Encore Boston Harbor General Contractor, Subcontractor Exchange Allegations over Disputed Bills

Posted on: July 17, 2019, 07:24h. 

Last updated on: July 17, 2019, 07:24h.

Ed Silverstein @casinoorgedsilv Read More

Expertise: Legal, Tribal Gaming.

Representatives from Suffolk Construction — the general contractor for the recently-opened Encore Boston Harbor — and subcontractor Coghlin Electrical Contractors — which claims it is owed over $30 million in unpaid bills for the project — continue to meet as Suffolk now says Coghlin has failed to provide needed documents and used “unfair business practices.”

In a statement released to Casino.org on Monday, Linda Dorcena Forry, vice president of Diversity, Inclusion and Community for Suffolk, said, “Coghlin has consistently failed to provide supporting documentation for a majority of its remaining claims, as required by the subcontract Coghlin signed.

Coghlin recently and unexpectedly added millions of dollars to its list of claims without providing any meaningful documentation to substantiate those claims,” the Suffolk statement adds. “This is not the first project on which Coghlin has engaged in these unfair business practices.”

Forry said that Coghlin “consistently and on numerous occasions throughout the casino project certified in writing that the majority of the claims it is now asserting did not exist, and also provided legal releases waiving its rights to make these claims.”

Issues Relate to Change Orders

But Coghlin President Sue Coghlin Mailman explained the new claims resulted from change orders on the $2.6 billion Everett, Massachusetts gaming venue. These are work directives added to an original contract.

The recent additions to our change order requests are claims which can never be calculated until the project is done,” Mailman explained in a statement quoted by the Worcester Telegram & Gazette. “Suffolk forced Coghlin to sign documents to get paid.

“Suffolk nor Wynn did not let Coghlin bill for additional work. Now that Suffolk has settled with Wynn and Wynn has the doors open, Coghlin is not being paid by Suffolk. Suffolk and Wynn knew to expect claims.”

Suffolk’s statement said the firm already paid Coghlin about $70 million for work on the casino. Last week, the two firms discussed a settlement amount on the final “substantiated claims,” Forry said.

Suffolk also said it provided millions of dollars in advance to help Coghlin meet its payroll. Suffolk also assisted with cash flow at the electrical firm.

“We hope to eventually reach a final and fair resolution with Coghlin,” Forry added in the statement. “We will continue to work diligently to ensure we fairly and efficiently close out all subcontracts.”

Officials from several other Massachusetts construction services firms are also concerned that some of their work as subcontractors on the gaming venue has yet to be paid.

When asked for comment on the latest statement, Encore Boston Harbor repeated its earlier statement to Casino.org that the resort casino “has paid all invoices presented by … Suffolk Construction.  Subcontractors work directly with the contractor, not Encore Boston Harbor.  Encore Boston Harbor has no outstanding invoices with Suffolk Construction.”

The Massachusetts Gaming Commission (MGC) was contacted by attorneys representing subcontractors regarding the billing issues. Last month, MGC General Counsel Catherine Blue wrote a letter to an attorney that said she and a commission project oversight manager will monitor the progress on the close-out process, and Blue will relate relevant concerns to appropriate parties.

“It is our understanding that Suffolk Construction and Coghlin Electric continue discussions,” commission spokeswoman Elaine Driscoll told Casino.org on Monday.

The Telegram & Gazette reported the two sides had a meeting last week. “We are supposed to be paid $2.6 million which means we are still owed $27 million — this is less than 10 percent of the money due,” Coghlin was quoted.

“We are not done fighting for our change orders …. Coghlin has had to fight for money on other projects as well, increasingly this is the state of the industry,” she added.

Mailman and other subcontractors said that in the Encore project, change orders were addressed every six to eight months. Typically, they would be addressed monthly in meetings.

Lawsuit, Record Fines

In an unrelated new lawsuit, plaintiffs allege Encore Boston Harbor Casino cheated blackjack players and withheld slot machine winnings from patrons. In May, Wynn Resorts agreed to pay a record $35.5 million in fines to the state of Massachusetts after it failed to disclose accusations of sexual misconduct against former CEO Steve Wynn.