GCA Construction News Bulletin May 2014

Guam Contractors’ Association

NEWS BULLETIN

Vol.55 Issue 05 MAY 2014

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MATCH YOUR FLEET TO YOUR PROJECT LOAD

TABLE OF CONTENTS

16

Feature Story

2 | MAY2014

6

S.A.M.E.

10

COMMITTEE UPDATE

16

FEATURE STORY

20

PHOTO HIGHLIGHTS

26

CONSTRUCTION HEADLINE

28

GARRISON REPORT

32

AROUND THE BENCH

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28

Garrison Report

www.guamcontractors.org

GCA

TRADES ACADEMY B u i l d i n g

S k i l l s

F o r

A

L i f e t i m e

Guam Contractors Association

THEDIRECTORS PRESIDENT James A. Martinez, GCA PAST CHAIRMAN Tom Anderson, Black Construction Corporation CHAIRMAN - ELECT Art Chan, Hawaiian Rock Products VICE CHAIRMAN - ELECT John Sage, WATTS Constructors SECRETARY/TREASURER William Beery, Tutujan Hill Group CONTRACTORS DIRECTORS: Narci Dimaoala, Amazon Construction Carlo Leon Guerrero, M80 Office Systems Conchita Bathan, Core Tech International Tom San Nicolas, dck pacific guam LLC Miguel Rangel, Maeda Pacific Corporation ASSOCIATE DIRECTORS: Jeffrey Larson, TakeCare Insurance Ray Yanger, Fastenal Patty Lizama, Pacific Isla Life Michael Kikuta, Matson Navigation

THEEDITORIALS

THETEAM

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.

PUBLISHER: James Martinez

To find out more about how you can become a GCA member contact Guam Contractors’ Association at Tel: (671)647-4840/41 Fax: (671) 647-4866 or Email: gca@teleguam.net. www.guamcontractors.org

COVER: IT Security

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

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

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

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S.A.M.E. UPDATE

Membership Meeting April 17, 2014

INVEST in your Building SAME’s main presenter for April’s General Membership Meeting was Ezra

of HVAC Design and Commissioning experience in Alaska. His talk, titled “Using

Commissioning is the process of checking and optimizing all of the building’s equipment and control systems to ensure efficient operations. RetroCommissioning is doing the same process to a building that has already been built.

Many buildings have never been commissioned making retro-commissioning all

• • • • •

Leadership in Energy and Environmental Design Accredited Professionals (LEED AP)

Retro-Commissioning Process • Select an Independent Commissioning Agent • Identify Goals • • Final Report Documentation and Improvement Plan • Completion of Remaining Improvements

“Simple payback for a retro-commissioning project is typically less than two years and often less than one year” -Portland Energy Conservation, Inc. (PECI) and EPA (2007) 6 | MAY2014

CONSTRUCTION NEWS BULLETIN

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S.A.M.E. UPDATE

Average Results from over 560 Buildings Across the Country Reduction in Energy Consumption Annual Energy Cost Savings Simple Payback Cash-on-cash Returns (First Year Savings/Project Cost)

16% Savings $0.29 per square foot 1.1 year 91% 4.5

-Lawrence Berkeley National Laboratory (2009)

Average Cost of Retro-Commissioning

$30,000 (depending on complexity of the building) Annual Energy Cost Savings $29,000 per year Long-term Savings $145,000 over 5 years Simple Payback 1.0 year Equivalent Stock Investment (Over 5 years) 31% Annual Rate of Return

Additional Energy Savings can be realized by combining Retro-Commissioning with an Energy Audit

(Walk-through Audit)

• • • • • •

Lower Operation and Maintenance Costs Extended Equipment Life Improved Indoor Air Quality Improved Worker Productivity & Safety Reduction in Liabilities

“The dollar value of non-energy benefits alone can offset the cost of a project by 50%.”

