CONTRACTORS JOSTLE FOR GUAM MILITARY BUILDUP

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By Bryan C. Sualog

SAIPAN, CNMI (Marianas Business Journal, Jan. 7) – With the military buildup moving forward, large corporations are hoping to get a piece of the estimated US$10 billion price tag. The transfer of more than 8,000 Marines and their families from Okinawa to Guam is drawing closer and more large corporations are taking an increased interest in the island and the buildup.

Bechtel Corp; KBR; Obayashi Corp.; Bechtel Mitsubishi Heavy Industries; Itochu International Inc.; the Japanese contractor, Akarai and Chevron Energy Solutions, are just a few on the long list of companies that have shown interest in the buildup.

Bechtel Corp., an engineering, construction, and project management company headquartered in San Francisco, Calif., had originally planned on holding a business outreach and training session on Guam in January. However, in a letter to local businesses, John Baggot, Maryland-based manager of space and missile defense for Bechtel Corp. announced the postponement of the event until March to coincide with the Joint Guam Program Office’s next Guam Industry Forum to be held March 6 and 7 (See "Still no word on upcoming JGPO meeting" in the Military section.). About 1,000 people are expected to attend the forum.

"We all should have a better understanding of contract scope by then and how we can best tailor our presentation to you," Baggot said in the letter.

On Aug. 23 and 24, hundreds of people packed into the Sheraton Laguna Guam Resort and the Hilton Guam Resort & Spa for the first Industry Forum. The two sites were linked via Marianas CableVision fiber and live presentations were shown in real time projection on screens at both locations (See "Look for answers at military’s buildup forum" in the Sept. 3 edition of the Journal.).

Representatives from a variety of off-island organizations participated including KPMG of Washington, D.C., consultants to the government of Guam through a U.S. grant for an almost $500,000 strategic plan; Lend Lease Retail & Commodities from New Jersey; Northrop Grumman from Colorado; AT&T from Hawaii; Petron Corp. from the Philippines; Booze Allen Hamilton Inc. from McLean, Va., and Hawaii; JWK Corp. from Gyeonggi-Do in Korea; Tetra Tech, represented by Randel L. Sablan, formerly acting administrator for the Guam Environmental Protection Agency; Chugash Support Services of Anchorage, Alaska; Sealaska Corp. from Juneau, Alaska; Adm. Tom Fellin — former commander of Naval Forces Marianas — representing interests in Japan; and W.C. "Chip" Gregson of WCG & Associates International LLC, former lieutenant general in the U.S. Marine Corps, now consulting to the government of the Northern Mariana Islands.

Chevron Energy Solutions and Nana Services LLC have also shown interest in participating in Guam’s future. The two companies recently aligned themselves with Guam Resource Recovery Partners for the construction of a new landfill and waste-to-energy facility.

James C. Davis, president of Chevron Energy Solutions; and Steven Cammack, president of Nana Services LLC; were both on island for the groundbreaking of GRRP’s landfill in Guatali.

Davis told the Journal, "Chevron Energy Solutions is exploring the possibility of energy projects on Guam as a natural extension of our work for the U.S. military and other federal agencies. Project discussions are still in their early stages, however, so we’re currently not in a position to be able to provide much detail at this point.

On Oct. 8 and 9, the U.S Department of the Interior’s 4th Conference on Business Opportunities in the Islands was held at the Hyatt Regency Guam. At the conference Maj. General David Bice (Ret.), executive director of the JGPO, shared an updated timeline with attendees, and said that the Preferred Working Level Master Plan would be completed by July 2008, with a construction schedule from 2009 to 2014 offering "close to $3.1 billion a year" in peak years. A 200-acre training complex would be built he said. "Estimates run from 12,000 to 15,000 [personnel] training in Guam and the surrounding islands," Bice said. "We see Guam becoming a transportation hub for goods and services. … My impression is the first year we’ll be taking care of housing for the workers and site work," he said, saying that construction was slated to begin in 2010. He estimated that "vertical" or building construction would begin in 2011. As to a shortage of labor, he said, "We’re already in discussion with [the Department of] Homeland Security and Congress." Referring to the movement of U.S. Marines from Okinawa to Futenma, required before U.S. Marines could come to Guam, Bice said, "So far Japan is ahead of schedule. They’re going to be starting construction in January 2008."

Companies from New Zealand have also taken an interest. New Zealand’s Trade and Defense Minister, Philip B. Goff; led a trade delegation of between 20 and 25 companies to Guam for the U.S. Department of the Interior’s Conference on Business Opportunities in October (See "The Kiwis are coming; NZ delegation to seek business on Guam" in the Sept. 17 edition of the Journal.).

KBR had shown previous interest in Guam when it submitted a bid for the Base Operating Services support contract for Naval Forces Marianas in 2005. KBR submitted the bid under Pacific American Support Services LLC — a joint venture between KBR and CH2M Hill Constructors Inc. (See "Guam BOS contract re-awarded to DZSP 21" in the April 4, 2005 edition of the Journal.). The contract was eventually awarded to DZSP 21 LLC.

KBR is headquartered in Houston, Texas, and employs more than 50,000 people worldwide in locations that include Australia, Africa, the U.K., Asia and the Middle East.

Bechtel had previously sent representatives to Guam. During the week of April 2, a consortium of U.S., Okinawan, and Japanese companies — led by Baggot — was on Guam conducting a fact-finding mission (See "Eyeing the island; U.S. contractors prepare for military build up on Guam" in the April 16 edition of the Journal.).

While on Guam the group met with members of the Guam Chamber of Commerce’s Small Business Development Committee and toured the Port Authority of Guam’s facilities.

The consortium consisted of Bechtel, Mitsubishi, Itochu, Akarai, and a large contractor out of Okinawa. The consortium was here to look at the port authority and what their capabilities are, storage facilities, talk to the contracting division, talk to OICC [Naval Facilities] Marianas, and talk to many different entities. They were also scouting what small business entities are on island.

A Journal source said Bechtel had also expressed interest in land that could accompany 3,500 homes.

According to its Web site, Bechtel is privately owned with headquarters in San Francisco. It has 40 offices around the world and nearly 40,000 employees. It had revenues of $20.5 billion in 2006 and booked work valued at $24.7 billion.

Nana Services is a service contract company that provides government agencies and commercial clients with support, including quality of life programming, facility operations, and commodities manufacturing and marketing. The company has contracts worldwide including Guam, New York, Alaska, and the South Pole, according to its Web site.

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