GCA Construction News Bulletin September 2011

Guam Contractors’ Association

CONSTRUCTION NEWS BULLETIN

Vol.52 Issue 09 SEPTEMBER2011

Worker’s Compensation

What We All Need to Know

Bonding

The Fundamentals

We're here to empower your communications...

ADZtech & Public Relations has the creative and marketing firepower to get you there!

www.adztechgu.com

671-477-1239

Your one-stop location for Real Estate Development & Business Consulting. www.lms-guam.com 671-647-2617

20

Feature Story

CONTENTS SEPTEMBER2011

18 8

Feature Story

Update C ommittee S.A.M.E.

12 14

C ommittee Update Headline: C onstruction TASA

16

Headline: C onstruction Triple Bottom Line

18

Story: F eature Worker’s Comp

2 | SEPTEMBER2011

20

Story: F eature Bonding

24 28 30 35

P hoto Highlights S mall Business C rane Critique Corner N ew Members

CONSTRUCTION NEWS BULLETIN

www.guamcontractors.org

THETEAM

THEDIRECTORS PRESIDENT James A. Martinez, GCA CHAIRMAN William “Bill” Beery, Tutujan Hill Group VICE CHAIRMAN Robert Salas, Landscape Management Systems PAST CHAIRWOMAN Chit Bathan, Ace-Builders SECRETARY/TREASURER Tom Anderson, Black Construction ASSOCIATE DIRECTORS: Edward Untalan, First Hawaiian Bank Paul Calvo, Calvo’s Insurance Vincent Davis, Hawthorne Pacific Corp Ray Yanger, Matson Navigation CONTRACTORS DIRECTORS: Tom Nielsen, Maeda Pacific Corporation Juno Eon, Core Tech International Robert Piper, Hensel Phelps John Robertson, AmOrient Art Chan, Hawaiian Rock Louis De Maria, dck pacific guam LLC

Guam Contractor’s Association (GCA) in conjunction with AdzTech and Public Relations, Inc. publishes the Construction News Bulletin (CNB) monthly. Reproduction of materials appearing in this publication is strictly forbidden without written permission by GCA. While we always strive for accuracy, we will from time to time overlook mistakes. In order to help us improve the quality and accuracy of this publication, we ask that you take the time to look at the information provided and notify GCA of any corrections as needed. Opinions and editorial content of this publication may not necessarily be those of the publisher, staff, GCA members, GCA Board of Directors and advertisers.

For more information about advertising in the GCA Construction News Bulletin contact the advertising department at (671) 477-1239/2239 or email at adztech@teleguam.net.

Distributed to GCA members or can be obtained by stopping by the Guam Contractors’ Association office located at 718 N. Marine Corps Drive, Suite 203, East West Business Center, Upper Tumon, Guam.

To find out more about how you can become a GCA member contact Chantel Cruz, Guam Contractors’ Association at (671)647-4840/41, or fax (671) 647-4866 or email to gca@teleguam.net.

Postmaster.

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

PUBLISHER: James Martinez SALES & MARKETING DIRECTOR: Geri Leon Guerrero AD SALES: Marc Mendiola PRODUCTION: Geri Leon Guerrero Christopher Estioca Christopher “Taco” Rowland PHOTOGRAPHERS: Marty Leon Guerrero Taco Rowland EDITOR: Adztech CONTRIBUTING WRITERS: John Robertson Dave Barnhouse Gennette Quan Simmons Nora Santos Marty Leon Guerrero Adam Baron Orlene Arriola Steffran Neff GCA STAFF: Chantel Torres-Cruz Francine Arceo Desiree Lizama COVER: Look Out Below!

Taking care of Work-Related Injuries.

The Chamorro word for “Rain!” is: Uchan (oo-chan)

brought to you by "Learn Chamorro" www.learnchamorro.com 6 | SEPTEMBER2011

CONSTRUCTION NEWS BULLETIN

www.guamcontractors.org

COMMITTEEUPDATE

AIRPORT UPDATE – PROGRAM OVERVIEW Guest speaker at the August meeting of SAME Guam Post was Mary C. Torres, Executive Manager, A.B. Won Pat International Airport Authority, Guam. She provided an update on the A.B. Won Pat International Airport projects, project status and project opportunities. Key points from Ms. Torres’ presentation are outlined below.

CAPITAL IMPROVEMENT PROGRAM • • • • • • • • • • •

Mission essential Increase activity Maximize capacity Enhance safety & security Federally funded Runway Extensions & Parallel Taxiway Construction ILS Installations (Runway 6L/24R & Runway 6R/24L Seismic Zone Upgrades AOA/Security Perimeter Fencelines Utility Infrastructure Upgrades Roadway Systems

RUNWAY AND TAXIWAY CONSTRUCTION • Runway extensions: 10,000 and 12,000 feet Phase IX – RWY 6L/24R – $1.9m (FY 2011) • Parallel Taxiway construction - 10,000 feet • Runway rehabilitation RWY 6L/24R – Phase I (Design) - $1.5m • ILS Installations (RWY 6L/24R & RWY 6R/24L) RWY 6L - Phase I - $2.2m RWY 6L - Phase II - $4.8m

RESIDENTIAL SOUND SOLUTION PROGRAM • • • • • •

GUAM INTERNATIONAL AIRPORT VISION “’Standard in Excellence’” “as a safe and secure, world-class airport and premier aviation hub in the region!”

7-10 Year Program (2006) $15.9 million through phase 1c Pilot phase, Phase 1a, 1b and 1c complete Includes 194 homes $82k per home improvements Phase 2A – pending FAA approval

SUSTAINABLE PRACTICES • Airports are going green – including GIAA.

MILITARY BUILD-UP

TERMINAL UPGRADES • Ongoing Restroom upgrades - $1.5m Carpet replacement - $1.0m 60-180 days A/C upgrades - $8.8 IDS/BIDS - $5m • Conceptual Food court upgrades - TBD • Bus Parking/Parking Lot redesign – TBD

• • • • • • •

Integrated Air Cargo Aprons - $66.5m Outbound Baggage Systems - $31.5m Third Floor Arrivals Concourse - $250m Passenger Concourse Construction - $180m Pipeline & Hydrant Fueling System - $36.8m Runway Retro-fit – Military Specs - $221.7m Alternate Airport – Military Crisis

OTHER KEY INITIATIVES • Master Plan Update - $700k • Fuel System Upgrades - $10m • Property Development – 100 acres

To join SAME Guam Post, logon to SAME.org and proceed to New Membership.

