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VOL. 58 ISSUE 1 JANUARY 2017 • GUAM CONTRACTORSʼ ASSOCIATION

Looking Ahead to 2017


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TABLE OF CONTENTS

CONSTRUCTION NEWS BULLETIN

JANUARY S.A.M.E.

6

INSIDER NEWS

8

AROUND THE BENCH

10

FEATURE STORY

12

FEATURE STORY

16

PHOTO HIGHLIGHTS

2017

12

Feature Story

20

16 Feature Story

C hamorro Ph rase Of Th e Month Fino Chamorro: English:

2 | JANUARY2017

Magof na Åñu Nuebu Happy New Year!

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BRING OUT THE TRUE COLOR OF PARADISE

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EDITORIALS

CONSTRUCTION NEWS BULLETIN

THEDIRECTORS

THEEDITORIALS

THETEAM

PRESIDENT James A. Martinez Guam Constractors’ Association

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.

PUBLISHER: James Martinez

PAST CHAIRMAN John Sage WATTS Constructors

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 or Adztech 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.

CHAIRMAN William Beery Tutujan Hill Group VICE CHAIRMAN Conchita Bathan Core Tech International SECRETARY/TREASURER John Robertson AmOrient Contracting CONTRACTORS DIRECTORS: Joe Roberto East Island Tinting Mark Mamczarz Black Construction Corp Peter Errett Hawaiian Rock Products Jessica Barrett Barrett Plumbing

ASSOCIATE DIRECTORS: Jeffrey Larson TakeCare Asia Pacific

AD SALES: Jaceth Duenas PRODUCTION: Jason Davis PHOTOGRAPHERS: Christopher “Taco” Rowland EDITOR: Adztech

For more information about advertising in the GCA Construction News Bulletin contact the advertising department at (671) 477-1239/2239 or email at adztech@teleguam.net.

CONTRIBUTING WRITERS: John Robertson R.D. Gibson John Aguon Shawn Gumataotao

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.

GCA STAFF: Desiree Lizama Elaine Gogue

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: gca@teleguam.net. www.guamcontractors.org

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PRODUCTION TEAM LEAD: Geri Leon Guerrero

COVER: Construction & Renovation Projects in Hagåtña: Guam Museum Guam Legislature Building Dulce Nombre de Maria Cathedral Basilica

Postmaster. Send address changes to Guam Contractors’ Association, located at 718 N. Marine Drive Corps Suite 203, East West Business Center, Upper Tumon, Guam.