-Portland Energy Conservation, Inc. (PECI) and EPA (2007)

(Standard Audit)

(Detailed Analysis)

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

CONSTRUCTION NEWS BULLETIN

MAY2014 | 7

COMMITTEE UPDATE

Military, Government and Labor Relations Committee Update – May 2014

Draft Supplemental EIS for the Military Realignment in the Asia Pacific

By John M. Robertson

The draft supplemental EIS was made public in late April. It comprises 1,448 pages (59 MB) with 36 pages devoted to the Executive Summary.

Excerpts from the Executive Summary are set out in this report as a brief introduction. Members of the engineering-construction community are encouraged to become familiar with the document.

It is known officially as the “Draft Supplemental Environmental Impact Statement, Guam and Commonwealth of the Northern Mariana Islands Military Relocation (2012 Roadmap Adjustments)”. It was prepared for: Joint Guam Program Office, Washington, DC. Prepared by: Naval Facilities Engineering Command Pacific, Pearl Harbor, HI PURPOSE AND NEED The purpose of the proposed action evaluated in this SEIS is to ensure that the relocated Marines are organized, trained, and equipped as mandated by 10 USC § 5063 to satisfy individual live-fire training requirements as described in the 2010 Final EIS and associated ROD, and to establish an operational U.S. Marine Corps (hereinafter “Marine Corps”) presence on Guam in accordance with the 2012 Roadmap Adjustments. The purpose remains unchanged from the 2010 Final EIS, albeit to support a materially smaller relocating Marine Corps force.

The proposed action is needed to ensure consistency with the new force posture adopted by the DoD in 10 | MAY2014

accordance with the 2012 Roadmap Adjustments, which provide for a materially smaller force on Guam than was originally proposed in the 2010 Final EIS, while fulfilling U.S. national security obligations to provide mutual defense, deter aggression, and dissuade coercion in the Western Pacific Region.

PROPOSED ACTION The proposed action is to construct and operate a cantonment, including family housing, and an LFTRC on Guam to support the Marine Corps relocation. To meet the purpose of and need for the proposed action, the Marine Corps requires facilities that can fully support the missions of the relocated units. These requirements include a cantonment (with family housing and community support facilities) of sufficient size and functional organization to accommodate the reduced and reconfigured number of Marines relocating to Guam per the 2012 Roadmap Adjustments, and an LFTRC that allows for simultaneous use of firing ranges to support individual skills training and related operations. The proposed action also includes the provision of on-site utilities, access roads, and related off-site infrastructure to support the proposed cantonment/family housing and LFTRC. The DON’s preferred alternative is to construct and operate the cantonment/family housing at the Naval Base Guam, Telecommunications Site at Finegayan (hereinafter “Finegayan”) and the LFTRC at Northwest Field (NWF) on AAFB. RELOCATION OF MARINES AND ASSOCIATED POPULATION CHANGE The proposed Marine Corps relocation to implement the 2012 Roadmap Adjustments would consist of approximately 5,000 Marines accompanied by approximately 1,300 dependents, a 64% reduction in the relocated Marine Corps population compared to CONSTRUCTION NEWS BULLETIN

the proposed relocation in the 2010 Final EIS. The relocation of Marine Corps uniformed personnel and their dependents would be augmented by civilian military workers and off-island construction workers, as well as indirect and induced population associated with economic growth from the proposed action. The analysis of population growth in the 2010 Final EIS showed a rapid increase in the first five years of the relocation, a peak, and then a sharp decline to a steady state population increase of more than 33,000 new residents compared to the baseline population. The sharp increase and decline were forecast because the original planned construction period was intense and extremely short (which would have required the influx and subsequent outflow of large numbers of off-island construction workers over a relatively short period), and would have coincided with the arrival of the larger contingent of Marines and their families. The proposed action for the SEIS includes a longer and more gradual construction period (13 years compared to 7 years for the 2010 Final EIS), generating a substantially smaller requirement for off-island construction workers. The extended duration and reduced intensity of construction, along with the reduced number of relocated personnel, would generate a smaller and more gradual overall increase in population, as shown in Figure ES-1. The eventual steady state (post construction) increase in island population related to the current proposed action would be approximately 7,400 additional Guam residents, a 78% reduction compared to the steady state population increase described in the 2010 Final EIS. CANTONMENT INCLUDING FAMILY HOUSING This component of the proposed action includes construction and operation of essential headquarters www.guamcontractors.org

was almost 78% larger than the preferred SEIS cantonment/family housing alternative at Finegayan. In addition to proposed construction of the various facilities and functions within the cantonment/family housing, the proposed action also includes expansion of the DoD Education Activity High School located at the Naval Hospital site on central Guam, and either expansion or (in the case of one alternative at AAFB) repurposing and replacement of the existing Andersen Middle School on AAFB.

