GCA Construction News Bulletin January 2015

CONSTRUCTION NEWS BULLETIN

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© 2014 Caterpillar. All Rights Reserved. CAT, CATERPILLAR, BUILT FOR IT, their respective logos, “Caterpillar Yellow,” the “Power Edge” trade dress as well as corporate and product identity used herein, are trademarks of Caterpillar and may not be used without permission.

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Feature Story

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Construction Headline

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INSIDER NEWS

CONSTRUCTION HEADLINE

FEATURE STORY

CRANE CRITIQUE

AROUND THE BENCH

MEMBER BENEFITS

GARRISON REPORT

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Guam Contractor’s Association (GCA) in conjunction with AdzTech and Public Relations, Inc. publishes the Construction News Bulletin (CNB) monthly. Reproduction of materials appearing in this publication is strictly forbidden without written permission by GCA. While we always strive for accu-racy, we will from time to time over-look mistakes. In order to help us improve the quality and accuracy of this publication, we ask that you take the time to look at the information provided and notify GCA of any corrections as needed. Opinions and editorial content of this publication may not necessarily be those of the publisher, production team, staff, GCA members, GCA Board of Directors and advertisers. For more information about advertising in the GCA Construction News Bulletin contact the advertising department at (671) 477-1239/2239 or email at [email protected]. Distributed to GCA members or can be obtained by stopping by the Guam Contractors’ Association office located at 718 N. Marine Corps Drive,Suite 203, East West Business Center, Upper Tumon, Guam.

To find out more about how you can become a GCA member contact Guam Contractors’ Association at Tel: (671)647-4840/41 Fax: (671) 647-4866 or Email: [email protected]

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

PRODUCTION TEAMGeri Leon Guerrero

AD SALES:Tom MendiolaJaceth Duenas

PRODUCTION:Geri Leon GuerreroChristopher “Taco” RowlandJaceth Duenas

PHOTOGRAPHERS:Christopher “Taco” Rowland

EDITOR:Adztech

CONTRIBUTING WRITERS:John RobertsonR.D. GibsonMiguel RangelDave BarnhouseJames MartinezGrace Donaldson

GCA STAFF:Francine ArceoDesiree Lizama

COVER:Overlook of capital.

THETEAMTHEDIRECTORS THEEDITORIALSPRESIDENTJames A. Martinez Guam Constractors Association

PAST CHAIRMANTom Anderson Black Construction Corporation

CHAIRMAN - ELECTArt Chan Hawaiian Rock Products

VICE CHAIRMAN - ELECTJohn Sage WATTS Constructors

SECRETARY/TREASURERWilliam Beery Tutujan Hill Group

CONTRACTORS DIRECTORS:Narci Dimaoala Amazon Construction

Carlo Leon Guerrero M80s Office Systems

Conchita Bathan Core Tech International

Tom San Nicolas dck pacific guam LLC

Miguel Rangel Maeda Pacific Corporation

ASSOCIATE DIRECTORS:Jeffrey Larson TakeCare Insurance

Ray Yanger Fastenal

Patty Lizama Pacific Isla Life

Michael Kikuta Matson Navigation

Guam ContractorsAssociation

TRADES ACADEMYGCA

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

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

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

visits to active construction projects.

Wayne Cornell, Richard Stump and Steve Taylor.

2014 Year End Report

Accomplishments

was the American Concrete Institute – ACI Concrete Field Testing Technician Course, Grade 1. Two sessions were held at the Hawaiian Rock Products training room with 64 participants.

Richard Stump with the committee he organized. Special thanks to Hawaiian Rock Products.

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

American Military Engineers

Society of


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

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

visits to active construction projects.

Wayne Cornell, Richard Stump and Steve Taylor.

2014 Year End Report

Accomplishments

was the American Concrete Institute – ACI Concrete Field Testing Technician Course, Grade 1. Two sessions were held at the Hawaiian Rock Products training room with 64 participants.

Richard Stump with the committee he organized. Special thanks to Hawaiian Rock Products.

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

American Military Engineers

Society of


S.A.

M.E

. UPD

ATE

the top of the home page.

Al Sampson distributed the following awards in July 2014: Post Leadership: Wayne Cornell and Noel Enriquez Post Service: James Atkinson Post Outstanding Support: Rose Sellew, Mary Jo Pablo, Pearl Capindo, Nerissa Doyle and Lorrie Uong.

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

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

A F I R S T L E G O L e a g u e Program was initiated in local schools with primary backing of L C D R S e a n Mc C o n n o n .

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

�e Post supported Wayne Cornell in applying for Fellow status within the SAME organization. His selection to that position was announced on 23 December. His investiture ceremony will occur sometime in the spring, at which time the Post will have two Fellows: Louis DeMaria and Wayne Cornell. Note that this was a major accomplishment because the standard is set very high, requiring

a lot over the years to SAME and the Engineering Profession.

www.guamcontractors.org CONSTRUCTION NEWS BULLETIN JANUARY2015 | 7

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

During the year 2014, our own Richard Stump

encompasses Alaska, Hawaii, Guam, Japan, Okinawa and Korea. He took over from William Grip, former member of the Honolulu Post.

Opportunities for Calendar Year 2015 include the following: Post Leaders Workshop, Phoenix: 19 – 21 February Fellows Luncheon & Investiture, Alexandria, VA: 12 March Joint Engineer Training Conference & Expo, Houston: 19 – 22 May Small Business Conference, New Orleans: 4 – 6 November

Noel Enriquezall Post members of the Board of Directors and functional committees updated and focused on requirements for meeting the various criteria throughout the year.

tracking multiple ongoing activities, and maintaining the necessary documentation. In the end, the Guam Post scored higher than ever before, receiving a streamer with distinction, being selected a Distinguished Post and the Post being considered for Top Post out of 46 Distinguished Posts from 105 Posts throughout the world.

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

Jecilia Llgardo attended the Post Leaders Workshop in Las Vegas: 29 – 31 Jan LT Russell Torgesen attended the Joint Engineer Training Conference & Expo in Orlando: 20 – 23 May Jesse Pangelinan attended the Small Business Conference in Kansas City: 09 – 11 Dec


your small business.

