VOL. 61 ISSUE 02 FEBRUARY2020 • GUAM CONTRACTORSʼ ASSOCIATION
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TABLE OF CONTENTS
CONSTRUCTION NEWS BULLETIN
FEBRUARY 12 6 OUTSTANDING IN THE FIELD Military news
8
Small business notes
10
FEATURE STORY
12
PHOTO HIGHLIGHTS
16
LIEN REPORT
18
Member benefits
22
NEWSLINE
23
IN MEMORIAM
24
FEATURE STORY
24
2020
IN MEMORIAM
GCA March Calendar
Board of Directors Meeting
Wednesday
March 4, 2020
7:30
Fiesta Resort
Activities Committee
Thursday
March 5, 2020
14:00
GCA Conf. Room
Power Up, It's a Mother Daughter Thing
Tuesday
March 17, 2020
17:30
GDOE Head Quarters
Wednesday
March 18, 2020
11:30
TBA
Thursday
March 19, 2020
14:00
GCA Conf. Room
Wednesday
March 25, 2020
14:00
GCA Conf. Room
Tuesday
March 31, 2020
11:30
GCA Conf. Room
Membership Luncheon Activities Committee Safety Committee Meeting Small Business Committee Meeting
2 | FEBRUARY2020
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EDITORIALS
CONSTRUCTION NEWS BULLETIN
THEDIRECTORS
THEEDITORIALS
THETEAM
PRESIDENT James Martinez Guam Contractors’ Association
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.
PUBLISHER: James Martinez
CHAIRMAN Jessica Barrett Barrett Plumbing VICE CHAIRMAN Peter Errett Hawaiian Rock Products
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 or Adztech 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.
SECRETARY/TREASURER Bill Beery Tutujan Hill Group PAST CHAIRMAN Mark Mamczarz Black Construction CONTRACTOR DIRECTORS: Henry Taitano Core Tech
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.
Harold Cullick Dylan Mechanical Mary Grace Jacot SET Pacific
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.
Kevin Kruger Granite Construction Shoja Rezvani Contrack Watts Contractors ASSOCIATE DIRECTORS: Bill Bernardo First Hawaiian Bank
To find out more about how you can become a GCA member contact Guam Contractors’ Association at Tel: (671) 647-4840/41 Fax: (671) 647-4866 or Email: gca@teleguam.net. www.guamcontractors.org
Mark Cruz MidPac Far East Patty Lizama Pacific Isla Life
PRODUCTION TEAM LEAD: Geri Leon Guerrero AD SALES: Jaceth Duenas PRODUCTION: Jason Davis Geri Leon Guerrero Christopher “Taco” Rowland PHOTOGRAPHERS: Jaceth Duenas EDITOR: Adztech CONTRIBUTING WRITERS: Al Sampson R.D. Gibson Kiet Ngo Nancy Xania Barnhouse Franklin Turner Alexander Major Ethan Brown GCA STAFF: Desiree Lizama Elaine Gogue Francine Taitague Trevor Cruz COVER: S.A.M.E. Celabrates their Centennial!
Postmaster. Send address changes to Guam Contractors’ Association, located at 718 N. Marine Corps Drive Suite 203, East West Business Center, Upper Tumon, Guam.
Camilo Lorenzo Matson Navigation
R LEB ATING CE
60 YEARS
GCA
TRADES ACADEMY B u i l d i n g
S k i l l s
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L i f e t i m e
Guam Contractors Association
4 | FEBRUARY2020
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OUTSTANDING IN THE FIELD
CONSTRUCTION NEWS BULLETIN
OUT STANDING IN THE FIELD
SHAWN REYES
REY SENIOR
COMPANY: East Island Tinting
COMPANY: Green Energy Solutions Inc.
POSITION: Site Manager
POSITION: Commercial Kitchen Service Manager
YEARS IN SERVICE: 14
YEARS IN SERVICE: 12 Years - HVAC-R Tech 8 Years - HVAC-R Journeyman 2 Years - GESI
What is the most interesting thing about working here, and about the work you do? Meeting new people, developing a skill in the film industry and sharing this skill with others. What are the 3 benefits you’ve discovered about working here that you weren’t aware of when you started? a. Company paid trips to further educate me in the industry b. Monthly profit sharing checks c. 90% Medical and Dental Insurance paid by the company What are your thoughts about the company’s vision and direction, and role in helping us achieve them? It’s clear with the understanding that “change” must be accepted in an effort to continuously move forward. What advice would you give to someone who’s thinking about applying for a job with us? Give it 100% and you will succeed. Be committed and enjoy the art we provide to all our very important customers in Guam. When you tell people about your job, what is one thing that surprises them, or gets them excited about the work you do? When we get vehicles that cost over $100,000.00 and go to homes to tint it are worth millions. Tell me about yourself, family, likes and hobby? I like spending time with my family. Being in a management role allows me to learn greater values to pass on to my kids. I also enjoy drag racing. Additionally, I pray for all that I have.