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S.A.M.E. UPDATE

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S.A.M.E. UPDATE

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NORTH KOREA: COLD WAR RELIC, PRESENT-DAY THREAT

North Korea North to desist. Korea to Thedesist. problem The isproblem is able to push ablea to button push in a button Pyongyang in Pyongyang and and that China that hasChina shownhas noshown evidence no of evidence of wipe out an wipe American out an American city. city. being willing beingtowilling yield a to priceless yield a strategic priceless strategic wholly — dependent a wholly dependent client state client state What to do? What Thetooptions do? Theare options stark: are stark: asset — aasset that a permanent acts as a permanent thorn andthorn and (1) Preemptive (1) Preemptive attack onattack its missile on its missile that acts as distraction distraction to U.S. power to U.S. in power the Pacific in the Pacific launching launching facilities.facilities. Doable but Doable reckless. but reckless. Rim —ofbecause mere economic of mere economic It is the option It is the most option likely most to trigger likely to antrigger Rim an — because pressure. actual war. actual The North war. The Koreans North enjoy Koreans bothenjoypressure. both conventional conventional superiority superiority and proximity: and proximity: a a (5) Strategic leverage on leverage China.onWe’ve China. We’ve vast armyvast poised army at poised the Demilitarized at the Demilitarized(5) Strategic been begging beenChina begging forChina decades fortodecades halt to halt Zone onlyZone 30 miles only from 30 miles Seoul. from Seoul. the Norththe Korean Northnuclear Koreanprogram. nuclear program. Americans Americans are not going are not to fight goinganother to fight another Beijing plays Beijing along plays with along sanctions with sanctions and and land war in land Asia. war in Asia. By John M. Robertson offers occasional offers occasional expressions expressions of dismay.of dismay. Nothing There’s more.one There’s way one way (2) Shoot(2) down Shoot thedown test ICBM, the testasICBM, as Nothing more. guaranteed to get its attention. to get its attention. Declare Declare advocatedadvocated by the Wall by the Street Wall Journal. Street Journal.guaranteed You can kick You the cancan kickdown the can thedown road, the but road,Assuming but that we would that we nowould longerno oppose longerJapan oppose Japan Assuming we can. Democrats we can. Democrats have donehave done when Kimwhen JongKim Un announces Jong Un announces “we have “we have acquiringacquiring a nuclear adeterrent. nuclear deterrent. their besttheir to abort bestortoslow abortdown or slow down reached the reached final stage the final in preparations stage in preparations to to anti-missile anti-missile defenses since defenses Ronald since Ronald test-launch test-launch an intercontinental an intercontinental ballistic ballistic This is a radical This is step a radical that goes step that against goesour against our Reagan proposed Reagan proposed them in the them early in 1980s. the early 1980s. rocket,” you rocket,” are reaching you are the reaching end ofthe that end of Even that so, we general policy general of nonproliferation. policy of nonproliferation. But But Even should so, we beshould able tobe intercept able to intercept a a road. Since road. the Since early 1990s, the early the1990s, United the United is topoint halt proliferation is to halt proliferation to the to the single, relatively single, relatively primitive primitive ICBM ofICBM the of the point the States, through States,the through United theNations, United has Nations, sort has North infinitely infinitely more dangerous more dangerous regime inregime in sort Korea North might Korea be might capablebeof.capable of. offered every offered kindevery of inducement kind of inducement to get to get North Korea. North China Korea. is the China key.isThe the key. The North Korea North to give Korea uptoitsgive nuclear up its nuclear Though such Chinese have Chinese many have nightmares, many nightmares, none none Though a shoot-down such a shoot-down would occur would occur program. program. All failedAll miserably. failed miserably. Pyongyang Pyongyang worse than worse a nuclear-armed than a nuclear-armed Japan. Japan. nowhere near nowhere North near Korean Northsoil, Korean it could soil, it could managed managed to extort money, to extortfood, money, oil and food, oil and still very well still very provoke wellaprovoke militaryaresponse. military response. commercial commercial nuclear reactors