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

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misconception, they surpassed my expectations. We were able to start a plan that was both fairly priced and made sense with what we were looking for. In the end, the tailored-solution was exactly what our team needed.” - Bill Beery

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Finding a tailor-made solution is just the beginning. ASC offers a level of service that sets us apart from other retirement plan providers in the region.

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FUSO GCA Now on Guam AD.pdf 1 26/10/13 10:26 AM

RULES COMMITTEE PRINT 113–58HOUSE AMENDMENT TO THE

TEXT OF S. 1847Titled, the Carl Levin and Howard P.

‘Buck’ McKeonNational Defense Authorization Act

for Fiscal Year 2015December 2, 2014

Subtitle C—Provisions Related to Asia-Pacific Military RealignmentSEC. 2821. REALIGNMENT OF MARINES CORPS FORCES IN ASIA-PACIFIC REGION.(a) LIMITATION BASED ON COST ESTI-MATES.—(1) LIMITATION AMOUNT.—Pursuant to the Supplemental Environmental Impact Statement for the ‘‘Guam and Common-wealth of the Northern Mariana Islands Military Relocation (2012 Road map Adjustments)’’, the total amount obligated or expended from funds appropriated or otherwise made available for military construction for implementation of the Record of Decision for the relocation of Marine Corps forces to Guam associated with such Supplemental Environmental Impact Statement may not exceed $8,725,000,000, subject to such adjust-ment as may be made under paragraph (2).

(2) ADJUSTMENT OF LIMITATION AMOUNT — The Secretary of the Navy may adjust the amount specified in paragraph (1) by the following:

(A) The amounts of increases or decreases in costs attributable to economic inflation after September 30, 2014.(B) The amounts of increases or decreases in costs attributable to compli-

ance with changes in Federal, Guam or Commonwealth of the Northern Mariana Islands, or local laws enacted after September 30, 2014.

(3) WRITTEN NOTICE OF ADJUSTMENT.—At the same time that the budget for a fiscal year is submitted to Congress under section 1105(a) of title 31, United States Code, the Secretary of the Navy shall submit to the congressional defense committees written notice of any adjustment to the amount specified in paragraph (1) made by the Secretary during the preceding fiscal year pursuant to the authority provided by paragraph (2).(b) RESTRICTION ON DEVELOPMENT OF PUBLIC INFRASTRUCTURE.—(1) RESTRICTION.—If the Secretary of Defense determines that any grant, coop-erative agreement, transfer of funds to another Federal agency, or supplement of funds available under Federal programs administered by agencies other than the Department of Defense will result in the development (including repair, replace-ment, renovation, conversion, improve-ment, expansion, acquisition, or construc-tion) of public infrastructure on Guam, the Secretary of Defense may not carry out such grant, transfer, cooperative agree-ment, or supplemental funding unless such grant, transfer, cooperative agreement, or supplemental funding—

(A) is specifically authorized by law; and

(B) will be used to carry out a public infrastructure project included in the report prepared by the Secretary of Defense under section 2822(d)(2) of the Military Construction Authorization Act for Fiscal Year 2014 (division B of Public Law 113–66; 127 Stat. 1017), as in effect on the day before the date of the enact-ment of this Act.

(2) PUBLIC INFRASTRUCTURE DEFINED.—In this subsection, the term ‘public infrastructure’ means any utility, method of transportation, item of equip-ment, or facility under the control of a public entity or State or local government that is used by, or constructed for the benefit of, the general public.

(c) REPEAL OF SUPERSEDED LAW.-Section 2822 of the Military Construction Authorization Act for Fiscal Year 2014 (division B of Public Law 113–66; 127 Stat. 1016) is repealed. The repeal of such section does not affect the validity of the amendment made by subsection (f) of such section or the responsibilities of the Economic Adjustment Committee and the Secretary of Defense under subsection

(d) OF SUCH SECTION, as in effect on the day before the date of the enactment of this Act.

The Senate Armed Services Committee (SASC) and House Armed Services Committee (HASC) came together to pass the National Defense Authorization Act for 2015 on 2 December. What they decided is presented below. The bill then had to be passed by the Senate Appropriations Committee and the House Committee on Appropriations before going before the full Senate and House of Representatives for approval. It was then ready to be signed or vetoed by the President. It was in fact ultimately signed into law by the President. This presentation therefore may not represent the final approved military construc-tion budget. The report focuses on construction in Guam and the Mariana islands but also includes Hawaii and all points west. It also includes the specific language that lifted the restriction on the relocation of Marine Corps elements from Okinawa to Guam. Also, restricted use of the Ritidian Unit.

At the annual joint meeting of GCA, SAME, AIA, GSPE, Land Surveyors and ASHRAE on 26 February, NAVFAC Marianas Commanding Officer, CAPT Glenn Shephard, will provide a briefing on the approved budget and list of projects for FY 2015 and perhaps beyond. It would be a good idea to save the date and register early because it will be well attended.


By John M. Robertson

MILITARY CONSTRUCTIONIN WESTERN PACIFIC

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RULES COMMITTEE PRINT 113–58HOUSE AMENDMENT TO THE

TEXT OF S. 1847Titled, the Carl Levin and Howard P.

‘Buck’ McKeonNational Defense Authorization Act

for Fiscal Year 2015December 2, 2014

Subtitle C—Provisions Related to Asia-Pacific Military RealignmentSEC. 2821. REALIGNMENT OF MARINES CORPS FORCES IN ASIA-PACIFIC REGION.(a) LIMITATION BASED ON COST ESTI-MATES.—(1) LIMITATION AMOUNT.—Pursuant to the Supplemental Environmental Impact Statement for the ‘‘Guam and Common-wealth of the Northern Mariana Islands Military Relocation (2012 Roadmap Adjust-ments)’’, the total amount obligated or expended from funds appropriated or otherwise made available for military construction for implementation of the Record of Decision for the relocation of Marine Corps forces to Guam associated with such Supplemental Environmental Impact Statement may not exceed $8,725,000,000, subject to such adjust-ment as may be made under paragraph (2).

