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Guam Contractors’ Association

NEWS BULLETIN

Mechanic’s

Vol.55 Issue 01 JANUARY 2014


TABLE OF CONTENTS

14

Feature Story

2 | JANUARY2014

6

S.A.M.E.

14

FEATURE STORY

18

PHOTO HIGHLIGHTS

20

COMMITTEE UPDATE

26

AROUND THE BENCH

28

GARRISON REPORT

CONSTRUCTION NEWS BULLETIN

26

Around the Bench

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At Hawaiian Rock Products, we are always ready to meet your FRQVWUXFWLRQQHHGV:HKDYHDรฑHHWRIRYHUFRQVWUXFWLRQYHKLFOHV DQGDZRUNIRUFHRIRYHUHPSOR\HHV:HRSHUDWHVWDWHRIWKHDUW IDFLOLWLHVVWUDWHJLFDOO\ORFDWHGWKURXJKRXWWKHLVODQGZLWKWKHFDSDFLW\ WRIXOรฐOODQ\SURMHFWVL]HUHTXLUHPHQWV2XUYDVWรฑHHWRIHTXLSPHQW FRQWLQXHVWRH[SDQGDORQJZLWKWKHJURZLQJQHHGVRIWKHLQGXVWU\ :HDUHKHUHWRSURYLGH\RXZLWKWKHTXDOLW\SURGXFWVDQGVHUYLFHV you need, when you need them. In Guam, we have the following list of batch plants: t"HBU$PODSFUF#BUDI1MBOU produces 250 Cubic Yards per hour t"OEFSTFO$PODSFUF#BUDI1MBOU produces 100 Cubic Yards per hour t.BOHJMBP'BDJMJUZ houses two (2) of the most modern 300 Cubic Yards per hour Concrete Batch Plants t#SBOEOFX"$1MBOU capable of producing environmentally friendly asphalt mixes and recyclable asphalt "41)"-5$0/$3&5&$0/4536$5*0/3&4063$& รท$VSKDOW%DWFK3ODQWV รท$VSKDOW6SUHDGHUV รท$VSKDOW'LVWULEXWRU รท3QHXPDWLF7LUHG5ROOHU รท9DFXXP7UXFNDQG$LU6ZHHSHU '-&&50'&26*1.&/5 รท50&7UDQVLW0L[HUV รท'XPS7UXFNV รท&RQFUHWH3XPSV รท&HPHQWDQG7UDFWRU7UDLOHUV รท(QG'XPSV รท/RZ%R\V

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1402 Route 15, Mangilao, Guam 96913 7HO  ย‡)D[   www.hawaiianrock.com 2008 Business Laureate

13-HRP-008 GCA Ready to Provide


Guam Contractors Association

THEDIRECTORS PRESIDENT James A. Martinez, GCA PAST CHAIRMAN Robert Salas, Landscape Management Systems CHAIRMAN - ELECT Tom Anderson, Black Construction Corporation VICE CHAIRMAN - ELECT Art Chan, Hawaiian Rock Products SECRETARY/TREASURER John Sage, WATTS Constructors CONTRACTORS DIRECTORS: Narci Dimaoala, Amazon Construction Juno Eun, Core Tech International Tom Nielsen, Maeda Pacific Corporation Tom San Nicolas, dck pacific guam LLC John Robertson, AmOrient Contracting ASSOCIATE DIRECTORS: Paul Calvo, Calvo’s Insurance Underwriters Carlo Leon Guerrero, M80 Office Systems Inc. Patty Lizama, Pacific Isla Life Ray Yanger, Matson Navigation

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, 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 SALES & MARKETING DIRECTOR: Geri Leon Guerrero AD SALES: Tom Mendiola Jaceth Duenas PRODUCTION: Geri Leon Guerrero Christopher “Taco” Rowland PHOTOGRAPHERS: Christopher “Taco” Rowland EDITOR: Adztech CONTRIBUTING WRITERS: John Robertson David F. Macaluso Ted Garrison Shawn Gumataotao

GCA STAFF: Francine Arceo Desiree Lizama COVER: Mechanical Liens


S.A.M.E. UPDATE

The Guam Post of the Society of American Military Engineers is part of a

national and international association of engineers and contractors focused primarily on land based facilities for our military men and women.

Mission, Vision and Values: The Society of American Military Engineers

(SAME), the premier professional military engineering association in the United States, unites architecture, engineering, construction (A/E/C), facility management and environmental entities and individuals in the public and private sectors to prepare for—and overcome—natural and man-made disasters, and to improve security at home and abroad. “To promote and facilitate engineering support for national security by developing and enhancing relationships and competencies among uniformed services, public- and private-sector engineers and related professionals, and by developing future engineers through outreach and mentoring.” “To be a premier global engineering organization leading the professional and personal growth of all members in support of military readiness and development of solutions to national security challenges.”

Unwavering commitment to always do what is right, regardless of consequences. Patriotism: Support our national ideals and take pride in our country. Public Service: Recognize the critical contribution that public servants make in supporting the economic and environmental needs of the nation. National Security: Recognize the dedication of our national security team, comprised of the uniformed services, civil service and contractors, in defending freedom. Technical Competence: Deliver high-quality solutions. Excellence: Strive for the highest standards of performance in all actions, both personal and professional. Environmental Stewardship: Preserve, protect, conserve and restore our national resources through sustainable practices. Over the years, SAME has developed a world-class program of conferences, workshops, symposiums, and professional development and networking opportunities in support of its mission: facilitating interaction between the public and private sectors to enhance engineering support to national security. SAME’s membership today comprises more than 20,000 leaders representing the uniformed military services as well as numerous government engineering profession and its contribution to the protection of our nation.