Figure ES-2

LIVE-FIRE TRAINING RANGE COMPLEX (LFTRC) This component of the proposed action includes the construction and operation of five live-fire training ranges and associated range control facilities and access roads at a single consolidated location to meet the individual weapons training/qualification requirements of the relocating Marines. It also includes construction and operation of a stand-alone hand grenade range at a single location on federally-owned land at Andersen South. The characteristics (though not the specific layout or footprint) of all proposed training ranges are consistent with the descriptions contained in the 2010 Final EIS, with the exception of a revised probabilistic SDZ configuration for the largest range in the LFTRC (i.e., the MPMG Range) and updated estimates of range utilization and ammunition usage.

Range utilization would depend on the number of personnel required to complete annual individual training events, the duration of each event, and the training capacity of each range.

Range utilization is estimated to be 39-weeks-per-year (Marine Corps and non-Marine Corps use) with 13 weeks of non-availability per year for weather, maintenance, and holidays.

Night training is estimated to occur twice per week during the qualification periods and would require consecutive firing days. The estimated annual ammunition usage at the LFTRC under the 2012 Roadmap Adjustments would be approximately 47% less than the amount analyzed in the 2010 Final EIS. This reduction would result from the changed composition and reduced numbers of Marine Corps personnel that would be relocated to Guam.

The LFTRC preferred alternative at NWF would comprise approximately 3,981 acres (1,611 ha) on land currently under the custody and control of the federal government.

Access to areas within the Ritidian Unit of the Guam National Wildlife Refuge (NWR) that fall within range SDZs would be restricted only when ranges are in use. Alternative 5 would impact approximately 265 acres (107 ha) for the construction of the individual

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MAY2014 | 11

COMMITTEE UPDATE

and administrative facilities; base operations; supply, maintenance and other support functions; housing for unaccompanied and accompanied personnel; and on base roadways, utilities, and similar infrastructure.

These categories of facilities and functions are consistent with those included in the proposed action for the 2010 Final EIS, but the relative size and scope of the cantonment is considerably reduced in the SEIS proposed action given the reduced size and adjusted composition of the relocating population. For example, the footprint for the cantonment/family housing selected in the 2010 ROD

COMMITTEE UPDATE

building, range towers, range access roads, and a perimeter fence, as well as the replacement of facilities within the Guam NWR that would fall within the range SDZs. The remaining acres would include lands and submerged lands within the SDZ that would not be affected by construction. Power to the site would extend from an existing overhead line at NWF. Potable water service would require installation of a water main along Perimeter Road to connect with an existing water line. Planned wastewater service to the range maintenance building would include construction of a new sewer main along Perimeter Road to connect with an existing sewer line.

UTILITIES AND INFRASTRUCTURE The DON updated the utilities assessment studies prepared for the 2010 Final EIS to reflect the reduced Marine Corps population and reduced facilities requirements associated with the 2012 Roadmap Adjustments.

The updated studies focused on power, potable water, wastewater, and solid waste disposal, and the DON conducted a new evaluation for information technology and communications (IT/COMM) requirements. The studies factored in the anticipated increase in population and associated utility demand, including direct, indirect, induced, and natural growth.

Utilities requirements for the proposed action include: (1) on-site DoD utilities to support the cantonment/family housing and LFTRC facilities under each project alternative; (2) off-site DoD utilities required to connect the proposed facilities to existing military and civilian utilities infrastructure and to install IT/COMM lines to connect the proposed facilities to each other and to other DoD facilities; and (3) upgrade or augmentation of existing off-site military and civilian utilities infrastructure where necessary and appropriate to support the relocation.

