GCA Construction News Bulletin January 2015

Page 1




+ GRT issue exemptions



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Construction Headline 2 | JANUARY2015



Feature Story www.guamcontractors.org


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 Tom Anderson Black Construction Corporation CHAIRMAN - ELECT Art Chan Hawaiian Rock Products VICE CHAIRMAN - ELECT John Sage WATTS Constructors SECRETARY/TREASURER William Beery Tutujan Hill Group CONTRACTORS DIRECTORS: Narci Dimaoala Amazon Construction Carlo Leon Guerrero M80s Office Systems Conchita Bathan Core Tech International Tom San Nicolas dck pacific guam LLC Miguel Rangel Maeda Pacific Corporation ASSOCIATE DIRECTORS: Jeffrey Larson TakeCare Insurance Ray Yanger Fastenal Patty Lizama Pacific Isla Life Michael Kikuta Matson Navigation



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.

PUBLISHER: James Martinez

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

COVER: Overlook of capital.

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

PRODUCTION TEAM Geri Leon Guerrero AD SALES: Tom Mendiola Jaceth Duenas PRODUCTION: Geri Leon Guerrero Christopher “Taco” Rowland Jaceth Duenas PHOTOGRAPHERS: Christopher “Taco” Rowland EDITOR: Adztech CONTRIBUTING WRITERS: John Robertson R.D. Gibson Miguel Rangel Dave Barnhouse James Martinez Grace Donaldson GCA STAFF: Francine Arceo Desiree Lizama


Society of

American Military Engineers

2014 Year End Report

As 2014 comes to a close for SAME Guam Post, it is time, on behalf of CAPT Glenn Shephard, President; CAPT Noel Enriquez (Retired), 1st Vice President; and LtCol Elton Sledge, 2nd Vice President to thank all Committee Chairs and SAME members in general for making this a successful year.

Accomplishments engineering and construction being deferred as result of delay in undertaking the relocation of Marine Corps assets from Okinawa to Guam. 1 Jan 2014 23 Dec 2014 Sustaining Member Firms 38 38 Representatives of Member Firms 153 145 Individual Members 97 109 Student & Faculty Members 4 5

visits to active construction projects. Wayne Cornell, Richard Stump and Steve Taylor.

was the American Concrete Institute – ACI Concrete Field Testing Technician Course, Grade 1. Two sessions were held at the Hawaiian Rock Products training room with 64 participants. Richard Stump with the committee he organized. Special thanks to Hawaiian Rock Products.

Jesse Pangelinan out for scholarships and other honoraria. Charlie Corn Scholarships ranging from $2,000 up to $4,000 were granted to 9 university bound students with Tor Gudmundsen heading the

6 | JANUARY2015



The Post supported Wayne Cornell in applying for Fellow status within the SAME organization. His selection to that position was announced on 23 December. His investiture ceremony will occur sometime in the spring, at which time the Post will have two Fellows: Louis DeMaria and Wayne Cornell. Note that this was a major accomplishment because the standard is set very high, requiring a lot over the years to SAME and the Engineering Profession. Al Sampson distributed the following awards in July 2014: Post Leadership: Wayne Cornell and Noel Enriquez Post Service: James Atkinson Post Outstanding Support: Rose Sellew, Mary Jo Pablo, Pearl Capindo, Nerissa Doyle and Lorrie Uong. A FIRST LEGO League Program was initiated in local schools with primary backing of LCDR Sean McC onnon.

SAME Guam Post was a major sponsor of MATHCOUNTS this year providing GSPE with a grant of $1,900. This is a major national initiative of SAME and NSPE. Elizabeth Gayle of GSPE was again the principal organizer.

The back of house support is all important to an organization but is not always recognized. Bob Shambach has devoted countless hours in creating and maintaining the annual budget and tracking accomplishments that lead to Streamers for the Guam Post.

Support of STEM (Science, Technology, Engineering and Math) activities in the region was led by Noel Enriquez with significant volunteerism by Joe Vinch at AAFB and various support from others.

the top of the home page.



JANUARY2015 | 7

Noel Enriquez all Post members of the Board of Directors and functional committees updated and focused on requirements for meeting the various criteria throughout the year. tracking multiple ongoing activities, and maintaining the necessary documentation. In the end, the Guam Post scored higher than ever before, receiving a streamer with distinction, being selected a Distinguished Post and the Post being considered for Top Post out of 46 Distinguished Posts from 105 Posts throughout the world.

During the year 2014, our own Richard Stump encompasses Alaska, Hawaii, Guam, Japan, Okinawa and Korea. He took over from William Grip, former member of the Honolulu Post.

The Post continued supporting Young Members in collaboration with the Guam Chamber of Commerce and the Guam Contractors Association. This activity was championed by Pete Diaz.

Jecilia Llgardo attended the Post Leaders Workshop in Las Vegas: 29 – 31 Jan LT Russell Torgesen attended the Joint Engineer Training Conference & Expo in Orlando: 20 – 23 May Jesse Pangelinan attended the Small Business Conference in Kansas City: 09 – 11 Dec Opportunities for Calendar Year 2015 include the following: Post Leaders Workshop, Phoenix: 19 – 21 February Fellows Luncheon & Investiture, Alexandria, VA: 12 March Joint Engineer Training Conference & Expo, Houston: 19 – 22 May Small Business Conference, New Orleans: 4 – 6 November

To join SAME Guam Post, log on to SAME.org and click on “Membership” at the top of the home page. 8 | JANUARY2015



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

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Finding a tailor-made solution is just the beginning. ASC offers a level of service that sets us apart from other retirement plan providers in the region. Let us help you save for a successful retirement, one paycheck at a time. Schedule to meet with our team today e: info@asctrust.com w: asctrust.com p: (671)-477-2724 FUSO GCA Now on Guam AD.pdf











10:26 AM



By John M. Robertson

RULES COMMITTEE PRINT 113–58 HOUSE AMENDMENT TO THE TEXT OF S. 1847 Titled, the Carl Levin and Howard P. ‘Buck’ McKeon National Defense Authorization Act for Fiscal Year 2015 December 2, 2014 Subtitle C—Provisions Related to Asia-Pacific Military Realignment

