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Build Up Insight

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671.649.4249 © 2015 Caterpillar. All Rights Reserved. CAT, CATERPILLAR, BUILT FOR IT, their respective logos, “Caterpillar Yellow,” the “Power Edge” trade dress as well as corporate and product identity used herein, are trademarks of Caterpillar and may not be used without permission.


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Feature Story


Chamorro Phrase Of The Month Fino Chamorro: English:

K책o guaha nisid책t-mu gi tenda? Do you need something at the store?

brought to you by The Guam Contractors Association. 2 | SEPTEMBER2015



TRADES ACADEMY B u i l d i n g

S k i l l s

F o r


L i f e t i m e

Guam Contractors Association

THEDIRECTORS PRESIDENT James A. Martinez Guam Constractors Association PAST CHAIRMAN Art Chan Hawaiian Rock Products CHAIRMAN John Sage WATTS Constructors VICE CHAIRMAN William Beery Tutujan Hill Group SECRETARY/TREASURER Conchita Bathan Core Tech International CONTRACTORS DIRECTORS: Carlo Leon Guerrero M80s Office Systems Mark Mamczarz Black Construction Corp Miguel Rangel Maeda Pacific Corporation John Robertson AmOrient Contracting Rick Brown Pernix Guam LLC ASSOCIATE DIRECTORS: Jeffrey Larson TakeCare Asia Pacific Michael Kikuta Matson Navigation Patty Lizama Pacific Isla Life Mark Cruz Mid Pac Far East

THEEDITORIALS Guam Contractor’s Association (GCA) in conjunction with AdzTech and Public Relations, Inc. publishes the Construction News Bulletin (CNB) monthly. Reproduction of materials appearing in this publication is strictly forbidden without written permission by GCA. While we always strive for accuracy, we will from time to time overlook mistakes. In order to help us improve the quality and accuracy of this publication, we ask that you take the time to look at the information provided and notify GCA of any corrections as needed. Opinions and editorial content of this publication may not necessarily be those of the publisher, production team, staff, GCA members, GCA Board of Directors and advertisers. For more information about advertising in the GCA Construction News Bulletin contact the advertising department at (671) 477-1239/2239 or email at Distributed to GCA members or can be obtained by stopping by the Guam Contractors’ Association office located at 718 N. Marine Corps Drive, Suite 203, East West Business Center, Upper Tumon, Guam. To find out more about how you can become a GCA member contact Guam Contractors’ Association at Tel: (671)647-4840/41 Fax: (671) 647-4866 or Email: Postmaster. Send address changes to Guam Contractors’ Association, located at 718 N. Marine Drive Corps Suite 203, East West Business Center, Upper Tumon, Guam.

THETEAM PUBLISHER: James Martinez PRODUCTION TEAM Geri Leon Guerrero AD SALES: Jaceth Duenas PRODUCTION: Geri Leon Guerrero Christopher “Taco” Rowland Jaceth Duenas PHOTOGRAPHERS: Christopher “Taco” Rowland Jaceth Duenas EDITOR: Adztech CONTRIBUTING WRITERS: John Robertson John Aguon R.D. Gibson Shawn Gumataotao Adam Baron GCA STAFF: Francine Arceo Desiree Lizama COVER: Guam and the Build Up

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General Membership Meeting August 20, 2015

In light of Typhoon Soudelor that devastated Saipan in early August, the Guam Post of the Society of American Military Engineers (SAME) gathered pledges from its members which was presented during the membership luncheon at the Outrigger Guam Resort. Chita Blaize, executive director of the Guam Chapter of Red Cross, was there to receive the contribution of

On August 28th, the Naval Facilities Engineering Command (NAVFAC) held its traditional change of command ceremony

on Guam, Capt. Shepard has been an active member of SAME holding the position of board president for a time. To show appreciation for his services, John Robertson, Guam Post Treasurer and long-time member, presented Capt. Shepard with a plaque and an edition of Inspirations of Guam, signed by SAME Guam Post members.

• Follow SAME Guam Post on Facebook! • Joint Small Business Mixer, Guam Auto Spot - September 10, 5:30-7:30 • Post Leaders Workshop, Alexandria, VA - September 20-22 To join SAME Guam Post, log on to and click on “Membership” at the top of the home page. 6 | SEPTEMBER2015


Main Presentation Final Supplemental Environmental Impact Statement (SEIS)


This month’s main presentation was given by Commander Daniel Schaan, (Forward), Office of the Assistant Secretary of the Navy - Energy, Installations and Environment. Just days before the release of the Final 2015 Record of Decision(ROD), CDR Schaan presented the Final SEIS Publication Brief discussing the Guam and CNMI Military Relocation Plan. The 2015 Final SEIS contains the cantonment and family housing Alternatives as well as Alternative information for the Live Fire Training Range Complexes at both Andersen

Air Force Base - Northwest Field and Andersen South.