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return, many feared the collective knowledge and the cooperation between the public and private sectors that proved vital to combat success would be lost. Industry and military leaders vowed to capitalize on the technical

SAME was formed from this vow. In 1919, Maj. Gen. William M. Black, USA, the Army’s Chief of Engineers, expand upon connections formed in war and promote the advancement of engineering and its related professions. to connect face-to-face, and establishing Post-to-community relationships across the country. Headquartered in Alexandria, Va., SAME provides its more than 27,000 members extensive opportunities for

project managers and corporate executives, Department of Defense civilians, private-sector experts and everyone and help secure our nation. and committee and council chairs plus 12 elected directors who serve three-year terms and are elected in groups of four annually by the members of the society. Post President Wayne L. Cornell, PE, President & CEO, DZSP 21 LLC Project Director, Navy Base Guam BOS Contract

Post 2nd Vice President Noel M. Enriquez CIPM™ MPM™ Brown and Caldwell. CAPT U.S. Navy (Retired)

Post 1st Vice President CAPT Glenn A. Shephard, NAVFAC Marianas

Post Secretary LT Russell Torgesen PE, NAVFAC Marianas, Navy Civil Engineering Corps

Post Treasurer John M. Robertson PE President & Principal Engineer, AmOrient Engineering Photos/Data courtesy of www.same.org www.guamcontractors.org

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JANUARY2014 | 7

S.A.M.E. UPDATE

History:


WINNING AWARDS IS GOOD. WINNING YOUR CONFIDENCE IS

EVEN BETTER. We were honored to be the recipients of 1st and 2nd place overall in the recent Guam Contractors Association Excellence in Construction Awards. But the long-term goal and basic philosophy of Black Construction is and always will be serving our clients, helping them grow, enhancing their visibility. Just in case you’re wondering, the overall 1st place award was for our Kosrae State Correctional Facility. The overall 2nd place award was for Phase l, Camacho Landmark Center-Personal Finance Center Building, shown here. We also received seven other individual category awards. Check our website for details.

A TutorPerini Company C O R P O R A T I O N

Phone 671.646.4861/5 • www.blackconstructionguam.com


Happy New Year from the Staff and Management of

242 W. Harmon Industrial Park RD, Guam 96913 Tel: (671) 646-9524/40 Fax: (671) 649-3888 jvisec@gmail.com


S.A.M.E. UPDATE

Post Membership:

Sustaining Member Firms:38 Individual Members: 97

Representatives:153 Student Members: 4

List of Sustaining Member Firms: NO. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38

ORGANIZATION NAME AECOM AMEC AMEL Technologies, Inc. AmOrient Engineering Brown & Caldwell Burns & McDonnell CDM Smith CHA Consulting, Inc. Chugach World Services, Inc. Coffman Engineers, Inc. Custom Mechanical Systems, Corp. DCK Worldwide DZSP 21, LLC E.M. Chen & Associates, Inc. EA Engineering, Science, and Technology, Inc. ECC GHD, Inc. Hawaiian Rock Products HDR Hensel Phelps Construction Co. Jacobs Kennedy/Jenks Consultants McDonough Bolyard Peck, Inc. Moffatt & Nichol MWH Myounghee Noh & Associates, LLC Parsons PCR Environmental Inc. RIM Architects Rolf Jensen & Associates S.E.T. - Pacific Inc. Smithbridge Guam Inc. Southeastern Archaeological Research, Inc. SSFM International, Inc. Stanley Consultants Inc. Tepa, LLC TG Engineers, PC Watts Constructors LLC

ADDRESS Orange, CA Plymouth Meeting, PA Honolulu, HI Hagatna, GU Walnut Creek, CA Kansas City, MO Chantilly, VA Albany, NY Tumon, GU Anchorage, AK Bargersville, IN Large, PA Hagatna, GU Barrigada, GU Hunt Valley, MD Burlingame, CA Seattle, WA Mangilao, GU Omaha, NE Honolulu, HI Cypress, CA San Francisco, CA Fairfax, VA Long Beach, CA Broomfield, CO Aiea, HI Washington DC Tamuning, GU Anchorage, AK Chicago, IL Tamuning, GU Yigo, GU Newberry, FL Honolulu, HI Muscatine, IA Colorado Springs, CO Tamuning, GU Honolulu, HI

JOIN DATE 11/6/1984 8/11/1986 11/12/2013 12/29/2003 9/1/2007 6/11/2013 7/19/2010 8/1/2013 12/15/2008 7/1/2012 3/7/2007 9/16/2003 11/16/2010 10/14/2009 10/11/1989 1/26/1996 12/12/2011 2/13/2002 1/1/1970 1/13/2009 3/1/1968 10/1/1990 10/15/2007 1/1/1980 2/10/1989 10/7/2013 12/31/1990 6/24/2004 10/1/2007 4/27/1988 9/15/2010 7/22/2004 12/6/2011 4/7/2008 3/1/1975 10/11/2012 3/1/2008 4/18/2013

To join SAME Guam Post, log on to SAME.org and click on “Membership” at the top of the home page. 10 | JANUARY2014

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Senior Vice President Infrastructure & Environment Division Federal Business Line, URS Corp. Adm. Engle joined URS in January 2007, transitioning to the private sector following a 28-year career with the U.S. Navy. President-Elect 2013-2014 Col. John W. Mogge, PH.D., RA, CSIP, F.SAME, USAF (Ret.) Global Director of Technology, Practice and Design, Environmental Services Business Group, CH2M HILL

Past President 2013-2014 Anthony F. “Tony” Leketa, P.E., F.SAME, SES (Ret.) Executive Vice President, Parsons Government Services

Vice President 2013-2014 Jane C. Penny, P.E., F.SAME Executive Vice President, Government Technical Services, AECOM

Vice President 2013-2014 William A. “Bill” Brown Sr., P.E., HAIA, F.SAME, SES (Ret.) Prior to his retirement, Bill Brown served as Executive Vice President of PageSoutherland-Page LLP, where he was responsible for establishing strategic focus in the federal market. Executive Director

Society of American Military Engineers (SAME) in September 2002. He is million. SAME has more than 30,000 members and more than 1,600 Sustaining Member companies, public agencies and academic institutions. Photos/Data courtesy of www.same.org www.guamcontractors.org

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S.A.M.E. UPDATE

President 2013-2014 Rear Admiral Gary A. Engle, P.E., DBIA, F.SAME, USN (Ret).


