GCA Construction News Bulletin July 2015

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Coming Together

PERNIX Group Acquires dck guam llc

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Feature Story

28 Garrison Report

Chamorro Phrase Of The Month Fino Chamorro: English:

Umaya' i kafe yan i asukat

Coffee and sugar go well together.

brought to you by The Guam Contractors Association.

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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 - ELECT John Sage WATTS Constructors VICE CHAIRMAN - ELECT 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 adztech@teleguam.net. 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: gca@teleguam.net. www.guamcontractors.org 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 EDITOR: Adztech CONTRIBUTING WRITERS: John Robertson John Aguon R.D. Gibson Shawn Gumataotao Dave Barnhouse Ted Garrison GCA STAFF: Francine Arceo Desiree Lizama COVER: The New Pernix Guam Team

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General Membership Meeting June 18, 2015

was no exception as the following SAME members were sworn in: President 1st Vice President 2nd Vice President Secretary Alternate Treasurer Alternate

Name: Organization: CAPT Noel Enriquez, USN (Ret) Brown and Caldwell Louis DeMaria, PE DCK Worldwide CAPT Stephanie Jones, PE, CEC, USN NAVFAC Marianas LT Timothy Dahms, USN NAVFAC Marianas LTJG Christopher Joseph, USN NAVFAC Marianas John M Robertson, PE AmOrient Engineering Mary Jo Pablo AmOrient Engineering


• 37th Annual Charlie Corn Golf Tournament Rescheduled to July 11th

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Colonel Phillip J. Zimmerman, USMC Officer in Charge, Marine Corps Activity - Guam, was the main presenter, highlighting the CNMI Joint Military Training Draft EIS (Environmental Impact Statement)/ OEIS(Overseas Environmental Impact Statement) currently taking place on Tinian and Pagan islands. He also discussed the NEPA(National Environmental Policy Act) Process, and its relation to the EIS. Military is proposing to establish a series of Ranges and Training Areas (RTAs) within the CNMI in order

responsibilities to maintain, equip, and train combat-ready forces to meet US mission for military readiness in the region. nput

to learn more about the US Military’s proposed training sites, visit www.CNMIJointMilitaryTrainingEIS.com.

To join SAME Guam Post, log on to SAME.org and click on “Membership” at the top of the home page. www.guamcontractors.org


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William “Bill” Beery, P.E. General Manager, Tutujan Hills Group Ltd. Immediate Past Chairman, GCA

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By John M. Robertson

China is not the only major world power seeking to expand its borders. Russia conducted a ‘peaceful’ invasion of Crimea and took control, humiliating and pushing out the Ukrainian military. It continues its advance into Eastern Ukraine. The Russian President has announced its intention to build up its arsenal of nuclear and other weapons and former satellite states such as Estonia and Latvia have expressed reason for concern. The U.S. has announced that it will increase its stockpile of heavy weaponry in Europe in concert with NATO. Some world leaders are noting that world tension is higher now than at any time since the Cold War. Add to that the monetary crisis in the Eurozone brought on primarily by Greece and the continuing civil wars in the Middle East and North Africa coupled with the ongoing war against the Islamic State, or ISIL; and the good people in the State Department and Pentagon have plenty of issues to ponder in the late night hours. That’s not to mention cyber warfare. In spite of these other major world issues, the Western Pacific is getting its share of attention.

Turning the ‘Asia Pivot’ Into Reality By engaging interlocking groups of democratic countries, the U.S. can ensure its presence in Asia.

that all parties stop such actions. He made clear that U.S. military planes would continue to fly through the islands’ airspace and that U.S. Navy ships would continue to sail through waters claimed by the Chinese. Relying on the United Nations Convention on the Law of the Sea, the Obama administration has rightly refused to accept as legitimate land forms any man-made features built on top of reefs. The goal is to negate any legal protection for China’s 2,000 acres of new land. Later on in his tour of Asia, Mr. Carter did offer some glimmers of how the U.S. would respond to China’s expansionism. In Vietnam, where he was feted by America’s erstwhile enemies, he promised to help Hanoi purchase American patrol vessels and generally expand defense trade. The two sides signed a Joint Vision Statement on Defense Relations. In New Delhi, Mr. Carter promoted greater defense-industrial cooperation. This included agreements to co-produce portable field generators and a protective suit for chemical-biological warfare, as part of the Defense Trade and Technology Initiative. Mr. Carter’s trip thus focused on one of Asia’s largest actorsIndia-and two smaller, though significant players—Vietnam and Singapore, where the U.S. Navy will be rotating some of its new littoral combat ships. The Obama administration should now link these two groups of states into a coherent whole.