nuclearinreactors exchange. in exchange. The principal The principal strategic challenge strategic challenge facing facing Which is Which why theisnew whyadministration the new administration But it wasBut all it a swindle. was all a North swindle. Korea North wasKoreashould was issue the United theStates United is the States riseisofthe revisionist rise of revisionist should a clear issue warning a clear that warning if such that a if such a never going never to give going uptoitsgive nukes up because its nukesitbecause it —powers Russia,—China Russia, andChina Iran — and Iran — test missile testis missile launched, is launched, we will bring we will it bringpowers it sees themsees as the them ultimate as the guarantee ultimate guarantee of of tostriving expel American to expel American influence influence down. Barack down.Obama BarackisObama gone. Such is gone. a redSuch astriving red regime survival. regime survival. regions. theirIn regions. comparison, In comparison, the the line couldline be acould powerful be a powerful deterrent deterrent for the forfrom the theirfrom Korean problem Korean isproblem minor, is anminor, an new administration. new administration. The North The Koreans North believe Koreansthat believe nukesthat nukes idiosyncratic idiosyncratic relic of the relic Cold of the War.Cold War. confer inviolability. confer inviolability. Saddam Hussein Saddam was Hussein(3) was North Korea North should Korea beshould a strategic be a strategic Return (3)tactical ReturnU.S. tactical nuclear U.S. nuclear invaded and invaded deposed andbefore deposed he before could he couldweapons weapons afterthought, like Cuba.like And Cuba. it would Andbe it would be to South to Korea. SouthThey Korea. wereThey wereafterthought, acquire them. acquire Kim them. won’tKim let that won’thappen let that happen not for if itsnot nukes. for its nukes. withdrawn withdrawn in 1991 byinGeorge 1991 byH.W. George Bush H.W. ifBush to him. That’s to him. whyThat’s Thaewhy Yong Thae Ho,Yong a Ho, a in the waning in thedays waning of the days Cold of the War.Cold War. recent high-level recent high-level defector, insisted defector,that insisted that That’s That’s if. Aa wholly big if. A unpredictable, wholly unpredictable, Gorbachev’s Gorbachev’s Soviet Union Soviet responded Union responded in in a big “As long as “AsKim longJong as Kim Un isJong in power, Un is in power,kind. A good highly and erratic oftenand irrational often irrational regime regime kind.idea A good in general, idea inbut general, not onbut nothighly on erratic North Korea North willKorea neverwill givenever up itsgive nuclear up its nuclear is acquiring is acquiring the capacity theto capacity destroytoandestroy an the Korean thePeninsula. Korean Peninsula. Pyongyang Pyongyang had had weapons, weapons, even if it’seven offered if it’s$1offered trillion$1ortrillion or constantly AmericanAmerican city by missile. city byThat’s missile. an That’s an railed railed constantly against their against presence, their presence, $10 trillion $10intrillion rewards.” in rewards.” urgent problem. North Korea North may Korea be just may be just but they did but act they asdid a deterrent act as a deterrent to any to any urgent problem. an unexploded an unexploded ordnance ordnance of a of a contemplated contemplated North Korean Northaggression. Korean aggression. Meanwhile, Meanwhile, they havethey advanced. have advanced. They’ve They’ve long-concluded Cold War.Cold But War. we But we Which might Which make might them make a useful them a useful long-concluded already exploded already exploded a handfulaofhandful nuclearof nuclear cannot keep cannot assuming keep assuming it will never it will go never go bargaining bargaining chip. chip. bombs. And bombs. they’ve Andtwice they’ve successfully twice successfully off. off. launched launched satellites, satellites, which means which they means they (4) Economic (4) Economic leverage on leverage China,onupon China, upon have the ICBM have the essentials. ICBM essentials. If they can If they can Theisforegoing adapted from is adapted a January from5th a January 5th which Pyongyang which Pyongyang depends for depends its for its The foregoing miniaturize miniaturize their weapons their to weapons fit on top to fit of on top of opinion piece opinion written piece by written Charles Krauthammer. by Charles Krauthammer. survival. Donald survival.Trump Donaldseems Trump to suggest seems to suggest the rocketthe androcket control andreentry, controlthey’ll reentry, be they’llusing be trade using to pressure trade to China pressure to China get to get 8 | JANUARY2017