FUSO GCA Now on Guam AD.pdf

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by: David Macaluso


After five decades, the 1962 Mechanic Lien Law became unclear, very complicated and contained traps for the contractor. Eight years into the new millennium, the old law was tested, but it didn't hold up in the 21st century. So new amendments were added to fix the the Law. Now those amendments will be a tested to see if they will hold up to time, in this ever changing modern world, and if modifications may be needed in the distant future. But even our nations forefather from the 18th century had to make changes to their Mechanic Lien Law Early Times The first concept of the mechanic lien may date back to the Roman Empire. It was introduced to the United States by one of the founding fathers Thomas Jefferson in the late 1700's, since then, as time passed, the reasoning and interest of these laws have greatly changed. The word mechanic has nothing to do with machinery, because back then very little machinery existed. But in fact, the word mechanic is an old English term that refers to people who work with their hands like builders and tradespeople. When Jefferson brought this law to the U.S., no liens rights laws existed in England, the country where America's legal system and concepts are based on. The reason why no such laws existed in England is because anyone who owned property where considered to be people who held some class status. And since England is roughly the same size as New England, land was scarce, and during that time it wouldn't make since for a lower class builder to have ownership rights in property because he contributed to its construction. But in America it was quite different, there was an abundant amount of land and during the early parts of U.S. History, a lot of it was given to the people. During that time land wasn't a problem it was the shortage of building materials and supplies needed to improve. Jefferson wrote the Lien law by using examples of lien like laws already being used in European countries that practiced civil law, such as France, Belgium and Spain. Some of those concepts dates back to the Roman Empire when it occupied those areas. But the www.guamcontractors.org

American version of the lien gave builders more rights into the land compared to the European version where it would only give the builder the value of the improvements. As mentioned earlier, building supplies and materials were very expensive, difficult to obtain and presented new challenges to early America. Aside from that, there was a nonexistent credit market which meant that financing to develop land was very hard to come by. Jefferson thought if the country was going to continue to expand and develop its land, there needed to be some kind of solution. He created a solution that would start land development in the nation's new capital, Washington D.C. Then in 1791, he introduced the Mechanic Lien Act to the Maryland legislature where the Capital was then located and it was quickly passed. After that similar laws were adopted in the U.S.. This law turned out to be an important piece of legislation for this young and developing country. This law allowed the nation to grow very rapidly and it assured the builders that they would have an ownership interest in the development of the land and it allowed the land owners to be flexible to develop their land without using financing groups. Although this law was intended to be used for cities and small towns, soon after, it was applied to agricultural areas and then through the entire state. As time went on problems came up, but the legislation quickly fixed the law. The original law was between the builder contracting with the owner, then later on down the road, laws were written to protect the subcontractors and suppliers if the builder refused to pay them for their services. Another change was made to the law, originally the law allowed the builder to acquire the lien automatically, without notice, and to maintain it for seemingly forever. This was quickly changed to make more complex notice requirements and time limitations. On our island In 1962, Guam made its own Mechanic Lien Laws which consisted of thirty five pages of documents. This bill lasted for nearly fifty years until it was recently amended by the 29th, 30th and 31st Guam Legislature. There were numerous problems with the old version of the law. The main problem was it was too complicated had pitfalls and traps for the contractor. Guam's lawmakers revised the law with the help of Attorney Tarpley and Attorney Clark and it court’s opinions refer to the

California mechanics lien jurisprudence because Guam actually adopted their laws from that state. The first trap in the 1962 Mechanic Lien Law contained the definition of a project’s completion date. In the old law the window to file liens would shift. This opportunity shifted because of various factors. One being when the actual completion date was scheduled. But to determine a project’s actual completion date, a “Notice of Completion” had to be recorded with Land Management, this would shorten the time period. Then it had to be determined if the project had been accepted by the owner. If there was a cessation of labor for sixty days, unless a Notice of Cessation had been recorded with Land Management, then that period could drop to thirty days and lastly whether there was substantial completion of the project compared to actual completion. It became difficult when someone could file a mechanic lien. The old law also had an odd loophole in regards to foreclosures. The old law allowed subcontractors and vendors to file liens as soon as they finished their work, which might be prior to the project's completion. But the initiation of foreclosures was prohibited until the period in which to file all claims of lien had expired, usually between sixty to ninety days after the project was done. But the old law also states that no lien could bind any property for more than ninety days after recording unless a foreclosure proceeding was initiated. It was possible that a recorded lien had expired without any action because it was incapable of being foreclosed. The old law also allowed subcontractors and vendors to record liens against projects after only a fifteen day lien notice. This wasn't enough time to allow the owners to find out about the labor, materials used, or equipment used for their project. Not knowing this made it difficult to monitored the project and to make payments. Amendments needed To help simplify this old law, the 29th Guam Legislature proposed Bill 297 which established a new Mechanics Liens Law for Guam. This bill was later signed into law on December 2, 2008 as Public Law 29-119. In its original form PL 29-119 didn't simplify the law. At that time, the Guam Contractors Association suggested to make PL 29-119 leaner, condensing it from forty five pages to only five pages to demonstrate how Guam’s Mechanic Lien Laws could be simple rather than more complex. The 30th Guam Legislature made additional changes to PL 29-119 in the form of Bill 7 on

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FEATURE STORY

Three times in three years, from 2008 to 2011, Guam's lawmakers needed to make amendments to its 1962 Mechanic Lien Law. During that time, it took the 29th, 30th and 31st Guam Legislature along with two attorneys, Thomas Tarpley and Arthur Clark, and the Guam Contractors Association to sort through the old law that has been in existence for nearly fifty years.