troop and family members scheduled to arrive as well as the demand on Guam’s environmental resources look to be far less. Also, the construction period is almost doubled allowing for a slow, steady, progression of work rather than the 7-year boom that was previously planned. To read more about the Final SEIS and the newly signed ROD, go to






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By John M. Robertson

On Saturday 29 August, as CAPT Glenn Shephard was in the air bound for his next assignment at Navy Yard in Washington, DC, the ROD was released to the public. Implementation is now left for incoming Commanding Officer of NAVFAC Marianas, CAPT Stephanie Jones who relieved CAPT Shephard at a Change of Command ceremony the previous day. This ROD signing comes almost five years since signing of the original ROD on 20 September 2010. The Final SEIS is set forth on 1,596 pages while the ROD has 28 pages. Portions of the ROD with special interest to the Engineering and Construction community has been extracted and is set forth below. This action does not clear the way for construction in CNMI which is covered under a separate EIS.

Record of Decision for the Final Supplemental Environmental Impact Statement for Guam and Commonwealth of the Northern Mariana Islands Military Relocation SUMMARY: The Department of the Navy (DON), after carefully considering the environmental consequences of the proposed action, as well as strategic, operational, and training requirements, obligations under treaties and other international agreements, and cost, announces its decision to construct and operate a main base (cantonment area), a family housing area, a live-fire training range complex (LFTRC), and associated infrastructure on Guam to support the relocation of a substantially reduced number of Marines and dependents than previously analyzed in a 2010 Final Environmental Impact Statement (EIS). The DON has selected the preferred alternative as identified in the 2015 Final Supplemental Environmental Impact Statement (SEIS), consisting of a cantonment at Naval Computer and Telecommunications Station Finegayan and family housing at Andersen Air Force Base (AAFB), and a LFTRC at AAFB–Northwest Field (NWF). The LFTRC also includes a stand-alone hand grenade range at Andersen South. The DON will be able to meet current and future DON and Department of Defense (DoD) training and operational requirements. The selected cantonment/family housing Alternative E comprises approximately 1,751 acres (709 hect-

10 | SEPTEMBER2015

ares [ha]) of land (not including offsite utility corridor improvements which total approximately 150 acres [60 ha]) that are currently under the custody and control of the DoD. The selected LFTRC at AAFB-NWF includes a construction footprint area of approximately 338 acres (137 ha) plus an additional 3,701 acres (1,498 ha) of land and submerged land for surface danger zones (SDZs). The entire LFTRC construction footprint is currently under the custody and control of the federal government. Although the selected alternative does not require acquisition of non-federal land on Guam, access restrictions already established by the U.S. Fish and Wildlife Service (USFWS) at the Ritidian Unit of the Guam National Wildlife Refuge (NWR) (which is managed by the USFWS) may be adjusted to account for the establishment of the SDZs for the LFTRC once it is operational. The DON will pursue an agreement with the USFWS to establish and operate a SDZ associated with LFTRC that will allow for the continued management of and access to the Ritidian Unit consistent with the purposes for which it was established. Mitigation Measures for Impacts Associated with the Cantonment/ Family Housing Section 2822(d) of the FY 2014 NDAA directed the Secretary of Defense to convene the Economic Adjustment


Committee (EAC) established in Executive Order No. 127887 “to consider assistance, including assistance to support public infrastructure requirements, necessary to support the preferred alternative for the relocation of Marine Corps forces to Guam.” Section 2822(d) further requires the EAC to submit a report to congressional defense committees which includes an Implementation Plan that addresses public infrastructure requirements necessary to support the preferred alternative identified in the Final SEIS. Mitigation for Water Resources Impacts of the GWA • Refurbishment interceptor sewer system will mitigate significant impacts to groundwater resources during the construction phase of the proposed action. The EAC Implementation Plan, which was coordinated with EAC federal agencies, includes detailed descriptions of work, costs, and schedules for completion of construction, improvements, and repairs to Guam public infrastructure affected by the realignment, including the refurbishment of the GWA interceptor sewer from AAFB to the Northern District WWTP, and expansion/rehabilitation of the NGLA monitoring network for sustainment of the NGLA. To support the Implementation Plan, EAC

assessed GWA water and wastewater systems that may be affected by the preferred alternative. The water and wastewater assessment recommended an updated and expanded NGLA monitoring well network and the refurbishment of the GWA interceptor sewer from AAFB to the Northern District WWTP. In addition to funds ($106.4 million) previously appropriated to the Secretary of Defense, DoD will seek additional funding ($67.5 million) to complete the necessary Guam water and wastewater system upgrades identified in the EAC Implementation Plan that are estimated to be no more than $173.9 million. • The DoD will, as appropriate, implement enhanced water conservation measures for the proposed action, improve existing DoD potable water systems to reduce system leaks, adjust pumping rates at DoD wells, and increase the use of existing wells and/or surface water from Fena Reservoir to reduce withdrawals from the NGLA. • The DoD will continue to support the Guam Water Resources Development Group (GWRDG) and support the USGS’s recommendation to rehabilitate and expand the hydrologic data collection network and monitoring necessary to ensure sustainable management of NGLA. Nearshore Waters Upgrading the Northern District WWTP treatment systems will mitigate significant impacts to the wastewater system on Guam once the upgrades are completed. In addition, refurbishing the main GWA sewer lines from AAFB to the Northern District WWTP along Routes 3 and 9 will mitigate potential failure of the concrete reinforced sewer lines that are in a state of deterioration. The EAC Implementation Plan will include detailed descriptions of work, costs, and schedules for completion of construction, improvements, and repairs to Guam public infrastructure affected by the realignment, including improvements and upgrades to the Guam wastewater system. The water and wastewater assessment that EAC prepared to support the Implemen-