12 | MAY2014

Figure ES-5

BEST MANAGEMENT PRACTICES Regardless of the alternative considered, the proposed action would include the implementation of Best Management Practices (BMPs) to proactively reduce, minimize, or avoid impacts. BMPs are existing policies, practices, and measures required by law, regulation, or DoD policy that reduce the environmental impacts of designated activities, functions, or processes. BMPs are distinguished

CONSTRUCTION NEWS BULLETIN

from mitigation measures because BMPs are (1) existing requirements for the proposed action, (2) ongoing, regularly occurring practices, and (3) routinely applied to the type of construction proposed. In other words, the BMPs identified in this SEIS are inherently part of the proposed action and are not additional mitigation measures proposed in response to the NEPA environmental review process for the proposed action. The applica-

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COMMITTEE UPDATE

tion of BMPs is, however, factored in to the environmental impact analysis for each resource category and may influence the conclusions resulting from such analyses.

FY 2015 PROJECTS IN HR 4435 NAVY North Ramp GSE Shops

21,880,000

North Ramp MWSS Facilities

28,771,000

AIR FORCE Guam Strike Fuel Maintenance Hangar, Increment 2

64,000,000

Combat Command Infrastructure Facility

3,750,000

Red Horse Logistics Facility

3,150,000

Satellite Fire Station

6,500,000

TOTAL REACTION ON GUAM It appears to most in our industry, that the original EIS had it right. It was based on about 8,700 members of the Marine Corps relocation to Guam along with family members. The larger number would have greater impact – true. But the impact would have more positive elements for the local Guam economy than negative. The proposed pace of construction was no doubt unachievable and would need to have been adjusted. JGPO officials at the time acknowledged that to be true, in private conversation.

The dominant detractors then were certain members of the Legislature that gained the title “Fab Five”. Some members of that group failed to gain reelection in 2012 and others were reelected but by a narrow margin.

They were anyway able to secure leadership positions in the new (current) Legislature. Their big issue at the time was the “Programmatic Agreement” which they were able to delay from September 2010 until March 2011. It is noteworthy that they have again tabled this issue for discussion during May 2014.

The non-governmental group, “We Are Guahan”, campaigned against the use of the proposed site for LFTRC

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$ 128,051,000 along Route 15. That site would have required federal acquisition of GovGuam land. They, or a reincarnation of that group, are back now with opposition to the preferred site at North West Field on Andersen AFB. In the Supplemental EIS, there will be no federal acquisition of GovGuam or private land. Opposition is based on proximity to a wildlife refuge and the required safety buffer zone. A very small part of the National Wildlife Refuge at Ritidian will be inaccessible during those times when the firing range is in use. It is indeed a small price to pay for the boost to the Guam economy from the expanded military presence on our island. The broader issue is the requirement for the Marine Corps having a base on Guam for the security of our island, the region and our Nation.

the same. Points of Contact are: CDR Curtis Duncan, JGPO Public Affairs Officer Telephone: (703) 602-3825 Maj Darren Alvarez, JGPO (Forward) Public Affairs Officer Telephone: (671) 339-3337 Comments on the Draft SEIS may be mailed to: Joint Guam Program Office Forward P.O. Box 153246 Santa Rita, Guam 96915

The director of JGPO has stated that without a live fire training range, the Marine Corps will not relocate to Guam.

That may be what some residents would prefer but they are a small vocal minority. Those of us in the majority position on this all-important matter must find our voice and speak up.

Attendance at planned hearings on the subject is important. If unable to attend the series of planned meetings, call or write letters and urge employees to do

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MAY2014 | 13

I.T. SECURITY… GOvguam style

by: David Macaluso

Back in 2005, an executive order established the Bureau of Information Technology. Since then the government has spent millions in technology management to ensure that GovGuam agencies maintain the highest possible level of security for data and reliability to service the people of Guam.

Eight years later, the Office of Technology was established by statute and is a creation of Public Law 32-10.

