Guam Contractors’ Association
CONSTRUCTION NEWS BULLETIN
Vol.53 Issue 05 MAY2012
They are Required
CONTENTSMAY2012 Feature Story
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Update C ommittee S.A.M.E.
C ommittee Update Story F eature 401k
Story F eature Safety
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No job is too big or small. Ready-Mix Concrete • Asphaltic Concrete • Paving Materials • Sand & Aggregates Keystone Retaining Wall Systems • Concrete Pipes • Precast Manholes • Concrete Paver Road Paving Contractor • Concrete Pump Rental • Concrete Blocks & Shapes
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Contact Art Chan to help you with your building needs.
2008 Business Laureate
Building The Marianas Since 1958
1402 Route 15, Mangilao, Guam 96913 • Tel: (671) 734-2971/8 • Fax: (671) 734-0990 • www.hawaiianrock.com
PRESIDENT James A. Martinez, GCA CHAIRMAN Robert Salas, Landscape Management Systems VICE CHAIRMAN Tom Anderson, Black Construction PAST CHAIRMAN William “Bill” Beery, Tutujan Hill Group SECRETARY/TREASURER Art Chan, Hawaiian Rock ASSOCIATE DIRECTORS: Patty Lizama, Individual Assurance Company Paul Calvo, Calvo’s Insurance Carlo Leon Guerrero, M80 Office Systems Inc. Ray Yanger, Matson Navigation CONTRACTORS DIRECTORS: Tom Nielsen, Maeda Pacific Corporation Juno Eon, Core Tech International Mike Venezia, Hensel Phelps John Robertson, AmOrient Louis De Maria, dck pacific guam LLC
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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 firstname.lastname@example.org. 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 Chantel Cruz, Guam Contractors’ Association at (671)647-4840/41, or fax (671) 647-4866 or email to email@example.com. Postmaster. Send address changes to Guam Contractors’ Association, located at 718 N. Marine Drive Corps Suite 203, East West Business Center, Upper Tumon, Guam.
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THETEAM PUBLISHER: James Martinez SALES & MARKETING DIRECTOR: Geri Leon Guerrero AD SALES: Marty Leon Guerrero June Maratita PRODUCTION: Geri Leon Guerrero Christopher “Taco” Rowland PHOTOGRAPHERS: Marty Leon Guerrero EDITOR: Adztech CONTRIBUTING WRITERS: John Robertson David F. Macaluso Dave Barnhouse David John Brett Maluwelmeng GCA STAFF: Francine Arceo Desiree Lizama COVER: Saftey Planning
GUAM WATERWORKS AUTHORITY COMPREHENSIVE MANAGEMENT PLAN FOR THE IMPLEMENTATION OF THE 2011 COURT ORDER
American Military Engineers
CAPT Heckmann presents Guam Post coin to Martin Rouch Guest speaker at the April meeting of SAME Guam Post was Martin Roush, General Manager of the Guam Waterworks Authority. Mr. Roush provided an overview of the GWA Comprehensive Management Plan for the implementation of the 2011 Court Order. Key points are outlined below. GWA has positioned itself for success by completing the Water Resources Master Plan in 2007. The full implementation of the Master Plan will greatly help GWA become a "Sustainable Utility." In the last few years, GWA has developed additional plans to vastly improve the utility: GWA Potable Water Enhancement Plan, GWA Water Audit Program & Water Loss Control Plan, and GWA Capital Improvement Plan 2011-2015. Along with the Water Resources Master Plan, these plans form the foundation that will move GWA to the next level. Combining GWA's plans with the 2011 Court Order and 2011 PUC Stipulations and GWA has the components to develop a Comprehensive Management Plan. This Comprehensive Management Plan will demonstrate how all the plans, court order, and PUC stipulation will be managed and tracked and how the elements of these plans fit into the
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whole. This Plan will demonstrate that GWA will thrive under the 2011 Court Order by focusing on leadership, management, and communication. This Plan explains GWA's toolbox approach to management and defines the specific tools GWA will use to manage the 2011 Court Order, 2011 PUC Stipulation, the Production Plan, Water Loss Control Plan, the Capital Improvement Program, and all other Management Initiatives. GWA must focus on priorities of the 2011 Court Order and elements of this Plan to be successful. GWA has begun to provide training to staff on this management and implementation plan with an emphasis on encouraging management to take a leadership role on the implementations of these initiatives. In conclusion, by prioritizing on increasing revenues, decreased expenditures, and environmental compliance, this Comprehensive Management Plan demonstrates GWA is in position to thrive under the 2011 Court Order. ABSTRACT Although the term "Business Model" has been in use since the early days of business, it became a buzzword in the dotcom age. The main reason for this is, most of the dotcom businesses without a "Business Model" failed. The basic "Business Model" is a plan implemented by a company to generate revenue and make a profit from operations. The idea of a "Business Model" should be applied to government agencies because the public expectation is the government should operate in an effective and efficient way. However, the difference in government agencies and the private sector is government agencies do not make a profit. Government agencies, especially GWA should generate the funds required to