Japan Open to Joining U.S. in South China Sea Patrols Concerns about China’s military buildup

spur Tokyo to play greater role in regional security Japan’s military would consider joining U.S. forces in regular patrols in the South China Sea, the nation’s top uniformed officer said, underscoring how China’s territorial claims are encouraging Tokyo to play a greater role in regional security. Adm. Katsutoshi Kawano, chief of the Joint Staff of the Japan Self-Defense Forces, said in an interview that China’s recent moves to build artificial islands have created “very serious potential concerns” for Japan, a trading nation that relies on the sea lane that runs through the area. “Of course, the area is of the utmost importance for Japanese security,” Adm. Kawano said. “We don’t have any plans to conduct surveillance in the South China Sea currently but depending on the situation, I think there is a chance we could consider doing so.” Adm. Kawano didn’t specify what actions by China might trigger Japanese consideration of patrols, and any activity by Japan’s military beyond its borders would likely raise concerns at home. However, Japan’s participation would be a welcome move for the U.S., which has sought to rely more on allies to provide peacekeeping in the region. “I view the South China Sea as international water, not territorial water of any country, and so Japan is welcome to conduct operations on the high seas as Japan sees fit,” said Adm. Harry Harris, head of the U.S. Pacific Command, at a briefing in Tokyo earlier this month.

On his recent tour through Asia, U.S. Secretary of Defense Ash Carter had a message for America’s allies and partners, as well as one for China. He promised to double down on America’s “pivot to Asia” while refusing to acknowledge Beijing’s territorial claims in the South China Sea. But his strategy of deeper engagement with Asian countries remains incomplete. Speaking before the Shangri-La Dialogue in Singapore, Mr. Carter reaffirmed that Washington would not recognize China’s land-reclamation activities in the Spratly islands. This was coupled with a demand

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Troops from Japan’s navy have been conducting joint drills this week with the Philippine navy around Palawan Island, just a few hundred kilometers from the Spratly Islands, which are at the heart of a territorial dispute between Beijing and Manila. The session features Japan’s P-3C surveillance aircraft, which Adm. Kawano described as having “a superb ability for detecting submarines and other objects in the water.” The U.S. has pledged to send aircraft and naval ships to contest China’s claims, and Australia already runs military patrols. Adm. Kawano took the helm of the military late last year as Prime Minister Shinzo Abe was seeking to ease decades-old self-imposed restrictions on the nation’s Self-Defense Forces. Mr. Abe has cited China’s military buildup and North Korea’s nuclear-weapons development for the shift. “In the case of China, as we can see with the South China Sea problem, they are rapidly expanding their naval presence and their defense spending is still growing,” Adm. Kawano said. “Also because there is a lack of transparency, we are very concerned about China’s actions.” In April, Japan and the U.S. revised the guidelines for their defense cooperation for the first time in 18 years, allowing Japan to contribute more to peacekeeping in Asia. Mr. Abe now must pass a set of bills to change domestic laws governing his pacifist nation’s military, a challenge given the caution expressed by lawmakers even within his own coalition. Adm. Kawano said he hoped to see more military cooperation with South Korea, an area that has suffered because of disagreements between Tokyo and Seoul over wartime history. A sign of a thaw came in June when leaders of both nations attended events marking the 50th anniversary of normalizing diplomatic relations. “Once the relations are normalized on political levels, I believe movements will emerge on our levels,” Adm. Kawano said.

This June 28, 2015 photo released by the Asia Maritime Transparency Initiative at the Center for Strategic and International Studies in Washington, D.C., shows the expansion of Chinese facilities on Fiery Cross Reef, where construction of a 3,000-meter airstrip is nearing completion.

A June 28, 2015 photo showing a close-up of Chinese construction of facilities on Fiery Cross Reef in the disputed Spratly Islands. .

New Images Show China’s Swift Construction of Airstrip on Disputed Reef China is not dragging its heels on Fiery Cross Reef. Images released in late June show that China has almost finished building a 3,000meter airstrip on a disputed reef in the South China Sea – with experts projecting further construction in the months to come. The satellite photos show an array of other completed projects on the reef, including two helipads, two lighthouses, a cement plant and as many as 10 communications antennas, according to the Asia Maritime Transparency Initiative at the Center for


Fiery Cross Reef had only a small installation until last year. It is seen here in July 2014, before construction expanded dramatically.