Senator Tommy Morrison wrote the bill and it was later passed and signed into law by Governor Eddie Calvo on April 12, 2013. Prior to public law 32-10, the Office of Technology was called the Bureau of Information Technology, now the office is an autonomous entity. In September 2013 Calvo appointed Joey Manibusan as the first chief technology officer.

The Office of Technology expands to all relevant (agencies) government line agencies to give them purvey of all IT information of the government.

There are two sides to this complex office, there's a policy side and a data integrity side.

On the data side, The Office of Technology issues the use of technology and data which is in compliance with the law. The office is also responsible and assists line agencies with their websites, technical support training and data backup space for their records. The office of IT also provides telephone service, internet service, tech support and installs new software into computers.

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This autonomous entity also asserts itself in other areas such as Land Mobile Radio (LMR) and Graphic Information System (GIS).

The LMR is a wireless two-way communications system used by all executive branches of the GovGuam incase of an emergency. Although this system can be independent, it can also be linked to another communication system like telephone networks. Traditionally this system is used by the military, the Department of Defense, emergency first responders or companies with large large staff or vehicles fleets.

introduced after the Department of Public Health and Social Services Office of Vital Statistics lost close to 3,000 electronic birth records due to a computer crash at the Department of Administration. Following the crash, the office of Vital Statistics had to manually recreate thousands of lost records.

It was later established that the Office of Technology already secures and backs up information and the bill was determined to be redundant to the service that are mandated by Public Law 32-10 and the bill was later vetoed.

The Graphic Information System (GIS) is designed to capture, store, analyze, and manage all types of geographical data of Guam. GIS has many applications that can be used with land management, engineering, and planning.

In the years to come the Office of Technology has an initiative to bring all GovGuam agencies together to have the government work in a single platform, which will pull everyone one together for one unified understanding of the system.

Governor Calvo made it a point to use technology to provide better service. One of those ways was to use GIS with a newly launched Land Management website, which is a basic online interface for Land Management and it can allow all records to be accessed 24/7 from anywhere in the world from the desktop. In the past, people would have to go to the office of Land Management to get hard copies. But this website allows people to access information through the internet and print what they need in the comforts of their own home or office.

From private to public sectors we all need to protect our files.

In January a bill was written that required the Office of Technology to be responsible for electronically backing up all critical government information and data. This bill was

CONSTRUCTION NEWS BULLETIN

MAY2014 | 17

FEATURE STORY

Have you ever wondered what the Office of Technology does for GovGuam?

GUAM’S LEADER

OCCUPATIONAL ENVIRONMENTAL SAFETY EQUIPMENT & SUPPLIES

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

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PHOTO HIGHLIGHTS

GCA Luncheon April 16, 2014 Hilton Resort & Spa Guam

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PHOTO HIGHLIGHTS

GCA Industry Fair & 7th Annual Construction Rodeo May 2&3, 2014 The Park, Tumon

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PHOTO HIGHLIGHTS 22 | MAY2014

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PHOTO HIGHLIGHTS

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PHOTO HIGHLIGHTS 24 | MAY2014

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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

CONSTRUCTION HEADLINE

FOR IMMEDIATE RELEASE April 28, 2014

CONTACT:

Dean Higuchi 808-541-2711 higuchi.dean@epa.gov

U.S. EPA: Andersen Air Force Base Signs Agreement to Improve Spill Prevention Plans, Safeguard Water Resources HONOLULU - The U.S. Environmental Protection Agency has finalized an agreement with Andersen Air Force Base (AAFB) in Guam requiring the base to update its oil spill prevention plan and address other spill prevention deficiencies at the base to better protect Guam's water resources.

The Federal Facility Compliance Agreement (FFCA) between EPA and AAFB will require an updated Spill Prevention, Control and Countermeasure (SPCC) plan and changes to the facilities to comply with newer, more stringent oil spill prevention requirements. The new plan will include AAFB, the Navy Base, and the petroleum pipeline between the two facilities.

"This agreement improves the base's ability to safeguard Guam's drinking water and the ocean environment," said Jared Blumenfeld, Regional Administrator for the EPA's Pacific Southwest Region. "We will continue to work with the base to ensure that the island's important natural resources are protected for future generations."

