It's failing because PsExec.exe was not found. It needs to be in the PATH environment variable of the Visual Build process. If you're using the 32-bit version of Visual Build, the System path is in a different location than for 64-bit processes. From 64-bit Explorer, it would be at C:\Windows\SysWOW64 (copy PsExec here for it to be available to 32-bit Visual Build).
http://www.kinook.com/VisBuildPro/Manual/6432bit.htm