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Beijing’s construction on – and of – the islands in the disputed Spratlys chain has ratcheted up tensions between China and its neighbors, as well as the U.S. Other claimants to the territory are Taiwan, Malaysia, Brunei, the Philippines and Vietnam. China, which claims almost the entire South China Sea as its own, has strenuously objected to calls from the U.S. and other to halt its island-building. At a regional security dialogue in late May, Adm. Sun Jianguo, a senior Chinese naval commander, maintained that the new isles will benefit China’s neighbors and “fall well within the scope of China’s sovereignty.” Chinese Foreign Ministry spokeswoman Hua Chunying told a regular news conference in Beijing recently that the construction of facilities on the island “will enable China to better perform its international obligations and responsibilities” in areas including disaster prevention, maritime search and rescue and ecological conservation. “Necessary military defense requirements,” she added, “will also be fulfilled.”

Satellite imagery of runway construction at Fiery Cross Reef in the Spratly Islands dated Feb. 6, 2015 and March 23, 2015 by Airbus Defense and Space.

Strategic and International Studies in Washington, which released the images. Work on the airstrip began in January and is now “nearly complete,” AMTI said, though Bonnie Glaser, a senior adviser for Asia at CSIS, was quoted in the report as saying there will likely be a “lull” in construction given the coming typhoon season. Another factor, she said, will be Chinese President Xi Jinping’s September visit to the U.S. “That said, I do think that activity will again

pick up again, perhaps in the fall,” Ms. Glaser was quoted as saying in the report. “The Chinese are going to continue with construction, militarization, but what we have over the summer is at least an opportunity for more dialogue.”

The foregoing was adapted from three recent articles in the Wall Street Journal: An 11 June 2015 article by Mr MICHAEL AUSLIN, a resident scholar at the American Enterprise Institute in Washington, D.C. and columnist for wsj.com. He is writing a book on risk in Asia. A 25 June 2015 article by YUKA HAYASHI and CHIEKO TSUNEOKA. And a 03 July 2015 article by felicia sonmez.

China a few weeks ago said it was done with its island reclamation in the Spratlys chain and was moving on to building military and other facilities on the reefs it has artificially expanded.


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Parking Lot LightsLED's and Saving Energy Costs by Shawn Gumataotao

They are an often overlooked but integral part of our island community's landscapes. There is no question that parking lots influence how we live, work, and play. They also require a substantial amount of energy and money to operate. A trend is growing across the globe and one that is seeing some traction in Guam-business owners are recognizing the potential of light-emitting diode (LED) technology in parking lot lighting. The reasons are simple: to save energy, reduce maintenance costs, and improve environmental sustainability. LEDs have been shown to save energy in limited applications, but are they ready for wide-scale adoption in parking lots? The U.S. Department of Energy continues to ask this question as well as property owners and entrepreneurs alike. Researchers and trade organizations have joined forces to develop a set of criteria retailers could follow to implement LED parking lot lighting and realize energy savings and reliability. Whether it is a parking lot in Atlanta or Agana, a LED Site Lighting Specification developed in cooperation with the U.S Departement of Energy provides information about both luminaire, or light

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fixture, performance and how the site should be lighted. For instance, the Specification outlines how lighting needs vary across the different parts of the parking lot. The Specification optimizes the performance of sites, satisfying more than pure lighting needs. Business concerns such as site aesthetics, branding, and customer safety also come into play. Additionally, the Specification recognizes the potential risks businesses face in adopting new technologies, including reliability and maintenance costs. To address these, the Specification requires that manufacturers guarantee product performance with a five-year minimum warranty for LED luminaires.

• Luminaires should follow the backlight, uplight, and glare (BUG) rating requirements in IESNA TM-15. • Luminaires should carry at least a five-year warranty covering the luminaire, finish, and power supply. • Testing requirements are identified on manufacturers cut sheets or specification sheets.

The LED Site Lighting Performance Specification provides requirements for lighting the site as well as the luminaires. Here are a few key details of the specification:

LED technology has advanced into new categories of “white light” applications, including parking lot lighting, where early indications suggest a high-quality light and long life. At present, however, tested products are available from a limited number of suppliers, performance in the later years of the product’s life-time can only be estimated, and LED luminaires are relatively expensive on a first-cost basis. Nonetheless, there are many benefits for LED lighting in parking lots.