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INSIDER NEWS

increase its increase military itscapabilities, military capabilities, with an withsatellite an launches, satellite launches, and two of and them two of them emphasis emphasis on pre-emptive on pre-emptive nuclear strikes, nuclear strikes, succeededsucceeded in puttinginobjects putting into objects orbitinto orbit accordingaccording to a transcript to a transcript of his remarks of hisby remarks overbythe U.S. over The the U.S. newsThe herenews is that here theis that the the Korean theCentral KoreanNews Central Agency. News Agency. young dictator youngisdictator so confident is so confident of of becomingbecoming a full nuclear a fullpower nuclear that power he has that he has Mr. Kim Mr. said Kim that North said that Korea North would Korea would dispenseddispensed with the fig with leaf the offig a space leaf of a space pursue nuclear pursuedevelopment nuclear development until the until theprogram. program. U.S. haltsU.S. its annual halts its military annualexercises military in exercises in South Korea, South reiterating Korea, reiterating a longtime a longtime This is one This more is one signmore that sign Kim that is racing Kim is racing demand of demand the government of the government in Pyongyang. in Pyongyang. to the finish to the linefinish of fullline nuclear-weapons of full nuclear-weapons While North While Korea North hasKorea madehas steady made steadycapability.capability. Thae Yong Thae Ho,Yong the No. Ho,2the in No. 2 in progress over progress the years over the toward yearsbeing toward ablebeingthe ableNorththe Korean NorthEmbassy Korean Embassy in London in London to mount to a weapon mount aon weapon a ballistic on amissile, ballistic missile, until he defected, until he defected, warned inwarned last week in last of week of experts have experts said have that the saidisolated that thecountry isolated country 2016 that2016 Kim that wants Kim to deploy wants to deploy is likely still is likely aboutstill twoabout or three twoyears or three yearsnuclear-armed nuclear-armed missiles by missiles the endbyofthe end of away fromaway threatening from threatening the U.S. the U.S. 2017. The2017. North The already Northhas already the has the homeland.homeland. technology technology to launchto a nuclear launch aweapon nuclear weapon against South against Korea South andKorea Japan.and ButJapan. But hurdles remain hurdlestoremain deploying to deploying an ICBMan ICBM with a nuclear with awarhead. nuclear warhead. Chief among Chief among them is a them re-entry is avehicle re-entrycapable vehicleofcapable of North Korea NorthClose KoreatoClose to withstanding withstanding extremes extremes of temperature of temperature Intercontinental Intercontinental Missile Missile Test, Test, and vibration. and vibration. A successful A successful test couldtest could Says Kim Says Jong Kim UnJong Un provide the provide Norththe with North valuable withdata valuable to data to This development This development would represent would represent an an work the work problem. the problem. advance inadvance country’s in country’s attempt toattempt build ato buildKN-08 a ballistic missiles in Pyongyang in nuclear weapon nuclearcapable weaponofcapable reaching of U.S. reaching U.S. The U.S. The has ship-based U.S. has ship-based missile defenses missile defenses October last year. North Korea has not yet mainland.mainland. South Korea, South Japan Korea, andJapan Guam and Guam test-launched the weapon. in the region, in theand region, intercepting and intercepting the test the test are already areeasy already targets. easy targets. PHOTO: ASSOCIATED PRESS would have would the dual havepurpose the dualofpurpose slowingof slowing