tation Plan recommended upgrades to the Northern District WWTP and the refurbishment of the GWA interceptor sewer from AAFB to the Northern District WWTP. In addition to funds ($106.4 million) previously appropriated to the Secretary of Defense; the DoD will seek additional funding ($67.5 million) to complete the necessary Guam water and wastewater system upgrades identified in the EAC Implementation Plan. The costs are estimated to be no more than $173.9 million. Mitigation for Cultural Resources Impacts • Implement the 2011 PA. Mitigation processes include reviewing projects as they are developed to confirm the identification of historic properties and appropriate measures to avoid, minimize, and mitigate adverse effects. The 2011 PA (Programmatic Agreement) requires consultation with the public and the PA Parties, which include Guam SHPO, ACHP, NPS, Guam Preservation Trust (GPT), and the Department of Chamorro Affairs (DCA). Potential impacts to culturally important natural resources will be addressed through requirements in the 2011 PA in coordination with knowledgeable traditional practitioners. Mitigation for Socioeconomics and General Services Impacts Public Services: • Although the DON has determined that Adaptive Program Management as described in the 2010 ROD is no longer required, the DoD will continue to work towards a charter as described in the 2010 ROD and support the efforts of the Civilian Military Coordination Council (CMCC) to develop recommendations, as appropriate, regarding adjustment of construction tempo and sequencing to directly influence workforce population levels and indirectly influence induced population growth before infrastructure capabilities are exceeded. • The DoD will continue to support existing programs that contribute and/or donate excess equipment to local agencies.

Sociocultural Issues: • Conduct orientation briefs, in accordance with the 2011 PA, for all incoming DoD personnel, their families, and contractors regarding cultural sensitivity in the area. All DoD personnel and contractors working on Guam will receive annual briefings. The DoD will develop the briefing in consultation with the Guam SHPO and will provide Guam SHPO with a copy of the final briefing materials. • The DoD will continue to support the efforts of the CMCC to develop recommendations, as appropriate, regarding adjustment of construction tempo and sequencing to directly influence workforce population levels and indirectly influence induced population growth to address sociocultural issues. • In accordance with the 2011 PA, the $12 million appropriated under the FY 2012 Consolidated Appropriations Act for a Guam Cultural Repository facility to mitigate cumulative impacts remains available. The appropriation provides funding for a repository for curation of archaeological collections on Guam and to serve as a source of information on Guam history and culture. Guam Cultural Repository is included in the EAC Implementation Plan, which addresses public infrastructure requirements necessary to support the preferred alternative. Mitigation for Environmental Justice and Protection of Children Impacts Socioeconomics and General Services • The DoD will consider the recommendations, if any, of the CMCC to adjust the construction tempo and sequencing if necessary to directly influence workforce population levels and indirectly influence induced population growth before infrastructure capabilities are exceeded. • The construction of a public health laboratory to alleviate some existing deficiencies in Guam’s public health infrastructure, and bolster Guam’s capability to meet public health demands brought about by projectrelated population growth and the rotational nature of the deployable


SEPTEMBER2015 | 11

units for training in the region by providing a facility that would help identify, treat, and control diseases of public health concern. The EAC Implementation Plan, which was coordinated with EAC federal agencies, will include detailed descriptions of work, costs, and schedules for completion of construction for a regional public health laboratory with bio-safety level 2 and 3 analytical testing capability. The cost estimate for a regional public health laboratory with bio-safety level 2 and 3 is no more than $32.2 million. In addition to funds ($13 million) previously appropriated to the Secretary of Defense, DoD will seek additional funding ($19.2 million). After the release of this ROD, the EAC Implementation Plan will be submitted to the congressional defense committees as part of a FY 2014 NDAA reporting requirement. Ground Transportation To reduce impacts to less than significant levels on roadway segments, the following eight roadway widening projects are recommended for implementation when determined to be eligible through the Defense Access Roads program and when funding is available: • Route 1, from Route 3 to Route 34 • Route 1, from Route 34 to Route 16 • Route 3, from Route 3A/9 to Finegayan Main Gate • Route 3, from Finegayan Main Gate to Finegayan Residential Gate • Route 3, from Finegayan Residential Gate to Route 28 • Route 3, from Route 28 to South Finegayan Main Gate • Route 3, from South Finegayan Main Gate to Route 1 • Route 28, from Chalan Balako to Route 3 In addition, the DON acknowledges that to reduce impacts to less than significant levels on intersections, improvement projects are recommended at the following intersections: • Route 3/3A/9 – Potts Junction • Route 3/Royal Palm Drive – South Finegayan Housing • Route 1/Route 3 – Guam Regional Medical City • Route 1/Route 27 – Dededo SwapMeet