8 | SEPTEMBER2011

CONSTRUCTION NEWS BULLETIN

www.guamcontractors.org

COMMITTEEUPDATE

Military, Government and Labor Relations Update (September 2011)

By John M. Robertson As mentioned in the August update, the Guam business community must act at this critical time in support of the military buildup. The consensus among local leaders in the public and private sector is that the buildup will occur but over a longer period and possibly be scaled back from what is detailed in the FEIS. That is by no means certain and complacency on our part may cause a worse case to become reality. Before lunging into action, we need to understand what is fact and what is speculation. What follows is information gathered from reliable sources in Washington, DC. The House of Representatives did pass its version of the NDAA supporting the Presidents’ budget request. The Senate language in the NDAA markup dated 17 June 2011 is problematic in relation to the military buildup on Guam. Starting on page 26 of 33 relevant items are extracted below for ease of reference:

Operations & Maintenance and Procurement Funding Items Extracted from U.S. Senate Committee on Armed Services News Release dated 17 June • Cuts $33.0 million from the Of�ice of Economic Adjustment for Guam facilities support appear to be ahead of need.

• Cuts more than $1.0 billion from the President’s budget for military construction and family housing projects. [not just Guam] - More than $500.0 million in incrementally funded projects to improve ef�iciency and prevent waste through more ef�icient cash �low of large projects.

- Approximately $180.0 million in overseas military construction deemed unnecessary or ahead of need.

- Approximately $150.0 million in projects requested for the realignment of U.S. Marine Corps forces from Okinawa to Guam as projects are not necessary in this �iscal year.

• Prohibition on funds for the realignment of USMC forces from Okinawa to Guam until the Commandant of the Marine Corps 12 | SEPTEMBER2011

provides an updated force lay-down. The Secretary of Defense must also submit a master plan to Congress detailing construction costs and schedule of all projects necessary to realize the Commandant’s force lay-down, and the Secretary must certify to Congress that tangible progress has been made to relocate Marine Corps Air Station Futenma.

• Requires DOD to study the feasibility of relocating Air Force assets at Kadena Air Base on Okinawa and moving Marine Corps aviation assets currently at Marine Corps Air Station Futenma to Kadena Air Base rather than building an expensive replacement facility at Camp Schwab.

• Provides for the rescission of $388.4 million of unobligated prior year military construction funds. [not just Guam] ****

There is no schedule for the House-Senate Joint Committee to meet and resolve differences between their two versions of the NDAA. That must now wait until after the super committee of�icially titled “Joint Select Committee on De�icit Reduction” has completed their deliberations and submitted their report to Congress. Everyone will recall the dif�iculty the Government faced in passing a law to increase the de�icit in early August. The impasse was resolved by appointing this committee. It is important for us to understand who is on the committee and what they must accomplish.

Joint Select Committee on De�icit Reduction Extracted from 11 August article in Politico.com

Congress �inalized the lineup of its super committee on de�icit reduction, as House Minority Leader Nancy Pelosi (DCalif.) named Reps. Jim Clyburn, Chris Van Hollen and Xavier Becerra to the 12-member panel. All three represent liberal districts.

Clyburn, who is black, and Becerra, who is Hispanic, are the only minorities on the new panel, which is charged with writing de�icitreduction legislation by Thanksgiving that can get an up-or-down vote in each chamber

by Christmas. They join House Republican super committee members Fred Upton (Mich.), Dave Camp (Mich.) and Jeb Hensarling (Texas); Senate Republicans Jon Kyl (Ariz.), Rob Portman (Ohio) and Pat Toomey (Pa.); and Senate Democrats Max Baucus (Mont.), John Kerry (Mass.) and Patty Murray (Wash.). Murray, the only woman on the panel, and Hensarling are its co-chairs.

'Super committee' to hold �irst organizational meeting on Thursday 8 September

CONSTRUCTION NEWS BULLETIN

Extracted from National Journal, September 2, 2011

The heads of the joint select committee charged with identifying $1.5 trillion in de�icit cuts over 10 years announced that they will hold a public organizational hearing on Thursday Sept.8, followed by their �irst public hearing on Tuesday, Sept.

13. The co-chairs of the panel, Rep. Jeb Hensarling, R-Texas, and Sen. Patty Murray, D-Wash., said in an announcement that the Thursday hearing, at 10:30 a.m., will include opening statements by panel members and will focus on consideration of proposed committee rules. The second hearing, also at 10:30 a.m. will include testimony on "The History and Drivers of Our Nation's Debt and Its Threats" from Congressional Budget Of�ice Director Douglas Elmendorf.

The panel created by legislation in early August allows raising the federal debt ceiling and requires de�icit cuts. The bill requires the committee to meet by Sept. 16 and to issue recommendations by Thanksgiving for cutting $1.5 trillion. Seven of the 12 panel members must agree for recommendations to be offered. Committee recommendations will automatically receive expedited consideration with amendments barred and no Senate �ilibusters allowed. If the panel's recommendations are not adopted, $1.2 trillion in cuts, with half targeting defense spending and entitlements largely exempted, will be imposed. If cuts of less than $1.2 trillion are agreed on, the mandatory cuts making up the difference will be imposed. ***** A further $600 Billion in cuts to military spending over 10 years would likely negatively impact the Guam military buildup. The principal author of the Senate amendments to the NDAA is Senator James Webb. It is important to understand the motivation behind this disruption to forward progress with the implementation plan in Okinawa and Guam.

Observations and Recommendations on U.S. Military Basing in East Asia Extracted from Senator Jim Webb’s web site – May 2011

Senator Jim Webb is Chairman of the Senate Committee on Armed Services Personnel Subcommittee and Chairman of the Senate Foreign Relations Committee East Asian and Paci�ic Affairs Subcommittee. He is a Naval Academy graduate and veteran of the Vietnam War. He is a former Secretary of the Navy.