FEATURE STORY

April 6, 2009. It was then later passed into Public Law 30-10 on April 17, 2009. The revisions include; the improvement that commenced prior to the effective date of this law, but are not completed prior to the effective date of this law, the following shall apply: (1) F or labor, services, materials, appliances or equipment provided to that portion of the work of improvement prior to the effective date of this law, it shall be covered by the prior Guam Mechanics' Lien Law. For labor, services, materials, appliances or equipment provided to that portion of the work of improvement after the effective date of this law, the 2008 Guam Mechanics' Lien Law shall apply, but the required preliminary twenty (20) day notice shall be given no later than: (A) the date required by this law; or (B) within thirty (30) days from the effective date of this law. The 31st Guam Legislature made additional changes to amend Public Law 30-10 in the form of Bill 219-31. During the public hearing on Bill 219-31, Attorney Tarpley who represented GCA said the current bill was to correct a basic typographical error that was in the previous law. Lawmakers needed to add eleven words that were accidently left out. Without those eleven words, "that claimant should not be precluded from giving a preliminary notice." the law didn't make sense. After the changes were made, this bill was signed into law, PL 31-112 on September 30, 2011. The main changes were to give notice right away. Subcontractors and vendors should provide the owner with a notice of their name and address, a general description of labor, service, equipment or materials furnished to a project, and the name of the person who ordered the same, with a description of the job site. This notice must also contain the following statement in boldface type:

PL 31-112 - A notice to the property owner If bills are not paid in full for the labor, services, equipment, or materials furnished or to be furnished, a mechanic’s lien leading to the loss, through court foreclosure proceedings, of all or part of your property being so improved may be placed against the property even though you have paid your contractor in full. You may wish to protect yourself against this consequence by (i) requiring your contractor to furnish a signed release by the person or firm giving you this notice before making payment to your contractor or (ii) any other method or device that is appropriate under the circumstances. If labor, service, equipment, or materials have been furnished to a job site by a claimant who did not give a preliminary notice that claimant shall not be precluded from giving a preliminary notice, at any time thereafter, however such claimant shall be entitled to record a lien only for labor, service, equipment, or material furnished within twenty (20) days prior to the service of the preliminary notice, and at any time thereafter. This notice should be furnished no later than 20 days after the subcontractor or vendor first furnished labor, service, equipment or materials to the job. In other words, this notice is required even before there is a claim for money owed. Any delay in furnishing this notice will result in reducing the value of any mechanic lien to labor and materials furnished within 20 days of such late notices. This notice only has to be given once. There is no need for any further “pre-lien” notice before recording a lien. Prime contractors need not give this notice. 2. A lien can be recorded as soon as the contractor, subcontractor, or vendor finishes work on the project, and they have 90 days thereafter to record it. This 90 day period can only be shortened if the entire project as a whole has been completed beforehand and the owner has mailed the Notice of Completion to the lien claimant at the address stated in the claimant’s aforementioned notice to owner, and the Notice of Completion is published in the newspaper. If the owner takes these steps, then liens must be recorded within 45 days. It should be noted that this shortened time period in which to file liens will only affect prime contractors and others who supply labor or materials during the last 45 days of a project. All others will still have the full 90 days. More importantly, those who have this shortened period to file liens will have ample notice so that the liens can be timely filed. Under the old law, a Notice of Completion did not have to be published or mailed to a claimant, but only recorded at Land Management. Thus many lien claimants were caught unaware. This should no longer be the case. 3. Lastly, if a claim remains unpaid after recording a lien, the claimant may (and must) file a lawsuit to foreclose the mechanic lien within 90 days of recording a lien, otherwise the lien will expire. There is no longer any need to wait until the project as a whole has been completed. Hopefully this will spur quick payment or settlement of claims.

Guam’s new mechanic lien laws apply to all works of improvement that commenced after January 31, 2009. For all works of improvement that were completed prior to January 31, 2009, prior Guam mechanic lien law will continue to apply. For those projects that commenced but are not completed prior to January 31, 2009, the following shall apply:

These amendment over the years helped form the Guam's current law, which in the long run will get rid of complex problems caused by the old laws pertaining to the 1962 mechanic lien process on Guam. Now as the islands continues to move forward in the 21st century, these new amendments to the 1962 Mechanic Lien Law, will be tested by our future generation in this ever changing world of construction.

Claims on labor, services, materials, appliances or equipment provided to the job prior to December 12, 2008, the date Public Law 29-119 was enacted by the Legislature, prior Guam mechanic lien law will apply. Any claims on labor, services, materials, appliances or equipment provided after the effective date of this law, the new law will apply, but the required 20 days notice must be given no later than the date required by the new law or by March 2, 2009, whichever last occurs.

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

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PHOTO HIGHLIGHTS

IAN Corp Airport Project Phase 1 Demolition December 31st, 2013 Tiyan

STANLEY CONSULTANTS INC. December 13, 2013 New Office Open House 18 | JANUARY2014

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COMMITTE UPDATE

Military, Government and Labor Relations Committee Update – January 2014

The Budget Bill for FY 2014 is Signed into Law

By John M. Robertson

The Pentagon’s top leaders on Thursday 12th December welcomed final congressional passage of a budget law that reduces the impact of sequestration for fiscals 2014 and 2015, but cautioned that the relief will not be enough to avoid additional cutbacks. This, according to the 19 December issue of Defense Daily. Defense Secretary Chuck Hagel told reporters in a briefing at the Pentagon that the Bipartisan Budget Agreement (BBA) approved by the Senate on Wednesday, the day before, allows the military to focus on the key areas of readiness and modernization, but will have to continue with cuts in other areas such as personnel compensation. “We will continue to press ahead with our efforts to cut DoD overhead and infrastructure costs, improve our acquisition enterprise and continue to make the tough choice on force structure,” Hagel said. The BBA, which cleared the House of Representatives last week, scales back sequestration in 2014 by $21 billion and caps the Pentagon’s spending level for fiscal 2014 at $520 billion. That still leaves the Pentagon $32 billion short of its requested spending for the rest of the fiscal year that began Oct. 1. The BBA reduces sequestration in fiscal 2015 by $10 billion. “There were three things we really need in order to manage the financial affairs of the department and the military, and they are certainty, time and flexibility,” Army Gen. Martin Dempsey, the chairman of the Joint Chiefs of Staff, said at the briefing. “The Bipartisan Budget Agreement gives us a little of each of those so it is a welcome event here at the end of 2013.” Dempsey said the bill will allow the Pentagon to restore near-term readiness and readiness