SEC. 2821. REALIGNMENT OF MARINES CORPS FORCES IN ASIAPACIFIC REGION. (a) LIMITATION BASED ON COST ESTIMATES.— (1) LIMITATION AMOUNT.—Pursuant to the Supplemental Environmental Impact Statement for the ‘‘Guam and Commonwealth of the Northern Mariana Islands Military Relocation (2012 Road map Adjustments)’’, the total amount obligated or expended from funds appropriated or otherwise made available for military construction for implementation of the Record of Decision for the relocation of Marine Corps forces to Guam associated with such Supplemental Environmental Impact Statement may not exceed $8,725,000,000, subject to such adjustment as may be made under paragraph (2). (2) ADJUSTMENT OF LIMITATION AMOUNT — The Secretary of the Navy may adjust the amount specified in paragraph (1) by the following: (A) The amounts of increases or decreases in costs attributable to economic inflation after September 30, 2014. (B) The amounts of increases or decreases in costs attributable to compli-

10 | JANUARY2015

The Senate Armed Services Committee (SASC) and House Armed Services Committee (HASC) came together to pass the National Defense Authorization Act for 2015 on 2 December. What they decided is presented below. The bill then had to be passed by the Senate Appropriations Committee and the House Committee on Appropriations before going before the full Senate and House of Representatives for approval. It was then ready to be signed or vetoed by the President. It was in fact ultimately signed into law by the President. This presentation therefore may not represent the final approved military construction budget. The report focuses on construction in Guam and the Mariana islands but also includes Hawaii and all points west. It also includes the specific language that lifted the restriction on the relocation of Marine Corps elements from Okinawa to Guam. Also, restricted use of the Ritidian Unit. At the annual joint meeting of GCA, SAME, AIA, GSPE, Land Surveyors and ASHRAE on 26 February, NAVFAC Marianas Commanding Officer, CAPT Glenn Shephard, will provide a briefing on the approved budget and list of projects for FY 2015 and perhaps beyond. It would be a good idea to save the date and register early because it will be well attended. ance with changes in Federal, Guam or Commonwealth of the Northern Mariana Islands, or local laws enacted after September 30, 2014. (3) WRITTEN NOTICE OF ADJUSTMENT.—At the same time that the budget for a fiscal year is submitted to Congress under section 1105(a) of title 31, United States Code, the Secretary of the Navy shall submit to the congressional defense committees written notice of any adjustment to the amount specified in paragraph (1) made by the Secretary during the preceding fiscal year pursuant to the authority provided by paragraph (2). (b) RESTRICTION ON DEVELOPMENT OF PUBLIC INFRASTRUCTURE.— (1) RESTRICTION.—If the Secretary of Defense determines that any grant, cooperative agreement, transfer of funds to another Federal agency, or supplement of funds available under Federal programs administered by agencies other than the Department of Defense will result in the development (including repair, replacement, renovation, conversion, improvement, expansion, acquisition, or construction) of public infrastructure on Guam, the Secretary of Defense may not carry out such grant, transfer, cooperative agreement, or supplemental funding unless such grant, transfer, cooperative agreement, or supplemental funding— (A) is specifically authorized by law; and CONSTRUCTION NEWS BULLETIN

(B) will be used to carry out a public infrastructure project included in the report prepared by the Secretary of Defense under section 2822(d)(2) of the Military Construction Authorization Act for Fiscal Year 2014 (division B of Public Law 113–66; 127 Stat. 1017), as in effect on the day before the date of the enactment of this Act. (2) PUBLIC INFRASTRUCTURE DEFINED.—In this subsection, the term ‘public infrastructure’ means any utility, method of transportation, item of equipment, or facility under the control of a public entity or State or local government that is used by, or constructed for the benefit of, the general public. (c) REPEAL OF SUPERSEDED LAW.Section 2822 of the Military Construction Authorization Act for Fiscal Year 2014 (division B of Public Law 113–66; 127 Stat. 1016) is repealed. The repeal of such section does not affect the validity of the amendment made by subsection (f) of such section or the responsibilities of the Economic Adjustment Committee and the Secretary of Defense under subsection (d) OF SUCH SECTION, as in effect on the day before the date of the enactment of this Act.



zone over all or a portion of the Ritidian Unit of the Guam National Wildlife Refuge shall include — (1) measures to maintain the purposes of the Refuge; and (2) as appropriate, measures, funded by the Secretary of the Navy from funds appropriated after the date of enactment of this Act and otherwise available to the Secretary, for the following purposes: (A) Relocation and reconstruction of structures and facilities of the Refuge in existence as of the date of the enactment of this Act. (B) Mitigation of impacts to wildlife species present on the Refuge or to be reintroduced in the future in accordance with applicable laws. (C) Use of Department of Defense personnel to undertake conservation activities within the Ritidian Unit normally performed by Department of the Interior personnel, including habitat mainte-

(a) AGREEMENT TO ESTABLISH —In order to accommodate the operation of a live-fire training range complex on Andersen Air Force Base-Northwest Field and the management of the adjacent Ritidian Unit of the Guam National Wildlife Refuge, the Secretary of the Navy and the Secretary of the Interior, notwithstanding the National Wildlife Refuge System Administration Act of 1966 (16 U.S.C. 668dd et seq.), may enter into an agreement providing for the establishment and operation of a surface danger zone which overlays the Ritidian Unit or such portion thereof as the Secretaries consider necessary. (b) ELEMENTS OF AGREEMENT —The agreement to establish a surface danger

nance, maintaining the boundary fence, and conducting the brown tree snake eradication program. (D) Openings and closures of the surface danger zone to the public as may be necessary.


SECTION 4001 AUTHORIZATION OF AMOUNTS IN FUNDING TABLES IN GENERAL—Whenever a funding table in this division specifies a dollar amount authorized for a project, program, or activity, the obligation and expenditure of the specified dollar amount for the project, program, or activity is hereby authorized, subject to the availability of appropriations.