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build contingency funds and make long term investments. GWA is a government created monopoly that is operated on enterprise funds. A government enterprise fund is defined as: the funds required to operate the department are generated by that department through rates and fees. Most utilities operate under enterprise funds which generate revenue through monthly utility bills or user fees. A sound utility generates the funds to operate the utility on a day-to-day basis and make sound investments to maintain the utility long term. A utility manager must strive to operate a utility in an effective and efficient manner. Using the concept of a "Business Model", GWA can make the investment that will reduce expenditures and investments that increase revenues thus lowering the cost of services to its customers. This Comprehensive Management Plan (the "Plan") is an internal management and implementation plan that provides the framework for the communication, tracking, and reporting of Guam Waterworks Authority's (GWA's) management initiatives and long-term strategies. The intent of this Plan is to provide the leadership so GWA will thrive under the 2011 Court Order. The 2011 Court Order provides a blue print to ensure GWA develops the projects and programs required to meet EPA's interim compliance requirements. Due to the cost estimate of the 2011 Court Order of over $300,000,000, GWA must develop a funding strategy to acquire the required loan and bond to achieve the 2011 Court Order. To acquire the required financing, GWA must make investments to improve GWA's fiscal position. The most important step is to improve its fiscal position or improve GWA's "Business Model" while continuing to develop a "Sustainable Utility." GWA must focus on a "Business Model" with defined priorities to
S.A.M.E. UPDATE achieve the timelines set in the 2011 Court Order. This Plan's definition of a "Business Model" is to demonstrate GWA has the credit quality to secure the loans, generate the revenues to operate the utility, cover the debt payment, make investments that have a high rate of return, and continue to invest in developing a "Sustainable Utility." The "Business Model" includes, but is not limited to, improving GWA's debt cover ratio, cash position, and cash reserves. But more importantly it is to run GWA more like a business. A "Sustainable Utility" includes the investment in workforce development, succession planning, water conservation, and asset management. Investment in an asset management program is a natural step in improving GWA's "Business Model," because making these basic investments in operations and maintenance will ensure life cycle costs are minimized. PURPOSE OF PLAN Since formation of the Consolidated Commission on Utilities ("CCU"), GWA has been in a state of constant improvement. Keeping up with this new tradition, GWA has the plans in place to vastly improve the utility: GWA Potable Water Enhancement Plan, GWA Water Audit Program & Water Loss Control Plan, GWA Capital Improvement Plan 2011-2015, and the GWA's Management Initiatives. These plans form the foundation that will move GWA to the next level, and these plans include elements that will improve GWA's "Business Model" Combine these four foundational plans with the 2011 Court Order and 2011 PUC Stipulations: GWA has the elements to develop comprehensive management and implementation plans. This Plan will demonstrate how all the plans, court order, and stipulation will be managed and tracked and how the elements of these plans fit into the whole. The interrelationship of the plans will be demonstrated; for example, the implementation of the CIP is the common denominator for GWA's success.
RECOMMENDATIONS The greatest threat to a Compliance Order related to the Clean Water Act and the Safe Drinking Water Acts are the investment in the capital projects to meet the deliverables of the Compliance Order "at the cost" of investment in the utilities "Business Model" and investments in the utilities "Sustainability Model" That is investment in solely capital projects will not solve GWA's compliance problems. In the 2006 Stipulated Order, EPA supported the investments in the "Business Model" and "Sustainability Model" by requiring the Master Planning efforts and requirement for qualified staff. EPA's PG Report strongly supports investment in Master Planning and Operations and Maintenance. This plan mitigates the threat of the Compliance Court Order by defining GWA's values with respect to investment in the utilities "Business Model" and investments in the utilities "Sustainability Model" This report provides the following over arching recommendations. Recommendation A: Keep focused on GWA's top three priorities: the 2011 Court Order, the Production Plan, and WAP & WLC Plan. Next make forward progress on the PUC 2011 STIP and management initiatives as defined in the Master Dashboard. Recommendation B: Invest in training management and supervisor staff on this plan and its initiatives. Define the dedicated resources to maintain the dashboards and reports defined by this plan. Update the dashboards and reports as defined in this plan using a team approach.
mentation plan provides the framework for the communication, tracking, and reporting of Guam Waterworks Authority's (GWA's) management initiatives. This plan is the first step to demonstrate GWA will thrive under the 2011 Court Order. This plan explains GWA's toolbox approach to management and defines the specific tools GWA will use to manage the 2011 Court Order. The management tools, specifically the reports and dashboards are included in Appendix A and Appendix B. GWA must focus on priorities of the 2011 Court Order and "Business Model" to be successful. GWA has begun to provide training to staff on this management and implementation plan with the emphasis on encouraging management to take a leadership role on the implementations of these initiatives. The introduction of this Plan defines the "Business Model" and includes implementation of programs to improve GWA's "Business Model." This plan demonstrates the 2011 Court Order cannot be separated from GWA's "Business Model." With an improved "Business Model," GWA's credit quality will be in place to receive the financing to complete the 2011 Court Order. In conclusion, the GWA will thrive under the 2011 Court Order by focusing on leadership, management, and communication.
Recommendation C: Continue on improving the "Business Model" and "Sustainability Model" with respect to Workforce Development, Master Planning, and investment in Operations and Maintenance. CONCLUSION This internal management and impleCONSTRUCTION NEWS BULLETIN
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ENGINEERING CAPITAL IMPROVEMENT PLAN 2012 – 2016 INCORPORATING 2011 COURT ORDER AND 2011 PUC STIP
Prepared by John M Robertson PE, Treasurer of SAME Guam Post – from Mr. Roush’s power point and the published GWA Comprehensive Management Plan.