Both power density and illuminance requirements are by lighting zone (LZ); different amounts of light (illuminance) are needed for different parts of the parking lot, and different environments need more or less light (and thus use power differently).

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Google defines a legacy as “an amount of money or property left to someone in a will.” Over time a legacy has come to be understood as something left behind for future generations to enjoy. Sometimes it has a pretty hefty price tag attached to it, but more often than not, it holds mostly sentimental value for the beneficiary. A legacy is something to be celebrated; it’s a culmination of a lifetime of hard work and success, passion, and, most of all, remembrance. The thing about legacies though is they need to start somewhere.

In the last few years, we have heard many things about a military buildup. The talk about the relocation of thousands of Marines continues to be a hot topic that cools every so often. Whatever the future holds for this buildup, it looks like Pernix is here for the long haul. “The business plan, the vision [to come to Guam] is to lift off our PacRim business plan – from here to Papua New Guinea...” Zayed continues, “Guam is important, and there may be a military buildup, but the transaction, for me, is about Guam.”

Just recently it was announced that Pernix Group, Inc. acquired certain assets of dck pacific guam, LLC and a membership interest in a joint venture. CEO and President of Pernix Group, Inc. Nidal Z. Zayed spoke about setting up shop on Guam and seeing what cards the Fates hold for his company and its acquisition of dck pacific Guam. Zayed said, “Although we are not a huge company, we [Pernix] have some significant backing and we’ve done work in many continents. But, if you want to be focused in the Pacific Rim, and Southeast Asia, and such from a macro-regional perspective, and you feel comfortable being on your own ‘soil’, [Guam] is the place to be.”

With their toes in the region, Zayed spoke about their work in energy. “Historically, energy has been more focused in this region, for us, than construction.” He continued, “Yes, we’ve built some things, but our revenue, our profitability, has been through building and operating power plants in the region.” He explains that Pernix’s “appetite” and vision for the region promotes ‘tremendous market.’ Guam is a critical piece of the puzzle to shape their vision, and they are willing to take the risk.

It is a funny thing how strategically positioned Guam is. From the days when our ancestors were guided by the stars to trade between the islands, as the unique stopover point utilized by the Spanish for the Galleon Trade, and even today as a major player in the airline industry, we see our island as an ever-growing regional hub of growth and development. No wonder many like to think that the Fates placed Guam in the center of the region.


“You need people who are willing to take local risk – an appetite for local risk,” starts Zayed. “It’s part of a larger plan [to work on Guam], a larger footprint to work in the entire Pacific…We came here, and we don’t quit…it’s in Pernix’s nature not to quit.” Zayed spoke at length about their work in Palau, Fiji, and Vanuatu. He explained their relationship with banking giant ANZ Bank in Fiji where they are building a power plant. They also distribute power in Vanuatu. “People there (Espiritu Santo) love us,” stated Zayed. “We’re


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putting up streetlights and connecting huts – on our own dime…it’s part of our regional business plan.” Maybe that is what most companies want to leave…their mark not just in the business world, but in the lives of the people and places they set roots. For Guam, it’s important we build up a workforce with the skills necessary to succeed and help our island grow and prosper. As cliché as that sounds, it’s a matter of fact. That same mentality is in no short supply from the Pernix Guam Family. With a perfect safety record, and significant resumé under their belts, they are looking at opening their doors with 80 people on staff, “but I expect it to increase fairly quickly. Primarily, that increase will come locally. We really don’t plan to bring much from outside the area.” Zayed continued, “It makes no sense for us to be bringing people from the States,” expanding on supporting local apprenticeships.

it done right, with the community always at the core of their work. Zayed and the Pernix Guam Family promote not just the highest standards of utility, construction, and contract work, they also stand by their values of professionalism, integrity, and – a core value for Guam – respect. More than anything, they are excited to work in and be a part of the community. “Construction is about life,” said Zayed. “You’ve got to be connected to the community. You have to care because we are asking the community to support us.” Maybe that is the legacy Pernix wants to leave behind: an attitude that even after the accolades, accomplishments, and contracts, it all comes back to investing in and building up a community. It just might be the thing they will be most remembered by.