Location Account


Project Title FY 2015

Hawaii Army Army Army Army Army Army

Fort Shafter Kadena WW Unspecified WW Unspecified WW Unspecified Total

Command & Control Facility Complex AB Missile Magazine Host Nation Support FY15 Minor Construction FY15 Planning and Design FY15 Military Construction

Guam Navy Navy

JR Marianas JR Marianas

Hawaii Navy

Kaneohe Bay

Navy Navy

Kaneohe Bay Pearl Harbor

Japan Navy




Navy Navy Navy Navy Navy Navy Navy

MCAS Futenma Okinawa WW Unspecified WW Unspecified WW Unspecified WW Unspecified Total

Guam AF www.guamcontractors.org

JR Marianas

Amount Requested

Amount Authorized

96,000 10,600 33,000 25,000 18,127 $539,427

85,000 10,600 33,000 25,000 18,127 $543,427

GSE Shops at North Ramp MWSS Facilities at North Ramp

21,880 28,771

21,880 28,771

Facility Modifications for VMU, MWSD, & CH53E Road & Infrastructure Improvements Submarine Maneuvering Room Trainer Facility



2,200 9,698

2,200 9,698





4,639 35,685 16,594 22,391 3,366 7,163 $1,018,772

4,639 35,685 0 0 33,366 7,163 $993,199

Security Mods DPRI MC167–T (CVW–5 E2D EA–18G) AB Aircraft Maint Hangar Alterations and SAP-F Hangar & Rinse Facility Modernizations LHD Practice Site Improvements F–35C Facility Addition and Modification F–35C Operational Training Facility MCON Design Funds Unspecified Minor Construction Military Construction

Guam Strike Fuel Systems Maintenance CONSTRUCTION NEWS BULLETIN 64,000 Hangar Increment 2

64,000 JANUARY2015 | 11


Location Account


Project Title FY 2015

Guam AF

JR Marianas


JR Marianas


JR Marianas

AF AF AF AF Air Force

JR Marianas JR Marianas WW Unspecified WW Unspecified Total

Guam Strike Fuel Systems Maintenance Hangar Increment 2 PAR Low Observable/Corrosion Control/ Composite Repair Shop. PRTC—Combat Communication Infrastructure Facility PRTC—Red Horse Logistics Facility PRTC—Satellite Fire Station Various Locations Planning and Design Unspecified Minor Military Construction Military Construction

Australia Def-Wide


Combined Communications Gateway

Hawaii Def-Wide Def-Wide

Hickam Hickam

Japan Def-Wide Def-Wide

Misawa AB Okinawa





Def-Wide Def-Wide Def-Wide

WW Unspecified WW Unspecified WW Unspecified

Def-Wide Def-Wide Def-Wide Defense Wide

WW Unspecified WW Unspecified WW Unspecified Total

Korea FH FH Family Housing

Camp Walker WW Unspecified Total

12 | JANUARY2015

Amount Requested

Amount Authorized







3,150 6,500 10,738 22,613 $811,774

3,150 6,500 10,738 22,613 $846,174



Replace Fuel Tanks Upgrade Fire Suppression & Ventilation System

3,000 49,900

3,000 49,900

Edgren High School Renovation Killin Elementary School ReplacementRenovation Kubasaki High School ReplacementRenovation E.J. King High School Replacement-n Renovation Unspecified Contingency Construction Unspecified ECIP Design Energy Conservation Investment Program Exercise Related Minor Construction Unspecified Planning and Design Unspecified Minor Construction Military Construction

37,775 71,481

37,775 71,481





9,000 10,000 150,000

0 10,000 150,000

8,581 132,240 34,906 $2,061,890

8,581 112,240 34,906 $1,962,890

Family Housing New Construction, Army Family Housing Planning & Design, Army Military Family Housing Construction, Army

57,800 1,309 $78,609

57,800 1,309 $78,609

Total Total Total Total

Military Construction, Army Reserve Military Construction, Naval Reserve Military Construction, Air National Guard Military Construction, Air Force Reserve

103,946 51,528 94,663 49,492

128,946 99,397 105,863 63,992

Grand Total

Military Construction






by James Martinez


It has been brought to our attention in recent months that subcontractors, working for a prime contractor on federal construction projects, are having issues with their GRT tax exemption at the Department of Revenue and Taxation (DRT). At issue is federal legislation that exempts prime contractors working exclusively on federal construction projects within the military fences in any state or territory from the requirement of obtaining a state-issued contractor’s license. In other words, if a contractor is working exclusively on a federal construction project here in Guam, meaning no other local work anywhere on the island, they are not required to obtain a Guam Contractors License issued by the Guam Contractors Licensing Board. However, they are required to obtain a Guam Business License from DRT in order to conduct business here According to P.L. 30-230, AN ACT TO AMEND §26201 AND §26202(e) OF ARTICLE 2 OF CHAPTER 26, TITLE 11, GUAM CODE ANNOTATED, RELATIVE TO THE BUSINESS PRIVILEGE TAX ON CONTRACTORS, Section 3. §26202(e) of Chapter 26 of Title 11 of the Guam Code Annotated is amended to read as follows: "(e) Tax on Contractors. There shall be levied, assessed and collected a tax rate of four percent (4%) measured against the gross income of any contractor; provided, that there shall be deducted from the gross income of the taxpayer so much thereof as has been included in the gross income earned from another taxpayer who is a contractor as defined in §26101 (b) and who has already paid the tax 14 | JANUARY2015

levied under this Subsection for goods and services that include the deductable gross income of the taxpayer who is a contractor; provided, that any person claiming a deduction under this Subsection shall be required to show in the person's return either the name and contractor's license number or the registration number for a professional engineer, architect or land surveyor or the Certificate of Authorization (COA) number for a business authorized to provide engineering, architecture or land surveying services by the Guam Board of Registration for Professional Engineers, Architects, Land Surveyors of the person paying the tax on the amount deducted by the person." Based on Section 3. §26202(e) of Chapter 26 of Title 11 of the Guam Code Annotated above, in order for a subcontractor to claim a GRT tax exemption for work performed, they must submit a return with the name of the contractor and the contractor’s license number of the company paying the tax on the amount deducted by the subcontractor. Similarly, the same holds true for subcontractors providing work and/or services for businesses authorized to provide engineering, architecture and land surveying services by the Guam Board of Registration for Professional Engineers, Architects and Land Surveyors (PEALS). In the same manner, a subcontractor must also file a return with the name of the company and the registration number of the professional engineer, architect and land surveyor in order to claim a GRT tax exemption for work and/services provided to these companies. In a perfect world of contracting, this process may seem simple and easy to administer. But we are not living in a perfect world. There are federal laws, rules and regulations that contraCONSTRUCTION NEWS BULLETIN