20 | JANUARY2014

already lost to spending reductions, but warned that sequestration as of now remains in place throughout the rest of the decade and will continue to impact the military’s ability to plan for the future. “The remainder of sequestration still lurks on the horizon beyond these two years,” he said. “So some of the force structure reductions that we had planned based on sequestration will march on.” President Barack Obama on Thursday 26 December signed the long-anticipated two-year budget agreement and a sweeping $630 billion defense measure that also changes the way the military handles sexual assaults. The budget deal is aimed at averting another government shutdown and at easing across-the board spending cuts known as the sequester. While small in scope, the plan sets spending parameters through the 2014 midterm elections and represents a bipartisan compromise that has become increasingly rare in Washington. The deal passed both the House and Senate with support from both parties earlier in December. Mr. Obama signed the measure the day after Christmas while vacationing in Hawaii. After discussing more-ambitious budget deals for years, the agreement was decidedly modest, but it brings some stability and predictability to fiscal policy. Members of both parties voiced complaints about the legislation, with Republicans pushing for more curbs on spending and Democrats lobbying to renew expanded unemployment benefits that are set to expire. Representative Paul Ryan and Senator Patty Murray, the budget committee chairs in both chambers, had been working on a deal that could pass not just in one half of parliament, unlike many other bills stuck to preaching to their partisan choirs. This is a return to the regular budget conference process, which many observers celebrate as a breakthrough, even if the bill is limited in its ambition. Rep. Paul Ryan (R., Wis.), one of the architects of the budget agreement, called it a modest but solid achievement Thursday, adding that he hopes to build on the progress that has been made. "It doesn't

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go as far as I'd like, but it's a firm step in the right direction," Mr. Ryan said in a statement. "This law is proof that both parties can work together. We can put aside our differences and find common ground." The package will allow spending to increase by $62 billion during the next two years, providing some relief from the spending cuts known as the sequester. The new spending will be offset by measures that cut the deficit by $85 billion over 10 years, resulting in a net deficit reduction of $23 billion over the same period. Mr. Obama called the budget deal a good first step away from shortsighted, crisis-driven decision making that has been a drag on the economy. The defense legislation signed by the president includes guidelines for spending $552.1 billion in defense funding and $80.7 billion for overseas military operations. The bill also aims to crack down on sexual assault in the military by giving victims of sexual assault access to specially trained lawyers and imposing minimum sentencing guidelines on assaults. Another component of the defense measure includes what Mr. Obama deemed a "positive step" in the debate over the prison at Guantanamo Bay. The legislation will provide the administration greater flexibility to transfer detainees to other countries. The president, who long has called for the prison to be shut down, praised the lifting of some restrictions while voicing opposition to other parts of the legislation, including language that effectively bans transfers of detainees to the U.S. for trial. Mr. Obama said he would work with Congress to change those sections, which he said could violate constitutional separation of powers principles. "The detention facility at Guantanamo continues to impose significant costs on the American people," Mr. Obama said. "I am encouraged that this act provides the executive greater flexibility to transfer Guantanamo detainees abroad and look forward to working with the Congress to take the additional steps needed to close the facility." The legislation has provisions of special interest to those of us in Guam and the Western Pacific. Those Sections are quoted below in full text

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SEC. 2306. MODIFICATION OF AUTHORITY TO CARRY OUT CERTAIN FISCAL YEAR 2013 PROJECTS The table in section 2301(b) of the Military Construction Authorization Act for Fiscal Year 2013 (division B of Public Law 112–239; 126 Stat. 2126) is amended in the item relating to Andersen Air Force Base, Guam, for construction of a hangar by striking ‘‘$58,000,000’’ in the amount column and inserting ‘‘$128,000,000’’. TITLE XXIV — DEFENSE AGENCIES MILITARY CONSTRUCTION Subtitle C — Provisions Related to Asia-Pacific Military Realignment SEC. 2822. REALIGNMENT OF MARINES CORPS FORCES IN ASIAPACIFIC REGION (a) RESTRICTION ON USE OF FUNDS. — Except as provided in subsection (b), none of the funds authorized to be appropriated under this Act, and none of the amounts provided by the Government of Japan for construction activities on land under the jurisdiction of the Department of Defense, may be obligated to implement the realignment of Marine Corps forces from Okinawa to Guam or Hawaii until the Secretary of Defense submits to the congressional defense committees each of the following: (1) The report required by section 1068(c) of the National Defense Authorization Act for Fiscal Year 2013 (Public Law 112–239;

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126 Stat. 1945). (2) Master plans for the construction of facilities and infrastructure to execute the Marine Corps distributed lay-down on Guam and Hawaii, including a detailed description of costs and the schedule for such construction. (3) A plan, coordinated by all pertinent Federal agencies, detailing descriptions of work, costs, and a schedule for completion of construction, improvements, and repairs to the non-military utilities, facilities, and infrastructure, if any, on Guam affected by the realignment of forces. (b) EXCEPTIONS TO RESTRICTION ON USE OF FUNDS. — Notwithstanding subsection (a), the Secretary of Defense may use funds described in such subsection for the following purposes: (1) To complete additional analysis or studies required under the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.) for proposed actions on Guam or Hawaii. (2) To initiate planning and design of construction projects on Guam. (3) To carry out any military construction project for which an authorization of appropriations is provided in section 2204, as specified in the funding table in section 4601. (4) To carry out the construction of a utility and site improvement project to support the North Ramp expansion at Andersen Air Force Base. (c) RESTRICTION ON DEVELOPMENT OF PUBLIC INFRASTRUCTURE. — If the Secretary of Defense determines that any grant, cooperative agreement, transfer of funds to another Federal agency, or supplement of funds available in fiscal year 2014 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 is specifically authorized by law. (d) ECONOMIC ADJUSTMENT COMMITTEE CONSIDERATION OF ADDITIONAL GUAM PUBLIC INFRASTRUCTURE FUNDING SOURCES. — (1) CONVENING OF COMMITTEE.—Not later than 90 days after the date of the enactment of this Act, the Secretary of Defense, as the chairperson of the Economic Adjustment Committee established in Executive Order No. 127887 (10 U.S.C. 2391 note), shall convene the Economic Adjustment Committee to