These recommendations were made following the joint visit of Senator Webb and Senate Committee on Armed Services Chairman Carl www.guamcontractors.org

Okinawa / Guam The issues related to downsizing the US presence on Okinawa and transferring some of these functions to Guam are militarily complex, potentially costly, and politically sensitive. The US andJapanese governments have been working for �ifteen years to come up with an acceptable formula. A general framework has now been agreed upon, whereby the US will relocate many of its bases from the populous southern end of Okinawa, moving some forces to the less populous north and also rebasing 8,000 US Marines on Guam. However, a stalemate has ensued, with many in Okinawa growing intransigent and, to a lesser extent, many on Guam losing their enthusiasm. On Okinawa, the most dif�icult issue regards the long-standing dilemma of relocating the US Marine Corps air facility at Futenma, now operating in a highly populated section of the island and the subject of numerous protests. The Marine Corps insists that any relocation must remain on Okinawa due to the unique air / ground partnership that is characteristic of Marine Corps operations.

One option – moving Marine Corps helicopter and other functions from Futenma to nearby Kadena Air Force Base – has been opposed because it would bring increased noise levels to Kadena. Many Okinawans, including many leaders, are adamant that the facility should be relocated off-island.

The present compromise reached between the US government and the Government of Japan calls for the construction of a contiguous, partially offshore replacement facility to the far north at Camp Schwab. The US government and the GOJ seem determined to pursue this option in order to bring �inal closure to the debate, but it is rife with dif�iculties. This would be a massive, multibillion dollar undertaking, requiring extensive land�ill, destruction and relocation of many existing facilities, and in a best-case scenario, several years of effort – some estimate that the process could take as long as ten years. Moreover, the recent earthquake and tsunami around Sendai in the north of Japan is creating an enormous burden on the Japanese economy and will require years of reconstruction. www.guamcontractors.org

On Guam, environmental issues have not been resolved, and many community leaders are concerned that local communities and facilities would be overwhelmed by any large increase in our military presence.

Their clear message is that federal money would be necessary to build up infrastructure outside of the bases in a manner commensurate with an increase in the bases themselves. Although several issues are being debated related to �iring ranges on Guam and training activities on places like Tinian, the principal issue for military planners involves whether to relocate families along with the 8,000 Marines who would be assigned to that island or to con�igure the Marines mostly as deployed units rotating into and out of Guam from a home base such as Hawaii or Camp Pendleton. This distinction would make a strong difference in terms of infrastructure costs for schools, medical, recreational facilities, and housing.

A good estimate is that 8,000 Marines would become 23,000 Americans if family members were included.

It should also be noted that Guam’s Andersen Air Force Base is a large, under-utilized facility. Mindful that B-52 missions were conducted continuously there in the 1970s, we estimate that Anderson Air Force Base is now operating at less than half of its capacity.

Recommendations 1. The Marine Corps should consider revising its implementation plan for Guam to a stripped-down presence with a permanently-assigned (family accompanied) headquarters element bolstered by deployed, rotating combat units that are home-based elsewhere, and the construction of a “Camp Fuji” style training site on Tinian. The “planned” versus “preferred” options for Marine Corps presence on Guam need to be resolved so that the Navy can develop and provide to the Committee the master plan for the overall buildup on Guam that was �irst requested in 2006.

2. DOD should immediately examine the feasibility of moving the Marine Corps assets at Futenma into Kadena Air Force Base, while dispersing a percentage of Air Force assets now at Kadena into other areas of the Paci�ic region. A number of other options exist in Japan and, especially, Anderson Air Force Base in Guam. In addition, the 6,000acre ammunition storage area at Kadena could potentially be down-sized, especially in light of the two ammunition storage areas already located on Guam – one of them comprising 8,000 acres in and of itself, and the other one already located on Anderson Air Force Base. Reducing the burden of the US presence on the people of Okinawa is an important goal associated with the realignment roadmap. Relocating Marine Corps

aviation assets as outlined above will allow the US to return the land at the Futenma Air Base faster and at substantially less expense than the current plan for the Replacement Facility at Camp Schwab. Additionally, it is imperative that we pursue every opportunity to avoid unnecessary and unaffordable costs to the US taxpayer. Money saved by abandoning the Camp Schwab FRF could be applied to new projects in the revised realignment plan following negotiations with the Government of Japan to formulate a new cost-sharing agreement. This option would keep our military forces in the region, would greatly reduce the timing of the sensitive political issues surrounding Futenma, could save billions in costs that would have gone into the offshore facility at Camp Schwab, would reduce the American footprint on Okinawa, and potentially could result in the return of more land to the Okinawan people if the size of the ammunition storage area at Kadena could be reduced. ***** The Senate markup of the NDAA is similar to the foregoing. It was announced by Senator McCaskill of Missouri. This alternative scheme has been referred to as the LevinMcCain- Webb plan. However, it is obviously the handiwork of Senator Webb and the other senators have signed onto it. In fact, it is not a real plan but is a suggested alternative to the EIS that cost the Government in excess of $100 Mil. It is understood that Senator Webb relied heavily on General James Jones, USMC (Ret) who was appointed National Security Advisor to the President from January 20, 2009 until October 08, 2010. From July 1999 to January 2003, General Jones was the 32nd Commandant of the Marine Corps.

All of the foregoing is important to an understanding of the serious challenge the Guam community faces in attempting to get the military buildup back on track. This knowledge does not provide a road map on how the Guam community should proceed to be successful but it does bring awareness of the many pitfalls that can be anticipated. There is in fact little the Guam community can do.

However, we are backed by the House of Representatives, the Obama administration and the military. The more we as a community push, the more those in the Senate can expect to soften their stance.

Starting in September our committee will be sending letters to key members of both houses of Congress and the military in an attempt to ensure adequate funding for the military buildup on Guam as being an essential element in strengthening the defense of our nation.

The Government and Labor Relations Committee is open to all members of the association.

Contact the GCA office for time and place of meetings.

CONSTRUCTION NEWS BULLETIN

SEPTEMBER2011 | 13

COMMITTEEUPDATE

Levin to Guam, Okinawa, and Tokyo from April 25 to April 29, 2011. Senator Webb also visited Korea and Vietnam the preceding week. Together, this entailed more than 30 meetings with senior government of�icials, U.S. diplomats and military commanders, visits to U.S. military installations, and other activities. The visit was one of several recurring visits to East and Southeast Asia by Senator Webb during his time in the U.S. Senate to reinforce American diplomacy and expand diplomatic and security relationships in the region.