dict local law and in most cases, if not all, these federal laws, rules and regulations trump local law making this seemingly easy process more difficult. GCA advises subcontractors to get a copy of their prime contractor’s license issued by the Guam Contractors Licensing Board (GLCB). If they do not have a Guam Contractors License, the subcontractor may not be eligible to claim the tax exemption and may be liable for paying the four percent (4%) GRT on the revenues generated from this contract even if the prime has a Guam business license and pays the GRT as required. The law is specific that subcontractors can claim an exemption on the GRT, provided that they submit the name of the prime contractor and their contractor’s license number issued by the Guam Contractors Licensing Board OR the company name, registration number or Certificate of Authorization (COA) if working for a company engaged in engineering, architecture or land surveying and registered with the PEALS Board. This DOES NOT include a Guam business license. Further, it is advisable to include your associated costs for GRT in your proposals to such contractors. For the most part, prime contractors working exclusively on federal construction projects here in Guam are working within the law, but a federal rule which exempts them from obtaining a state-issued contractors license for a state or territory outside their licensing jurisdiction is not consistent with our local law and this creates a problem for the subs when they file their GRT. Until we can resolve this problem, the GCA advises all subcontractors to do their due diligence to ensure they are eligible to claim a tax exemption under this law.



Providing Security & Education

for the

d n a l s I

The Spaniards who came to Guam once marveled at the ingenuity and island home of the Chamorro people. They cited the latte’ stone huts by the ocean, cut from the limestone and built with materials from the trongkon niyok. And let’s not forget about the swiftness of the proa galaide, which moved so effortlessly across the water, it appeared to be flying. Though times have changed, and modernization has progressed on our Pacific paradise, the ingenious and industrious spirit of our people continues to thrive. Guam has come a long way, and so have her people. Where there was once rubble from war, there are now buildings of industry and commerce. There are affordable homes being designed and built around Guam to help families set roots and grow. There has been a stronger push to promote work in science, technology, engineering, and mathematics. And, many are taking a noble calling to become engineers, architects, and land surveyors. No matter which way we look at it, engineers, architects, and land surveyor professionals contribute greatly to the welfare, development, and progress of our island. There are engineering, architectural, land surveyor, and landscape architect professionals working together to continue the progress our island has made over the last few decades as Guam becomes an epicenter for commerce, culture, tourism, and industry in the Western Pacific. These folks work closely with the Guam Board of Registration for Professional Engineers, Architects and Land Surveyors.The PEALS Board is a regulating body, which oversees the licensing of professional engineers, architects, land surveyors, and landscape architects. According to Ray C. Borja, Executive Board Administrator of the Guam Board of Registration for Professional Engineers, Architects, and Land Surveyors, “The PEALS Board has the enforcement responsibility on matters pertaining to registration and practice of engineering, architecture, landscape architecture and land surveying professions.”



JANUARY2015 | 17

The Guam PEALS Board was created under Guam Law in August,

Since June 20, 2009, any engineer, architect, landscape architect, and

1960. Just as those they license and register, their main mission to

land surveyors who agrees to provide engineering, architectural,

ensure the safety of the general public and engineering, architec-

landscape architectural, land surveying, and construction manage-

tural, landscape architect and land surveyor professionals are

ment service to a client, must have a written contract (P.L. 30-35

following established laws. More specifically, they regulate the

Secion 32125) signed by all parties. This contract should be

practice of these integral professions by ensuring standards of

included in your records, as well as all communication between all

competency by way of education, experience, and examination,

those involved. You may also be working closely with your

licensing, establishing standards of practice for the licensed, and

engineers, architects, and land surveyors to obtain building permits

enforcing laws, codes, and standards fairly and professionally.

at the Guam Department of Public Works – which also receives

clearance from the PEALS Board.

The Guam PEALS Board isn’t just around to promote safety for

those they license.They also educate the public about how to make

As arduous and time-consuming this process may seem, it is all the

sure you work with those who will make your project a success.

more necessary when it comes down to the safety and well being

The PEALS Board is not a referral service and cannot recommend

of Guam and her people. More than anything, the work of the

any engineers, architects, landscape architects or land surveyors,

PEALS Board promotes industry and job growth on Guam. It helps

but can advise on whether they are registered, licensed, and

sustain our economy. It keeps Guam moving forward.

whether they have taken any disciplinary action against these professionals. However, they do offer a few suggestions when

As Guam moves forward in the 21st century, we should look

starting out with a project involving engineers, architects, landscape

toward building and bolstering STEM (Science, Technology,

architects, and land surveyors.

Engineering, and Mathematics) education in schools to inspire the

next generation of professionals who will continue building Guam.

With whatever project a business or consumer might be interested

From homes for families to grow to small businesses and offices,

in taking on, it is always the best idea to have a solid plan first. With

engineers, architects, landscape architects and land surveyors have

your basic criteria and budget, start asking around and learn about

their hands in the development and enhancement of Guam. It’s

peoples’ credentials. Sometimes, depending of course on the

amazing how fast the island is growing. It’s almost as amazing as the

project, your planning may include all four professionals.

innovative spirit of our island’s people.

18 | JANUARY2015




Crane Accidents Are your operators doing all they can to prevent one?

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 over-looked or misunderstood topics by management and operators alike. By Dave Barnhouse

This month’s topic: Crane accidents, are we doing all we can to prevent one, and are we learning from each and every accident or near miss?