The compliance agreement sets a schedule with deadlines for AAFB to: • Submit a certified updated SPCC plan by December 5, 2014 • Complete a drainage assessment and necessary improvements to the underground injection control wells to ensure protection of groundwater • Complete all fuel containment improvement projects • Follow the specified reporting schedules outlined in the agreement EPA conducted a Spill Prevention, Control and Countermeasure inspection at the base in 2010 and found several areas where the base was not in compliance with the SPCC requirements. Based on that inspection, EPA issued a Finding of Violation (FOV) on April 5, 2011.

Since the FOV was issued, the base worked closely with EPA to identify and address all SPCCrelated deficiencies under this agreement. This compliance agreement is one of the first with a federal facility since the new EPA SPCC regulations took effect in 2010.

For more information on SPCC Regulations please visit: http://www.epa.gov/emergencies/content/spcc/ ###

26 | MAY2014

CONSTRUCTION NEWS BULLETIN

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Bring on the Green.

Not sure where to bring your wooden pallets, crates, untreated wood waste from construction & renovations, land clearing shrubbery, trees refuse, yard trimmings, cardboard & paper?

We are the nearest, most affordable option on island.

Pick up services available as well.

For more Information, hours of operation or credit application call 437-4374., Ext. 100 or email us at greenwaste@pacifictrucking.com

Now accepting green waste at $9.00 per cubic yard.

Pacific Unlimited Inc. DBA: Pacific Trucking

Located at our EPA Permitted Ordot Green Waste & Composting Facility just across the former Ordot Landfill.

GARRISON REPORT

- WHY IS IT? I

ntegrated delivery is a delivery method that embraced 360 degree collaboration between all the stakeholders on a project; including designers, consultants, general contractor, subcontractor, vendors, and yes the owner.

Design-build (DB) and Integrated Project Delivery (IPD) are two examples of integrated delivery. There are numerous differences between the various contract forms of both DB and IPD. One major difference is in the DB approach each entity has its own contract, while in the IPD format the key practitioners operate within a partnership that makes each partner responsible for the other partners. The most important commonality amongst all varieties of integrated delivery is the fact all the key practitioners and the owner are brought together at the beginning of the project.

This is important because regardless of how you assess the construction industry it is broken. For example, even during the

28 | MAY2014

construction boom, the construction industry was one of the least profitable industries. The industry is not attractive to workers as the industry struggles to find enough qualified workers. Owners are not happy as indicated in an "Engineering News Record" article where Nadine Post reported that a survey found that 47 percent of clients would not hire the same contracting firm again. If no one is happy, it is safe to conclude the industry is broken.

The problem is the above issues are not the problem, but the symptoms. The real problem is the construction industry's poor productivity, which is costing buyers of construction services at least 30 percent extra in costs. The Construction Industry Institute estimates that only 20 to 25 percent of the dollars spent on a construction project are actually add value for the client. Value added activities are activities that actual build something, such as, hanging drywall, placing concrete, etcetera.

CONSTRUCTION NEWS BULLETIN

It is not that contractors have not tried to improve productivity, but most work on the wrong things. They tend to work on the activities that actual add value. In other words, how can they hang drywall faster. The problem is that most of the waste occurs between the tasks, not in the construction tasks. For example, Clemson University professor Roger Liska's research indicates that the average worker waste 20 percent of his time waiting for materials, equipment, or information. To eliminate waste of waiting for stuff requires better coordination and collaboration. The only way to substantially reduce system waste is by using integrated delivery, which is the conclusion of numerous international studies that explored the reasons for the industry's poor productivity.

The UK Egan Report recommended that, "Clients should require the use of integrated teams and long-term supply chains and actively participate in their creation." Sir John

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It has been estimated that if the construction industry shifted to integrated delivery methods it could achieve the following: • Reduce total project costs by 30 percent.

• Decrease design and construction time by 50 percent.

• Reduce building operating costs by 50 percent.