Talk about the economic gains of the military buildup has become sluggish to say the least. However, there seems to be no short supply of interest in development on Guam because there seem to be more opportunities to expand and use Guam as the hub of operations; a role it is all too familiar with as history has taught us. As Guam heads into the next few years, we look to companies like Pernix Guam who hold true to getting the job done, and getting

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A monthly crane and rigging informative column for all personnel directly or indirectly involved with crane safety. Each month we will attempt to explain a different technical issue pertaining to crane operations here on Guam, addressing the sometimes overlooked or misunderstood topics by management and operators alike. By Dave Barnhouse

For those not current with the OSHA proposed crane operator ruling, mobile crane operators will need to be nationally certified by November, 2017. The verbiage comes from 1926 – Subpart CC, issued August 9, 2010. In that ruling, it was determined that crane operators were required to be nationally certified by ANSI (referring to certification by one of only a few certification agencies). At first, operators were to reach compliance by November 10, 2014, (29 C.F.R. § 1926.1427(k), but the deadline was extended to Nov. 10, 2017. Even with that extension, Guam contractors have a serious problem: Workers whose first language is not English cannot pass the comprehensive written test, and crane owners need to band together to exempt Guam and the CNMI from this ominous ruling. On paper, the ruling makes sense. The three year extension is due, in part to issues pertaining to the requirements in the standard addressing crane operator certification limited by type as well as capacity. OSHA intends to address these issues of crane operator certification and safe operation in the interim. What does this mean here on Guam regarding our crane operators? Certification limited by capacity is the last of our concerns here. What we need to deal with immediately is a means to get our operators certified in compliance with the new OSHA ruling, by capacity or type. Recently I have conducted 2 separate 40 hour crane operator exam prep classes in anticipation of the first class of CCO certified operators. The written exams are proctored at UOG, timed, and designed to slip up the most knowledgeable of the

26 | JULY2015

operators. The tests results were not pretty. One operator, whose first language is English, became CCO certified out of more than a dozen operators who participated. A second attempt a few months later produced the same results. All concerned have agreed on the reason, the language barrier. And also that Guam, CNMI, and any Micronesian Island under OSHA jurisdiction have a serious problem, that there will be no certified operators by November of 2017 unless we act now. The practical tests demonstrating their hands-on operation of the crane were challenging but most passed without too much trouble. The written tests, however, were another matter for workers who speak English as a second language. Most speak English well but read and comprehend a little less. Understand that an operator not able to read and comprehend the crane’s manual and capacity charts is not a candidate for operator certification. Most operators here on Guam can read and comprehend the manual, but not with a stopwatch toting proctor looking over his shoulder. Quoting Rick Schmidtke from Smithbridge Guam Inc.: We tried to make sense as to why our operators could not pass the exam. It was concluded that it was more a literacy issue than a practical one. Guam has a very interesting mixed and multilingual culture. English is one of the official languages spoken here, but there is a big difference in comprehension for most between reading, writing and speaking, due to their native languages such as Chamorro, Filipino, Japanese, Korean, Chinese, and other Micronesian island dialects used.


Mr. Danny Natividad from BME & Sons: Our crane operators are not U.S. Nationals and speak Filipino language, some native dialects in the Philippines, and some English which is commonly used language here in Guam. Our crane operators will encounter problems passing the NCCCO written test and our crane operators will not be able to continue to work after 2017. Guam crane operators are a diverse group of workers from the Philippines, Korea, China, Micronesia, India, Indonesia, Japan, and others, all of which speak English as their second language. In Mr. Edwin Chings’ words of Core Tech International, We believe the workers on Guam and the CNMI can comfortably handle the practical and physical skills and techniques of operating a crane - the problem is the written test in English which requires, within a short period of time, the understanding of many subtle meanings of words and phrases which will be easily known and recognized by a native English speaker, but not by others. Can you imagine the frustration of a person taking a test who has problems understanding the written test within a short period? Many persons who were born and raised in the U.S. have experienced the same frustration with written tests in college, so how can we expect non-native speakers to be equal to native English speakers? In speaking with the Director of Operations and Program Development of National Commission for the Certification of Crane Operators, (NCCCO) it was learned they are focusing their resources in the states on the further development


of programs in Spanish. This is admittedly acknowledging there is a problem with bilingual personnel with English as their second language taking the NCCCO written tests with success. Since the certifying agencies are focusing their time elsewhere and no efforts are being made to assist all bilingual operators, a point could be made that discrimination exists regarding these local operators. It is believed that if the OSHA November 2017 certification requirements remain the majority of the small contractors will believe they have no choice but to have non-qualified and untrained operators operating their cranes because of the unavailable personnel capable of passing a CCO or CIC written exam and the skilled operator shortage that exists in the entire Marianas. Many crane operators are not U.S. Nationals, and Guam, as much as it likes to call itself Where America’s day begins, is not a state, and it needs its individual differences recognized. Island CERTS is presently discussing with the appropriate OSHA personnel the options for Guam for assuring the operators are competent and remain up to date with the crane industry operating and safety requirements. This