12 | SEPTEMBER2015

• Route 1/Route 26 – Macheche Road • Route 16/Route 27 – Harmon Loop Road • Route 16/Route 10A – Airport Road • Route 1/Route 14A – ITC Intersection • Route1/Route 10A – Airport Road CONCLUSION The proposed action and selected alternatives differ significantly from those analyzed in the 2010 Final EIS and addressed in the 2010 ROD in a number of important ways. In addition to the significantly reduced number of Marines and their dependents relocating to Guam, the proposed action selected in this ROD will be implemented at a more gradual pace over 13 years compared to 7 years for the original proposed action considered in the 2010 ROD thus avoiding short-term population and construction tempo peaks and associated environmental impacts. Construction of the cantonment at Finagayan will impact approximately 859 fewer acres than was projected in


2010 and, unlike 2010, the cantonment, family housing and LFRTC construction will occur only on land currently under custody and control of the DoD. The selected cantonment alternative maintains a natural buffer area between developed areas and nearby sensitive coastal resources and, by placing the family housing at AAFB, leverages the availability of an existing family housing area and supporting infrastructure at AAFB.

/s/ Steve Iselin – 08/28/2015 Principal Deputy Assistant Secretary of the Navy (Energy, Installations and Environment)





iSqFt and CMD Merge by Shawn Gumataotao

What happens when you combine the resources of the largest provider of construction information in North America with the leading software-asa-service company? You get a marriage that will make its corporate leadership in Cincinnati,Ohio very happy in the coming years as construction activity takes an upswing-even here in Guam. iSqFt and Construction Market Data Group (CMD) announced earlier this month that the companies have merged. The combination brings together businesses with complementary strengths in different segments of the construction sector, creating an organization with an enhanced product offering for customers and a strong technology platform focused on innovation. After the merger is completed, the combined organization will provide comprehensive construction data and software solutions for customers across North America and the Pacific Rim. “CMD has established an excellent track record providing high-quality data, information and insights to the

14 | SEPTMBER2015

construction industry across North America,” said iSqFt CEO Dave Conway. “With our shared commitment to customer service and product delivery, this merger fits into our long-term strategy to leverage the best of our combined companies to provide improvements on our already great data and deliver innovative solutions.” CMD, formerly Reed Construction Data and Construction Market Data, is owned by Warburg Pincus, a leading global private equity firm focused on growth investing, and Reed Business Information. Warburg Pincus will continue to be a shareholder in the combined company.

outstanding customer service and will create exciting opportunities for its employees and users. This blogger is looking forward to the upgrades to the interfaces to include video, opportunity status and bidder audit reports. To find out more about how GET, LLC, through our construction technology and materials partners can help your next project, give us a call at 671-4830789 or check out our website at for more information.

“We are excited about the combination of iSqFT and CMD and look forward to partnering with the management teams to support the company’s growth initiatives,” said Warburg Pincus Managing Director Alex Berzofsky. The local construction firms which use iSqFt will gain highly complementary capabilities that will build on these respective firms’ reputations for


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Center Stage

The Guam Military Build Up by R.D. GIBSON

In traditional theater, it is the actor who is the show. They are what keep the people interested. The stories are typically well-known, so everyone might already know the story. What keeps some audience coming to shows is their desire to see how each individual actor plays a role they know: portrayal is everything on the stage; their staging, their vocals, their make-up, the costumes. The beautiful moment is when the actor finally arrives on stage and completely steals the show, captivates their audience, and allows them to be a part of a new experience. So is the tale of the Guam Military Buildup. It has been written about, praised, criticized, delayed, analyzed, downsized, and so much more. For nearly a decade, Guam has sat waiting to see the relocation of thousands of United States Marines and their dependents to Guam: a move that has been met with both welcoming voices and strong opposition. It has come under heavy fire – pun intended - for its environmental and cultural impact moving over 5,000 (at one point 8,000) people to our slice of paradise. Bringing to light considerable concerns of what the movement would do to our infrastructure, language, and even endangered animals, among other things. Heck, it even caught a snag earlier this year with the Micronesia Kingfisher (sihek), an endangered bird on Guam. However, with the Record of Decision having just been released, our island has taken the final step in preparations for continued growth and development in anticipation of the relocation of Marines. With talks starting in 2006 to move