To join SAME Guam Post, logon to SAME.org and proceed to New Membership. 8 | MAY2012
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Military, Government and Labor Relations Committee Update May ‘12) Military Relocation Final Environmental Impact Statement (FEIS) and Record of Decision (ROD) issued in 2010, the ongoing Supplemental Environmental Impact Statement (SEIS) for the live fire training range complex on Guam will be expanded to include an assessment of changes to the number and composition of Marines relocating to Guam. The assessment will include an evaluation of alternatives for the main base and family housing, as well as a new assessment of impacts to Guam's civil infrastructure.
By John M. Robertson High level meetings in Tokyo and Washington during the week of 22 April ended with agreement between the two nations on a restart in planning for the realignment of military forces in the western Pacific. This culminated in a meeting between President Obama and Prime Minister Noda in Washington on 30 April. To be clear on what has been agreed to, a 2 May 2012 Navy Press Release is quoted below in full text. NEPA Planning for Guam Realignment Roadmap Adjustment WASHINGTON (NNS) -- The Department of Defense, in a joint statement with the Government of Japan announced April 26 that they have agreed to adjustments in the 2006 Realignment Roadmap Agreement to relocate U.S. Marine Corps forces from Okinawa, Japan to Guam. The adjustments include reducing the originally planned relocation of 8,600 Marines to a force of approximately 5,000 Marines on Guam. As a result of the adjustments, the Department of the Navy (DoN) will be required to assess the potential environmental impacts of accommodating the reduced number of Marines on Guam, including any associated changes in basing and training requirements. As a consequence of this substantial change to the proposed action in the Guam and Commonwealth of the Northern Marianas Islands (CNMI)
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The following components decided in the 2010 ROD should not be affected by this adjustment and will most likely not be reconsidered in the expanded SEIS: • Training on Tinian, • Relocation of the Marine Corps Air Combat Element (ACE), air embarkation facilities, and the development of the North Gate and access road at Andersen Air Force Base, and • Wharf improvements and associated waterfront facilities and utility systems to support sea embarkation at Apra Harbor. The above actions will be implemented pending Congressional approval and authorization. The expanded SEIS will not address aircraft carrier berthing in Apra Harbor. DoN anticipates issuing a Notice of Intent (NOI) for the expanded SEIS in the fall of 2012. In the interim, DoN anticipates continuing with site assessments of potential live-fire training range complex alternatives as well as initiating initial base and family housing planning in preparation of the NOI and scoping meetings. Following the NOI, the Navy will hold public, open house scoping meetings on Guam. Specific dates and locations for these scoping meetings will be included in the NOI. Additional Confirmed Information The two governments have agreed to the following adjustments to the 2006 U.S. – Japan Roadmap for Realignment Implementation: a) The SEIS is expected to
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require another three years with a new Record of Decision (ROD) in early 2015. b) Location for the Marine Corps Base on Guam will be reopened for possible revised decision based on the smaller footprint needed. The decision will be between NCTS Finegayan, Andersen AFB, Andy South, NCTS Barrigada and Navy Base Guam. c) Delinking Futenma Replacement Facility from the relocation of III MEF personnel from Okinawa and land returns south of Kadena. d) A revised Marine force laydown consisting of Marine Air-Ground Task Forces (MAGTF) in Okinawa, Guam and Hawaii. e) Relocation of 9,000 Marines and their family members off Okinawa f) Marine force of approximately 10,000 Marines plus family members to remain on Okinawa, including III MEF Headquarters; 1st Marine Aircraft Wing Headquarters; 3rd Marine Logistics Group Headquarters; 31st Marine Expeditionary Unit; base sustainment elements of Marine Corps Installations Pacific; and other essential aviation, ground and support units. g) Marine force of approximately 5,000 Marines relocating to Guam, to include 3rd Marine Expeditionary Brigade Headquarters; 4th Marine Regiment; and elements of aviation, ground and support units from III MEF, along with a base sustainment unit. Approximately 2,000 Marines will be stationed on Guam, accompanied by family members, with a rotational force of approximately 3,000 Marines. h) A rotational Marine Force in Australia. Remainder of Marines moving from Okinawa to be based primarily in Hawaii. i) Financial contribution of GOJ is revised and will be cash only. Funds already contributed are included as part of total GOJ financial contribution. j) In order to develop Guam as a strategic hub and mitigate the impact of the U.S. military presence on local communities, the two governments will explore new efforts to promote bilateral dynamic defense cooperation in the region, including development of joint www.guamcontractors.org
ranges and training areas in Guam and CNMI as shared-use facilities for US and JSDF forces. Subcommittees of the House Armed Services Committee met and marked up the Fiscal Year 2013 DOD budget request on April 25th and 26th. Key provisions relating to Guam are: a) Section 2831—Use of Operation and Maintenance Funding To Support Community Adjustments Related To Realignment of Military Installations and Relocation of Military Personnel on Guam. (This authorizes the SECDEF to assist the Government of Guam in meeting costs of providing increased municipal services and facilities associated with the buildup.) b) Section 2833—Repeal of Condition on Use of Funds for Guam Realignment. This section would strike the provision in Sec 2207 of the Military Construction Authorization Act for Fiscal Year 2012 (division B of Public Law 112-81) to obtain a coordinated federal agency plan that supports the civilian infrastructure on Guam as a condition for moving forward with the Marine Corps realignment of forces to Guam. (The Committee believes that a Supplemental Environmental Impact Statement Record of Decision is the correct forum to consider the impacts of the overall realignment from a federal agency perspective.) c) Authorizes $128 million for Air Force military construction projects on Anderson AFB. Authorizes $67.5 million for Defense Logistics Agency military construction project on Anderson AFB. Authorizes $8.5 million for National Guard military Action by the Guam Business Community The Guam business community has come together on previous occasions in support of the realignment of military forces in the western Pacific as vital to the defense of our nation while at the same time enhancing the economy of our island and the well being of all its residents. These efforts have been supported by the Guam Contractors Association, the Guam Chamber of Commerce, the Guam Hotel and Restaurant Association, the Employers Council and other local