consider assistance, including assistance to support public infrastructure requirements, necessary to support the preferred alternative for the relocation of Marine Corps forces to Guam. (2) REPORT REQUIRED.— Not later than the date on which the Record of Decision for the relocation of Marine Corps forces to Guam associated with the ‘‘Guam and CNMI Military Relocation (2012 Roadmap Adjustments) Supplemental Environmental Impact Statement’’ is issued, the Secretary of Defense shall submit to the congressional defense committees a report— (A) describing the results of the Economic Adjustment Committee deliberations required by paragraph (1); and (B) containing an implementation plan to support the preferred alternative for the relocation of Marine Corps forces to Guam (e) DEFINITIONS. — In this section: (1) DISTRIBUTED LAY-DOWN.— The term ‘‘distributed lay-down’’ refers to the planned distribution of members of the Marine Corps in Okinawa, Guam, Hawaii, Australia, and possibly elsewhere that is contemplated in support of the joint statement of the United States–Japan Security Consultative Committee issued April 26, 2012, in the District of Columbia (April 27, 2012, in Tokyo, Japan) and revised on October 3, 2013, in Tokyo. (2) MASTER PLAN.— The term ‘‘master plan’’ means documentation that provides the scope, cost, and schedule for each military construction project. (3) PUBLIC INFRASTRUCTURE.— 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. (f) REPEAL OF SUPERSEDED LAW .—Section 2832 of the Military Construction Authorization Act for Fiscal Year 2013 (division B of Public Law 112–239; 126 Stat. 2155) is repealed. There follows, a listing of specific projects for which the budget was approved. It includes those on Guam as well as those in Hawaii, Kwajalein, CNMI, Japan and Korea. No FY2014 project budget was requested or authorized for military construction in Diego Garcia, Singapore, the Philippines or Australia unless they were in the category of worldwide, unspecified. .

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JANUARY2014 | 21

COMMITTE UPDATE

TITLE XXIII — AIR FORCE MILITARY CONSTRUCTION SEC. 2305. LIMITATION ON PROJECT AUTHORIZATION TO CARRY OUT CERTAIN FISCAL YEAR 2014 PROJECTS No amounts may be obligated or expended for the construction of a maintenance facility, a hazardous cargo pad, or an airport storage facility in the Commonwealth of the Northern Mariana Islands, as authorized by section 2301(a), until the Secretary of the Air Force submits a report to the congressional defense committees that provides— (1) a summary of alternatives considered to support divert-field operations associated with Andersen Air Force Base; (2) a description of the overall construction requirements to support divert-field operations associated with Andersen Air Force Base and any other alternative considered; and (3) a comparison of the costs and benefits of leasing, as compared to purchasing real estate in fee, that supports the entirety of the divert-field requirement.


COMMITTE UPDATE

TITLE XLVI—MILITARY CONSTRUCTION SEC. 4601. MILITARY CONSTRUCTION (In Thousands of Dollars Military Account State/Country Installation

Project Title FY 2014

ARMY Hawaii: Fort Shafter Command and Control Facility—Admin Japan: Kyoga Misaki Company Operations Complex Kwajalein: Kwajalein Kwajalein Atoll Pier Total Military Construction, Army

Request

75,000

70,000

0

33,000

63,000 1,119,875

NAVY Guam: (JRM = Joint Region Marianas) JRM Aircraft Maint Hangar - North Ramp 85,673 JRM Bams Forward Oper & Maint Hangar 61,702 JRM Dehumidified Supply Storage Facility 17,170 JRM Emergent Repair Facility Expansion 35,860 JRM Modular Storage Magazines 63,382 JRM Sierra Wharf Improvements 1,170 JRM X-Ray Wharf Improvements 53,420 Hawaii: Kaneohe Bay 3rd Radio Bn Maint./Operations Complex 25,336 Kaneohe Bay Aircraft Maintenance Expansion 16,968 Kaneohe Bay Aircraft Maintenance Hangar Upgrades 31,820 Kaneohe Bay Armory Addition and Renovation 12,952 Kaneohe Bay Aviation Simulator Modernization/Addition 17,724 Kaneohe Bay Mv–22 Hangar 57,517 Kaneohe Bay Mv–22 Parking Apron and Infrastructure 74,665 Pearl City Water Transmission Line 30,100 Pearl Harbor Drydock Waterfront Facility 22,721 Pearl Harbor Submarine Production Support Facility 35,277 Japan: Camp Butler Airfield Security Upgrades 5,820 Yokosuka Communication System Upgrade 7,568 Worldwide Unspecified: Worldwide Unspecified Mcon Design Funds 89,830 Worldwide Unspecified Minor Construction 19,740 Worldwide Unspecified Worldwide Construction 0 Total Military Construction, Navy $1,700,269 AIR FORCE Guam: (JRM = Joint Region Marianas) JRM Par—Fuel Sys Hardened Buildings 20,000 JRM Par—Strike Tactical Missile Mxs Facility 10,530 JRM Par—Tanker Gp Mx Hangar/AMU/Sqd Ops 132,600 JRM Prtc Red Horse Airfield Operations Facility 8,500 JRM Prtc Sf Fire Rescue & Emergency Mgt 4,600 Hawaii: Pearl-Hickam C–17 Modernize Hgr 35, Docks 1&2 4,800 Mariana Islands: Saipan Par—Airport Pol/Bulk Storage Ast 18,500 Saipan Par—Hazardous Cargo Pad 8,000 Saipan Par—Maintenance Facility 2,800 Total Military Construction, Air Force $1,156,573 22 | JANUARY2014