United States Marines from Okinawa, Japan to Guam, we’ve seen the conversation change, most especially the discussion of the reduction of the number of uniformed men and women from 8,000 Marines and 9,000 dependents to 5,000 Marines and 1,300 dependents. It has been touted as one of the biggest projects for the Department of Defense ever. The Department of Defense made it a point to take into consideration all parties involved during the drafting of the Environmental Impact Statement. With the public given time to give their concerns and comments, the DOD made sure it took into consideration all that was necessary. According to a Record of Decision factsheet available on the Guam Buildup EIS website, (, “actual construction will not begin for several months after the ROD, allowing time for a financing plan from the Government of Japan for utility upgrades, the stand-up of the Civil-Military Coordination Council, and cultural resources consultations.” The factsheet goes on to point out that some of the first projects on island will be off-base, mostly to upgrade local infrastructure and make improvements to the Port of Guam. With an expected increase in population, the factsheet also points out that the influx of people will be slowed. It says that the increase in population is directly related to how much the infrastructure would be able to handle. With Japan footing a portion of the bill ($3.1B of the estimated $8.9B), the island is still waiting to see how and when construction will begin. CONSTRUCTION NEWS BULLETIN

SEPTEMBER2015 | 17

At this point, everyone is standing at attention to work with the Department of Defense to strengthen infrastructure for both the long- and short-term futures for Guam. For the last nine years or so, there has been an influx of economic activity. New businesses, national and international franchises, and both local and foreign investment is finding their way in to Guam, providing jobs and support for the community, and opportunities. Buildings have gone up. Some have been demolished. But, what can be agreed upon is many businesses have struggled, especially waiting for the buildup to take flight, but that hasn’t deterred any from seeing the potential opportunities at the door. Now is the time to continue the momentum that has already been built. Construction, training employees, strengthening of apprenticeship programs, growing skillsets, along with helping local entrepreneurs, engineers, and construction workers establish themselves, and making sure we grow talent and industry on Guam. The Guam Military Buildup most definitely has the potential to help our community grow to exponential heights.

18 | SEPTEMBER2015

On some level, the buildup has become synonymous with delays. The community has made it a point to voice their concerns about the forecasted impact an increased military presence and construction would have on the island. With news report after press release documenting the glacial pace of an impending, major military event, the people of Guam made it a point to persevere, and instead of waiting for the buildup to come, they put on their gloves, hard hats, and protective gear, and went to work anyway. Sure, even without the buildup, there would be investment, growth, and opportunities. It is called time. But, now Guam will see not just economic influx and development behind the gate, but outside it as well. This calls for the community of engineers, construction companies, carpenters, electricians, plumbers, and the builders of our island to come together. It’s a time to support one another. At this point, the buildup is center stage ready to show the community what it is made of. Its makeup is in place, its routine is rehearsed, vocals are warmed up, the spotlight is coming on, and the curtain is going up.


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Practical Views After the Record of Decision Signing From Bond-Insurance Professionals

by John Aguon

The Record of Decision, finally, signed—August 29, 2015. Here, three local Bond/Insurance professionals issue practical comments regarding it. They are: Adam Baron-Bond Manager, Cassidy’s Associated Insurers; Orlene Arriola-Broker CPCU, CRIS for AXS Insurance; and Pam Cruz-Bond Manager, Takagi & Associates. All three professionals were attendees at the Guam Industry Forums, years ago, as were many of us. And, being part of that cadre of anticipators, we had envisioned a sooner realization. Well, it’s now arrived, and while the revised buildup has been trimmed, there is still an impact which will usher an economic wave unprecedented in Guam/Micronesia history. Baron, Arriola, and Cruz speak practically, presenting their brief views regarding the local market, expected developments, and provide some helps for participation in this massive economic event.

GCA.Adam Baron-Bond Manager, Cassidy’s Associated Insurers GCA: On the bonding side, there has been a down market over the past few years. What’s your anticipation going forward regarding the recently announced signing of the Record of Decision?

affecting Guam. Good, bad, what…for Guam? Baron: There’s going to be good and bad. There will be a lot of business to be transacted, over the next 5, to 8, to 10 years. And, that will be good; resulting in more jobs, higher wage opportunities, more commodities being sold, more business opportunities - all the good things that come with a growing economy. But, there will be a downside; maybe, a run-up in property values, making it a little more difficult for locals to afford property and other commodities that are sensitive to inflation. GCA: What parting advice would you give then, to these small to medium sized businesses you deal with? Baron: Make sure you do everything your bond agent tells you to do. They want you to succeed. There’s going to be tremendous opportunity; even, if not as a prime, there’ll be opportunity as a sub; and a lot of primes will require their subs to bond. So, potentially the difference between getting a profitable job or not, may be dependent upon your ability to get bonded. My advice is to keep as much capital in the business as possible; this will keep the bonding companies happy and will maximize your ability to obtain more contracts. And, as I always tell my clients, “Cash is king.”