Kim’sprogress nuclear and progress demonstrating and demonstrating In 2016, North In 2016, Korea North conducted Korea conducted two twoKim’s nuclear an effective an deterrent. effective deterrent. Kim may Kim figure may thefigure the nuclear tests, nuclear andtests, test-launched and test-launched dozens ofdozens of U.S. won’t U.S. take won’t such take action such as it action prepares as it prepares rockets. The rockets. North The Korean Northmilitary Koreanhas military has to inaugurate to inaugurate a new President a new President and South and South also frequently also frequently showcasedshowcased a long-range a long-range Koreabyisan riven impeachment by an impeachment trial of trial of missile known missileasknown the KN-08, as thebut KN-08, has not but hasKorea not is riven Park Geun-hye. Park Geun-hye. But the U.S. But the U.S. yet test-launched yet test-launched the missile, thewhich missile, which PresidentPresident right to self-defense right to self-defense provides ample provides ample experts estimate experts has estimate a range hasthat a range couldthat could justification, justification, and U.N.and Security U.N. Council Security Council reach continental reach continental U.S. U.S. resolutions resolutions ban the North ban the from North pursuing from pursuing its missile its program. missile program. In September In September last year, last North year, Korea North saidKorea said it had successfully it had successfully tested a high-powered tested a high-powered defensive the defensive use of force usecarries of force carries rocket engine rocket forengine launching for launching satellites, satellites,Even the Even risks that risks Kim that would Kim retaliate, would retaliate, but the but the which South which Korea’s SouthDefense Korea’sMinistry Defense Ministry is letting risk is a man letting as reckless a man asasreckless as said couldsaid alsocould be used alsoinbelong-range used in long-rangelarger risklarger Kim gainKim the means gain the to means hold American to hold American missiles. Mr. missiles. Kim,Mr. whoKim, donned whoa donned westerna western cities hostage. cities Kim hostage. evidently Kim evidently believes that believes that suit for hissuit roughly for hishalf-hour roughly half-hour address, address, once the North once the hasNorth a credible has aability credible to ability to also madealso a rare made reference a rare reference to the political to the political destroyorSeattle Chicago, or Chicago, the U.S. will the U.S. will scandal that scandal has put thatSouth has put Korea’s South Korea’s destroy Seattle have no choice have no other choice than other to accept than to it as accept a it as a PresidentPresident Park Geun-hye Park Geun-hye on the brink on the of brink of normal nuclear normal state. nuclear The state. Obama The Obama impeachment, impeachment, describingdescribing the ongoing the ongoing North Korean leader Kim Jong Un in May 2016. Administration, in consultation in consultation with with street demonstrations street demonstrations in Seoul as in “an Seoul as “anAdministration, PHOTO: EUROPEAN PRESSPHOTO AGENCY President-elect President-elect Donald Trump, Donaldcan Trump, can explosionexplosion of pent-upofpublic pent-up anger” public against anger” against demonstrate demonstrate its bipartisan its bipartisan resolve toresolve to North Korea’s Northleader, Korea’s Kim leader, JongKim Un, Jong said Un, Ms. said Park’s Ms. party. Park’s Mr.party. Kim Mr. didn’t Kim make didn’t make thwart that thwart plan.that plan. during hisduring New Years’ his New Day Years’ speech Day that speech that any reference any reference to the recent to the U.S. recent U.S. his country hisiscountry finalizing is finalizing preparations preparations for a for a presidential presidential election orelection to President-elect or to President-elect The foregoing Theisforegoing adapted from is adapted two articles from two written articles written test launch test of launch an intercontinental of an intercontinental ballistic ballistic Donald Trump. Donald Trump. by JonathanbyCheng Jonathan and Cheng published andinpublished the January in the January missile, which missile, would which mark would an advance mark aninadvance in the issue Wall of Street the Wall Journal. Street Journal. its attempt itstoattempt build ato nuclear build aweapon nuclear weaponIf he proceeds If he with proceeds the test, withthe theU.S. test, the U.S.5th issue of 5th capable ofcapable reaching of the reaching U.S. Mr. the U.S. Kim,Mr. Kim, should shoot should it down, shoot according it down, according to the to the deliveringdelivering a new-year a new-year address from address from Wall Street Wall Journal. StreetThe Journal. test itself The test is not itself a is The not a author, John M Robertson, is Secretary-Treasurer of the Guam Contractors Pyongyang Pyongyang on state television, on state television, also said also said shock. Four shock. previous Four tests previous of the tests of the Association. that North that Korea North would Korea continue would to continue toTaepodong-2 Taepodong-2 missile were missile disguised were disguised as as Like Us On Facebook

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AROUND THE BENCH

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SMART LIGHTING IS ON THE WAY By: Shawn Gumataotao

T

here is no question that wireless technology has become an important part of our daily routines here in the Western Pacific. It should come at no surprise that wireless technologies like Bluetooth, Wi-Fi, and "RF Ids" are experiencing a rise in usage both here and beyond our shores in communities all over the world. Correspondingly, the rising popularity of wireless technology in lighting solutions is thus considered to be one of the major reasons driving the smart lighting market. The wireless lighting solutions are easy to control and help its customers to attain maximum energy saving. Pune, India-based The Insight Partners issued a report last month that calls out the emergence of the smart lighting industry.

What is it? Fancying themselves as the industry research provider of "actionable intelligence", The Insight Partners defines smart lighting as a technology that enables its users to govern the lighting of any space without being surrounded by unnecessary wires.They call out in their 198 page report that Smart lighting is a 10 | JANUARY2017

part of upcoming IoT technology, facilitating mobile and sensor based control on the luminosity of lights in a particular space. Additionally, they claim that the intelligent connected lighting offers its users a eco-friendly environment and effectively reduces the consumption of energy. Based on their research, they surmise that the global Smart Lighting market is expected to grow at a compound annual growth rate of 17.1% between now and 2025 and would grow into a $51 billion industry into the next decade. The report wisely notes that the global smart lighting market is fragmented based on geographical area and the types of lighting being used across commercial and residential applications in those areas. Whether it be from Light Emitting Diode (LED) Lamps, Fluorescent Lamps, Compact Fluorescent Lamps (CFL) to High Intensity Discharge Lamps, the usage of these lamps will vary across the globe with many developing countries in the region of Middle East and Africa expected to have the highest growth.