CONSTRUCTIONHEADLINE

TASA

Chamorro Chamorro Tradition Tradition Renaissance Renaissance by:Marty Leon Guerrero

All over Guam and the Marianas Islands, models of ancient Chamorro outrigger sailing canoes and replicas of latte stones are displayed as art work. A simple search through historical documentation from the days of European explorers reveal many accounts showcasing the awesome craftsmanship, engineering and beauty of these "flying" vessels and monolithic structures - especially as being indicative to the culture of the Chamorro people. Hundreds of years would pass and these icons became relics, their functions relegated as objects in art and logos.

Traditions Affirming our Seafaring Ancestry (TASA) was created in 2010 as a natural progression of the growth in the renaissance of the Chamorro traditional seafaring heritage. Founded by long time enthusiast and participants of this cultural craft, TASA includes members not only from Guam but also Rota and Saipan. These members saw a need to focus their energy and resources on the completion of a latte canoe house at Ypao beach when they returned from the historic maiden voyage of Sakman Saina in 2009.

TASA has secured a site at The Gov. Joseph Flores Beach Park at Ypao, entering into an MOU with the Department of Parks and Recreation. Additionally, TASA was approached by The Baldyga Group to construct an ancient Chamorro village complete with two latte huts and eight other traditional huts. Completed in June, the village is the main feature of the cultural park - Lina'la. Most importantly,

14 | SEPTEMBER2011

the completion of these traditional structures is a testament to the resolve of TASA to establish credibility and integrity to Project Guma Latte Marianas. A pictorial documentation of this accomplishment can be viewed at http://www.facebook.com/tasa.seafaring .

Project Guma' Latte is strategically located at Ypao Beach, providing accessibility to the local community of Guam and a contrast to the modern hotel structures of Tumon Bay for our visitors.

Demonstrations and activities in and around the Guma Latte will serve to educate our local people, and our visitors about the rich tradition and culture of the ancient Chamorro. They will also provide us the opportunity to bring Guam's architectural history and indigenous culture to light.

For the next couple of months, we will be documenting the progress of the TASA group and the Project Guma’ Latte as the majority of the materials needed to bring this project to fruition will be donated by some of our GCA members. This is just one of the many ways our generous members give back to our community as well as taking part in perpetuating our beautiful Chamorro culture. So, if you’re a member of GCA, and you want to donate time or most importantly, some building material, don’t hesitate to contact Mr. Ron Acfalle at 689-8277 or you can email him at tasa.marianas@gmail.com or nativebuilders@yahoo.com.

CONSTRUCTION NEWS BULLETIN

www.guamcontractors.org

CONSTRUCTIONHEADLINE

People. Planet. Profit.

A triple bottom line mini-conference by: Steffran Neff

On September 1, 2011, the University of Guam Center for Island Sustainability, Sea Grant Program, and the Guam Small Business Development Center hosted a mini-conference at the Hyatt Regency Guam for small businesses to discuss how they can incorporate triple bottom line practices into their operations.

Triple bottom line (TBL) is a term used for balancing economic, environmental, and social factors into decision-making and business practices. Presenters at the conference included Steffran Neff, Managing Engineer for Brown and Caldwell and Barbara Burkhardt, Architect, Chugach World Services. During the conference, the presenters spoke about what businesses are doing right now on Guam and local and regional solutions to better incorporate sustainability and TBL into business. Several local businesses discussed their current practices including Payless Supermarket, Isla Paint and Roofing, Coast 360, Perez Brothers, and Island Girl Coffee ‘n Quenchers.

16 | SEPTEMBER2011

Guam Contractor Association Member, Steffran Neff of Brown and Caldwell spoke of the use of a business case evaluation (BCE) to assist businesses in justifying the incorporation of TBL into their decisions and day-to-day practices. Ms. Neff described the BCE as a step-by-step approach that Brown and Caldwell has been successfully using with a variety of clients from municipalities to private business of all sizes.

The BCE focuses on life-cycle costing which is imperative when evaluating TBL considerations. In many cases where TBL is concerned a business will find that if it spends a bit more capital up front, it can have a significant return on investment in the not so long run while helping the environment and the community. A good example of this on Guam is implementing energy efficiency measures. A capital investment may be needed for new equipment or materials, but in a very short time a business can save money while reducing its carbon footprint and lessening the local burden on fuel imports. In addition to potential cost savings, incorporating TBL and

CONSTRUCTION NEWS BULLETIN

sustainability into business practices has been shown to improve employee recruitment and retention, increase employee morale and productivity, and lead to better community relations.

When asked why Brown and Caldwell supports TBL and the University of Guam’s Center for Island Sustainability, Ms. Neff pointed to Brown and Caldwell’s history, “Our legacy of environmental stewardship that goes back to Dave Caldwell, who, since founding of the company in 1947, insisted that Brown and Caldwell’s approach to wastewater plant design minimize energy use. A true visionary, he pioneered and advocated wastewater reuse long before it was fashionable. Dave's belief that the needs of society, our clients and the environment can co-exist remains an integral part of our culture and is readily seen in the innovations and advancements of Brown and Caldwell’s engineers and scientists who have since followed.” Ms. Neff continued by stating how proud she was to continue in the footsteps of Dave Caldwell by helping business of all size and type incorporate sustainability and TBL into their day-to-day practices.

www.guamcontractors.org

FEATURESTORY

INSURANCE The Claims Process

By: Gennette Quan Simmons Did you know that workers’ compensation insurance is the oldest form of insurance in the United States? And if you’re thinking it’s also the most complex, you’re probably correct. The following overview covers a few key components of how the claims process works in Guam and is by no means complete. But it does provide a brief summary of some of the most commonly asked questions as well as responses provided by two of Guam’s insurance experts, Stephanie Finona, claims manager for Pacific Indemnity Insurance Company and Orlene Arriola, AINS (Cassidy’s Associated Insurers).

What is Worker’s Compensation?

The Territory of Guam, like the 50 states and the District of Columbia have Workers Compensation Laws

18 | SEPTEMBER2011

with the same basic objective of providing no-fault benefits to workers injured on the job. Guam Law, like the laws of other jurisdictions, mandates that all employers with one or more employees are responsible for the benefits to workers as outlined by statute for medical expenses, disability, and death as a result of a work-related injury.