Baron: As more funds flow into Guam, construction companies will start to ramp up and undertake work at higher, perhaps unprecedented levels. There should be ample construction opportunity for all companies – large and small, particularly those on MACC contracts. And even the work that goes to large businesses will in part trickle down to smaller, local contractors. Much of this work will require bonds and keep me busy. It should be a very good decade ahead for all of us.

GCA.Orlene Arriola-Senior Broker, CPCU, CRIS for AXS Insurance

GCA: Will those MACC’s be renewed?

Arriola: As local contractors are sought to do more sophisticated work, they will increase their capabilities and technical skills. And as insurance professionals, we’ll also have to understand those new risk exposures. Necessarily, we’ll find products, methods, and risk financing techniques to address those new construction capabilities and technologies—for these yet-tobe-built unique structures over the next few years.

Baron: Yes. The 8(a) MACC, which is a little bit on the smaller side, was just awarded. So, we’ve seen an increase in bond activity, although, not revenue yet—with the 8(a) MACC since they are only at the bidding stage for task orders. The 8(a) MACC. That’s kind of the sweet spot for our local contractors. Another MACC, which is called the Small Business MACC, is the next step above the HUB ZONE MACC. The bid will probably be announced, but we don’t know just when—maybe, the 4th quarter of this year. In addition, there is the Large Business MACC and all the MAMISU projects. Most MACCs are five years in duration. GCA: Do you see your business activity staying within the period of fiscal years 2016 through 2020? Baron: Yes. We should see a significant amount of work for our local guys in that period.

GCA: Relative to the just announced signing of the Record of Decision for the Guam Military Buildup, what do you see as constructive for Guam contractors and the insurance sector?

Right now, our local insurance market has not matured as quickly as other markets, because, we are simply not a large urban area. But, with the size of the infrastructure improvements which are slated in the near term, we’re going to have these opportunities—to work on these type of new exposures, bigger limits, within unique environments, etc. GCA: The rhetoric of opportunity aside, what about the challenge? Arriola: Of course, if your business or insurance group is not currently ready, or planning to prepare, then, the challenge may be insurmountable. Currently, the “professional” infrastructure on

GCA: From a “Guam” perspective how do you see this buildup


SEPTEMBER2015 | 21

Guam is not there—administratively, production, etc. It is already stressed, and we have barely begun.

large contractor is needing bonding, may be dependent on their internal philosophy regarding it. We hope they will require it.

If anyone is willing to innovate, create a vision, and understands what’s going to be needed; they’re going to have to make some investments rather quickly, upgrading their technology and preparing their staff to meet these demands. If they don’t, those needs will be outsourced.

One thing bonding does is to pre-qualify a contractor—based on their work experience and history; determine their viability as a good contractor, and are able to meet the requirements of the general contractor. GCA: How do you advise contractors to proceed in this imminent economic upturn?

GCA: How so? Arriola: The testing for our local market is that we’ll be competing against global brokers and global carriers who may want to follow their existing contractors or insureds that are coming into Guam buildup. The “small guy”, us, will have to keep up if we’re looking to perform at that level; get the professional skills, the training, the certifications, and knowledgebase. Before, we could get by being a “generalist”, but that may prove to be inadequate during this buildup, because, specialists will be required. If we intend to keep some of those premium dollars here, we have to rise to the occasion—for both local brokers and carriers. GCA: Will there be some technical expertise we just won’t be able to provide? Arriola: There may be a need for the use of specialty contractors, in which case their insurance professionals will follow them. Because, our carriers just may not have had the expertise, or even the need, to insure that given kind of exposure. GCA: Any recommendation you’d give your insurance customers, in preparation for the buildup? Arriola: One thing to consider for all local businesses is: along with prosperity comes liability. I recommend that they periodically review their exposures and make sure that it’s updated. Most individuals and businesses don’t do that, and they should. This review process will help them see what they should and can be covered for; and, it will assist owners/managers to better understand what their risk tolerance level is. There will be great opportunity, but it will come with great responsibility. Businesses, contractors all need to understand where they are at risk, and properly insure for it.

GCA.Pam Cruz, Bond Manager, Takagi & Associates GCA: Are you focusing on military or commercial contractors?

Cruz: When we meet a new, or an existing contractor who hasn’t bothered to get bonding, we highly recommend to them to try. Get their paperwork in order. Get their financials completed. Get a good job costing system in place in their computer. So, they can prepare themselves, and are able to take the opportunity to bid on projects that come along. The pre-qualification process takes time. it’s not like getting insurance. It’s more akin to getting a loan. It also communicates to the surety, that here is a contractor willing to invest some time and money in getting his financials in order, software in order, crosses the “T’s" and dots the “i’s”. They are diligent. This is the kind of contractor we want. Furthermore, as the contractor moves through this process, they will discover their approved project capacity, and can focus on the bid itself, rather than the bond approval process. Get it done. GCA: Do you see yourselves as just focusing on existing clients or do you welcome new clients? Cruz: We’re always looking for more. However, the majority of our work is with Japanese firms. We are a Japanese-owned business, with Japanese-speaking staff. Bonding is not used in Japan, so we have been successful helping them in that regard—educating and providing understanding; particularly, qualifying for a TreasureListed bond. It helps them to open doors on- and off-base, if you have the status as a T-Listed contractor. GCA: Any closing comments for contractors? Cruz: Bonding is like a marriage. It needs to be viewed as a long-term relationship. Get to know each other. Grow together. That takes time. Do work. Complete work. Go through ups and downs. And, when the rosy-blush has left, you would have established a strong, tried-and-tested successful relationship with your surety partner.

