The city has given up trying to work with a general contractor to correct defects on a $54 million traffic management building that is more than a year behind schedule.

City officials Monday sent a letter to Watts Constructors LLC notifying the company that it is barred from doing any more work on the troubled Honolulu project.

The notice cites insufficient efforts by Watts to correct items that include water leaks and improper installation of lobby glass walls and fire escape stairways.

Under provisions of the contract, the city has let two surety companies — American Home Assurance Co. in New York and Zurich American Insurance Co. in Illinois — know they are now responsible to assume the contractual obligations of Watts on the project or pay monetary damages. A bond to cover the work was posted by Watts for such a situation.

A representative of Watts could not be reached for comment Monday after the city announced its decision.

Watts had been working with the city to correct defects since February when the city announced that the contractor had defaulted on the contract because of construction deficiencies.

At that time Watts said it would satisfy the city and that the company remained committed to successful completion of the building.

The contract allowed time for Watts to devise and implement corrections, but the city said in its letter that this effort has taken too long.

Specifically, the city said flood testing on the roof hasn’t happened yet, and water was observed leaking into seven rooms on June 5 and one room on July 3.

Another issue pertains to a weather-resistant barrier that hadn’t been installed beneath exterior metal wall panels as called for in the March 2015 contract. According to the city, Watts argued that the barrier wasn’t needed but later agreed to remove the panels and install such a barrier on two sides of the building by June 1.

“To date, these activities have not been completed despite Watts’ latest construction schedule showing that these activities would be completed by July 6, 2018,” the letter to Watts said.

The letter acknowledged that Watts has been doing some corrective work that includes redoing welds for support structures connected to glass walls and replacing improper fire escape stairs. Yet not all of this work is done, the city said, noting that demolition of one fire escape stairway is no more than 50 percent complete.

The city’s letter said Watts submitted its latest construction schedule Thursday and forecast an Oct. 8 completion date for all necessary work, which would be 480 days after the contract’s June 14, 2017, completion deadline.

“The termination letter and the letter to the sureties were issued only after many opportunities had been given to Watts to correct the various defaults,” Donna Leong, city corporation counsel, said in a statement. “Unfortunately, Watts did not address the defaults by taking necessary corrective actions and did not provide sufficient resources and personnel to correct those defaults. The city is taking this action because of Watts’ continuing delays, as we need to complete construction.”

To prevent Watts from further work, the city secured the construction site and said any workers needing to retrieve their tools can do so by having their employer make an appointment with the city Department of Transportation Services.

A new completion date could depend on responses from the two insurance companies. Watts began began work in April 2015 on the project funded mainly by the Federal Highway Administration, which is providing $37.8 million compared with $15.8 million from the city.