Workers’ Compensation insurance is a policy that transfers the financial responsibility to provide these benefits from employers to an insurance company in exchange for a premium.

Guam Law also takes it a step further and requires that this insurance must be provided by an “admitted” insurance carrier (carrier licensed to do business on Guam), and as clarified by the Guam Department of Labor, purchasing a worker’s compensation policy, almost without exception, is the exclusive option to meet this obligation.

CONSTRUCTION NEWS BULLETIN

As it relates to Contractors doing business on Guam, this insurance policy is also required to obtain a Contractor’s License regardless of the number of employees at the time of application. In addition, Prime Contractors are responsible for the payment of benefits to the employees of uninsured subcontractors.

A violation of the law is charged as a misdemeanor, and if convicted, an employer can be punished by a fine of not more than $1,000 or by imprisonment of not more than (1) year, or both.

The claims process

After a work injury occurs or is discovered, the employee must notify their employer of a work injury as soon as possible. With respect to the type of injury, specific forms for notification to relevant agencies must be completed by the employer and employee and are available online www.guamcontractors.org

day from the date of the workrelated injury and is payable to the employee.

The employer provides the employee with the initial medical authorization (Form GWC101) to seek emergency medical care.

Process obstacles

The employer reports the work injury to their respective insurance carrier and the Guam Department of Labor within 10 days of their knowledge of the injury.

The insurance carrier takes over the claims process and provides subsequent medical authorizations as needed.

When applicable, disability payment is paid on the 14th day from the date of injury and is payable to the employee.

Most common injuries claimed:

Lacerations & Abrasions Lower Back Pain

What is the average wait time for workers to be compensated?

After proper reporting and filing, benefits should start automatically.

Medical treatment for work related injury is covered immediately.

The first three days of disability is a grace period. This period may be compensable if the disability period exceeds fourteen days.

When applicable, the first disability payment is paid on the 14th www.guamcontractors.org

- Untimely reporting by employers who lack experience or knowledge of the Workers’ Compensation process often results in delays. This leads to fines for late reporting and an interest penalty for late disability payments. In the past couple of weeks the Workers Compensation Division of the Guam Department of Labor has been penalizing employer’s who do not submit their injury report in a timely manner.

- The current law does not provide a specific medical fee schedule relating to the treatment of workrelated injuries creating variability in the fees that can be charged by medical providers for treatment and services. This variability can result in additional time required by a carrier to administer a claim.

With respect to serious injuries, or injuries requiring specialized treatment, on-island medical facilities with the specialists or equipment to provide such treatment may not be offered or readily available locally.

- The Government of Guam Vocational Rehabilitation Program may have insufficient resources to provide adequate vocational rehabilitation services to address the current needs of Guam’s growing population.

the Guam Workers’ Compensation Statute.

- Coordination with local Medical providers to offer needed specialties and/or equipment for common work-related injuries.

When this is not economically feasible for medical providers, collaborative efforts between local and off-island Medical providers and community groups can be encouraged to make these treatments available to injured workers.

Helpful resources

www.dol.guam.gov – Regulatory and Compliance (Workers Compensation). Free Workshops/Labor Clinics Calendar www.justice.gov.gu/compilerofla ws/gca/22gca/22gc009 - 22 GCA Business Regulations Chapter 9 Worker’s Compensation www.justice.gov.gu/compilerofla ws/GAR/17GAR/17GAR002-10.pdf - 17 GAR - LABOR RELATIONS DIV. 2 – WORKERS’ COMPENSATION www.dol.guam.gov/index - Guam workers compensation forms (downloadable) and a description of the form and how it is used.

Potential solutions

- Educating all employers of the proper claims procedure and the importance of timely reporting of all work-related injuries.

- The development of a medical fee schedule that is approved by the Legislature and made a part of CONSTRUCTION NEWS BULLETIN

SEPTEMBER2011 | 19

FEATURESTORY

at www.dol.guam.gov. (Forms GWC101, GWC201, GWC202, GWC203, etc.)

FEATURESTORY

Fundamentals of Bonding

by: Adam Baron Bond Manager Cassidy’s Associated Insurers, inc.

In previous articles written for the GCA bulletin, I’ve outlined the process and expectations of a surety company when considering a contractor for surety credit.

Basically, it’s a ‘how to’ with respect to a contractor qualifying for bonding. However, this article is more elementary in that it defines much of the terminology and basics of bonding.

So let’s begin with describing the basic bond arrangement and the parties involved…

Surety is a three party arrangement where one party (contractor, referred to as the Principal) has a contractual obligation to second party (owner, referred to as the obligee); with a third party (the surety) being a guarantor of the first party, both jointly obligated to the owner/obligee.

Detailing and defining the three parties a bit further, there is: the Contractor (also referred to as the Principal). The Principal is to perform the work as contractually outlined in the underlying contract, plans, specifications and general conditions which all detail what the Principal is expected to do and within what time frame.

the Surety: The surety is the ‘backer’ of the contractor. They prequalify the contractor/principal in terms of experience, capability and financial capacity. If sufficient, the surety will agree to issue a bond for the specific contract. The bond issued guarantees certain obligations of the contractor. If all goes well, the surety will have little to do (and little communication with the owner/obligee).

In due course they will be able to close their bond file (when appropriate) without much involvement. However, if the contractor/principal should fail to perform on the job, or fail to pay certain vendors, then the surety would become much more involved with the Obligee (and Contractor/Principal) in finding and funding a remedy to the situation.

the Surety

There are basically three primary types of bonds pertaining to contract surety.

These are: Bid bonds, Performance Bonds and Payment Bonds.

Each is briefly described below: Bid Bonds: Bid bonds are most frequently mandated on public/gov’t

the Obligee: The obligee is the party for whom the contractor is performing the work.

The obligee, as the owner, has little expected of them. They of course must adhere to the contracts terms and (perhaps most importantly) pay the Contractor as contractually agreed.

Otherwise there is little required of the Obligee.

the Principal

the Obligee 20 | SEPTEMBER2011

projects. If/when required, the bid bond will be provided to the owner (government) by the contractor as part of the contractor’s bid submission.

The bid bond guarantees that the bid was placed in good faith and that the contractor, if awarded the contract, will enter in to the contract and provide the required Performance and/or Payment bonds. The bid bond is usually a set percentage of the total bid amount (usually 10% to 20% of the bid).