(2) ADJUSTMENT OF LIMITATION AMOUNT — The Secretary of the Navy may adjust the amount specified in paragraph (1) by the following:

(A) The amounts of increases or decreases in costs attributable to economic inflation after September 30, 2014.(B) The amounts of increases or decreases in costs attributable to compli-

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

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

SEC. 2822. ESTABLISHMENT OF SURFACE DANGER ZONE, RITID-IAN UNIT, GUAM NATIONAL WILD-LIFE REFUGE.(a) AGREEMENT TO ESTABLISH —In order to accommodate the operation of a live-fire training range complex on Ander-sen Air Force Base-Northwest Field and the management of the adjacent Ritidian Unit of the Guam National Wildlife Refuge, the Secretary of the Navy and the Secre-tary of the Interior, notwithstanding the National Wildlife Refuge System Adminis-tration Act of 1966 (16 U.S.C. 668dd et seq.), may enter into an agreement provid-ing for the establishment and operation of a surface danger zone which overlays the Ritidian Unit or such portion thereof as the Secretaries consider necessary.

(b) ELEMENTS OF AGREEMENT —The agreement to establish a surface danger

zone over all or a portion of the Ritidian Unit of the Guam National Wildlife Refuge shall include — (1) measures to maintain the purposes of the Refuge; and (2) as appropriate, measures, funded by the Secretary of the Navy from funds appropri-ated after the date of enactment of this Act and otherwise available to the Secretary, for the following purposes:

(A) Relocation and reconstruction of structures and facilities of the Refuge in existence as of the date of the enactment of this Act.(B) Mitigation of impacts to wildlife species present on the Refuge or to be reintroduced in the future in accordance with applicable laws.(C) Use of Department of Defense personnel to undertake conservation activities within the Ritidian Unit normally performed by Department of the Interior personnel, including habitat mainte-

TITLE XLVI—MILITARY CONSTRUCTIONSECTION 4601 MILITARY CONSTRUCTION

(In Thousands of Dollars)

Hawaii Army Fort Shafter Command & Control Facility Complex 96,000 85,000Army Kadena AB Missile Magazine 10,600 10,600Army WW Unspecified Host Nation Support FY15 33,000 33,000Army WW Unspecified Minor Construction FY15 25,000 25,000Army WW Unspecified Planning and Design FY15 18,127 18,127Army Total Military Construction $539,427 $543,427 Guam Navy JR Marianas GSE Shops at North Ramp 21,880 21,880Navy JR Marianas MWSS Facilities at North Ramp 28,771 28,771

Hawaii Navy Kaneohe Bay Facility Modifications for VMU, 51,182 51,182 MWSD, & CH53ENavy Kaneohe Bay Road & Infrastructure Improvements 2,200 2,200Navy Pearl Harbor Submarine Maneuvering Room Trainer 9,698 9,698 FacilityJapan Navy Iwakuni Security Mods DPRI MC167–T 6,415 6,415 (CVW–5 E2D EA–18G)Navy Kadena AB Aircraft Maint Hangar Alterations 19,411 19,411 and SAP-FNavy MCAS Futenma Hangar & Rinse Facility Modernizations 4,639 4,639Navy Okinawa LHD Practice Site Improvements 35,685 35,685Navy WW Unspecified F–35C Facility Addition and Modification 16,594 0Navy WW Unspecified F–35C Operational Training Facility 22,391 0Navy WW Unspecified MCON Design Funds 3,366 33,366Navy WW Unspecified Unspecified Minor Construction 7,163 7,163Navy Total Military Construction $1,018,772 $993,199 Guam AF JR Marianas Guam Strike Fuel Systems Maintenance 64,000 64,000 Hangar Increment 2AF JR Marianas PAR Low Observable/Corrosion Control/ 0 34,400 Composite Repair Shop.AF JR Marianas PRTC—Combat Communication 3,750 3,750 Infrastructure FacilityAF JR Marianas PRTC—Red Horse Logistics Facility 3,150 3,150AF JR Marianas PRTC—Satellite Fire Station 6,500 6,500AF WW Unspecified Various Locations Planning and Design 10,738 10,738AF WW Unspecified Unspecified Minor Military Construction 22,613 22,613Air Force Total Military Construction $811,774 $846,174 Australia Def-Wide Geraldton Combined Communications Gateway 9,600 9,600

Hawaii Def-Wide Hickam Replace Fuel Tanks 3,000 3,000Def-Wide Hickam Upgrade Fire Suppression & 49,900 49,900 Ventilation System

Japan Def-Wide Misawa AB Edgren High School Renovation 37,775 37,775Def-Wide Okinawa Killin Elementary School Replacement- 71,481 71,481 RenovationDef-Wide Okinawa Kubasaki High School Replacement- 99,420 99,420 RenovationDef-Wide Sasebo E.J. King High School Replacement-n 37,681 37,681 RenovationDef-Wide WW Unspecified Unspecified Contingency Construction 9,000 0Def-Wide WW Unspecified Unspecified ECIP Design 10,000 10,000Def-Wide WW Unspecified Energy Conservation Investment 150,000 150,000 ProgramDef-Wide WW Unspecified Exercise Related Minor Construction 8,581 8,581Def-Wide WW Unspecified Unspecified Planning and Design 132,240 112,240Def-Wide WW Unspecified Unspecified Minor Construction 34,906 34,906Defense Wide Total Military Construction $2,061,890 $1,962,890 Korea FH Camp Walker Family Housing New Construction, Army 57,800 57,800FH WW Unspecified Family Housing Planning & Design, Army 1,309 1,309Family Total Military Family Housing Construction, $78,609 $78,609Housing Army Total Military Construction, Army Reserve 103,946 128,946 Total Military Construction, Naval Reserve 51,528 99,397 Total Military Construction, Air National Guard 94,663 105,863 Total Military Construction, Air Force Reserve 49,492 63,992 Grand Total Military Construction $6,557,447 $6,551,843

AmountAuthorized

LocationAccount

Installation Project Title FY 2015 AmountRequested


Guam AF JR Marianas Guam Strike Fuel Systems Maintenance 64,000 64,000 Hangar Increment 2AF JR Marianas PAR Low Observable/Corrosion Control/ 0 34,400 Composite Repair Shop.AF JR Marianas PRTC—Combat Communication 3,750 3,750 Infrastructure FacilityAF JR Marianas PRTC—Red Horse Logistics Facility 3,150 3,150AF JR Marianas PRTC—Satellite Fire Station 6,500 6,500AF WW Unspecified Various Locations Planning and Design 10,738 10,738AF WW Unspecified Unspecified Minor Military Construction 22,613 22,613Air Force Total Military Construction $811,774 $846,174 Australia Def-Wide Geraldton Combined Communications Gateway 9,600 9,600