A serious crane accident can be catastrophic and unfortunately they do occur periodically. But the majority of accidents are not the front page news items with fatalities we read about now and then. They are minor accidents with no injuries or property damage. But any crane accident has the potential to injure, cause property damage, or worse. I will discuss a few of these mi-nor accidents I have witnessed here on Guam, what caused them, as well as some disturbing deficiencies noted on cranes that could very well have caused an accident. Most of these items could have and should have been noted by the operator during his daily inspection. An operator must be competent to operate a crane and this includes competent enough to adequately inspect a crane and evaluate if any deficiencies found during this inspection could be considered a safety hazard. All operators must have the authority to stop crane operations if he finds what he considers a safety hazard until a qualified person determines otherwise or the hazard is abated. Some of the deficiencies I have noted during an inspection or accidents resulting from crane operations with deficiencies: Some deficiencies do not appear serious at first glance but when it comes to lifting equipment no deficiency should be taken lightly. Consider the instance when a mechanic plugged a pipe tee in an airline but did not have a pipe plug so he used what he had, a grease fitting. The unknowingly operator who greased this line should have known what he was greasing but apparently did not. The airline was on a lattice boom crane with drum air brakes. Once the line was full of grease and filled the quick re-lease for the brake cylinder it blocked the air and the operator lost control of the load.

20 | JANUARY2015

Improper termination, use of wire rope clip Next near miss was comical but could have been disastrous. During a heavy lift and 90 degree swing the riggers thought the Kenworth with a winch would be good tagline control. All went well until the load was in place and a rigger was instructed to stop the winch by pushing in the clutch. Unfortunately he was too short to push the clutch to the floor and the winch came close to tipping the already maxed out crane. One of the most preventable deficiency I see often is the improper wire rope termination at the wedge socket. I try my best to educate operators and riggers alike of the importance to keep wire rope clips off the live end and also


to re-socket the wire periodically. An example of the importance of this was a dropped load from a crimped line that happen to result in a fatality. The sad part of this is that the wire rope clip that supposedly secures the line is what caused the rope to break. When in reality the clip holds nothing, the wedge is what takes all the weight. Another deficiency noted more than a few times during one of my annual inspections is improper reeving. Namely the hoist wire over top of the sheave keeper pin. This happens now and then to the operator not paying attention when he is installing or re-reeving a wire. When the boom is down, or at zero degrees, often the lower keeper is not removed and the wire is easily reeved over top


the keeper instead of under. What can very well happen is the wire saws through the keeper pin and destroys the wire during a heavy lift. A power line accident occurred locally a few years back because of a cell phone call. While directing a crane travelling in reverse, the signal person answered his cell phone and turned his back to the crane. The driver proceeded until the boom contacted the overhead power lines at which time there was a fireworks show and he immediately pulled forward away from the lines. Cell phones should not be a distraction during crane operations and any work near power lines are considered critical and require a lift plan to address this type of issue. Luckily no one was injured but there are many in this business not so lucky when it comes to power lines. Crane operations also include mobilization, driving down the road or loading onto a lowboy. Recently an operator slipped off a lowboy and the crane rolled over onto its side. He was not hurt but the crane was not so lucky. This accident could have been pre-vented simply by having a signal per-son on both sides of the lowboy. Service persons injured on cranes also are considered crane accidents, including the mechanic who hammered on a dragline bucket tooth edge. He lost an eye when a small sliver of steel pierced it. Qualified persons must perform maintenance or repairs and a qualified person should realize bucket teeth are hard tensile steel, not to be hammered on. Recently a crawler carbody crack near the track extension beam was welded by a certified welder without a proper procedure. Again, this work must not be performed by unqualified persons. Qualified means knowing a procedure for this specific repair is needed. This weld was a groove weld on two inch thick steel. After load testing the crane the crack was back and bigger than ever. For readers unfamiliar with welding heavy steel and the purpose of a procedure, what happens is during the welding of the root pass the base metal is so thick it acts as a heat sink and pulls the heat from the weld too fast, sometimes causing a root crack. The procedure for welding thick steel will usually require pre-heating the base metal and possibly post-heating as well. Another near miss resulting from over-sight or just plain laziness was the loss of the front counter weight on a truck crane during a lift over the front. The crane had no over the front capacity so this lift should not have been taking place. The counter weight had top hook pins that was holding the entire weight. The lower pins were not in place, the crane teetered on the front outriggers, the counter weight hit the ground and became unhooked from the top pins, fell to the ground, and the crane fell hard backwards on the rear outriggers.


Evidence of Improper reeving wire rope over keeper pin A rigging accident occurred after a very corroded set of 4-leg slings were wire brushed and painted with diesel fuel. What resulted was a set of slings that looked almost new but was corroded to the core. The fortunate thing was the slings broke before the load was off the ground. A 140 ton truck crane suffered a back-wards tip after swinging over the side with all counter weights installed and outriggers retracted. Operators must know the limitations of the particular crane they are operating. Another accident occurred here on Guam a few years ago because of improper crane set-up and improper rigging. This involved lifting a forty foot container. The crane had a relatively short boom resulting in using short slings because of lack of head room. The container was loaded heavily in the middle and when lifted, folded like a lawn chair. Again, a qualified person should know containers require near vertical rigging, use a spreader if necessary.

he programs the computer to as-sure he is programming all parameters correctly as the crane is configured. Older cranes may have only two or three charts: over the end, side, or 360°. Using the wrong chart may very well lead to an over loaded crane. All of the above accidents or near misses were preventable, and they most definitely should not happen again. Every near miss should be scrutinized to find out what happen, how it happen, and what measures we need to take to prevent it from ever happening again. Operators should check entire crane, mechanical, hydraulics, functional, etc. and note any and all deficiency no matter how unimportant it may seem. I encourage classroom participants to share any near misses or accidents with the other operators so that we can all learn from a mishap or near miss. Though accidents are unfortunate, they are still a very effective learning tool.