may be in the line of a variance for Guam and surrounding areas in OSHA jurisdiction allowing for a revised program such as the training program in place presently, the employer being responsible for training and finding operators competent to operate their respective type and capacity crane. If your business owns and operates mobile cranes in construction or the November 2017 deadline would have a negative impact on your business, you can help. Please forward a letter on your company letterhead to contactus@islandcerts.org in your own words the situation at your business, mentioning the operator’s operating skills but limited English proficiency. In addition, mention whether your operators are U.S. Nationals. We will forward these letters to the appropriate OSHA office and hopefully a consideration will be made for a variance of this operator certification requirement.

Please e-mail any comments, questions, or specific topics you would like to see addressed in this column to certs@ite.net and we will certainly attempt to accommodate your requests.

Dave Barnhouse resides in Tamuning and has been involved with operations, maintenance, operator training, and/or inspections, of cranes since 1969. He is a Certified Environmental Trainer, CHST, NCCCO certified crane operator, Lift Director, Level II Rigger, NCCCO practical examiner for all types of mobile crane operators, riggers, signal persons, and the only OSHA accredited crane inspector on Guam.


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Best Value and Integrated Project Delivery (IPD) Make Great Partners

In the foreword of the book, 2015 Best Value Approach, by Professor Dean Kashiwagi, Ph.D., describes best value. “Best value leads to lower prices, more qualified vendors, efficiency, and customer satisfaction.” Integrated Project Delivery Collaborative (IPDC) trademarked the term IPD back in 2005. They had been developing the concept during the 1990’s and filed for the trademark in 2000. IPDC states IPD is “a system that allows common sense, efficiency and shared goals/incentives to triumph.” The challenge is that when using terms like “Best Value” and “IPD” there are a raft of definitions floating around. Worse what some people think “Best Value” or “IPD” are something they are not. When people get unsatisfactory results from imposters, it will have a negative impact on the proper concept. However, when done properly, both the Best Value Approach (BVA) and IPD are very successful. Many people don’t understand the true meaning of Best Value and IPD. Therefore, it’s essential that we define both terms in order to have a common baseline for the discussion. Some of the variations of both terms have had some successes, but it’s impossible to compare all the possible variations. Therefore, my discussion is based on the BVA approach defined by Kashiwagi and AIA's definition of IPD, which accurately describes IPDC approach to IPD. Kashiwagi’s Best Value Approach “The Best Value Approach (BVA) is not a change in processes or steps; it is a change in paradigm. It is an approach expert’s use in all aspects of their life to 28 | JULY2015

minimize risk and increase performance. It can be applied to all industries and throughout the supply chain. It is not technically based, but founded on the use of logic and common sense. BVA requires minimal management. BVA is a flat organization. BVA utilizes people, who know what they are doing, who are measured, and accountable. BVA is an environment where the people doing the work are using optimal, efficient, and effective practices. BVA is where the vendors are practicing BVA practices independent of the clients. BVA minimizes risk by utilizing expertise instead of client management, direction, and control. Risk is created by ‘nonexpert’ management and transactions, and the confusion caused by those transactions. BVA minimizes risk by using vendor expertise, creating a no-risk and transparent environment. What separates BVA from all the other best value systems is that BVA will even assist the ‘blind’ vendors to ‘see.’ BVA is a leader’s dream, and many be the traditional manager’s worst nightmare; it minimizes the actions of decision-making, management, direction, and control.” AIA’s Definition of IPD “IPD is a method of project delivery distinguished by a contractual arrangement among a minimum of owner, contractor and design professional that aligns business interests of all parties. IPD motivates collaboration throughout the design and construction process, typing stakeholders success to project success to project success, and embodies the following contractual and behavior principles.”