Hawaii Def-Wide Hickam Replace Fuel Tanks 3,000 3,000Def-Wide Hickam Upgrade Fire Suppression & 49,900 49,900 Ventilation System

Japan Def-Wide Misawa AB Edgren High School Renovation 37,775 37,775Def-Wide Okinawa Killin Elementary School Replacement- 71,481 71,481 RenovationDef-Wide Okinawa Kubasaki High School Replacement- 99,420 99,420 RenovationDef-Wide Sasebo E.J. King High School Replacement-n 37,681 37,681 RenovationDef-Wide WW Unspecified Unspecified Contingency Construction 9,000 0Def-Wide WW Unspecified Unspecified ECIP Design 10,000 10,000Def-Wide WW Unspecified Energy Conservation Investment 150,000 150,000 ProgramDef-Wide WW Unspecified Exercise Related Minor Construction 8,581 8,581Def-Wide WW Unspecified Unspecified Planning and Design 132,240 112,240Def-Wide WW Unspecified Unspecified Minor Construction 34,906 34,906Defense Wide Total Military Construction $2,061,890 $1,962,890 Korea FH Camp Walker Family Housing New Construction, Army 57,800 57,800FH WW Unspecified Family Housing Planning & Design, Army 1,309 1,309Family Total Military Family Housing Construction, $78,609 $78,609Housing Army Total Military Construction, Army Reserve 103,946 128,946 Total Military Construction, Naval Reserve 51,528 99,397 Total Military Construction, Air National Guard 94,663 105,863 Total Military Construction, Air Force Reserve 49,492 63,992 Grand Total Military Construction $6,557,447 $6,551,843

AmountAuthorized

LocationAccount

Installation Project Title FY 2015 AmountRequested

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dict local law and in most cases, if not all, these federal laws, rules and regulations trump local law making this seemingly easy process more difficult.

GCA advises subcontractors to get a copy of their prime contractor’s license issued by the Guam Contractors Licensing Board (GLCB). If they do not have a Guam Contractors License, the subcontractor may not be eligible to claim the tax exemption and may be liable for paying the four percent (4%) GRT on the revenues generated from this contract even if the prime has a Guam business license and pays the GRT as required. The law is specific that subcon-tractors can claim an exemption on the GRT, provided that they submit the name of the prime contractor and their contractor’s license number issued by the Guam Contractors Licensing Board OR the company name, registration number or Certificate of Authori-zation (COA) if working for a company engaged in engineering, architecture or land surveying and registered with the PEALS Board. This DOES NOT include a Guam business license. Further, it is advisable to include your associ-ated costs for GRT in your proposals to such contractors. For the most part, prime contrac-tors working exclusively on federal construc-tion projects here in Guam are working within the law, but a federal rule which exempts them from obtaining a state-issued contractors license for a state or territory outside their licensing jurisdiction is not consistent with our local law and this creates a problem for the subs when they file their GRT.

Until we can resolve this problem, the GCA advises all subcontractors to do their due diligence to ensure they are eligible to claim a tax exemption under this law.

It has been brought to our attention in recent months that subcontractors, working for a prime contractor on federal construction projects, are having issues with their GRT tax exemption at the Department of Revenue and Taxation (DRT).

At issue is federal legislation that exempts prime contractors working exclusively on federal construction projects within the military fences in any state or territory from the requirement of obtaining a state-issued contractor’s license. In other words, if a contractor is working exclusively on a federal construction project here in Guam, meaning no other local work anywhere on the island, they are not required to obtain a Guam Contractors License issued by the Guam Contractors Licensing Board. However, they are required to obtain a Guam Business License from DRT in order to conduct business here

According to P.L. 30-230, AN ACT TO AMEND §26201 AND §26202(e) OF ARTICLE 2 OF CHAPTER 26, TITLE 11, GUAM CODE ANNO-TATED, RELATIVE TO THE BUSINESS PRIVILEGE TAX ON CONTRACTORS,

Section 3. §26202(e) of Chapter 26 of Title 11 of the Guam Code Annotated is amended to read as follows:

"(e) Tax on Contractors. There shall be levied, assessed and collected a tax rate of four percent (4%) measured against the gross income of any contractor; provided, that there shall be deducted from the gross income of the taxpayer so much thereof as has been included in the gross income earned from another taxpayer who is a contractor as defined in §26101 (b) and who has already paid the tax

levied under this Subsection for goods and services that include the deductable gross income of the taxpayer who is a contractor; provided, that any person claiming a deduction under this Subsection shall be required to show in the person's return either the name and contractor's license number or the registration number for a professional engineer, architect or land surveyor or the Certificate of Authoriza-tion (COA) number for a business authorized to provide engineering, architecture or land surveying services by the Guam Board of Registration for Professional Engineers, Architects, Land Surveyors of the person paying the tax on the amount deducted by the person."

Based on Section 3. §26202(e) of Chapter 26 of Title 11 of the Guam Code Annotated above, in order for a subcontractor to claim a GRT tax exemption for work performed, they must submit a return with the name of the contrac-tor and the contractor’s license number of the company paying the tax on the amount deducted by the subcontractor. Similarly, the same holds true for subcontractors providing work and/or services for businesses authorized to provide engineering, architecture and land surveying services by the Guam Board of Registration for Professional Engineers, Architects and Land Surveyors (PEALS). In the same manner, a subcontractor must also file a return with the name of the company and the registration number of the professional engineer, architect and land surveyor in order to claim a GRT tax exemption for work and/services provided to these companies.

In a perfect world of contracting, this process may seem simple and easy to administer. But we are not living in a perfect world. There are federal laws, rules and regulations that contra-

GRT EXEMPTION ISSUEAFFECTING SUBCONTRACTORS WORKINGON FEDERAL CONSTRUCTION PROJECTS

by James Martinez


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The Spaniards who came to Guam once marveled at

the ingenuity and island home of the Chamorro

people. They cited the latte’ stone huts by the ocean,

cut from the limestone and built with materials from

the trongkon niyok. And let’s not forget about the

swiftness of the proa galaide, which moved so effort-

lessly across the water, it appeared to be flying.