The luckiest operator involved in an accident I’ve seen was a rough terrain roll over while carrying a load. This operator had every opportunity to stop operations before the lift but chose to continue despite the known safety hazards on the crane. The crane had no emergency or parking brake, all the brake chambers leaked so the service brakes only lasted about ten seconds, the engine needed a fuel filter change so it would quit periodically The crane was carrying a load up a hill, engine quit, operator applied brakes, lost air and coasted back, over edge of road a rolled over. The trees actually probably saved him as they acted as a cushion when the crane went over.

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, NCCCO Lift Director, and practical examiner for all types of mobile cranes and the only OSHA accredited crane inspector on Guam.

The wrong load chart use has been noted to be a problem ever since there has been multiple load charts. Even though new cranes have very accurate load, radius, boom angle etc. indicators, the operator still needs to be careful how

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 at-tempt to accommodate your requests.


JANUARY2015 | 21



Assistant Marketing Manager for Deco Lighting Amanda Keen wrote a great post on the Deco Blog recently on how our Commerce, California-based partners have come up with a wattcontrolled driver for their lighting products that is outperforming the competition in this ever changing marketplace. Keen wrote that most LED Drivers are only capable of operating in mild environments, rated for operation up to 75° or 80° Celsius (167°F or 176°F) and remarked that temperatures inside a lighting fixture are often higher than this. "Small fixture compartments and poor air circulation can generate extreme heat, often coming close to temperatures that boil water," wrote Keen. "The heat results in damage to the driver’s battery-like electrolytic capacitors. The electrolyte, which is typically a gel, evaporates over the life of the capacitor’s components. Higher operating temperatures speed up this evaporation, shortening the life of the capacitor and leading to premature driver failure."

22 | JANUARY2015

It appears that Deco Lighting has solved the dilemma of premature power supply failure by utilizing watt-controlled drivers designed to stand up to extreme heat. Unlike other LED drivers, Deco LED watt-controlled drivers are rated for operation up to 90° Celsius (194 °F). "Our process focuses on making the driver operate cooler and longer than the competition," wrote Keen. Deco Lighting's driver components are positioned on the circuit board in a manner that prevents the build-up of heat. Also, their circuit boards are arranged in a way that allows Deco Lighting driver components to touch the metal housing so the driver components can be used as a heat sink. Also, Deco insulates key heat-sensitive components inside the driver.

these on Guam and would be happy to arrange a presentation. It is for these reasons why we are so bullish about Deco Lighting. Yes. Deco Lighting offers a ten-year, one hundred thousand hour warranty, which includes labor. Deco’s warranty backs up the confidence they have in their productswe stand ready here and across Micronesia to support them. For more information about Deco's LED drivers or other products please check out our website at www.get-guam.com or call us at 671-483-0789 to discuss solutions for your important lighting needs-All Made in America!!!

Interesting to note, Deco Lighting ensures quality in every component that comprises their LED lighting fixtures, from high-quality Nichia LEDs to finelyengineered heat transfer castings to state-of-the-art drivers. GET,LLC has






SAFELY! Proper Control Planning by Miguel Rangel As we all know, the importance of developing a proper traffic control plan is a must before work can be started. The purpose of the plan is to ensure that the work area involving intersection provides access to residential or business, includes speed limit control, signs and signals to guide the public though work area safely. These types of plans are site specific and necessary. They should be adaptable to many roadway conditions and work operations without being specific to any one condition. The Traffic Control Plans follows the standards for traffic control for construction projects. When construction projects suspend the normal function of the roadway, a traffic control plan is developed to assure the safety of all road users, and the protection of workers. At the same time, the traffic control plan provides for continuity of the movement of motor vehicles, bicycle and pedestrian traffic while allowing for the efficient completion of the construction project. Other time consuming obstacles to overcome is obtaining encroachment permits from local agencies such as DPW, GPA, GWA, telecommunication companies, Mayors offices and federal agencies if their 24 | JANUARY2015

known utilities are involved. Storing and keeping up with the maintenance of these signs and other related safety items are important. Some additional items used aside from signs are cones, drums, and concrete barriers, solar powered flashing arrows and crush absorbing system (very few available on GUAM). The upkeep is vital so that the safety of the motorist is priority. In addition, personnel involved in traffic control activities must be properly trained on how to recognize hazards and are authorized to control or resolve hazards. All of these are vital in ensuring that proper control and planning prevents any mishaps or incidences. It is important to know companies that are accessible to train personnel, respond in short notice to emergency construction projects and have the equipment, materials and transportation readily available but not to mention who are earth conscious in reusing materials, equipment, and clean up.

and on response to construction projects for rent. Check it out! Use your local resource. Maeda Pacific Corporation specializes in civil work, which includes road construction, site development, utilities, demolition and environmental work. Maeda Road Construction, of Tokyo came to Guam after the devastation of Typhoon Pamela in 1976 and set up Maeda Pacific Corporation on island, Maeda has long history of working on U.S. Military bases in Japan and leaned about opportunity in Guam and Micronesia, MPC is responsible for many roadways including portion of route 1 Marine Corp. Drive , route 8, route 16, route 24, route 11, route 3 and route 27, our other major projects have included most of the hotel civil works, including Hyatt Regency Guam, Hotel Nikko, Okura and Pacific Star Hotel, MPC work does not stop in Guam, The company has worked on Beach Road, Navy Hill road, Coral Tree Avenue and Garapan Street in Saipan. For additional inquiries or rental call 671-646-4326.

Many not know but there is a local company who offers construction traffic control plans, materials and equipment on site, on demand



Tel: 670-234-6601 www.kanoaresort.com reservations@kanoaresort.com

2014, the construction industry FACT*

By the year

will need more than


*2010 FMI Report



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We can help.



Is your employee turnover high? If yes, is the cause due to low employee morale? Is it due to poor supervision or lack of work tools or perhaps lack of training? If you have provided these, then review your recognition program. Perhaps, it is simply a lack of recognition of each employee's worth and resulting in employee disengagement. Many employers, particularly those small businesses, cannot afford extravagant recognition programs. Below are five inexpensive ways to recognize employees.