If you think those goals are unrealistic, consider the following three examples. First, the St. Helens Metropolitan Borough Council in the United Kingdom had to build two schools with the same requirements and size.

They built one using the conventional designbid-build approach and other used designbuild. The design-build school cost 38 percent less and everyone agreed it was a better school. Second, when the St. Anthony Falls Bridge (I35W) collapsed on August 1, 2007, time was of the essence because it was costing the Minneapolis community about $400,000 a day in extra transportation costs as a result of the missing bridge. Minnesota Department of Transportation went to design build. When I interviewed Jay Hietpas; I asked, "Why they went with design build?" His answer was, because the day we open the bridge is the day we would have gone out for bids if we had used the design-bid-build approach. The $235 million bridge was replaced in 437 days from the date of its collapse. Third, the U.S. Department of Energy wanted to build the National Renewable Energy Laboratory in Golden, Colorado. Their first effort used the conventional design-bid-build approach, but the bids came in too far over the budget to proceed.

The second effort used design-build and the result was a building that not only met the original budget, but produced an energy zero building - meaning it generates all the energy that the building needs.

These results were achieved by the teams working together from the beginning of the design process. There are several ways you can look at the integrated delivery approach. It is a procurement process. It a process where the supply chain is managed very efficiently and effectively. The reality is, it is both of them.

The challenge for contractors as well as buyers of construction services is, how do use the integrated delivery approach and be sure that you are getting superior results for the right price? The answer to that question lies in the quote by Arizona State University professor Dean Kashiwagi, where he states, "the high performer can always perform for a lower price." Therefore, the key question is, "How do you select the right team of high performers for your particular project and insure they

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perform to you expectations?"

What is needed is a system. The following system has been adapted from the one developed by the Performance Based Studies Research Group at Arizona State. It has five phases; including the pre-qualification phase, the selection phase, the design phase, the clarification phase, and the execution phase.

Let us briefly examine these five phases.

Pre-qualification Phase: When starting the process you might consider checking out the past performance and financial capabilities of potential team members. Once you have established a list of qualified team members this phase may not be needed. I say this because one of the recommendations reported earlier was that the integrated delivery team should develop long-term supply chains, because by working together they can continue to improve the process. An example of pre-qualification might be, if you are working on a hospital, that all team members have extensive hospital experience.

Selection Phase: In the selection phase you examine the potential team member's specific project capability, its risk assessment plan for the project, its value added suggestions, its budget, and interviews with the key individuals they will have on the project. Notice that since you cannot obtain a bid estimate at this time because there are no plans and specification, you rely on the potential team member to provide a detailed budget based on experience. By comparing the results from these various areas, one can determine what potential team member would be the best fit for the project. In the integrated delivery process, this is done at the beginning of the project before any major design decisions are made. So the discussion are based on how the potential member sees the project unfolding based on the owner's requirements for the project and the team member's experience from similar projects.

Design Phase: This phase is unique to the integrated delivery process. In this phase, the contractors and designers collaborate on the design approach. The contractor should be allowed to dictate how it will do something as long as that way meets the requirements of the project. Often there is more than one way to do something and it is in everyone's best interest to allow the contractor to do the work in a way that he is most comfortable as long as it does not sacrifice the project's performance.

What is hard for many people to understand in this approach is that there is no single dictator who makes all the decisions. Instead, you allow the best qualified person to indicate the best way to do something in that person's area of expertise. Since no one is an expert in all areas of construction, everyone must accept the need to defer to the person most qualified.

In the end, this will reduce risk and problems.

Clarification Phase: In the clarification phase you get a final opportunity to evaluate the

contractor members approach to the project before construction starts. In this phase, you confirm each contractor 's final estimated cost is within their budget. You also make sure their detailed schedule of work fits the overall project schedule, including all milestones. At this time, the contractor should identify any potential risks that it cannot control or where there is still insufficient information. Finally, each contractor team member presents its detailed risk report and risk mitigation plan.

The good news is that past results indicate that if you do a good job selecting the team members, all your team members will pass this phase.