organizations. Notable among such issues was the proposed Abercrombie Amendments to the FY 2010 NDAA and the proposed implementation of Project Labor Agreements (PLAs) on Guam. By pooling our resources and making sure our voices were heard, we were able to succeed in having those measures that would have damaged the local economy blocked. The current dilemma began when U.S. Senators Paul Levin, Jim Webb and John McCain were successful in convincing their fellow senators that the military buildup on Guam was “unrealistic, unworkable, and unaffordable”. This issue could not be dealt with in the same way as others and requires intense long term action in the Halls of Congress. Some forward thinking leaders in our community stepped forward in December 2011 and established a separate and distinct organization they named: “Guam U.S. Asia Security Alliance, Inc” (GUASA). Founding officers were Joe Arnett, Paul Blas and Gerald Perez. Its Mission Statement reads as follows: “The corporation and the experts it employs shall advocate for the security of Asia; for United States security as it relates to challenges from within the Continent; and for the security of Guam and the CNMI, the only sovereign United States soil in Asia. This advocacy will seek to broaden, along with Congresswoman Madeleine Z. Bordallo, the political footprint in Congress, particularly in the Senate, as to the enormous strategic value of developing military assets on sovereign soil in order to maintain the security of all assets in Micronesia as well as peace in Asia. In addition, the corporation and its experts shall strengthen the appreciation of policymakers in both Houses that developing military assets on Guam and the CNMI will require both on and off the base improvements in infrastructure to accommodate a 50-year military development plan. GUASA in the Chamorro language means “to sharpen”; in this case the tip of the spear for the security of Asia and the United States.” Those familiar with decision making
COMMITTEEUPDATE in Washington understand that an influential advocate is essential to achieving objectives. This is especially so for Guam because we have no representation in the Senate and a highly effective but nonvoting delegate in the House of Representatives. Also, our territorial status, our distance from Washington and our small population work against us. Local governments and corporations engage the services of lobbyists to promote their causes and it is understandable that we must do the same to achieve success in this most important endeavor. After evaluating offers from a number of law offices engaged in lobbying activity, GUASA engaged the services of K&L Gates LLP with offices in Washington DC. Over the past four months, K&L Gates has laid the ground work for what is to come. This has included: Analyzed language in the FY12 NDAA, developed potential courses of action and made recommendation on strategy and direction for proceeding with advocacy campaign; Conducted initial outreach to key staff and administration officials to inform them of GUASA’s formation, goals and objectives with respect to implementation of the Realignment Roadmap; Developed a strategy and coordinated action plan for engaging Congress and the Administration to advocate in support of the Roadmap; Conducted a joint fly-in to Washington DC with the Defense Association of Okinawa consisting of 29 separate meetings with key officials and decision makers in Congress, CSIS, the Department of Defense and the State Department; Reviewed and analyzed the FY13 DOD budget request with respect to the Realignment; Conducted follow up with offices engaged during fly-in; Initiated planning with the House Foreign Affairs Committee staff to conduct an Open Briefing for members of Congress and staff on the key role of Guam and Okinawa in maintaining security in Asia and the Western Pacific; Initiated outreach to think tanks and independent 3rd parties who can be leveraged to support the buildup; Established collaborative working relationship with Governor Calvo’s Washington DC liaison;
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COMMITTEEUPDATE Reviewed and analyzed joint statement by the US-Japan Security Consultative Committee regarding revisions to the Realignment Roadmap; Outreach to office of Senator Inouye regarding letter of support to Secretaries Panetta and Clinton in support of SCC joint statement; Reviewed and analyzed the House Armed Services Committee markup of the FY13 budget request with respect to the buildup; Continuous coordination and communication with office of Congresswoman Bordallo; Continuous monitoring of statements and actions of key Members of Congress opposed to the Realignment; Provide immediate intelligence to GUASA regarding relevant government activities and policies. The Way Ahead for Guam Now that the governments of the U.S. and Japan have decided on a revised roadmap for the military realignment in the western Pacific, GUASA and the lobbyist must move aggressively forward to ensure decisions in the coming months are favorable to Guam’s economy and all local residents including our military contractors. This activity will in general include: 1. Briefing meetings with members of the Senate Armed Services Committee (SASC) whose chairman is Paul Levin and ranking minority leader is John McCain. Much of the effort will be with principal staffers of the committee and individual senators. The committee is expected to meet before the end of May to provide their markup of the FY 2013 National Defense Authorization Act (NDAA). The intention is to have the Senate adopt language of the House Armed Services Committee (HASC) markup. 2. Should the Senate incorporate unfavorable language in their markup, it will be necessary to reinforce the position of the HASC before they convene the Conference Committee to work out differences. 3. Briefing meetings with members of the Senate Committee on Appropriations, Subcommittee on Defense whose Chairman is Senator Daniel Inouye and Ranking Member is Senator Thad Cochran. 4. Briefing meetings with House 12 | MAY2012
and Senate Foreign Affairs Committees to educate them on the strategic value of Guam as they interface with the authorizers and appropriators. 5. Briefing meetings with organizations such as “Center for Strategic and International Studies” that has been contracted to conduct an independent assessment of the US security posture in the Western Pacific. Also other Washington “think tank” organizations such as the Heritage Foundation that have influence with members of Congress. 6. Some specific objectives are being addressed such as a. Possible release of FY 2010 and 2011 U.S. and GOJ funding that was blocked by language in the FY2012 NDAA. The funds amounting to approx $1 Billion should be redirected to projects that will be unaffected by change in location of the Marine Corps Base. This includes projects at Andersen AFB for the Marine Air Wing and Wharf improvements at Navy Base Guam.