In the event that the contractor fails to enter in to the contract or fails to provide the requirement Performance/Payment bonds, the owner has the right to claim to the surety for an amount up to the full penalty of the bid bond (ie. the full 10-20%). The amount of the claim depends on how much additional costs the owner incurs if the second-low contractor is to be selected in lieu of the low bidder.

CONSTRUCTION NEWS BULLETIN

Performance bonds. The performance bond protects the owner (Obligee) from financial loss due to the contractor’s failure to perform in accordance with the contract, plans and specifications. If, on a bonded project, a contractor fails to perform accordingly, the owner has recourse to file a claim with the surety.

The surety must then investigate and, if appropriate, step in and remedy the situation. They can do so by: 1) facilitating a bailout plan with the original contractor (if agreeable to the owner), or 2) the surety can find an acceptable replacement contractor at the surety’s expense, or 3) the surety can negotiate a financial settlement with the owner.

Payment bonds. The payment bond protects the owner from certain unpaid suppliers, subcontractors or labors (and other possible claimants) having a direct working relationship with the contractor (or, in some cases, under the prime www.guamcontractors.org

One final item worth explaining is the Indemnity Agreement. The concept of the indemnity agreement is one of the defining differences between surety and insurance. The indemnity agreement is a critical element of a surety relationship and is one of the main aspects of surety that lend it to appear more like bank credit than an insurance policy. Resembling a bank’s loan agreement, the

www.guamcontractors.org

primary function of the indemnity agreement is to serve as the contractor’s agreement to reimburse the surety for all costs incurred by the surety in the event that the surety had to step in and complete the bonded contractors’ obligations.

FEATURESTORY

contractor’s subs (ie. two layers down)).

These are typically entities which have mechanic’s lien rights. In the event that the bonded contractor (or his subcontractor) is unable to pay uncontested amounts payable to certain subcontractors, suppliers or laborers (or other possible claimants), the surety would then step in and satisfy the uncontested job-specific payables of the contractor. It is interesting to note that Payment bond claims can occur even if the job site performance is proceeding satisfactorily.

The bottom line: As a form of credit, if the surety has to pay out to honor any of the contractor’s obligations, the contractor must reimburse the surety.

I hope you have found the above informative and invite you to further explore surety bonds by visiting the Surety Information Office website at www.sio.org.

You may access the following link to review my previous article “How to Qualify for U.S. Treasury Listed Bonds”; www.guamcontractors.org/publications /September_2009.pdf

CONSTRUCTION NEWS BULLETIN

SEPTEMBER2011 | 21

PHOTOHIGHLIGHTS

August Luncheon

August 17th,2011 Onward Agana Beach Resort

GCA’s 24th Annual Golf Tournament

Honorable Eddie Baza Calvo, Governor of Guam speaks on government reorganization plan and reduction in the government workforce.

August 20th, 2011 LeoPalace Resort Guam

24 | SEPTEMBER2011

CONSTRUCTION NEWS BULLETIN

www.guamcontractors.org

PHOTOHIGHLIGHTS

www.guamcontractors.org

CONSTRUCTION NEWS BULLETIN

SEPTEMBER2011 | 25

PHOTOHIGHLIGHTS 26 | SEPTEMBER2011

CONSTRUCTION NEWS BULLETIN

www.guamcontractors.org

SMALLBUSINESS

TRAININGS/SEMINARS The Guam SBDC is one of seven SBDC’s serving the Micronesian region, collectively known as the Pacific Islands Small Business Development Center Network (PISBDCN). We offer free, confidential, one-to-one counseling in all areas of business management, including pre-venture feasibility, business planning, marketing, and financial management. We also offer small business training programs at low to no cost.

• September 23, 2011, 8:30am-11:00am • October 21, 2011, 8:30am-11:00am • October 27, 2011, • October 28, 2011,

12noon-2:30pm 8:30am-11:00am

“How to Write A Business Plan” “Small Business Tax ComplianceWhat you need to know” "WIB: Monitoring Cash Flow & Seeking Funds” “Quickbooks: Analyzing Financial Data

To register, call the Guam SBDC at 735-2590 or email Laurine Sablan at laurine@pacificsbdc.com. For more information, please visit www.pacificsbdc.com (click on workshops/calendar) or call 7352590.

Requests for reasonable accommodations for persons with disabilities must be made 72 hours in advance. For arrangements, please call Guam SBDC at 735-2590. Services are extended to the public on a non-discriminatory basis.

September 22, 2011, 9:00 a.m. – 10:03 a.m.

8(a) Application Process

The SBA's 8(a) BD Program, named for a section of the Small Business Act, is a business development program created to help small disadvantaged businesses compete in the American economy and access the federal procurement market. The Guam PTAC will help you navigate the forms and requirements of the 8a program.

Location of Workshops: UOG School of Business & Public Administration Bldg. Classroom 131 October 6, 2011, 9:00 a.m. – 10:30 a.m.

Developing a Capabilities Statement

A capabilities statement is probably one of the most important marketing tools that you can use to promote your business in the federal/local market place. Join us in this workshop as we help you to develop a great marketing tool.

Location of Workshops: UOG School of Business & Public Administration Bldg. Classroom 131 October 20, 2011, 9:00 a.m. – 10:30 a.m.

Women Owned Small Business (WOSB) SBA's new Women-Owned Small Business (WOSB) Federal Contract program provides greater access to federal contracting opportunities for WOSBs and economically-disadvantaged women-owned small businesses (EDWOSBs). Contracting officers at federal agencies are allowed to set aside contracts for certified WOSBs and EDWOSBs and help federal agencies achieve the existing statutory goal of five percent of federal contracting dollars being awarded to WOSBs. The Guam PTAC will explain the WOSB program and guide you through the registration process.

Location of Workshops: UOG School of Business & Public Administration Bldg. Classroom 131

FREE HOW TO START A BUSINESS Date: September 28, Wednesday and October 14, Friday Time: 9:00a to 11:30 a.m.

Location: Guam Department of Labor - 3rd Floor Conference Room FFor many people, a business is the culmination of a dream or ambition based on specific skill or interest. You may know the type of business that you have always wanted to open, but because of lack of finances, resources, time, or self-confidence, you have never been able to put that plan into action. To start a business, you will need a lot of information, but the basics are simple. This workshop will discuss the basics of starting a small business!