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Authorized

63,000 1,109,875

85,673 61,702 17,170 35,860 63,382 1,170 53,420 25,336 16,968 31,820 12,952 17,724 57,517 74,665 30,100 22,721 35,277 5,820 7,568 89,830 19,740 0 $1,700,269

20,000 10,530 132,600 8,500 4,600 4,800 18,500 8,000 2,800 $1,138,843 www.guamcontractors.org


Project Title FY 2014

Request

DEFENSE WIDE Hawaii: Ford Island DISA Pacific Facility Upgrades Pearl-Hickam Alter Warehouse Space Japan: Atsugi Replace Ground Vehicle Fueling Facility Iwakuni Construct Hydrant Fuel System Kadena Ab Kadena Middle School Add/Renovation Kyoga Misaki an/Tpy–2 Radar Site Torri Commo Sta. SOF Facility Augmentation Yokosuka Upgrade Fuel Pumps Korea: Camp Walker Daegu Middle/High School Replacement Total Military Construction, Defense-Wide

2,615 2,800

2,615 2,800

4,100 34,000 38,792 0 71,451 10,600 52,164 $3,985,300

4,100 34,000 38,792 15,000 71,451 10,600 Korea: 52,164 $3,413,250

$320,815 $174,060 $32,976 $119,800 $45,659 $44,008 $512,871 $76,360 $388,598 $73,407 $389,844 $55,845 $1,780 $451,357 $0

$315,815 $174,060 $32,976 $119,800 $45,659 $44,008 $512,871 $76,360 $388,598 $73,407 $389,844 $55,845 $1,780 $451,357 $0

$11,011,633

$10,366,853

Military Budgets with no FY2014 Activity in Western Pacific Total Military Construction, Army National Guard Total Military Construction, Army Reserve Total Military Construction, Navy and Marine Corps Reserve Total Military Construction, Air National Guard Total Military Construction, Air Force Reserve Total Family Housing Construction, Army Total Family Housing Operation & Maintenance, Army Total Family Housing Construction, Air Force Total Family Housing Operation & Maintenance, Air Force Total Family Housing Construction, Navy and Marine Corps Total Family Housing Oper & Maint, Navy and Marine Corps Total Family Housing Oper& Maint, Defense-Wide Total DOD Family Housing Improvement Fund Total Base Realignment and Closure Account Total Prior Year Savings Total Military Construction

The FY 2014 Military Construction Budget is generally good for Guam. The amount totals ±$495 Mil. Construction on projects related to the Marine Corps transfer from Okinawa to Guam and Hawaii may not proceed this year but planning and design will continue. Japanese funding for the buildup remains frozen. Commitment to proceed with buildup construction when the Master Plan has been approved and the Record of Decision signed is clear – meaning no reason for uncertainty. Perhaps the best news for Guam is that the DoD Office of Economic Adjustment is

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Authorized

required to investigate the need for projects outside the gate where the military buildup will impact on Guam’s infrastructure. Budgets for the Divert Runway in Saipan is included in the list of authorized projects. However, Section 2305 places a hold on proceeding until certain conditions are met (see above). This project will be on hold for another reason and that is the lack of agreement from the CNMI government. They want the Divert Runway to be placed on Tinian instead of Saipan.

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JANUARY2014 | 23

COMMITTE UPDATE

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AROUND THE BENCH

Are CFLs Safe? A Closer Look.

By: Shawn Gumataotao

In 1976, the non-profit National Lighting Bureau (NLB) was founded to educate lighting decision-makers about the benefits of using what has been termed, "High-Benefit Lighting®". The NLB helps guide many a professional society and trade association and manufacturers, utilities, and agencies of the federal government alike. The latest argument : are compact-fluorescent lamps (CFLs) safe-especially when they reach the end of their useful life? The NLB is taking a hard look at this as speculation is abound that speaks to the contrary. Even NLB Chair Howard Lewis has recently described such claims as "Absolutely, categorically untrue. An urban myth." There are documented reports that the basis of the rumor might very well be the normal performance of well-designed CFLs’ fire-safety systems. In most CFL end-of-life situations, these safety systems remain dormant, Mr. Lewis said. “Most commonly, CFLs get somewhat dimmer as they enter failure mode, and then expire or, in some cases, expire with a popping sound similar to the sound made by an incandescent bulb when it ‘gives up the ghost.’” In some cases, however, capacitors, resistors, or other electronic components located in the CFL's ballast may fail in such a way that they make a slight sizzling sound and/or cause odor or smoke. It’s even possible for the ballast housing to discolor or deform, principally because of the fire-inhibiting

26 | JANUARY2014

chemicals incorporated into the plastic that the housing is fabricated from. Such reactions pose no danger, Mr. Lewis said. “What it really is,” he noted, “is a demonstration of the CFL’s remarkable fire-safety design working exactly as it’s supposed to, to protect consumers and keep them safe.” In a 2010 report, Underwriters Laboratories said that CFL bulbs may emit a bit of smoke at the end of its useful life including a more "dramatic pop". Additionally, the National Geographic Green Guide says that CFL bulbs “burn out when the ballast overheats and an electronic component, the Voltage Dependent Resistor (VDR), opens up like a fuse in your home’s fuse box, shutting off the circuit and generating heat and possibly a small amount of smoke. This might sound dangerous, but the VDR is a cut-off switch that prevents any hazards.” In some cases, the ballast’s plastic housing can melt slightly where the glass coil connects to the ballast, the Green Guide states, noting that this “is simply a sign that the heat is escaping as intended in the design of the bulb.” Simply put-CFL bulbs may emit a bit of smoke and smell and have burnt looking bases when they die, but that's as it should be. There is no fire danger. The U.S. Consumer Product Safety Commission continues to be on the look-out for such activity. The Commission started an online