b. Acceleration of the SEIS process. Since the original FEIS was so comprehensive it should be possible to reissue in scaled down form such as with an Environmental Assessment. This would allow projects to proceed at earlier date than 2015. Support GUASA The effort by GUASA is expected to continue for two or more years. It is necessary for the engineeringconstruction industry to join others in the community in support of this important but very expensive endeavor. The cost divided between many concerned companies is not so great and the return on investment makes it worthwhile. Waiting for things in the government to evolve without this kind of initiative is not realistic and has been proven many times over. It is up to each of us to do his or her fair share.. Senseramente, John M Robertson, Committee Chairman
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As a 401(k) provider, we are constantly asked the question, “Are 401(k) plans working”? The answer to this question depends on how the plan provider (your company) defines success.
needs to save in the neighborhood of 10% a year over their working years. As an employer, if you can put in 3%, you will be competitive within the industry without breaking your bank!
Is the goal of your plan to provide a savings and investment plan to help your employees save for christenings, vacations, family emergencies and retirement, or is the goal to provide a successful retirement for your employees when they stop working for your company, with the side benefit of helping your employees when family emergencies arise?
• Investments. 401(k) plans provide all sorts of investment options for participants. While having many options is great for the sophisticated investor, it is overwhelming for the average participant. To fix this, utilize age-weighted profiles as your plan’s default investment option. Age-weighted systems use a more aggressive investment allocation when your participants are young and get more conservative over time as your employees near and enter retirement. These systems work great and remove a lot of investment confusion and stress from your employees’ lives.
If the answer is that you want a straight savings and investment plan and are not too worried about your employee’s retirement, then your plan is most likely working. However, if your goal is to provide a successful retirement, the current trends are not very promising. On average, sixty to seventy percent of eligible employees actively participate in their retirement plan. Within the participating group, eighty percent are not contributing enough. This means on average, only about 20% of your employees are currently saving enough for a successful retirement. This is obviously not a good trend! The good news is that with a concerted effort and a few changes to your plan provisions, you can get your plan on track. The first and most important change you need to make is psychological. Everyone needs to start thinking of your plan as a retirement plan and not a savings account for every family need. Once you have recognized your plan as a true retirement plan, you need to make sure your plan provisions are set for success: • Enrollment. Instead of requiring your employees to actively sign up for your plan, change your enrollment to auto enrollment. Using auto enrollment, when your employees become eligible they will be notified that unless they elect otherwise, they will begin to contribute to the plan. This sounds like a small change, but it is not. Your participation should increase by about 10% immediately. • Employer Match. If you are not already doing so, start a matching program for your plan. A matching system is very affordable. To have a successful retirement, a participant www.guamcontractors.org
• Measuring Success. It is not enough to get your employees enrolled and in the right investments. If they do not contribute enough during their working years, they will be short at retirement. To solve this, implement a process to annually review each of your participant’s individual plans to see if they are on track. If they are not on track, make sure the system provides recommendations to get your participants back on track. Ask your provider for recommendations on which measurement metric you should use. • Life Insurance. One of the nice things about a traditional pension system is that if a participant dies before retirement, there is a death benefit to help take care of the family. You can offer this benefit as part of your plan by providing low cost term insurance to cover the shortfall. To make it even more cost effective, you can set your plan to reduce coverage as your participants get closer to retirement as their account balance can make up for the shortfall as it grows.
By: David John President, ASC Trust Corp.
In summary, the state of the retirement industry is in flux. The bad news is that not enough eligible employees are participating in their plan and those that are participating need help to get on track. The good news is that the weak links in the current 401(k) – defined contribution system have been identified. The key is to make your 401(k) plan look and feel more like a traditional pension system and less like a savings account. If you implement these changes you can truly make a difference in your employee’s lives and you can do it without breaking the bank.
• Retirement Income. As your participants retire, they will need to come up with a plan to cover their expenses in retirement. This can be very tricky. If a participant spends too much early on, they can end up running out of money before they die. To reduce the chances of this happening, make sure your plan has designed retirement income structures utilizing a combination of annuities and manual payouts.
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Why they are
by: Brett Maluwelmeng
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FEATURESTORY Local businesses can celebrate another successful year of proper safety when National Safety Month kicks off in June. One of the biggest factors in keeping your employees safe is personal protection equipment, or PPE. All types of PPE – from fall protection to hazardous material containment and cleanup to respirators – can be required in the workplace. But why are they required? “Generally, the law states that if there are hazards in the workplace, PPE must be worn,” said Anthony Anderson, Program Manager for OSHA On-Site Consultation in Guam. Determination if hazards are present is made by the employer via a job safety hazard analysis, Anderson added. It’s not hard to see why safety precautions are needed as 4,547 workers were killed on the job nationwide in 2010, according to the Department of Labor Bureau of Statistics. Aside from being the law, PPE provides peace of mind during potentially dangerous work conditions, said Mid Pac Far East LLC Sales Manager Mark Cruz. “If something goes wrong, you have some protection in place.” However, the quality of PPE cannot be underestimated, as the number of fatalities has gone done considerably in the last 20 years, (in some part due) to better PPE, Anderson said. “Most of the equipment we see is from the recognized leaders in the industry for quality and is not known as the least expensive,” said John “Jack” Fernandez, president of Industrial Hygiene Professionals.