devices. When a wireless lighting system is installed in a place, one should always make sure that the keypads, processors and dimmers are within a specific range. For example, some old residential buildings may be constructed with metal wire integrated in the walls that might create disturbance or weaken the signals of a wireless system. Though it has certain drawbacks, it is expected to capture more than half of the lighting market in next few years. The prospects are peaking the interests of many tech companies and the lighting manufacturing giants who have been switching their product portfolio to wireless smart lighting solutions. Need a lighting controls or LED lighting solution or both for your facility? Check out our website at www.get-guam.com or give GET, LLC a call at 671-483-0789. We are a provider of Independence LED Lighting and Deco Lighting Inc. products-All Made in America!!!

Experts believe that the shortcoming of a wireless system will be the occasional disturbance in communications among www.guamcontractors.org

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Well, it's been a year since we last featured Rey Llaneta, President of Management and Strategic Services (MAS2) Consultants and his efforts to promote what he posits as Guam's looming economic opportunity. If you recall, in early 2016, he approached Guam Contractors Association(GCA) members, specifically, urging their attendance to the Asian Development Bank's (ADB) 7th Business Opportunities Fair (Go to: adb.org for more information). That event, as in the previous year is scheduled for about the same time frame, as noted at the website above. Asked about the actual call to action he issued last year to GCA, he said, "Fifteen entities, and/or, individuals registered last year; 9 actually attended." He regarded that showing as constructive, as it indicated interest. Himself, now having a total of 7 ADB Opportunity Fairs under his belt, continues his business development adventure as enthusiastically and excitedly for the prospect of bringing more Guam businesses in to the fold--chomping at the bit of just a smidgen of ADB's $8+ Billion annual trove of projects. Commenting further, he said, "ADB, similar, to NAVFAC, is a process. Things do not happen overnight, so those wanting to succeed with ADB, must understand that relational aspect." Having reported out on the ADB Opportunity Fair, Llaneta segues to an iteration of the ADB Opportunity Fair--his Philippines Opportunity Forum. "Make Guam Greater." That's a slogan Llaneta initiated as he began to explain his follow-on to last year's ADB. "To make Guam Greater", as he explains, "To make Like Us On Facebook

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Guam the source for highly capable workers who are trained, experienced, know and follow strict International construction standards in the U.S. I feel that is important. The thought process is that we have people on Guam who know the U.S. Standards. And, I believe there is a niche there in Asia to attend to--people want it done right." On March 22nd - 23rd, the ADB's 8th Annual Business Opportunities Fair is scheduled to take place, and Llaneta encourages GCA members to register for it at ADB.org. "We want Guam businesses to see these huge opportunities, which are just hours from our shore." His Philippines Opportunity Forum seeks to network Guam attendees to other direct prospective dealings: the U.S. Embassy, USAID, Philippines NAVFAC, and others. GCA member contractors, he notes, have dealt with Federal systems, so these off-shore situations should be generally the same with some tweaking. At the ADB website, Business Opportunities Event objectives listed are: During the event, participants will have the opportunity to: • Meet with ADB staff in procurement, consulting, project management and related operations; • Meet with ADB sector specialists; • Network with other consulting firms and suppliers in donor and developing countries; • Hear presentations on how to qualify for ADB-financed contracts; • Discover what business opportunities are available, and where.

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CONSTRUCTION NEWS BULLETIN

example of a Guam-based contractor that was able to successfully execute such a strategy eastward, to San Diego, which is about 10,000 KM away. Why not go westward with that idea, and brandish our skill sets in the Asia-Pacific region? Of course, why not.

