,000 to the construction costs and when you add in the delays and transaction costs, you could easily rack up a half million dollars,” Vaughn said. “It would take a $5.6 million project and bring it to $6.1 million.”
Blaney said the School Board’s legal counsel determined a performance bond was not required for Vaughn’s services as an architect. But whether one would be required for Vaughn’s role as a contractor remains an open matter.
“They have not chimed in on Third Dimension,” he added.
Vaughn said the strategy to use Third Dimension for more of the labor than initially intended came into play when the final design of the school increased the square footage even though no additional money had been appropriated at the time for any extra work.
“It was a strategy to save thousands of dollars using low-cost labor,” he said.
As an example, Vaughn used his company to grind and polish the concrete floors for about $25,000, which he said saved $75,000.
He estimates his company’s labor at $200,000.
“Less than 5 percent of the total project cost is subject to this (bond),” he said.
Unity residents approved a $4.7 million bond to build the school in 2010. But, after the district received an additional $900,000 through various sources, it is now a $5.6 million project.
On Monday, Vaughn was adamant that his small firm cannot afford to post a performance bond.
“Third Dimension cannot do it,” Vaughn said of the bond. “Whatever it is, I don’t have the capacity.”
The new school is being built next to the old one, which has been torn down. In July 2010, the state ordered that school be closed because of numerous code and safety violations, though emergency repairs kept it open until the end of the last school year.
Patrick O’Grady can be reached at email@example.com.