FREE HOW TO WRITE A BUSINESS PLAN Date: September 28, Wednesday and October 14, Friday Time: 1:00 to 3:30 p.m.

Location: Guam Department of Labor - 3rd Floor Conference Room Writing a business plan can be an intimidating task. But it doesn’t have to be if you take it one step at a time. This workshop will help guide you through the steps needed to write a business plan.

Remember…a written business plan will help you avoid mistakes and save you grief, time and money!

For more information, please call the Guam VBOC at 475-4900 or the Guam Department of Labor One-Stop Career Center at 475-7000.

Requests for reasonable accommodations must be made 72 hours in advance. All SBA program services are extended to the public on a non-discriminatory basis.

The Guam Veterans Business Outreach Center is a program supported by the U.S. Small Business Administration (SBA) under a cooperative agreement. SBA does not endorse any products, opinions, or services of any external parties or activities.

Register now with the Guam Procurement Technical Assistance Center (PTAC).

Visit www.guamptac.com or call 735-2552.

Guam Procurement Technical Assistance Center

28 | SEPTEMBER2011

CONSTRUCTION NEWS BULLETIN

www.guamcontractors.org

September 30, 2011 8:30 a.m. - 12:00 p.m.

Fort San Rafael, Outrigger Resort “The HR Challenge: Sorting through the Complex Web of Employment Laws” Presented by: Grace Donaldson, President, Solutions:HR Management & Consulting; Katherine Dote, HR Director, Guam Marriott Resort & Spa; Lorie Kamminga, HR Director, Foremost & Coca-Cola/Glimpses & Subway

October 14, 2011 8:30 a.m. - 10:30 a.m.

Fort San Rafael, Outrigger Resort “Cash flow Planning & Budgeting” Deadline to register: Thursday, October 13, 2011, 2:00 p.m.

Deadline to register: Thursday, September 29, 2011, 2:00 pm Registration Information Chamber Member Admission: $10.00/person Non-member Admission: $20.00 Registration forms are available at the Chamber Office, and on the Chamber website: www.GuamChamber.com.gu

www.guamcontractors.org

Tel: 472-6311/8001• Fax: 472-6202 Email: info@guamchamber.com.gu

CONSTRUCTION NEWS BULLETIN

SEPTEMBER2010 | 29

SMALLBUSINESS

The Guam Chamber of Commerce Small Business Focus & Development Committee in cooperation with Guam Small Business Development Center presents the 2011 Small Business Management Seminar Series:

CRANECRITIQUECORNER

NCCCO OPERATOR CERTIFICATION

This month’s topic:

by: Dave Barnhouse

PREPARING FOR THE NOVEMBER 2014 DEADLINE A monthly crane and rigging informative column for all personnel directly or indirectly involved with crane safety. Each month we will attempt to explain a different technical issue pertaining to crane operations here on Guam, addressing the sometimes overlooked or misunderstood topics by management and operators alike, by Dave Barnhouse Guam Crane Services and Island CERTS have been associated with the NCCCO programs since their inception and strongly believe these certification pro-grams are the most comprehensive in the crane and lifting industry. NCCCO is officially recognized by federal OSHA as meeting OSHA and ANSI/ASME requirements for crane operator, rigger, and signal person qualifications. NCCCO is accredited by the National Commission for Certifying Agencies for fairness, validity, and reliability in testing. NCCCO's Mobile, Tower and Overhead Crane Operator, Signal person, and Rigger Level I programs are accredited

by ANSI. The Specialty Examinations for the NCCCO mobile crane operator certification program test the following knowledge areas relating to the operation of each of these types of cranes: • Lattice Boom Truck Cranes (LBT) • Lattice Boom Crawler Cranes (LBC) • Telescopic Boom Cranes—Swing Cab (TLL) • Telescopic Boom Cranes—Fixed Cab (TSS) Domain 1: Site • Approximately 12% of test Domain 2: Operations • Approximately 30% of test Domain 3: Technical Knowledge • Approximately 23% of test Domain 4: Manufacturers’ Load Charts • Approximately 35% of test DOMAIN 1: SITE 1. Know the proper use of mats, blocking, or cribbing and outriggers or crawlers as

they affect the suitability of supporting surfaces to handle the expected loads of the operation.

2. Know the limitations of machine clearances, extension of crawlers or outriggers/stabilizers, and counterweights.

DOMAIN 2: OPERATIONS 1. Know how to inspect the crane for unsafe conditions, complete required records, and communicate unsafe conditions to the proper authority.

2. Know how to pick, carry, swing, and place the load smoothly and safely on rubber tires and on outriggers/stabilizers or crawlers (where applicable).

3. Know proper boom assembly and disassembly techniques for: a. Lattice booms b. Extension and retraction of power pinned and/or manual boom extensions c. Erection and dismantling of lattice extension or jibs 4. Know how to react to changes in conditions that affect the safe operation of the crane.

5. Know how to shut down and secure the crane properly when leaving it unattended.

6. Know how to prepare the crane for transportation by loading or unloading on trailers, and be familiar with the differences

This month’s test quiz addresses: Synthetic slings:

What are the differences in nylon and polyester slings, and are there advantageous of one over the other?

30 | SEPTEMBER2011

CONSTRUCTION NEWS BULLETIN

www.guamcontractors.org

If a lift crane is configured to perform duty cycle work such as clam shell or dragline, what are the load capacity requirements?

between rail and barge loading.

7. Know how to move the crane (no load) safely under its own power: a. Between job sites b. Within job sites c. Loading onto and unloading off of trailers 8. Know the manufacturer’s specifications for operating in various weather conditions and understand how environmental conditions affect the safe operation of the crane.

9. Know how to level the crane properly.

10. Know how to perform daily maintenance and inspections.

11. Know how to use the following operator aids: a. Wind indicator b. Anti–two block device c. Boom angle indicator d. Boom angle device e. Boom length indicators 12. Know the proper procedures for operating safely under the following conditions: a. Traveling with suspended loads b. Approaching two blocking c. Operating near electric power lines d. Using suspended personnel platforms e. Using other than full outrigger/crawler extensions f. Lifting loads from beneath the surface of the water g. Using various approved counterweight configurations h. Handling loads out of the operator’s vision (“operating in the blind”) i. Using electronic communication techniques such as radios 13. Know emergency response procedures for: a. Fire control b. Electric power line contact c. Loss of stability d. Control malfunction e. Two blocking f. Overload g. Carrier or travel malfunction DOMAIN 3: TECHNICAL KNOWLEDGE 1. Know the functions and limitations of the crane and attachments.