What To Look For In a survey conducted by KimberlyClark Professional at the 2006 National Safety Congress, 87 percent of the
respondents said they had observed workers fail to wear PPE when they should have. The number one reason – cited by a whopping 62 percent – was that “PPE was uncomfortable”. Fernandez gives a good example of one way to help cancel out this factor. “Miller fall protection harnesses are not the least expensive on the market but the added durability and padding mean the employee will have the equipment longer and is more likely to wear the equipment properly due to the added comfort,” Fernandez said. Tommy Pierson, owner of J.V. International Safety Equipment Company, adds that proper equipment should indicate that it has been inspected and approved by the American National Standards Institute (ANSI). “You can purchase the same item cheaper from another store, but does that product meet ANSI standards? For example, we've seen customers walking through our doors, complaining that the respirator they purchased from company ABC is not fitting or working properly. Our advice? Do not take shortcuts,” Pierson said. “There is no price in exchange for the safety of your life or the life of your employees and co-workers,” he added. It is also important to note that maintenance and replacement of PPE is a key factor to keeping the workplace safe. “You replace PPE as it gets work or as per the manufacturer’s recommendations. (Replacement) depends on whether or not your employer is obligated to provide it to you and their attitude towards safety,” Cruz said.
Training Of course, PPEs only work correctly if they are used properly. That said, there are several local businesses that offer free training courses for various types of PPEs.
ment, we also have a variety of in-depth ‘Competent Person’ courses related to the use of our equipment,” Fernandez said. “For example, our Confined Space Entry Competent Person course is a 3-day program where the students actually have the opportunity to perform instrument calibrations and learn advanced instrument settings. To ensure proficiency the class is also taken in the field to demonstrate competency with the equipment at a sewer lift station.” He added that IHP has a similar program for fall protection that provides students with hands-on experience with many types of anchor systems, body wear (harnesses), connecting devices (lanyards), confined space rescue systems (tripods/winches), and related equipment. “In rare cases, PPE will fail. But most (accident) cases are down to human error – failure to use PPE or improper usage,” Anderson said, which is why proper training is just as important as having the proper equipment. “OSHA always insists on training in accordance to manufacturer’s recommendations,” Anderson said. “But it is up to the company if they want to add training above and beyond the manufacturer’s recommendations.” But to ensure PPE is used properly, it doesn’t stop at training. Anderson said there are a couple things to do to help ensure that PPE continues to be used properly. “You need a strong mission statement. Safety has to begin with commitment from the employer,” he said. “You also need a policy to ensure safety guidelines are followed. It should become more of a culture or second nature to use PPE when required, not a burden,” he said. “This should happen from the top down to the management down to the workers on the front line.”
“Aside from the free familiarization training we offer upon delivery of equip-
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GCA Luncheon April 18th, 2012 Hilton Guam Resort & Spa
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Walk, Run, Roll & Stroll
May 5th, 2012
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Guam Contractors Association
BOWLING LEAGUE Week 4
Place 1 2 3 4 5 6 7 8 9 10
# 5 4 1 8 3 10 9 2 6 7
Points Points Pins plus Last Wk Lask Wk Team Name Won Lost Handicap Won Lost -1Hawaiian Rock Products 2 11943 3 1 819 11 5 Hawaiian Rock Products 1 11746 0 841 11 5 4 CMS 11214 0 729 11 5 4 Guam Crane Services 11005 608 11 5 4 0 DCK Pacific 11309 10 6 1 3 777 Black Construction Corp. 11645 9 7 4 0 852 CarQuest 10806 8 8 0 4 464 Cassidy’s Association Insurance 5 10832 11 0 4 527 Advance Management inc. 10789 0 4 608 5 11 Adztech & Public Relations 10805 4 517 2 14 0
# 3 5 9 4 8 1 10 2 6 7
Points Points Pins plus Last Wk Lask Wk Team Name Won Lost Handicap Won Lost -1DCK Pacific 9 3 8545 3 1 792 Hawaiian Rock Products 2 8 4 8998 1 3 719 CarQuest 8 4 8056 2 2 387 Hawaiian Rock Products 1 7 5 8794 3 1 814 Guam Crane Services 7 5 8318 2 2 573 CMS 7 5 8261 2 2 614 Black Construction Corp. 5 7 8577 2 2 720 Cassidy’s Association Insurance 5 7 8136 1 3 566 Advance Management inc. 5 7 8121 3 1 608 Adztech & Public Relations 2 10 8012 1 3 443
-2805 865 649 625 697 744 501 477 622 539
-3721 778 636 581 759 827 541 507 574 438
HDCP Total 2945 2952 2953 2687 2764 3068 2750 2696 2668 2793
-2745 826 554 893 646 691 662 445 597 508
-3793 766 607 783 581 578 745 486 634 490
HDCP Total 2837 2968 2767 3027 2640 2813 2748 2706 2739 2662
-2809 740 433 707 621 775 465 526 504
-3776 669 512 664 619 802 496 555 499
HDCP Total 3212 2872 2614 2908 2682 2905 2665 2610 2658
-2428 649 596 785 694 656 659 595 414
-3453 696 614 780 759 637 635 612 591
HDCP Total 2675 2818 2770 2862 2836 2766 2765 2772 2692
Place 1 2 3 4 5 6 7 8 9 10
Place 1 2 3 4 5 6 7 8 9 10
# 5 3 9 8 1 4 2 6 7 10
Points Points Pins plus Last Wk Lask Wk Team Name Won Lost Handicap Won Lost -1Hawaiian Rock Products 2 7 1 6030 4 0 883 DCK Pacific 6 2 5708 4 0 605 CarQuest 6 2 5289 2 2 373 Guam Crane Services 5 3 5678 2 2 631 CMS 5 3 5448 3 1 602 Hawaiian Rock Products 1 4 4 5767 2 2 758 Cassidy’s Association Insurance 4 4 5430 2 2 507 Advance Management inc. 2 6 5382 1 3 632 Adztech & Public Relations 1 7 5350 0 4 488
Place 1 2 3 4 5 6 7 8 9 10