Cruz: We have a good mix. Whether it’s a military contract or private work, each of them have their peculiarities. If there is a major contractor acquiring work, we’d hope some of our subs would be used in that work. Whether that

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Work In Progress ReportsA Surety’s Perspective by: Adam Baron

Of all the routine documents a contractor shares with his bonding company, the Work In Progress (WIP) report may be the most important. Right away, you might want to contest that statement – arguing that the yearend financial statements are more important – and that opinion certainly has merit since the CPA financials are the cornerstone of your bond capacity. However, the information provided in your periodic WIP reports (and analysis thereof) can allow for a rough estimate of the financial position of the company. Thus, the financial statement is a confirmation of what already has been provided in the WIP reports. In most cases, your bond underwriter already knows how your year end is shaping up from the data provided in the WIPs. However, there is information told in your frequent WIP schedules that may not be found in the annual financial statements.

(and possibly remaining receivables) on jobs that have been recently completed.

Let’s begin with the information that is normally provided in the Work In Progress report. Formats for the WIP reports vary from company to company but there is generally a set of items that are customary on most reports. These items are: contract name/number/owner, start date, completion date, contract amount (including change orders), costs when bid, costs to date, revised estimated costs to complete and amount billed to date. Most WIP reports also have a counterpart ‘Completed Contracts’ (CC) section as well. This section cites profit

Work In Progress Report - Analysis Of A Single Wip Report

26 | SEPTEMBER2015

The work in progress and completed contract schedule information is interesting alone, but when compared against each other can be a valuable tool to sureties and construction company managers alike in ascertaining the financial trend of projects and of the company as a whole. The data extrapolated and compared for jobs in progress includes: total revised/updated project costs, percent complete, current estimated gross profit for the project, gross profit percentage, profit variance from inception, earned revenue (based on percentage of completion), and over- or underbillings. We will address some of these in greater detail.

A few comparisons and questions utilizing the extrapolated data mentioned above are: - Start date and completion date versus percent complete – Are jobs behind schedule? - Contract price vs. Cost when bid – was there adequate profit from the onset? - Revised costs of the project vs. cost when bid – Are profit figures holding


up? Or, is there a profit fade? How bad? - Billings to date vs. Earned Revenue – Are jobs overbilled? Underbilled? Why? If grossly underbilled? Could there be looming (hidden) losses? These could represent a risk to the overall financial health of the company, so it is critical to investigate these when this data generates a cause for concern. We can further incorporate the schedule of completed contracts into our analysis. By comparing the average profit percentage for jobs in progress versus the average profit percentage for completed jobs we can ask the following: - Overall, do profits generally hold up from in-progress to complete? Is there a tendency to be too optimistic on jobs in progress that later show lower profit at completion? Is the input data accurate? - Conversely, do final completed contract profits have a tendency to push upward at completion? This could be a sign of a conservative job-costing approach by a company. There are an endless array of factors that affect profitability, some of which may be external to a company’s management. For example, a general lower level of profit margin on various

jobs in progress versus the ones listed as complete on the same report can be a reflection of the state of competitiveness in the marketplace, where lower margins on new contracts are a byproduct of increase competition. Work in progress report - analysis of a series of WIP reports There’s one more variable we can add to the mix – a period over period comparison. Once we’ve analyzed the current work in progress and completed contract report, we can dig even further into same-job profit comparisons over time. In other words, we can look at profit projections for any particular job listed on a company’s June 30 WIP and then compare the estimated profits to what was previously stated at 3/31, for 12/31 and prior for that job. This allows for period-over-period profit comparison and can be helpful to identify aberra-

tions in profit over time for individual jobs. From this we can ask: - Have previous trends worsened? Or have they reversed? - Do estimated profits “yoyo” up and down from one report to the next for the same job? - Do certain sizes or types of projects have a habit of having profit tail off at the end? - Have underbillings trended downward or could there still be a looming loss? - Are there remaining receivables on completed projects that previously had large underbillings while in progress? Implications It would be noteworthy to identify what sureties may consider as a ‘red flag’. Not all red flags pan out to be a problem, but such a flag may prompt a call from your agent to discuss the subject. Some red flags would be: significant profit fade on any large project, continu-

ous trend of downward profit estimates over time (on many projects), general profit slides from last WIP to Completed, significant underbillings, identification of many WIP jobs past stated completion date and/or unreliable profit estimates over time (the “yoyo effect”). All these items could be an early indication of problems within a construction company. Many times there are plausible and acceptable explanations to these red flags. Often corrective measures have already been taken by the time the surety asks the questions. These are usually acceptable, however, what does pose a significant problem for the surety is when the contractor was unaware of this own company’s warning signs. Take a minute to evaluate your company’s work in progress schedule and see what those figures tell you. Good luck and may your WIP reports contain many profit spikes!