1) Walk around and talk to staff. A 2013 study published in Diabetes Care found that three 15-minute post-meal walks each day were more effective at regulating blood-sugar levels than was a single 45-minute walk midmorning or in the afternoon. In a Forbes article (Gallo, 2013), Carmine Gallo stated that most employees want more than a paycheck. They want to feel engaged. Regularly spending time with employees, talking to them is one way to let them know they matter and turn them into engaged employees. Why not combine walking with employee engagement? I like to say that I enjoy gossiping but I look at it as preparation. When an employee shares with coworkers she is pregnant or shares that his mother is sick, and he is the primary caregiver, then you can expect sometime in the near future they may request for FMLA leave. Thus, you can prepare by cross training others to do the job during the employee's absence. 2) Ask yourself, what would put a smile on employee faces? One of my former bosses connected with employees creatively. One day, he pushed a cart into every department and scooped ice cream for all who wanted to partake. On that one

28 | JANUARY2015

day, he managed to put a smile on everyone's face - even those who did not want ice cream. If not ice cream, what about a chocolate bar and signed card on Valentine's Day. These are unexpected but pleasant touches of appreciation. A former colleague once told me that people are like bank accounts. When you deposit money into the account regularly, the occasional withdrawal does not bankrupt the bank. When you regularly recognize employees' worth, the occasional discipline will not cause much damage to the employee's morale. 3) Institute a regular brown bag meeting. Have a meeting that includes rank and file representatives from each department, the general manager and the human resources manager. Ask two questions: What can we do differently to make our company better? What can we do differently to make our respective departments run more efficiently? You might be surprised at the simplicity, but effective suggestions and the passion employees feel for the company or their respective departments. Word of caution, if you are unable to provide an answer, you must do so later and must do so publicly. And if you make a promise, you must deliver on that promise. 4) Bring managers together in informal settings on a regular basis. In most cases, managers become managers because of their force of will or strength of their personalities. Managers will have differences of opinions, different methods of accomplishing the same thing. Often, this translates to departments failing to work together. Consider ways to bring managers in an informal, nonthreatening way. Perhaps on their birthdays or work


anniversary, the birthday celebrant and managers are taken to lunch or an afternoon snack - outside of the office where everyone is on equal footing. One rule is there will be no discussions of work. This time together would be a time to get to know the others - likes/dislikes, what they do outside of work, discovering what makes the other person tick. It is especially effective in getting individuals who do not work well together to discover the whole person, not just the person with whom they work. Typically, employees spend more time with their coworkers than with their spouses or significant others. So ask the question: "What makes a marriage last" and apply the answer in a work setting.

5) Institute a recognition program which recognizes teamwork rather than the individual. Employee recognition programs, in which one employee is the winner, does not develop motivation. Or if it did, it developed motivation of that one employee. Programs such as “Employee of the Year� award are often regarded as programs in which the boss' "favorite" is recognized, which does not necessarily have a positive ring to it. However, a program, which recognizes teamwork helps to develop employee morale within the organization. One such program could have employees give recognition cards to others who help them. And at the period, these recognition cards are placed in a raffle for a prize(s). This program also acknowledges each person who made a contribution, large or small, into making the team or department a better one. Grace Donaldson, General Manager, Pacific Human Resource Services grace.donaldson@PHRSGuam.com 671.637.6906/7/8 www.PHRSGuam.com



How to Sell Value to Increase Profitability Daniel Pink, author of A Whole New Mind, identified the primary cause of the construction industry's low-profit margins. He wrote, "For business, it's no longer enough to create a product that's reasonably priced and adequately functional." Unfortunately, that's what the construction industry attempts to do when it bids work based on price. The problem with the low bid approach is that it hurts both the vendor and buyer because despite conventional wisdom it actually encourages low performance and low value. The good news is there is a better solution even if for those forced to compete for low bids. The solution is competing on value. Value is the most sustainable way to separate your company from the competition. Is this approach easy? No, it is not easy! But attempting to compete on razor thin margins and expecting to make any money is virtually impossible. For example, a mechanical contractor that typically bid work declared chapter 11 bankruptcy. When the company came out of bankruptcy, they vowed not to bid work anymore. That contractor is now doing fine. They did not go bankrupt because they did not understand the mechanical business; they went bankrupt because they could not figure out how to bid work too cheaply and make a profit. When they learned to compete on value, they began to prosper. If you think this concept doesn't apply to you because you are forced to bid work, think again. One of Garrison's clients happens to be a road builder, and most of their work is competitively bid. This contractor makes a higher profit margin than most of his competitors. They achieve higher profit margins by competing for projects

30 | JANUARY2015

where they can deliver superior value as a result of their knowledge and skills. This advantage allows them to win a competitive bid because they can construct the project at a lower cost while still earning a higher fee. Contractors need to understand the opportunity to deliver the greatest value on a project is before construction starts, not during the construction process. This is true even in the competitive bid market as the road builder example demonstrates. The superior value is achieved by carefully selecting the right projects on which to compete. However, when contractors are allowed to use their knowledge and experience to impact the design from the beginning of the design process, they can substantially increase the value they deliver. The question is how do you compete on value? The Solution Competing on value requires both an overall business strategy and bid strategy. The business strategy is what Garrison refers to as Blue Ocean Contracting. This is a business approach where contractors differentiate themselves as much as possible from their competitors by providing superior value that clients appreciate. This value is achieved as a result of their knowledge and experience and applying it through an integrated delivery approach. In essence, the approach is about creating a business strategy that employs the company's specific knowledge and experience that produces the greatest value for its clients, but equally important value that clients appreciate. Too many contractors believe that compet-


ing on value means providing more for more. While this can certainly be the case, it is not the only scenario. Of course, sometimes it is better value to spend a little more upfront during construction in order have a greater saving in expenses later in the life of the project. In other cases, greater value is achieved by delivering the same results at a lower cost by using the contractor's knowledge and experience to find a better way of designing and constructing the project. This is what true value engineering is all about delivering the same results at a lower cost. It also means understanding the client's budget. Often the project's value could be increased, but if the client can't afford it then it is not true value. For example, a very expensive car may offer the greatest overall value, but if that car is outside the buyer's budget, the purchase could cause financial problems regardless of the value. Therefore, what we mean is delivering the maximum value for the client's budget. When your company delivers superior value that your clients appreciate, you will have both happy and loyal clients. The second part of the process is making the bid presentation to the client so that you win virtually every bid. Sound unrealistic, but Southwell has a track record of doing just that when you employ the process described below. Southwell is often shocked at the amount of money, time and effort that people waste bidding for work without even thinking about it. In construction, you will often hear that if you win 1 out of every 4 then you’re about right! But, when you think about it that means you’re losing 75% of every bid you go for. Too often people accept their ‘sector norm’ without questioning whether it makes good