# 9 5 8 4 3 1 2 6 7
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Points Points Pins plus Last Wk Lask Wk Team Name Won Lost Handicap Won Lost -1CarQuest 7 1 6030 4 0 498 Hawaiian Rock Products 2 6 2 5708 4 0 753 Guam Crane Services 6 2 5289 2 2 654 Hawaiian Rock Products 1 5 3 5678 2 2 751 DCK Pacific 5 3 5448 3 1 726 CMS 4 4 5767 2 2 570 Cassidy’s Association Insurance 4 4 5430 2 2 538 Advance Management inc. 2 6 5382 1 3 668 Adztech & Public Relations 1 7 5350 0 4 472 CONSTRUCTION NEWS BULLETIN
Cranes’ A-2-B Systems Explained This month’s topic:
WHEN ARE THEY REQUIRED? by: Dave Barnhouse
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. First, what is an A-2-B? This is an acronym for anti-two block. Simply put, there must be a means to prevent the lower hook block from accidently contacting the upper boom tip block and possibly damaging sheaves and other components or parting the hoist wire and dropping the load. If you are not familiar with crane operations you might be thinking that would not likely be something a crane operator would do and he would always be careful to maintain sufficient distance between the two considering the possible results of contact. If on the other hand you are familiar with crane operations than you realize it is easy to get caught up with the operations on the ground and forget how little head room you may have between the boom tip and the hoist block. Many headache balls have been two-blocked while the operator was paying attention only to the main block, parting the line and resulting in the hook on the ground. Unfortunately, this has resulted in some fatalities. Lock-outs vs. Warning systems: There are two types of A-2-B systems: the more common type is the hydraulic lock-out, where once the two block switch is activated the hydraulic solenoid on that circuit closes and the function is stopped, not enabling further hoisting for example and causing any damage. The second type is the warning system, where once the two-block switch is activated an alarm goes off in the operators cab and he knows to immediately stop the function. EM385-1-1 and OSHA 1926.1400 differ slightly on the requirements of the A-2-B, but not significantly. The following will explain what cranes require an A-2-B lock-out and which crane types can make do with a warning system only. Let’s establish first that the A-2-B system is not a safety device. It is an operators aid. What this means is that the crane may operate without a functional A-2-B system, but only temporarily. Alternative measures must be taken, however, if the system is not functional. The alternative measures can only be temporary and consist of clearly
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marking the cable (so that it can easily be seen by the operator) at a point that will give the operator sufficient time to stop the hoist to prevent two-blocking, and use a spotter when extending the boom. This is identical wording in OSHA and EM385-1-1. EM385-1-1: (A-2-B). Anti-two-blocking devices shall be installed at all points of two-blocking. (a) All cranes and derricks shall be equipped with A-2-B/Hoist limit device that will disengage the function that is causing the two-blocking or an A-2-B damage prevention feature (except as noted). They shall be tested and certified functional by a competent person prior to operating the crane. (b) Lattice boom cranes. Lattice boom cranes shall be equipped with an A-2-B device to stop the load hoisting and boom-down functions before the load block or load contacts the boom tip. Occasionally the above is interpreted word for word before reading the complete section. There are exceptions to the preceding: EXCEPTION 1 – Duty Cycle: Lattice boom cranes that are used exclusively for duty cycle operations are exempt from A-2-B equipment requirements. EXCEPTION 2 – Lattice boom cranes with manually operated friction brakes: Lattice boom crane and hoisting equipment with manually activated friction brakes, A-2-B warning devices may be used in lieu of A-2-B prevention devices. (c) Telescopic boom cranes. (i) Telescopic boom cranes shall be equipped with an A-2-B device to stop the load hoisting function before the load block or load contacts the boom tip and to prevent damage to the hoist rope or other machine components when extending the boom. (ii) Telescopic boom cranes that are used exclusively for duty cycle operations shall be equipped with a two-blocking damage prevention feature or warning device to prevent damage to the hoist rope or other
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Two blocking as result of non-functioning two-block switch
machine components when extending the boom. (d) Floating cranes. Floating cranes may use an A-2-B alarm system in lieu of a disengaging device unless they are hoisting personnel. (e) Other cranes used in duty cycle operations, to include clamshell (grapple), magnet, drop ball, container handling, concrete bucket, pile driving and extracting operations, drilled shaft operations are exempt from the requirements for A-2-B devices. (f) Temporary alternative measure: clearly mark the cable (so that it can be easily seen by the operator) at a point that will give the operator sufficient time to stop the hoist to prevent two blocking and use a spotter when extending the boom. Interpretation of the above: all hydraulic cranes must have A-2-B lock-outs, (with exception of duty cycle operations) this
CRANECRITIQUECORNER Answers to last month’s test quiz: Crane hook safety latches: Is a crane hook ever allowed to operate without a functional latching hook? Normally no, but there are exceptions: OSHA 1926.1425 (c)(2) Hooks with self-closing latches or their equivalent must be used. Exception: ‘‘J’’ hooks are permitted to be used for setting wooden trusses. OSHA 1926.1433 (d)(4) Latching hooks. (i) Hooks must be equipped with latches, except where the requirements of (ii) and (iii) below are met.