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complaints database in March 2011-in that year there were 34 complaints about CFLs emitting smoke or a burning odor and four reports of the lights actually catching fire. For years, CFLs have been touted as the bulb of the future because it uses about a fifth of the power than a regular bulb and is reported to have a life six to 10 times as great. The fire hazard concern with CFLs is not a new issue. In a past recall, Trisonic Compact Fluorescent Light Bulbs were recalled due to fire hazard by the Consumer Product Safety Commission in October of 2010. In 2009, standards were revised for materials used in the plastic housing of the base of CFLs sold in North America. However, millions are still in use that were produced before the change. Want to change? There are other alternatives, such as the light-emitting diode (LED) light. GET, LLC can assist you with that choice. Give us a call at (671) 483-0789 or check us out at www.get-guam.com for more information and put the fear aside and move ahead with the future of lighting-LED.

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GARRISON REPORT

Value-Based Contracting Value-based contracting may be one of the most misunderstood concepts. Many people believe that when value is mentioned, price is no longer a major concern. Nothing could be further from the truth. Edwards Deming explained, “Price has no meaning without a measure of quality being purchased.” In other words, without understanding the value you receive, price is meaningless. The obstacle to improving value in the construction industry is the industry’s failure to manage the supply chain. Numerous studies from around the world have reached the same conclusion, so it isn’t a national problem; it’s a worldwide problem. It’s so bad that the Construction Industry Institute has stated that construction is the only significant industry that hasn’t increased productivity in the past 50 years. But what is value-based contracting? It’s a process in which people collaborate with people and groups outside each other’s formal control and inspire each other to work toward common goals despite differences in their convictions, cultural values and operational norms. There are four key aspects to effective collaboration. The first is coordination. Without proper coordination, a project is doomed to struggle. Clemson professor Roger Liska has determined there is a 20 percent loss of productivity while waiting for information, materials, equipment or supplies. This is simply poor coordination. When you consider that the average construction worker operates at 40 percent efficiency, simply improving coordination would increase worker productivity by 50 percent. The second key is cooperation. Unless the project team cooperates to achieve common goals, productivity will suffer. We have all seen projects where more effort is spent covering one’s backside than working to build the project. Cooperation goes a long way to eliminate this issue. The third key is capability development. By working with the right people on an ongoing basis, the team’s capabilities can be improved. Just a like sports team, the longer the team members work together, the more they can accomplish. The fourth key is connection. Collaboration can’t be produced through force. The various team members have to want to collaborate. This means they must connect with one another and communicate in an open manner. Too often both sides lie to each other. In fact,

28 | JANUARY2014

it has become almost a game. The first person says, “I need such and such by a particular date.” He actually needs it later, but since he isn’t sure the other person will finish on time, he builds in a cushion. The other person agrees, but he knows there is a cushion, so he’s not really committed to the date. The problem with this approach is it makes it impossible to plan properly since no one knows when a task needs to be done or when it will be done. This lack of reliability makes improving productivity virtually impossible. Information Measurement Theory explains that people should avoid making subjective decisions. This shocks many managers because they think making decisions is what they are supposed to do. Unfortunately they are wrong, but let me explain. If you know what to do in a particular situation, do you make a decision, or do you just do what needs to be done? Most people acknowledge they just do it. Now when you have say three choices and you need to decide which one to do—in essence, make a decision—what does it tell you? It indicates you don’t know the answer. When you decide on an option, you create risk. Of course, in life we have to make decisions. But how many times have you made a decision on what restaurant to go for dinner? How many of those dinners didn’t turn out so well? Was that a bad choice? Of course, we survive many bad decisions, but if we constantly do that in a business situation, it could be a lot more costly than a poor dinner. What are your options when faced with a choice? The first would be to obtain more information to determine a definitive course of action. The second option is to find someone who knows what to do. Finally, when it’s unchartered territory and there is no place to go for a definitive answer, we must experiment. This is how innovation works: try things until you find something that works; then roll out that solution. So how does one select a value-based contractor? The Performance Based Studies Research Group (PBSRG) at Arizona State University has developed just such a process. It starts with experience. The obvious aspect is you want to find quality contractors, but it goes beyond that. What experience do they have in your type of project? This is critical because they will need to have the expertise to know what to do in the situations that they will be confronted with. If they don’t have that expertise, they will place the project at risk. The second aspect is leadership. You need

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people who understand the importance of a team effort to determine the best solution. They understand it’s not their job to dictate to people what to do. In essence, they embrace the principles of collaboration. The third factor is having the contractors perform a risk analysis of the project. In essence, they must identify the potential problems and indicate how they will minimize them. This is directly related to experience and understanding the project. If a contractor can’t identify the potential risks, he will be surprised and place the project at risk. The fourth factor is value assessment. Here contractors offer options to increase the value of the project. The focus is on increasing the value to clients, not merely reducing costs. Alternatives suggested are true valueengineering options, not just cost-cutting options. The final aspect is price. Price is important because no one wants to pay a huge premium for no added value. If two contractors can deliver the exact same performance, why would you pay a higher price? In contrast, why would you want to hire a roofing contractor whose roofs leak like a sieve just because he was a dollar cheaper? To learn more about PBSRG’s Performance Information Procurement System (PIPS), go following link to listen to the three interviews with Jacob Kashiwagi: PIPS Phase I: http://ow.ly/ro5nJ PIPS Phase II: http://ow.ly/ro5nJ PIPS Phase III: http://ow.ly/ro5nJ In the end, buyers be best served by working with companies that follow the PIPS philosophy and have developed a long-term relationship with their team members because that allows them to work together to improve efficiency and quality. To learn more about the Best Value concept, consider attending the Best Value Conference in Tempe, Arizona from January 13th through January 16th, 2014. To learn more about the conference go to: http://ow.ly/ro5KN 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." www.guamcontractors.org


January 2014  

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

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