business sense. You wouldn’t do this in any other part of your business, so you’ve got to ask yourself “…are you bidding to win or bidding to lose?” If you’re bidding to win and not quite there, then there are some simple things you can do now and by continuing to follow these Top Ten Tips you will be able to write a winning bid, time and time again and stand out from your rivals: 1. Answer the bid questions clearly - say what you will do to achieve the stated objectives of the contract…and say how you will do it, how you will know you’ve done it and what the outcome will be for your client. 2. Provide all relevant information you’re asked for and incorporate additional information when and wherever possible…avoid answering ‘yes’ or ‘no’ and expand your answers to raise your profile above that of your rivals, so you get noticed. 3. Manage your bid as you would a projectdevelop a Bid Management Plan with agreed timescales and responsibilities…and be sure to stick to it! 4. Appoint a single Bid Manager and feed information and research data to him/her to enable a Bid Roadmap to be produced that guides your team and saves you wasted time and effort- your Bid Team will thank you for this.

5. Really, really understand how you are going to be assessed before you start work on the bid so you can score the highest…you’d look at the risks before starting a project and this is just the same.

10. Use plain English and avoid jargon or overly technical explanations so you are easily and clearly understood and make the whole process of assessing your bid as painless as possible for the judges.

6. Make sure your answers are relevant to the problems, issues and objectives your customer wants to fix and what they want to achieve. This is what Southwell calls the ‘3Ps ProcessTM’, which can mean the difference between winning and losing.

Of course, in this short report it is impossible to cover everything you need to know. Bidding is like a journey and it has taken Southwell a long time to develop my winning formula. There will be many forks in the road to distract you but if you stay on course in the long run you will get more confident in writing great bids, propositions or sales documents that win you more work…and that is a great measure of your success.

7. Check the word limits on each of the responses and stick to them- use bullets and diagrams to increase the amount of information you can provide without going over. Check out the financial section and use space there to add further explanation…whilst it might not be scored it’s a bit like being in court when the judge says some evidence you’ve just heard is inadmissible- tough, you already heard it and it’s in your subconscious! 8. Include your best examples of previous, relevant and successful work and state the benefit you achieved for your client- this goes to the very heart of the only question your customer wants answering…’what’s in it for me?’ Tell them and you’ll score highest. 9. Provide references if asked but be sure to brief them first before they are contacted.

If you want to read more about the 3Ps ProcessTM and other tools and techniques you can use to change your bid culture for the better then get a copy of your free guide “are you bidding to win or bidding to lose?’ at www.visiontdm.co.uk and share your experiences through Southwell's articles. To learn more about how you can increase your company profit margins by competing on value, contact either Ted Garrison, principal at New Construction Strategies (1-386-437-6713, Ted@TedGarrison.com, www.TedGarrison.com) or Neil Southwell, principal at Vision tdm, International Bid Strategist (44-1925-748540, neil.Southwell@visiontdm.co.uk, www.visiontdm.co.uk). Seminars and coaching services are both available to help your company improve its profitability.

www.morricoequipment.com www.guamcontractors.org


JANUARY2015 | 31

32 | JANUARY2015



Electrical Drafter







2 13 1 1 0 0 10 0








1 5 4

0 0

Field Supervisor


Golf Instructor

Heavy Equipment Mechanic

Hvac Technician

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

Massage Therapist

Motor Rewinder

Nursery Worker

Painter,Transporter Equipment


Quality Inspectors

Radiologic Technician

Restaurant Manager Refrigeration & AC Mechanic

Shipfitter Sous Chef

Scuba Dive Instructor

Welder Welder - Fitter


Electric Motor Repairer

5 0 2 1 1 0 1 1 1 1

Maintenance Electrician

Elevator Installer Chef Spa Supervisor - Trainer Biomedical Equipment Specialist Automotive Mechanic Baker Mechanic Auto Body Repairer Tech. OSH Instructor Buyer

Total Non-Construction H2-B Workers





Baker Master


2 4 19



Wedding Service Attendants



Heavy Equipment Mechanic

TOTAL Construction H-2B Workers

Total OTHER Construction


Tower Crane Operator

Project Supervisor


33 1090







HVAC Mechanic




Foreman General Maintenance & Repairer




Field Supervisor


Electrical Power Lineman



Architectural Drafter Civil Engineer


AC& Refrigeration Mechanic

Other Construction Occupations

Employers Workplace Monthly Report Statistics

Ulatrsound Technician

Baker Mechanic

Specialty Cook Training & Dev. Specialist

Other Non-Construction Occupations

1 8 0

Auto Repairer Baker

GUAM DEPARTMENT OF LABOR Alien Labor Processing Certification Division

1211 13 8 2 0 1234

Grand Total H2B Workers

4.45% 0.57%


Sheetmetal Worker

Reinforcing Metalworker Structural Steelworker Plumber


Cement Mason




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

Camp Cook 41.53%










Common Construction Occupations

Japan 0.65%

Heavy Equip. Operator Electrician

Total U.S. Workers


Philippines 98.30%

Korea 1.06%

H-2B Population by Nationality








US Workers vs. H-2B

Grand Total H-2B Workers


36 83

Total H-2B Employers

Total U.S. Workers


Construction Non-Construction

Employers By Industry

Total by Nationality

Philippines Korea Japan

Workers by Nationality

Total Common Const.


47 6

Camp Cook




13 19


Heavy Equip. Operator

Plumber Sheetmetal Worker

Structural Steelworker

Reinforcing Metalworker

Common Construction Occupations 393 439

Cement Mason Carpenter

MONTH ENDING: November 2014

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