Though times have changed, and modernization has

progressed on our Pacific paradise, the ingenious

and industrious spirit of our people continues to

thrive. Guam has come a long way, and so have her

people. Where there was once rubble from war,

there are now buildings of industry and commerce.

There are affordable homes being designed and built

around Guam to help families set roots and grow.

There has been a stronger push to promote work in

science, technology, engineering, and mathematics.

And, many are taking a noble calling to become

engineers, architects, and land surveyors. No matter

which way we look at it, engineers, architects, and

land surveyor professionals contribute greatly to

the welfare, development, and progress of our island.

There are engineering, architectural, land surveyor,

and landscape architect professionals working

together to continue the progress our island has

made over the last few decades as Guam becomes

an epicenter for commerce, culture, tourism, and

industry in the Western Pacific.

These folks work closely with the Guam Board of

Registration for Professional Engineers, Architects

and Land Surveyors. The PEALS Board is a regulating

body, which oversees the licensing of professional

engineers, architects, land surveyors, and landscape

architects. According to Ray C. Borja, Executive

Board Administrator of the Guam Board of Regis-

tration for Professional Engineers, Architects, and

Land Surveyors, “The PEALS Board has the enforce-

ment responsibility on matters pertaining to

registration and practice of engineering, architec-

ture, landscape architecture and land surveying

professions.”


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

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

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

tural, landscape architect and land surveyor professionals are

following established laws. More specifically, they regulate the

practice of these integral professions by ensuring standards of

competency by way of education, experience, and examination,

licensing, establishing standards of practice for the licensed, and

enforcing laws, codes, and standards fairly and professionally.

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

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

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

The PEALS Board is not a referral service and cannot recommend

any engineers, architects, landscape architects or land surveyors,

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

whether they have taken any disciplinary action against these

professionals. However, they do offer a few suggestions when

starting out with a project involving engineers, architects, landscape

architects, and land surveyors.

With whatever project a business or consumer might be interested

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

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

peoples’ credentials. Sometimes, depending of course on the

project, your planning may include all four professionals.

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

land surveyors who agrees to provide engineering, architectural,

landscape architectural, land surveying, and construction manage-

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

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

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

those involved. You may also be working closely with your

engineers, architects, and land surveyors to obtain building permits

at the Guam Department of Public Works – which also receives

clearance from the PEALS Board.

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

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

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

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

sustain our economy. It keeps Guam moving forward.

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

toward building and bolstering STEM (Science, Technology,

Engineering, and Mathematics) education in schools to inspire the

next generation of professionals who will continue building Guam.

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

engineers, architects, landscape architects and land surveyors have

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

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

innovative spirit of our island’s people.


A serious crane accident can be catastrophic and unfortunately they do occur periodically. But the majority of accidents are not the front page news items with fatalities we read about now and then. They are minor accidents with no injuries or property damage. But any crane accident has the potential to injure, cause property damage, or worse. I will discuss a few of these mi-nor accidents I have witnessed here on Guam, what caused them, as well as some disturbing deficiencies noted on cranes that could very well have caused an accident. Most of these items could have and should have been noted by the operator during his daily inspection. An operator must be compe-tent to operate a crane and this includes competent enough to adequately inspect a crane and evaluate if any deficiencies found during this inspection could be considered a safety hazard. All operators must have the authority to stop crane operations if he finds what he considers a safety hazard until a qualified person determines otherwise or the hazard is abated.

Some of the deficiencies I have noted during an inspection or accidents resulting from crane operations with deficiencies:Some deficiencies do not appear serious at first glance but when it comes to lifting equip-ment no deficiency should be taken lightly. Consider the instance when a mechanic plugged a pipe tee in an airline but did not have a pipe plug so he used what he had, a grease fitting. The unknowingly operator who greased this line should have known what he was greasing but apparently did not. The airline was on a lattice boom crane with drum air brakes. Once the line was full of grease and filled the quick re-lease for the brake cylinder it blocked the air and the operator lost control of the load.

A monthly crane and rigging informative column for all personnel directly or indirectly involved with crane safety. Each month we will attempt to explain a different technical issue pertaining to crane operations here on Guam, addressing the sometimes over-looked or misunderstood topics by management and operators alike. By Dave Barnhouse

Crane Accidents

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

Improper termination, use of wire rope clip

Are your operators doingall they can to prevent one?

Next near miss was comical but could have been disastrous. During a heavy lift and 90 degree swing the riggers thought the Kenworth with a winch would be good tagline control. All went well until the load was in place and a rigger was instructed to stop the winch by pushing in the clutch. Unfortunately he was too short to push the clutch to the floor and the winch came close to tipping the already maxed out crane.

One of the most preventable deficiency I see often is the improper wire rope termination at the wedge socket. I try my best to educate operators and riggers alike of the importance to keep wire rope clips off the live end and also

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


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Dave Barnhouse resides in Tamuning and has been involved with operations, maintenance, operator training, and/or inspections, of cranes since 1969. He is a Certified Environmental Trainer, CHST, NCCCO Certified Crane Opera-tor, NCCCO Lift Director, and practical examiner for all types of mobile cranes and the only OSHA accredited crane inspector on Guam.

the keeper instead of under. What can very well happen is the wire saws through the keeper pin and destroys the wire during a heavy lift.

A power line accident occurred locally a few years back because of a cell phone call. While directing a crane travelling in reverse, the signal person answered his cell phone and turned his back to the crane. The driver proceeded until the boom contacted the overhead power lines at which time there was a fireworks show and he immediately pulled forward away from the lines. Cell phones should not be a distraction during crane opera-tions and any work near power lines are considered critical and require a lift plan to address this type of issue. Luckily no one was injured but there are many in this business not so lucky when it comes to power lines.

Crane operations also include mobilization, driving down the road or loading onto a lowboy. Recently an operator slipped off a lowboy and the crane rolled over onto its side. He was not hurt but the crane was not so lucky. This accident could have been pre-vented simply by having a signal per-son on both sides of the lowboy.