Contractual Principles: • Key participants bound together as equals • Share financial risk and reward based on project outcome • Liability waivers between key participants • Fiscal transparency between key participants • Early involvement of key participants • Jointly developed project target criteria • Collaborative decision making Behavior Principles: • Mutual respect and trust • Willingness to collaborate • Open communication The Comparison IPDC raise some interesting questions. “What if all of the construction members were friends looking out for the interest of the Client and each other, applauding the successes of each other and sharing the pain of each other’s failures?” “What if all of the design and construction entities on a project could be organized in such a way that they all functioned as if they truly were a single company with a single goal and with no competition amongst themselves for profit or recognition?” Doing as those questions suggest would certainly create a paradigm shift. While the definitions show a great deal similar points, let examine a few items in greater detail. Rely on Experts One of the key foundations for both processes is their commitment to rely on experts in order to minimize risk and www.guamcontractors.org

increase performance. The BVA “forces the best value vendor to understand that they have full control of the project, and by so doing will manage and minimize the risk and project deviation that is outside of their control (if caused by the client, or unforeseen events in the environment).” IPDC states, “By design, our process eliminates traditional trade boundaries and incentivizes all team members to work together, from start to finish, to deliver the project at the best possible value without sacrificing quality. Owners and team members benefit alike. Everyone wins.” In putting together an IPD partnership, all the team members have a strong incentive to make sure that each partner is a true expert in their area of expertise. The reason is simple, they will share in the risks and rewards created by that partner. When the partners trus t one another’s expertise, it makes sense for them to allow their expert partner on a particular scope of work to indicate the course of action on that scope of work. The trust of the expert partner is based on the fact the partner knows what he is doing and because they are measured and accountable. Minimize the Need to Communicate BVA “forces the expert vendor to communicate to everyone in a simple, dominant, non-technical language, using performance measurements that can easily be understood by a non-expert.” In the IPD process, there are no hidden agendas proclaims IPDC. In fact, they explain, “Information flows freely throughout the process; everyone is at the table on day one.” The participants in the flow of information include the owner all the way down to the sub-contractors. IPDC explains, “Everyone participates in the conversation and gets information first hand. The Owner’s priorities don’t get lost in translation.” Since everyone is at the table, the amount of information that must be interpreted is minimized. Minimize the Need for the Owner to Manage, Direct or Control the Project One the important benefits of the BVA is it minimizes the Owner’s need to manage, direct or control the project. This benefit is achieved by transferring “the control to the best value vendor by using a process structure that forces the vendor to be an expert. The BVA assigns accountability to the expert.” With a single source of responsibility throughout the design and construction, the Owner will never have to play referee between architect and designers. In fact, the situation is such “each IPD team member is accountable for the performance of the other team members and shares in the overall project responsibility.” In essence, each team member is 100 percent accountable for www.guamcontractors.org

the results – there is no finger pointing. Minimize Costs and Maximizing Profits Almost by definition, a key objective of BVA is to minimize costs. IPDC addresses this goal by stating, “Sophisticated Owners and developers recognize traditional project delivery methods do little to incentivize lower project costs. The IPD cost sharing arrangements allow shared savings, the more the team can save the owner, the greater their profit.” The idea of an incentivizing people to save costs is a powerful tool even when dealing with responsible and accountable individuals because it forces a constant cost evaluation of the work being performed. Maximizing Technical Competency When practitioners are technically competent, they virtually have no technical risk. Therefore, it reduces overall risk to the project. The BVA forces contractors to demonstrate their technical competence to ensure the selected contractor is technical competent. In the IPD arena, each partner will insist their partners are technical competent because they are accountable for their partners’ performance. Therefore, it’s in the IPD team’s best interest to ensure there are no weak links on their team. Maximize Customer Satisfaction The BVA has had its tremendous success documented. The Performance Based Studies Research Group at Arizona State has conducted hundreds of project worth well over a billion dollars. Their results are that 98 percent of the time the customer is highly satisfied. That result is not surprising when you consider those projects finished on time, with high quality, and no contractor generated change orders. A typical response to IPDC work is the quote by one of its clients. “I’ve managed various types of engineering and construction projects for over 17 years, so I know a great operation when I see one. I have found your team to be professional, extremely competent and driven to provide the very best building products, quality construction and customer service.” Compare this to the estimate that nearly 70 percent of conventional construction projects have a problem with one or more of the budget, quality or schedule. Competition One important aspect of the BVA approach is that it generates competition. As we all know, price is always a factor, but the BVA ensures the contractor can deliver the project for the price quoted. If

