By Wayne Chargualaf and Morgan Legel
The construction industry is one of few that may not have suffered as drastically during the COVID-19 pandemic, Guam Business Magazine asked three major construction companies doing work in the islands how the industry is fairing, through Coronavirus and otherwise.
What is the biggest project you’re working on now?
“Our largest current project on Guam is the Ironwood Villa Del Mar Phase 2 project. This is a $17 million construction contract to build a total of 88 affordable housing units,” says Keith J. Stewart, president of Pacific Rim group of companies.
“Black’s largest project currently under construction is the Andersen Air Force Base Replace Housing project valued at $178 million. The project scope is to construct 93 new duplex units, or 186 homes for the U.S. Military,” says Leonard K. Kaae, senior vice president and general manager of Black Construction Corp.
“The P601 Hangar at Andersen Air Force Base. It is an aircraft hangar and we are undertaking steel procurement and erection works and precast erection works under Hensel Phelps. We have five cranes on the project, ranging from 60t to 600t,” says Ben Bailey, vice president and general manager of Smithbridge Guam.
What do you think of the current state of the construction labor market on Guam?
“The labor market has certainly constricted with the construction work underway. For the first time in our company history, Pacific Rim has had to source additional workforce support by utilizing the H2-B visa program. As a company which has only hired local workers in the past, we see the change as a net positive for the local workforce. The constricting of the workforce that has occurred has resulted in increased wages, improved benefits and quality of life for locals and will draw more local talent into the industry. So, we see the changes so far as a positive for local workers,” says Stewart.
“I believe the labor market continues to be a challenge for those projects outside the fence and/or not directly related to the Marine realignment. Black continues to utilize a combined workforce of both local and H-2B manpower to construct our projects. With the majority of our work being inside the fence, Black continues to obtain support from the U.S. Navy on the processing of foreign nationals to supplement the lack of local labor,” says Kaae.
“Labor resources have steadily increased on Guam but are still have a way to go to satisfy market demands with the military buildup work starting to ramp up. Our focus still remains on investing in local labor to train and upskill, rather than relying too heavily on the H-2B resource market. We are motivated to foster a sustainable human resourcing approach that creates a more rounded and resilient labor market for Guam now and into the future,” says Bailey.
What do you think is the most pressing concern for the island’s construction industry aside from labor?
“The construction community overextending itself by committing to more than they can actually accomplish. This can happen to both subcontractors and general contractors as they pursue more and more work. Supervisory talent will be stretched to its limit as more and more labor, cash flow and other resources are required. It’s hard to say no to work, but we will all need to if we hope to remain successful,” says Stewart.
“Based on the Navy’s forecast for construction over the next nine years, there are many pressing concerns facing the industry. The most obvious is the current lack of temporary housing for the future H-2B workforce. Based on the information provided in the recent forum, the workload forecasted from 2020 on through to 2024 will increase significantly. This will mandate a foreign workforce that Guam hasn’t seen for a number of years. Available compliant housing could be slow and slippery for any contractor,” says Kaae.
“The overall economic climate is of concern for all industries due to the adverse implications that COVID-19 will have in depressing global markets. The construction sector is not as susceptible to the reverberations of this, as say the tourism industry, due to the majority of forward pipeline work being tied up in infrastructure capital improvement and Department of Defense projects. But there will be significant implications, nevertheless, that will affect the overall supply chain for the construction industry,” says Bailey.
Which project, past or present, do you think best shows off your firm’s capabilities and why?
“The Dusit Thani Resort is the project that best shows off our firm’s capabilities. We are a contractor that is not afraid of taking on the most difficult or challenging project and that has the experience and relationships with both subcontractors and vendors to finish such challenging projects, even with high level finishes. We love digging into complex projects that showcase our team’s talents,” says Stewart.
“Over the years, Black has had many projects that exemplify our estimating, engineering, material procurement, equipment resources, project management and overall project execution Excellence. Many of these projects have been recognized on both the Local and National levels by the ABC General Contractors Association. The most recently recognized was the P-662 MDA Test Support Facility on Wake Island, which won Black’s 5th National Eagle award over the past eight years. Black performed 95% of the $13 million contract in a remote austere location. All of our construction materials, equipment resources and other requirements were barged into the island with support from our partner, Seabridge Guam. We were also commended by the Navy for our performance,” says Kaae.
“We are a ‘can-do’ company and never take no for an answer, which results in us always looking to tackle the most technical or problematic jobs. In 2015 we had an opportunity to do just that by undertaking the design and construction of two new 75,000-barrel (3.15 million gallon) capacity above ground jet fuel storage tanks at Cabras Distribution Terminal for IP&E.
This was a high risk project that left us susceptible to the unpredictable environment, however, we were able to deliver the project with confidence and without delay by implementing an innovative tank jacking system that employed a top-down construction method, mitigating destructive typhoon risks and allowing our workers to undertake majority of the welding work at ground level. This ultimately led to 98,000 manpower hours completed on the project without a lost time injury or accident — an achievement the entire project team was and still are extremely proud of,” says Bailey.
What new technology, process, or business practice in the construction field do you find most interesting, important, or exciting?
“Pacific Rim really focuses more on the basics than on new technologies. We have found that the most interesting and exciting projects are those that have unique challenges and that few other contractors will pursue. We have the ability to think out of the box and provide our clients with solutions that our competitors often cannot, whether it is the biggest building/hotel on Guam, casinos on Saipan and Tinian, our own housing developments or new data centers. Pacific Rim is not afraid to step in and complete projects that others might find too challenging (but of course we will also take on more typical projects,)” says Stewart.
“I think the advancements in technology have provided real time communications with mobile phone communications, viewing of contract and shop drawings on tablets in field without carrying the documents around, which are cumbersome and at times exposed to weather. Video conferencing is commonplace for Black in communicating with our subcontractors, designers or other business partners. I’m an old construction hand and so all of this new technology although at times awkward for me is still exciting,” says Kaae.
“I think we are going to see a significant increase in the implementation of smart and intuitive machinery become more prevalent in the industry and form the benchmark for how we operate heavy construction equipment in the safest manner possible. This technology has been experimented with for a number of years, but it is now refined and available to the mass market at an affordable cost. I was working with Caterpillar in Australia and their new smart excavator technology that operates with high grade sensors and controls to provide semi-autonomy to the excavator operations including, bucket grading settings that won’t allow the operator to over-dig or stray from an offset, automated swing limiters to protect the operator from slewing into power lines or live traffic, and many more features. This technology increases the safety performance of the operator and the environment they are working in, as well as reducing labor costs by increasing productivity. I believe this technology will begin to become a basic feature for most machines in the near future and then the next step will be full autonomy without the requirement for an operator … but perhaps we won’t touch on that just yet,” says Bailey.