SEPTEMBER2015 | 27

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Welder Welder - Fitter NICU OB Registered Nurse








3 1 2 22 1 1 1 0 8 1





Electric Motor Repairer

CT Tech


Chemotherapy Registered Nurse

Heavy Equipment Mechanic

OR Registered Nurse Inventory Control Manager Japanese Specialty Cook Landscape Gardeners OBGYN Registered Nurse Les Mills Certified Instructor Machinist Marine Maint. Machinist Marine Maint. Mechanic MRI Technician

Massage Therapist

Motor Rewinder

0 1 0 0 1 1 1 1 0 3 6

Elevator Installer Specialty Chef Thai Spa Supervisor - Trainer Biomedical Equipment Specialist Automotive Mechanic Inventory Control Manager Auto Body Repairer Tech. OSH Instructor Buyer HVAC Mechanic AC Maintenance Tech

6 3

Birthing Registered Nurse Cardiac Cath Registered Nurse Pediatrics Registered Nurse Executive Chef Painter/Blaster Med/Tele Registered Nurse Surgical Registered Nurse


1 2 5

0 0 1


Radiologic Technician

Restaurant Manager Refrigeration & AC Mechanic

Shipfitter Sous Chef Executive Asst. Mgr. F&B

Specialty Cook Italian Cuisine

Total Non-Construction H2-B Workers


0 6 4



ICU Registered Nurse


Quality Inspectors

Maintenance Worker, Machinery


Med-Surg OR Registered Nurse





ER Registered Nurse

Painter,Transporter Equipment

Scuba Dive Instructor


NICU Registered Nurse



Nursery Worker




Maintenance Electrician

Elec./ Electronic Service Tech




3 4 29


18 2


Baker Master

Wedding Service Attendants

Ultrasound Technician

Baker Mechanic

Specialty Cook Shipwright / Carpenter

Other Non-Construction Occupations



HVAC Mechanic

Heavy Equipment Mechanic

TOTAL Construction H-2B Workers

Total OTHER Construction



1 1 1

Project Manager Quality Control Inspector Tower Crane Operator




Project Supervisor




General Maintenance & Repairer










10 11

Field Supervisor


Electrical Power Lineman

Civil Engineer

AC& Refrigeration Mechanic AC& Refrigeration Technician Architectural Drafter

Other Construction Occupations

Employers Workplace Monthly Report Statistics

4 11 1

Auto Repairer Baker

GUAM DEPARTMENT OF LABOR Alien Labor Processing Certification Division












Total U.S. Workers

Grand Total H2B Workers

US Workers vs. H-2B

Grand Total H-2B Workers

Total U.S. Workers



38 85

Non-Construction Total H-2B Employers



1601 5 6 2 0 0 2 1 3 0 1614

Employers By Industry

Philippines Korea Japan Kiribati United Kingdom Australia Italy Peru Thailand Other Total by Nationality

Workers by Nationality

Total Common Const.


73 4

Electrician Camp Cook



9 30

525 168

Heavy Equip. Operator

Plumber Sheetmetal Worker

Structural Steelworker

Reinforcing Metalworker

Common Construction Occupations 482

Cement Mason Carpenter


Korea Thailand 0.31% 0.19%







5.52% 0.30%

Other 0.00%

Peru 0.06%

Prepared By: Sherine Espinosa Contact information: Greg Massey, ALPCD Administrator P.O. Box 9970 Tamuning, Guam 96931 (671)475-8005/8003

Camp Cook

Heavy Equip. Operator Electrician

Sheetmetal Worker

Reinforcing Metalworker Structural Steelworker Plumber


Cement Mason






United Kingdom





United Kingdom 0.00%

Kiribati 0.12%


Common Construction Occupations

Philippines 98.83%

Japan 0.37%

Australia 0.00%

Italy 0.12%

H-2B Population by Nationality





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GCA Construction Index GCA Construction Index GCA Construction Index DOD Contracts*

Building Permits*

Building Permits*














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provided by!," Guam Department of Labor, of Labor Statistics; !+"Statistics !'" (!" ((" Bureau (#" ()" (%" Guam Contractors Association; and the GCA Trades Academy, as of July 31, 2015.



Statistics provided by Guam Department of Labor, Bureau of Labor Statistics; Guam Contractors Association; and the GCA Trades Academy, as of July 31, 2015.

32 | SEPTEMBER2015


GCA Construction News Bulletin September 2016  

Guam Contractors' Assn. Monthly Construction News Bulletin is Guam's official construction news publication.

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