they the contractor can’t deliver the project for that price, its quote is meaningless. The idea is to obtain the lowest price to perform the desired work. IPD can also have competition. The IPD teams can be evaluated the same way that the BVA contractors are evaluated. The difference is the evaluation is based on the entire team as a unit. Just like in sports, the team wins or loses, the individuals don’t win or lose, except as part of the team. We are not interested in obtaining the best individuals, what we want is the highest performing team. It takes a special mentality to work in a collaborative environment where everyone sitting at the table is equal. Too often, a superstar has too big an ego and is not a very good team player and as a result he has a negative impact on the team. Sir John Egan was asked to review the construction industry. In his report Rethinking Construction, he wrote, “Clients should require the use of integrated teams and long-term supply chains and actively participate in their creation.” He merely referred to integrated teams, but what he described was an IPD team. However, the term IPD hadn’t been coined at that time. Why is the ongoing team concept so important? The answer is that the team continues to improve from project-toproject. It simply doesn’t make sense to lose the experience and skills gained from working with your team members on one project. No one would expect to win the Super Bowl with a pick-up team. So why does anyone think we will get the best results from a design/construction team that hasn’t worked together on an on-going basis. There have been many projects that have had design-build competitions where the entire team was selected as team. The process would be much the same for the IPD team. In the end, the BVA and IPD would deliver what's precisely needed, lower prices, more qualified vendors, efficiency, and customer satisfaction. I could go on explain how these two processes support each other, but I think you get the idea. Ted Garrison; president of Garrison Associates, is a catalyst for change. As a consultant, author and speaker; delivers his Construction 3.0 Strategies that offer breakthrough solutions for the construction industry by focusing on critical issues in leadership, project management, strategic thinking, strategic alliances and marketing. Contact Ted at 800-861-0874 or Ted@TedGarrison.com. Further information can be found at www.TedGarrison.com."


JULY 2015 | 29

30 | JULY2015



0 2 1 0 1 1 1 1 0 3 6

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

1 2 1

ICU Registered Nurse Birthing Registered Nurse Cardiac Cath Registered Nurse Pediatrics Registered Nurse Executive Chef



1 2 4

0 0

Quality Inspectors

Radiologic Technician

Restaurant Manager Refrigeration & AC Mechanic

Shipfitter Sous Chef

Total Non-Construction H2-B Workers


Med-Surg OR Registered Nurse





ER Registered Nurse

Scuba Dive Instructor


NICU Registered Nurse



Painter,Transporter Equipment




Maintenance Electrician

Elec./ Electronic Service Tech




Baker Master


Nursery Worker



Heavy Equipment Mechanic

Hvac Technician



Golf Instructor

Motor Rewinder



Massage Therapist


Field Supervisor

2 24 0 1 1 0 8 1


Japanese Specialty Cook Landscape Gardeners Laundry Supervisor Les Mills Certified Instructor Machinist Marine Maint. Machinist Marine Maint. Mechanic MRI Technician

Electrical Drafter


Electric Motor Repairer


3 4 29

Wedding Service Attendants Welder Welder - Fitter






Heavy Equipment Mechanic

TOTAL Construction H-2B Workers

Total OTHER Construction



1 1 1

Project Manager Quality Control Inspector Tower Crane Operator




Project Supervisor




HVAC Mechanic



General Maintenance & Repairer








3 9


Field Supervisor


Electrical Power Lineman

Civil Engineer

AC& Refrigeration Mechanic AC& Refrigeration Technician Architectural Drafter

Other Construction Occupations

Employers Workplace Monthly Report Statistics

Ultrasound Technician

Baker Mechanic

Specialty Cook Training & Dev. Specialist

Other Non-Construction Occupations

4 12 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



40 86

Non-Construction Total H-2B Employers



1339 7 4 2 0 0 1 0 0 0 1352

Employers By Industry

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

Workers by Nationality

Total Common Const.


67 3

Electrician Camp Cook



8 17

453 113

Heavy Equip. Operator

Plumber Sheetmetal Worker

Structural Steelworker

Reinforcing Metalworker

Common Construction Occupations 438

Cement Mason Carpenter

MONTH ENDING: April 2015

Korea Thailand 0.52% 0.00%







5.97% 0.27%

Other 0.00%

Peru 0.00%

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 0.15%


Common Construction Occupations

Philippines 98.97%

Japan 0.30%

Australia 0.00%

Italy 0.07%

H-2B Population by Nationality



GCA Construction Index GCA Construction Index GCA Construction Index DODDOD Contracts* Contracts*

Building Permits* Building Permits*


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Statistics provided by Guam Department of Labor, Bureau of Labor Statistics; Guam Contractors Association; and the GCA Trades Academy. * as of April 30, 2015. 32 | JULY2015



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