(ii) Hooks without latches, or with latches removed or disabled, must not be used unless:
and be designed to retain slings or other lifting devices/accessories in the hook when the rigging apparatus is slack.
(A) A qualified person has determined that it is safer to hoist and place the load without latches (or with the latches re-moved/tiedback).
OSHA 1926.1431 (g)(1)(i) (Personnel platform criteria) Hooks….(A) Of a type that can be closed and locked, eliminating the throat opening. (B) Closed and locked when attached.
(B) Routes for the loads are pre-planned to ensure that no employee is required to work in the fall zone except for employees necessary for the hooking or unhooking of the load.
ASME B30.5-2011, Hooks shall be equipped with latches unless the application makes the use of a latch impractical.
(iii) The latch must close the throat opening includes lattice boom cranes with hydraulic winches. Lattice boom cranes with manually operated friction brakes, however, may use A-2-B warning systems. OSHA 1926.1416 wording is nearly identical with the exception that only cranes manufactured after February 28, 1992 are required to be equipped with an anti-two-blocking device. Lattice boom cranes, as with EM385-1-1, require a device that either locks out the function or warns the operator in time for the operator to prevent two-blocking. This also only applies to cranes manufactured after February 28, 1992, though it would be highly recommended to retrofit all cranes with an A-2-B regardless when it was manufactured. Another requirement of the lattice boom cranes is all cranes manufactured after November 8, 2011 must be equipped with an A-2-B lock-out device.
This month’s test quiz addresses: When is a boom length indicator not required on a telescopic boom?
We will discuss the answers to this question in next month’s edition of GCA Construction News Bulletin, please be sure not to miss it. I will attempt to test your knowledge of crane operations each month in this column with a few questions relating to one of the mentioned topics. These questions will address the weak areas more frequently noted during my classroom operator training and/or the more common discrepancies noted during crane
inspections. If your company or subs utilizes cranes whether as owner or renter I invite you to look for this column each month and test your crane knowledge. Please e-mail any comments, questions, or specific topics you would like to see addressed in this column to firstname.lastname@example.org and we will certainly attempt to accommodate your requests.
Dave Barnhouse resides in Yigo 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, Level II Rigger, and NCCCO practical examiner for all types of mobile crane operators, riggers, signal persons, and the only OSHA accredited crane inspector on Guam. Sheave flange damage as result of two-blocking
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Its Impact on Safety and Quality
The benefits of pre-planning are often difficult to understand because the error or problem occurs many months later. Proper pre-planning, for example, can have a major impact on safety. Typically, materials are moved an average of 4.5 times before they are installed. When you consider that a worker is 3 times more likely to be injured moving materials than actually installing it, it is easy to understand how pre-planning reduces injuries by better scheduling the deliveries of materials. According to Mike Sullivan, Forbes Magazine reports that the average contractor operates on margins of only 1.5 to 3 percent. In the current market these numbers are dropping even further. This has resulted in contractors struggling to cover their overhead, never mind make a profit.
Ted Garrison, president of Garrison Associates, is a catalyst for change. As a consultant, author and speaker he provides breakthrough strategies 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 Growing@TedGarrison.com. Further information can be found at www.TedGarrison.com."
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“Our study that we have done internally and participated in externally has indicated there are great many mistakes that occur on jobs and that these mistakes are directly or indirectly related to poor pre-planning,” reports Sullivan. Studies by the Lean Construction Institute (LCI) have found that over 50 percent of the tasks assigned every week on a non-lean construction project don’t finish on time. Sullivan and Weitz Company are familiar with
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the Last Planner System developed by LCI. In fact they started a pilot program back in 2006 to see if the Last Planner would fit into their culture. The result was they instituted a companywide policy in 2008 to implement Last Planner on all Weitz’s projects from that point forward. The Weitz Company found that their projects had about a 50 percent success rate of completed tasks on a weekly basis, but when the Last Planner process is instituted the number quickly jumps to around 85 percent. “This has a dramatic impact on the productivity on the project,” declares Sullivan. Sullivan says that they often hear people complain they don’t have time to pre-plan because they need to get started. He explains that what these people are telling you is that appearing to be busy is more important than planning the work. He adds, “We see that work without a plan will always lead to rework, which has a tremendous negative impact on productivity, safety and quality on projects.” To hear Mike Sullivan’s entire discussion on how pre-planning can benefit your projects and company, listen to his full interview at www.jackstreet.com/JackStreet/WCON.Sulli vanM2.cfm.