Service persons injured on cranes also are considered crane accidents, including the mechanic who hammered on a dragline bucket tooth edge. He lost an eye when a small sliver of steel pierced it. Qualified persons must perform maintenance or repairs and a qualified person should realize bucket teeth are hard tensile steel, not to be hammered on.

Recently a crawler carbody crack near the track extension beam was welded by a certified welder without a proper procedure. Again, this work must not be performed by unqualified persons. Qualified means knowing a procedure for this specific repair is needed. This weld was a groove weld on two inch thick steel. After load testing the crane the crack was back and bigger than ever.For readers unfamiliar with welding heavy steel and the purpose of a procedure, what happens is during the welding of the root pass the base metal is so thick it acts as a heat sink and pulls the heat from the weld too fast, sometimes causing a root crack. The proce-dure for welding thick steel will usually require pre-heating the base metal and possibly post-heating as well.

Another near miss resulting from over-sight or just plain laziness was the loss of the front counter weight on a truck crane during a lift over the front. The crane had no over the front capacity so this lift should not have been taking place. The counter weight had top hook pins that was holding the entire weight. The lower pins were not in place, the crane teetered on the front outriggers, the counter weight hit the ground and became unhooked from the top pins, fell to the ground, and the crane fell hard backwards on the rear outrig-gers.

A rigging accident occurred after a very corroded set of 4-leg slings were wire brushed and painted with diesel fuel. What resulted was a set of slings that looked almost new but was corroded to the core. The fortunate thing was the slings broke before the load was off the ground.

A 140 ton truck crane suffered a back-wards tip after swinging over the side with all counter weights installed and outriggers retracted. Operators must know the limitations of the particular crane they are operating.

Another accident occurred here on Guam a few years ago because of improper crane set-up and improper rigging. This involved lifting a forty foot container. The crane had a relatively short boom resulting in using short slings because of lack of head room. The container was loaded heavily in the middle and when lifted, folded like a lawn chair. Again, a qualified person should know containers require near vertical rigging, use a spreader if necessary.

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

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

he programs the computer to as-sure he is programming all parameters correctly as the crane is configured. Older cranes may have only two or three charts: over the end, side, or 360°. Using the wrong chart may very well lead to an over loaded crane.

All of the above accidents or near misses were preventable, and they most definitely should not happen again. Every near miss should be scrutinized to find out what happen, how it happen, and what measures we need to take to prevent it from ever happening again. Operators should check entire crane, mechani-cal, hydraulics, functional, etc. and note any and all deficiency no matter how unimportant it may seem. I encourage classroom partici-pants to share any near misses or accidents with the other operators so that we can all learn from a mishap or near miss. Though accidents are unfortunate, they are still a very effective learning tool.

Please e-mail any comments, questions, or specific topics you would like to see addressed in this column to [email protected] and we will certainly at-tempt to accommodate your requests.

Evidence of Improper reevingwire rope over keeper pin


INSIDE THEWATT CONTROLLED

LED DRIVER

THE SWITCH

Assistant Marketing Manager for Deco Lighting Amanda Keen wrote a great post on the Deco Blog recently on how our Commerce, California-based partners have come up with a watt-controlled driver for their lighting prod-ucts that is outperforming the competi-tion in this ever changing marketplace. Keen wrote that most LED Drivers are only capable of operating in mild environments, rated for operation up to 75° or 80° Celsius (167°F or 176°F) and remarked that temperatures inside a lighting fixture are often higher than this.

"Small fixture compartments and poor air circulation can generate extreme heat, often coming close to tempera-tures that boil water," wrote Keen. "The heat results in damage to the driver’s battery-like electrolytic capacitors. The electrolyte, which is typically a gel, evaporates over the life of the capacitor’s components. Higher operat-ing temperatures speed up this evapo-ration, shortening the life of the capaci-tor and leading to premature driver failure."

It appears that Deco Lighting has solved the dilemma of premature power supply failure by utilizing watt-controlled drivers designed to stand up to extreme heat. Unlike other LED drivers, Deco LED watt-controlled drivers are rated for operation up to 90° Celsius (194 °F). "Our process focuses on making the driver operate cooler and longer than the competition," wrote Keen.

Deco Lighting's driver components are positioned on the circuit board in a manner that prevents the build-up of heat. Also, their circuit boards are arranged in a way that allows Deco Lighting driver components to touch the metal housing so the driver components can be used as a heat sink. Also, Deco insulates key heat-sensitive compo-nents inside the driver.

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

these on Guam and would be happy to arrange a presentation.

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

by Shawn Guamtaotao

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CONTROLLING

SAFELY!

As we all know, the importance of developing a proper traffic control plan is a must before work can be started. The purpose of the plan is to ensure that the work area involving intersection provides access to residential or business, includes speed limit control, signs and signals to guide the public though work area safely. These types of plans are site specific and necessary. They should be adaptable to many roadway conditions and work operations without being specific to any one condition.

The Traffic Control Plans follows the standards for traffic control for construction projects. When construction projects suspend the normal function of the roadway, a traffic control plan is developed to assure the safety of all road users, and the protection of workers. At the same time, the traffic control plan provides for continuity of the movement of motor vehicles, bicycle and pedestrian traffic while allowing for the efficient completion of the construction project.

Other time consuming obstacles to overcome is obtaining encroachment permits from local agencies such as DPW, GPA, GWA, telecommunication companies, Mayors offices and federal agencies if their

known utilities are involved.

Storing and keeping up with the maintenance of these signs and other related safety items are important. Some additional items used aside from signs are cones, drums, and concrete barriers, solar powered flashing arrows and crush absorbing system (very few available on GUAM). The upkeep is vital so that the safety of the motorist is priority.

In addition, personnel involved in traffic control activities must be properly trained on how to recognize hazards and are authorized to control or resolve hazards. All of these are vital in ensuring that proper control and planning prevents any mishaps or incidences.

It is important to know companies that are accessible to train personnel, respond in short notice to emergency construction projects and have the equipment, materials and transportation readily available but not to mention who are earth conscious in reusing materials, equipment, and clean up.

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

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

Proper Control Planningby Miguel Rangel

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TRAFFIC


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

[email protected]

By the year the construction industrywill need more than

2014,

MILLION1.5 CRAFT PROFESSIONALS

Find out more at nccer.org

*2010 FMI Report

FACT*

ARE YOUREADY We can help.?