Execution Phase: In the execution phase you manage the risk assessment and any variations in costs, schedule or performance by using each contractor's own quality control and assurance program for their work. The key to this process is the weekly risk report, which includes a risk mitigation plan for any potential risk. You also need to monitor the list of potential risks, any cost modifications, anytime modification including those that impact milestones, and any variance from established and agreed upon performance metrics.

While the above description of the system that is needed to manage the integrated delivery is a short outline of the process, it does provide the basics. However, to completely understand the system requires more detail than is possible in a short report. If you would like to learn more about how to implement an effective integrated delivery system, please contact me.

One final thought. While integrated delivery refers to the integration of both design and construction, the concepts described above, excluding the design phase, can be applied to contractors that are forced to bid on completed drawings and specifications. In other words, a general contractor selecting the best qualified subcontractors and working with them to reduce costs through better procedures will be more successful than simply attempting to get a lower subcontractor prices by beating on subcontractors. You may get a lower bid number hammering subcontractors' prices, but the question remains can those subcontractors actual perform the work that is required?

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."

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MAY2014 | 29

GARRISON REPORT

Egan also added, "By continuously improving its performance through the use of integrated teams, the industry will become more successful, this will in turn enable it to attract and retain the quality people it needs, which will enable it profitably to deliver products and services for its clients."

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AROUND THE BENCH

LED Lights to Rival Regular Light Bulb in Price by 2020 By: Shawn Gumataotao Our friends at Deco Lighting have been fantastic to work with over the past couple of months. Not only have they helped us with a number of Design Build efforts here in Guam, we have since lit up the Santa Rita Basketball Court in Southern Guam with the installation of four Deco Light D823-LED 23" Floodlights. Deco Lighting VP of LED Lighting Ben Peterson has been a huge help to us and recently this writer stumbled across an on-line article written

by Ben about an issue that has many in this part of the world wondering if it is really time to make the full conversion to LED. "It is exciting to see LED technology finally having its time to disrupt traditional inefficient incandescent lighting," said Peterson. "As volume production increases, and prices come down, affordability rises.

We have seen this parallel in many new industries and technologies, LED Lighting is not like the iPod replacing the Walkman but more like solar panels on the roof replacing diesel generators."

Peterson added that as the efficacy (lumens/watt) of LED increases and costs come down it makes more and more sense to make the switch. He notes that rebates from utilities and other programs help get early adopters into new technologies like

32 | MAY2014

solar and LED lighting, but the real growth happens when the price performance is almost at parity or better than current incumbent technologies making it a no brainer for consumers to switch throughout the next six years and beyond.

Ironically, our friends in Hawaii will get to try this out first hand as the Pacific Business News is reporting that Hawaii Energy is offering small businesses and restaurants across the archipelago an opportunity to replace their old lighting with newer energyefficient ones for free. Hawaii Energy is a ratepayer-funded energy conservation and efficiency program for Oahu, the Big Island, Maui, Molokai and Lanai. Businesses there pay about 33 cents per kilowatt-hour on Oahu and slightly more on the Neighbour Islands, about three times the national average of 10 cents per kilowatt-hour.

Guam businesses pay well over 26 cents per kilowatt hour depending on what time they are not using their peak load which puts it on par with Hawaii.

With lighting accounting for nearly half of a retail business' overall electricity costs at 48 percent, account for 27 percent on an office's costs and 18 percent for restaurants what is the lifeline of an economy to do?

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Ben offers a solution.

"Organizations like Nichia, CREE, and Philips are at the leading edge trying to squeeze more light out every diode for less dollars, which in turn will allow all of us to use less energy and produce less greenhouse gasses," said Peterson. "Its an exciting time, the next time you are in a parking lot or building look up and look for what kind of light you see. You will be surprised how much more LED lighting you will see as time progresses."

We think it is already happening. Expect this not to be an LED sprint, but more of an LED marathon.

To learn more about the lighting products that GET, LLC provides, including the LED lines of our partners, Independence LED Lighting and Deco Lighting Inc., please check out our website at www.getguam.com or call us to discuss solutions for your important lighting needs-All Made in America!!!

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