2. Know basic crane terms.

3. Know the basics of machine power flow

www.guamcontractors.org

ASME B30.5 requires cranes performing duty cycle work to have capacity reduced 20%. The crane must have the applicable load chart with these reduced capacities

systems: a. Mechanical b. Electrical c. Pneumatic d. Hydraulic e. Combination 4. Know how the boom hoist and load hoist(s) are driven and engaged to the power source.

5. Know the requirements of standard and optional controls.

6. Know the requirements of pre-operation inspection and maintenance.

7. Know how to use operational assist devices, including: a. Anti–two block devices b. Load moment indicators and rated load indicators c. Outrigger position indicators d. Mechanical levels e. Boom angle indicators f. Load indicating devices g. Boom stops and boom hoist disconnect h. Radius indicators i. Drum rotation indicators and boom length indicators 8. Know how to use manufacturerapproved attachments and their effects on the crane.

9. Know the function and safe use of crawler position (extended or retracted), outriggers, and/or stabilizers.

10. Know how to assemble and disassemble boom sections, extensions, and jib.

DOMAIN 4: MANUFACTURERS’ LOAD CHARTS 1. Know the terminology necessary to use load charts.

2. Know how to use load charts; for example: a. The operational limitations of load charts and footnotes b. How to relate the chart to the configuration of the crane—crawlers or outriggers extended or retracted, jib erected or offset, and various counterweight configurations c. The difference between structural capacity and capacity limited by stability

d. What is included in load chart capacity e. The range diagram and its relationship to the load chart f. The work area chart and its relationship to the load chart g. Where to find and how to use partsof-line information 3. Know how to calculate net capacity for allowable configurations of the crane using the manufacturer’s load chart.

The four tasks that make up the Practical Examination are: • Task 1: Place overhaul ball chain in Stop Circle • Task 2: Follow hand signals • Task 3: Place overhaul ball in barrels • Task 4: Negotiate Zigzag Corridor with Test Weight

"Island CERTS fully endorses the national certification program offered by the National Commission for the Certification of Crane Operators (NCCCO), and will prepare candidates for the CCO certification examinations."

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

CONSTRUCTION NEWS BULLETIN

SEPTEMBER2011 | 31

CRANECRITIQUECORNER

Answers to last month’s test quiz: Duty Cycle Cranes:

REFINERY/ENVIRONMENTAL 320 South East Santa Rita Industrial Dr. Santa Rita, GU 96915 Tel: (671) 565-7474 Fax: (671) 565-7575 L.P. GAS DIVISION 330 Chalan Pale Ramon Lagu Yigo, GU 96929 Tel: (671) 653-4888 Fax: (671) 653-4889 WASTEWATER DIVISION 213 Dulce De Maria Anigua, GU 96910 Tel: (671) 472-8280 Fax: (671) 472-8282 GRESCO ITI 482 Route 10 Vietnam Veterans Hwy. Mangilao, Guam 96913 Tel: (671) 734-4886 Fax: (671) 734-4889 CNMI / FSM REGIONAL DIVISION PMB 327, Box 10000 Saipan, MP 96950 Tel/Fax: (670) 234-2000

Photo by: E.Olson

gresco gresco gresco refinery environmental wastewater

gresco ITI

FEDERAL • INDUSTRIAL • COMMERCIAL • RESIDENTIAL

Toll Free: 1-855-4GRESCO www.grescopacific.com

Contractor: Falcon Fire Protection, LLC P.O.Box 326326 Hagatna, GU 96932 GCA Contact: John Robison Email: falconfireguam@yahoo.com Ph: 671-483-6539 Fax: 671-969-3401 Description: Fire Protection Services First Pacific Buiders LLC P.O.Box 9598 , Tamuning Guam 96931 GCA Contact: Anacleto Joey Alcantara Email: joey.alcantara@firstpacificbuilders.com Ph: 671-4969-1808 Fax: 671-989-8848 Description: General Contractor

Gillham & Associates dba GK2 P.O. Box 3207 Hagatna, GU 96932 GCA Contact: Toni Quitugua Email: gk2main@gk2guam.coc Ph: 477-9224 Fax: 477-3456 Description: Civil and Structural Consulting Engineers Ledge Light Technologies, Inc. GCIC Building Suite 701 414 West Soledad Ave. Hagatna, GU 96910 GCA Contact: Olorun femi Bajomo Email: fbajomo@ledgelight.com Ph: 477-5483/5484 Fax: 477-5480 Description: Information Technology Services

RW Armstrong 744 N. Marine Corps Drive Ste 115 Tamuning, GU 96931 GCA Contact: Ken Baki Email: kbaki@rwa.com Ph: 671-646-4200 Description: Engineering and Architect PRES (Pacific Renewable Energy Solution) T.S. Tanaka Building Suite 104, 220 South Route 4 Agana 96910 GCA Contact: Thomas Tanaka Email: info@presguam.com Ph: 671-472-7737 Fax: 671-472-7652 Description: Renewable Energy Allied:

Associate: DNA, Inc. P.O. Box 2830 Hagatna, GU 96932 GCA Contact: Jeff Marchesseault Email: dnainc.guam@gmail.com Ph: 477-9052/3/4 Fax: 477-9055 Description: Real Estate Investment & Property Management

www.guamcontractors.org

NV5 Guam, Inc. 221 Lake View Drive Suite E301 Yona, GU 96915 GCA Contact: Mark Baron Email: mark.baron@nv5.com Ph: 619-843-3772 Description: Engineering (Geotechnical, Inspection, Testing, Survey, Civil, Construction Management)

ASSE Guam Section GCA Contact: Oneal McAfee, President Email: onealm@blackguam.com Ph: 671-646-4861 ext. 891 Description: Health and Safety Organization

CONSTRUCTION NEWS BULLETIN

SEPTEMBER2011 | 35

NEWMEMBERS

SEPTEMBER 2011