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

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

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

anniversary, the birthday celebrant and managers are taken to lunch or an afternoon snack - outside of the office where everyone is on equal footing. One rule is there will be no discussions of work. This time together would be a time to get to know the others - likes/dislikes, what they do outside of work, discovering what makes the other person tick. It is especially effective in getting individuals who do not work well together to discover the whole person, not just the person with whom they work. Typically, employees spend more time with their coworkers than with their spouses or significant others. So ask the question: "What makes a marriage last" and apply the answer in a work setting. 5) Institute a recognition program which recognizes teamwork rather than the individual. Employee recognition programs, in which one employee is the winner, does not develop motivation. Or if it did, it developed motivation of that one employee. Programs such as “Employee of the Year” award are often regarded as programs in which the boss' "favorite" is recognized, which does not necessarily have a positive ring to it. However, a program, which recognizes teamwork helps to develop employee morale within the organization. One such program could have employees give recognition cards to others who help them. And at the period, these recognition cards are placed in a raffle for a prize(s). This program also acknowledges each person who made a contribution, large or small, into making the team or department a better one.

INCREASING EMPLOYEE MORALE ANDREDUCING TURNOVER ON THE CHEAP

Grace Donaldson, General Manager,Pacific Human Resource Services

[email protected] 671.637.6906/7/8

www.PHRSGuam.com


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

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

If you want to read more about the 3Ps ProcessTM and other tools and techniques you can use to change your bid culture for the better then get a copy of your free guide “are you bidding to win or bidding to lose?’ at www.visiontdm.co.uk and share your experiences through Southwell's articles.

Daniel Pink, author of A Whole New Mind, identified the primary cause of the construc-tion industry's low-profit margins. He wrote, "For business, it's no longer enough to create a product that's reasonably priced and adequately functional." Unfortunately, that's what the construction industry attempts to do when it bids work based on price. The problem with the low bid approach is that it hurts both the vendor and buyer because despite conventional wisdom it actually encourages low perfor-mance and low value. The good news is there is a better solution even if for those forced to compete for low bids.

The solution is competing on value. Value is the most sustainable way to separate your company from the competition. Is this approach easy? No, it is not easy! But attempting to compete on razor thin margins and expecting to make any money is virtually impossible. For example, a mechanical contractor that typically bid work declared chapter 11 bankruptcy. When the company came out of bankruptcy, they vowed not to bid work anymore. That contractor is now doing fine. They did not go bankrupt because they did not understand the mechanical business; they went bankrupt because they could not figure out how to bid work too cheaply and make a profit. When they learned to compete on value, they began to prosper.

If you think this concept doesn't apply to you because you are forced to bid work, think again. One of Garrison's clients happens to be a road builder, and most of their work is competitively bid. This contrac-tor makes a higher profit margin than most of his competitors. They achieve higher profit margins by competing for projects

where they can deliver superior value as a result of their knowledge and skills. This advantage allows them to win a competitive bid because they can construct the project at a lower cost while still earning a higher fee.

Contractors need to understand the oppor-tunity to deliver the greatest value on a project is before construction starts, not during the construction process. This is true even in the competitive bid market as the road builder example demonstrates. The superior value is achieved by carefully selecting the right projects on which to compete. However, when contractors are allowed to use their knowledge and experi-ence to impact the design from the begin-ning of the design process, they can substantially increase the value they deliver.

The question is how do you compete on value?

The SolutionCompeting on value requires both an overall business strategy and bid strategy. The business strategy is what Garrison refers to as Blue Ocean Contracting. This is a business approach where contractors differentiate themselves as much as possible from their competitors by providing superior value that clients appreciate. This value is achieved as a result of their knowledge and experience and applying it through an integrated delivery approach. In essence, the approach is about creating a business strategy that employs the company's specific knowledge and experience that produces the greatest value for its clients, but equally important value that clients appreciate.

Too many contractors believe that compet-

ing on value means providing more for more. While this can certainly be the case, it is not the only scenario. Of course, some-times it is better value to spend a little more upfront during construction in order have a greater saving in expenses later in the life of the project. In other cases, greater value is achieved by delivering the same results at a lower cost by using the contractor's knowl-edge and experience to find a better way of designing and constructing the project. This is what true value engineering is all about - delivering the same results at a lower cost. It also means understanding the client's budget. Often the project's value could be increased, but if the client can't afford it then it is not true value. For example, a very expensive car may offer the greatest overall value, but if that car is outside the buyer's budget, the purchase could cause financial problems regardless of the value. Therefore, what we mean is delivering the maximum value for the client's budget. When your company delivers superior value that your clients appreciate, you will have both happy and loyal clients.

The second part of the process is making the bid presentation to the client so that you win virtually every bid. Sound unrealistic, but Southwell has a track record of doing just that when you employ the process described below. Southwell is often shocked at the amount of money, time and effort that people waste bidding for work without even thinking about it. In construction, you will often hear that if you win 1 out of every 4 then you’re about right! But, when you think about it that means you’re losing 75% of every bid you go for.

Too often people accept their ‘sector norm’ without questioning whether it makes good

business sense. You wouldn’t do this in any other part of your business, so you’ve got to ask yourself “…are you bidding to win or bidding to lose?”

If you’re bidding to win and not quite there, then there are some simple things you can do now and by continuing to follow these Top Ten Tips you will be able to write a winning bid, time and time again and stand out from your rivals:

1. Answer the bid questions clearly - say what you will do to achieve the stated objec-tives of the contract…and say how you will do it, how you will know you’ve done it and what the outcome will be for your client.

2. Provide all relevant information you’re asked for and incorporate additional information when and wherever possible…avoid answering ‘yes’ or ‘no’ and expand your answers to raise your profile above that of your rivals, so you get noticed.

3. Manage your bid as you would a project- develop a Bid Management Plan with agreed timescales and responsibilities…and be sure to stick to it!

4. Appoint a single Bid Manager and feed information and research data to him/her to enable a Bid Roadmap to be produced that guides your team and saves you wasted time and effort- your Bid Team will thank you for this.

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

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

7. Check the word limits on each of the responses and stick to them- use bullets and diagrams to increase the amount of information you can provide without going over. Check out the financial section and use space there to add further explanation…whilst it might not be scored it’s a bit like being in court when the judge says some evidence you’ve just heard is inadmissible- tough, you already heard it and it’s in your subconscious!