At the end of the event, participants will have: • Discovered the advantages of ADB-financed contracts • Received an inside look at ADB's policies and procedures for the procurement of goods and works, and the recruitment of consultants • Learned how to locate business opportunities • Learned the best ways to prepare responsive bids and proposals • Received first-hand information on contracting opportunities by sector currently available under ongoing ADB-financed projects, and upcoming ADB pipeline projects • Explored areas of cooperation with other BOF participants Taking action on his Philippines Opportunity, Llaneta has partnered up with GPSI, to comprise MAS2-GPSI. This group of US Veterans, has a "Can-Do" perspective on their endeavor to seek out and succeed at deploying their Federal contract/project/construction management expertise for Pacific projects beyond Guam. He mentions the concept of "Power Projection", as a "military term to reach out and touch; amassing resources in a timeframe as quickly as possible--compressed. Having that ability for the military is very important. For instance, with have Military Sealift Command (MSC), ships floating between Guam and Saipan, these are ships that are filled to the brim with resources to quickly deploy at a moments notice to a given point of need--regionally." That power project concept is how he is framing the Guam situation, as a forward positioned team of resources; in this case, of contract/project/construction management experts amassed on U.S.soil (Guam), ready to participate in Asia locations in the Asia Pacific area such as –the Philippines, Korea, Austrailia, China, the Marshalls, etc. Llaneta illustrated Monty McDowell's MTO as an 14 | JANUARY2017

Then he rears back, and pauses. “You know, I really consider Guam as my home. And, he wants to grow this “forever” opportunity for our people here. During the Marianas buildup, we will have many Gumanians that are highly trained, experienced, and capable of doing so many things, from skilled workers to the management of those workers. Where do they all go when there’s no more buildup? His answer- head west to Asia and help build it! Make Guam the source for the construction “brains”. Thus, a cycle will begin in which Guam’s youth will go to school here following in their parents footsteps, making Guam the go to place for workers, managers, and technical skills. I believe this idea can do well for the Guam businesses who will pursue it.” Those personal motivations stated, you understand his drive to Make Guam Greater. For more information about the upcoming 8th ADB Business Opportunities Fair, go to adb.org, or contact Rey Llaneta at: rey.llaneta1@gmail.com

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Deconstructing the Tax Dilemma By: R.D. Gibson


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emember getting that first paycheck and wondering what FICA, Medicare, Social Security, and taxes and everything else were? And then calculating what could’ve been made? Imagine those being taken out twice. Not cool! All business owners know about the 4-percent Gross Receipts Tax that is due. However, recently passed legislation points out and corrects a double taxation issue affecting local subcontractors working with prime contractors who aren’t required to hold a Guam contractor’s license. Laws are defined as “the system of rules that a particular country or community recognizes as regulating the actions of its members and may enforce by the imposition of penalties.” Legislation usually works to fix a problem affecting the entire community. Sometimes it can appropriate funds, create programs, increase or decrease taxes, or ban something. Businesses are sometimes at the throws of new human resource, taxation, and licensing laws. These usually stipulate measures to ensure fairness and equality. Recently, the 33rd Guam Legislature passed a measure, and the governor signed it into law. Bill 221-33, now Public Law 33-194, “eliminates an option of double taxation between contractors and subcontractors not intended by the enactment of Public Law 30-230,” says Senator Frank B. Aguon who introduced the legislation. He cited P.L. 30-230, which was introduced by the late Senator Vicente “Ben” C. Pangelinan in the 30th Guam Legislature. The original law (P.L. 30-230) by Senator Pangelinan restructured the Business Privilege Tax for prime contractors and subcontractors. At the time, subcontractors were being taxed doubly. Where subcontractors were being charged BPT and prime contractors were cutting payments to “those subcontractors from its gross income for its own BPT obligations, Pangelinan’s law made it so prime contractors would pay the Business Privilege Tax while the subcontractors would deduct payments from said prime contractors from their gross incomes for their own BPT Like Us On Facebook