6 | FEBRUARY2020
For Rey Senior, efficiency is the name of the game. It is about helping consumers realize savings and return on investment potential, help customers reduce their carbon footprint, and using non-renewable resources to make it happen. “I really like working here because it’s new,” he said. “We get to learn all over again, and just try to bring energy savings to the people of Guam.” Rey Senior is a Commercial Kitchen Service Manager at Green Energy Solutions, Inc. With over a decade of experience, he began working at GESI in the summer of 2018. He spoke about how air conditioning is a must in Guam. He said the company goes beyond just fixing appliances that are necessary for island life; now they’re looking at ways for their customers to save money - finding solutions to create savings. “If we can do it, and save people money, ...that’s what we’re going for right now…” But, the major goal is efficiency. “We’re not an AC company, we’re not a lights company, we’re an energy efficient solutions company.” He pointed to the company’s vision to bring energy efficiency and savings to the Marianas and potentially the region; a statement he says with plenty of fervor. “Be passionate about what we’re doing, take pride in what we’re doing,” he said. Passion is something he learned from his family - the center of his life on island. A ‘typical Guam boy’, he credits his work ethic and drive to his parents. “Me and my brother are very motivated by what they’ve shown us” he commented on the example his parents set for him.
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WE RENT
• • • • • • • • • • • • • •
Trucks - Box Truck, Reefer & Flatbed Trucks - Tractors & Dump Trucks Water Trucks and Trailers Forklifts - Gas/LPG/Diesel Rough Terrain Forklifts, Telehandlers Generators 20 KW - 500 KW Load Banks - 750 KW Air Compressors 180-900 CFM Wheel Loaders & Skid Steer Loaders Excavators - Mini to 32 ton Backhoes - 4WD 4 in 1 Bkts Scissor Lifts, Boom Lifts Double/Single Drum Rollers 3-10 ton Low Boy Tractor/Trailer 35-55 ton
197 Ypao Road, Tamuning, Guam 96913 Tel: (671) 649-1946 • Fax: (671) 649-1947 www.morricoequipment.com
“East Island Tinting made it easy for me when I needed some tint for Meskla, my restaurant. On top of the options that they gave me, they were fast, friendly, informative, and the quality of their work is excellent! The best part is that they guarantee their work! It was a pleasure doing business with them.” Peter Duenas Owner
Across Micronesia Mall, Route 16 647-TINT (8468) / 649-TINT northislandtinting@guam.net
East Hagåtña 477-TINT (8468) / 472-TINT eastislandtinting@guam.net
MILITARY NEWS
CONSTRUCTION NEWS BULLETIN
SMALL BIZ NOTES NAVFAC Marianas awarded about $38.8M in contracts from October 2019 through January 2020 on which Small Business (SB) concerns may participate as prime or subcontractors. Of that amount, about $15.9M was awarded to SB concerns to provide a variety of products and services on Guam. Socio-economic breakdown of the SB awards are: - $13.0M - Small Disadvantaged Business (SDB) - $10.9M - HUBZone Small Business (HZSB) - $3.6M - Women-Owned Small Business (WOSB) - $390K - Service-Disabled Veteran-Owned Small Business (SDVOSB) The sum of the figures above exceed the overall SB awards of $15.9M because some SB concerns qualify for multiple socio-economic categories. Significant SB awards in January: • Pacific Federal Management, Inc. was awarded about $665K • Advance Management, Inc. was awarded about $1.2M to provide custodial services on Naval Base Guam. to provide grounds maintenance and tree trimming services at various military installations on Guam. • ICAN Resources, Inc. was awarded about $2M to provide mess attendant services at Andersen Air Force Base. • Pacific Unlimited Inc. was awarded about $1.2M to provide tire and wood collection and disposal services for Naval • ICAN Resources, Inc. was also awarded about $786K to Base Guam and Andersen Air Force Base. provide additional galley/mess attendant services on Naval Base Guam. Source: Federal Procurement Data System – Next Generation (FPDS-NG)
HOW TO DEAL WITH TRUST ISSUES It is often said that, “Trust is the foundation for a healthy relationship.” While this is true in personal relationships, it also applies to work relationships; whether it’s among peers, between a manager and subordinate, or an employee and the organization. A breakdown of trust can be attributed nearly all workplace issues which include poor performance, high turnover, difficult employees, burnout, disengagement, lack of initiative, etc. Most will agree that trust is the key to good business. Here’s how you can promote trust with your team, contractors, organization, and others: • Share information: Do not withhold information about future goals and performance from your team. Being transparent will strengthen your team and build credibility. • Stay away from office gossip: Gossip can create a hostile workplace environment and makes you appear untrustworthy. Try to resolve issues with the person directly or vent your frustrations with a coworker to someone outside the organization.