8. Include your best examples of previous, relevant and successful work and state the benefit you achieved for your client- this goes to the very heart of the only question your customer wants answering…’what’s in it for me?’ Tell them and you’ll score highest.

9. Provide references if asked but be sure to brief them first before they are contacted.

How to Sell Value to Increase Profitability


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

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

If you want to read more about the 3Ps ProcessTM and other tools and techniques you can use to change your bid culture for the better then get a copy of your free guide “are you bidding to win or bidding to lose?’ at www.visiontdm.co.uk and share your experiences through Southwell's articles.

Daniel Pink, author of A Whole New Mind, identified the primary cause of the construc-tion industry's low-profit margins. He wrote, "For business, it's no longer enough to create a product that's reasonably priced and adequately functional." Unfortunately, that's what the construction industry attempts to do when it bids work based on price. The problem with the low bid approach is that it hurts both the vendor and buyer because despite conventional wisdom it actually encourages low perfor-mance and low value. The good news is there is a better solution even if for those forced to compete for low bids.

The solution is competing on value. Value is the most sustainable way to separate your company from the competition. Is this approach easy? No, it is not easy! But attempting to compete on razor thin margins and expecting to make any money is virtually impossible. For example, a mechanical contractor that typically bid work declared chapter 11 bankruptcy. When the company came out of bankruptcy, they vowed not to bid work anymore. That contractor is now doing fine. They did not go bankrupt because they did not understand the mechanical business; they went bankrupt because they could not figure out how to bid work too cheaply and make a profit. When they learned to compete on value, they began to prosper.If you think this concept doesn't apply to you because you are forced to bid work, think again. One of Garrison's clients happens to be a road builder, and most of their work is competitively bid. This contrac-tor makes a higher profit margin than most of his competitors. They achieve higher profit margins by competing for projects where they can deliver superior value as a

result of their knowledge and skills. This advantage allows them to win a competitive bid because they can construct the project at a lower cost while still earning a higher fee.

Contractors need to understand the oppor-tunity to deliver the greatest value on a project is before construction starts, not during the construction process. This is true even in the competitive bid market as the road builder example demonstrates. The superior value is achieved by carefully selecting the right projects on which to compete. However, when contractors are allowed to use their knowledge and experi-ence to impact the design from the begin-ning of the design process, they can substantially increase the value they deliver.

The question is how do you compete on value?

The SolutionCompeting on value requires both an overall business strategy and bid strategy. The business strategy is what Garrison refers to as Blue Ocean Contracting. This is a business approach where contractors differentiate themselves as much as possible from their competitors by providing superior value that clients appreciate. This value is achieved as a result of their knowledge and experience and applying it through an integrated delivery approach. In essence, the approach is about creating a business strategy that employs the company's specific knowledge and experience that produces the greatest value for its clients, but equally important value that clients appreciate.

Too many contractors believe that compet-

ing on value means providing more for more. While this can certainly be the case, it is not the only scenario. Of course, some-times it is better value to spend a little more upfront during construction in order have a greater saving in expenses later in the life of the project. In other cases, greater value is achieved by delivering the same results at a lower cost by using the contractor's knowl-edge and experience to find a better way of designing and constructing the project. This is what true value engineering is all about - delivering the same results at a lower cost. It also means understanding the client's budget. Often the project's value could be increased, but if the client can't afford it then it is not true value. For example, a very expensive car may offer the greatest overall value, but if that car is outside the buyer's budget, the purchase could cause financial problems regardless of the value. Therefore, what we mean is delivering the maximum value for the client's budget. When your company delivers superior value that your clients appreciate, you will have both happy and loyal clients.

The second part of the process is making the bid presentation to the client so that you win virtually every bid. Sound unrealistic, but Southwell has a track record of doing just that when you employ the process described below. Southwell is often shocked at the amount of money, time and effort that people waste bidding for work without even thinking about it. In construction, you will often hear that if you win 1 out of every 4 then you’re about right! But, when you think about it that means you’re losing 75% of every bid you go for.

Too often people accept their ‘sector norm’ without questioning whether it makes good

business sense. You wouldn’t do this in any other part of your business, so you’ve got to ask yourself “…are you bidding to win or bidding to lose?”

If you’re bidding to win and not quite there, then there are some simple things you can do now and by continuing to follow these Top Ten Tips you will be able to write a winning bid, time and time again and stand out from your rivals:

1. Answer the bid questions clearly - say what you will do to achieve the stated objec-tives of the contract…and say how you will do it, how you will know you’ve done it and what the outcome will be for your client.

2. Provide all relevant information you’re asked for and incorporate additional information when and wherever possible…avoid answering ‘yes’ or ‘no’ and expand your answers to raise your profile above that of your rivals, so you get noticed.

3. Manage your bid as you would a project- develop a Bid Management Plan with agreed timescales and responsibilities…and be sure to stick to it!

4. Appoint a single Bid Manager and feed information and research data to him/her to enable a Bid Roadmap to be produced that guides your team and saves you wasted time and effort- your Bid Team will thank you for this.

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

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

7. Check the word limits on each of the responses and stick to them- use bullets and diagrams to increase the amount of information you can provide without going over. Check out the financial section and use space there to add further explanation…whilst it might not be scored it’s a bit like being in court when the judge says some evidence you’ve just heard is inadmissible- tough, you already heard it and it’s in your subconscious!

8. Include your best examples of previous, relevant and successful work and state the benefit you achieved for your client- this goes to the very heart of the only question your customer wants answering…’what’s in it for me?’ Tell them and you’ll score highest.

9. Provide references if asked but be sure to brief them first before they are contacted.

To learn more about how you can increase your company profit margins by competing on value, contact either Ted Garrison, principal at New Construction Strategies (1-386-437-6713, [email protected], www.TedGarrison.com) or Neil Southwell, principal at Vision tdm, International Bid Strategist (44-1925-748540, n e i l . S o u t h w e l l @ v i s i o n t d m . c o . u k , www.visiontdm.co.uk). Seminars and coach-ing services are both available to help your company improve its profitability.

www.morricoequipment.com


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GCA Construction News Bulletin January 2015