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obligations,” according to Bill 221-33 (P.L. 33-194) in the Legislative Findings and Intent section. Moreover, Aguon’s measure also sought to solve a longstanding problem regarding contractor’s licenses and registration numbers. If a non-local contractor wanted to do business on island, the law only required them to hold a Guam business license. P.L. 33-194 ensures that contractors may include the Guam business license number on their BPT return and avoid having to pay the taxes twice. It simplified tax enforcement: the real issue at hand. Additionally, Aguon’s law clearly amended the distinction between primary construction contractors and construction subcontractors. “This helps our local subcontractors in particularly (sic) with military contracts that they service by affording them the opportunity to enter into agreements to service the contractors without paying an additional 4% (sic) on taxes taken from their earnings,” said Senator Aguon. According to Marie Benito, Deputy Director of the Department of Revenue and Taxation, “We had problems in the past because the Prime (sic) didn’t have a contractor’s license and that was the requirement.” She added, “The new law makes it easier for (subcontractors) to take the exemption on the BPT forms.” Senator Aguon is looking at two very important impacts with the passage of this law. First, he stated the clarity regarding who is responsible for who picks up the tax tab makes tax collection a bit easier. “It’s the ambiguity of responsibility that leads to the inability or even the delay to collect tax revenue,” stated Aguon. “This is something this government cannot afford,” he continued This is also going to impact small business development. It leaves a lot of room for “opportunity for growth in service to primary contractors without the additional payment of the 4% (sic) tax rate.” Phil Hagen of Pacific Pest Control points out that it took this bill to correct the problem. “Having to lose an extra

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JANUARY2017 | 17


FEATURE STORY

CONSTRUCTION NEWS BULLETIN

4% (sic) a month because a law was interpreted wrong costs not only our company but many other sub-contractors hundreds to thousands of dollars a month when filing GRT,” said Hagen. “It didn’t matter that the Prime had a GRT number and paid GRT, sub-contractors had to now also pay GRT on the same dollar,” he continued. Hagen, who currently has one contract with a prime contractor, went on to point out this is a fair arrangement. “If one of the parties in a contract pay (sic) GRT, the others should not…fixing this ‘interpretation’ of the law makes it clear that only one party on a project or contract needs to pay GRT rather than double taxing like how it was before.” Sure, 4-percent might seem like a small number, but “it relieves a small business like ours from unnecessary taxation,” added Hagen. He pointed out that that 4-percent can be invested back into the equipment and employees of the business. Additionally, the money the was ‘mistakenly taxed’ has every opportunity to stay here to “fix or update equipment or put that money back into working with other local companies.” Hagen pointed out that “prime contractors will still need the local work force (sic) to do construction and they will use other local business with a specialty in a certain trade.” He finds it doubtful for prime contractors from off-island to send a large number of employees when there are already able bodies on-island. Although Mark Cruz of Mid Pac Far East represents a supplier, he brought up the impending military buildup and the delays local contractors have faced. The military

18 | JANUARY2017

buildup is supposed to have 5,000 Marines and 1,300 dependents move to Guam in the next few years, according to The Marines Corps Times. However, movement has slowed over the years, which has left many lingering questions. “The delay in the Military Buildup cost many companies millions of dollars when they jumped the gun and moved into Guam in 2010,” stated Cruz. “Here we are 7 (sic) years later and the Buildup isn't even 30% (sic) complete.” Cruz also adds that it’s important to ensure the contractors from off-island are paying their Guam Business Privilege Taxes for their base contracts. He hopes the buildup will start to gain traction, so the island can begin seeing money and jobs coming to the island. Senator Aguon said, “The contractors that bought this issue to our attention have been very grateful for the clarity.” Although subcontractors have experienced the unfair double taxation on their services for a time now, the light at the end of this tunnel has arrived. With the clarification of taxation and responsibility, local subcontractors see a correction they’ve worked with local lawmakers for become a reality – a possible win-win in everyone’s book. Benjamin Franklin said “In this world nothing can be said to be certain except death and taxes.” Sure, but nobody should have to die twice, nor should they have to pay the same tax twice as well. It was a collaborative effort by members of the contractor community and policymakers to make this a reality for many businesses who have dealt with this technicality of law for far too long.

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2016 Year inReview

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2016 Year inReview

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2016 Year inReview

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GCA Construction News Bulletin January 2017  

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