8 | FEBRUARY2020
• Speak normally: There may be a tendency to be speak/use very technical language in an office environment. Try to curtail the use of curt, governmental jargon when speaking to your teammates. • Trust others first: Like respect, trust is a two-way street. Others won’t trust you if you do not trust them; do not micromanage. Trust others to perform a task without you watching over them. • Avoid office surveys: You don’t need anonymity to receive honest feedback. Instead, regularly ask your employees, either over the phone or in person, how they are doing. • Encourage growth: Routinely give employees honest feedback. A mix of praise and constructive criticism will encourage development or reinforcement of skills. • Give credit where it’s due: Do not be a manager that jumps in the spotlight when the team achieves success. Share successes with your employees. • Stop blaming and shaming: Focusing on employee mistakes without acknowledging their hard work will create a culture of fear and may drive employees away. Always view mistakes as a learning opportunity.
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SMALL BUSINESS NOTES
CONSTRUCTION NEWS BULLETIN
Small Business Focus They say people live on Guam because they were born here, were hired here, were deployed here -- or fell in love. That is our story. David A. Barnhouse moved to Guam in 1987 for six months to run a dragline. Thirty-three years later, Dave still loves Guam and its people. I came for a spring-break visit but fell in love with Dave, quit my job in Oregon, got married, and moved to Guam, where I have lived for seven years. When I relocated to Guam in 2013, I was a high-school language-arts teacher in Tigard, Oregon, and had previously worked as a big-city journalist. I had experience juggling life, of course, having been married before and raised triplets, but I knew nothing of balance sheets and profit and loss statements. Nevertheless, I became business partners with Dave, who started his sole proprietorship in 2000 and celebrates his 20th year in 2020. At the time with became partners, Dave had one employee, having given his crane business to his son. I started out sweeping floors, answering calls and delivering invoices, but a hunger for knowledge led me to read books, take classes at PTAC and meet with PTAC’s Frank CrisostomoKaaihue and SBA’s Denise Mendiola. It also led me to consult with such business leaders as Jerry Paulino, Ho Eun, Graeme Ridley and Dave Burger, whose continuing mentorship has
10 | FEBRUARY2020
helped me grow as a businessman. Five years ago, Island CERTS became an S-corporation, and I became its president. In the last five years, we have grown from one to 24 employees. From one crane, we now own seven. From one weld inspector we now have eight, offering RT, Phased Array Ultrasound Testing, AWS/CWI visual inspections, floor scanning and hydro testing. We also have three ICC Structural Welding and Structural Steel and Bolting Special Inspectors. In addition, ICC offers welder qualification tests, inspection and testing of ordinance handling equipment and rigging gear. We offer fuel tank inspections, inspections of isotainers and ocean-going containers. Island CERTS offers heavy equipment inspections and safety training, including crane operator practical examinations for National Commission for the Certification of Crane Operators (CCO), as well as Crane Operator instructional training and Test Site coordinating for the written tests. Island CERTS also provides safety training, such as rigging and mobile crane hand signals, operator training for other heavy equipment, such as forklifts, excavators, backhoes, skid-steer, aerial lifts, and others.
other with respect, humor – and high expectations. Another strength is our cultural diversity. Our workers come from Guam, Chuuk, Russia, the Philippines, the U.S. mainland, and Yap. With strong teamwork, we offer customers professional service that rivals any company in the world.. Besides believing in our employees and the customers they work with, we believe in supporting the Guam community. Island CERTS Corporation gives 1 percent of net profits to Guam’s hard-working non-profits, from Gain Animals in Need to Sanctuary and Guam’s motorcycle groups who help the homeless and Guam’s children. We also restored the statue at Two Lovers Point as a gift to the people of Guam. We are thankful for Guam, its diverse community and its hafa adai spirit. We are grateful for the support of businesses who believe in supporting local businesses first. We love our beautiful island where America’s Day begins, and we believe that together we can make this island a paradise. By Nancy Xania Barnhouse President, Island CERTS Corporation
What makes our company strong? Our workers. To create a strong, hard-working team, we treat each
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CONSTRUCTION NEWS BULLETIN
SMALL BUSINESS NOTES
BONDING for Small Business WORKSHOP The GCA SB Committee in collaboration with SBDC and PTAC hosted a Bonding Workshop on January 27 at UOG Jesus and Eugenia Leon Guerrero Business and Public Administration Building. Adam Baron from Cassidy’s Insurance, Nancy Tan from Moylan’s Insurance, and Bobby Salas from Takagi Insurance, provided information for contractors and vendors about Bonding. Topics presented were: the basics of bonding, who are required to provide bonding, application process for bonding, and the basic insurance guidelines. A take-away from the workshop was an understanding on a guarantee of payment. This is based in the case of any issues that
may arise while under contract such as a contractor’s nonpayment of employees’ wages or suppliers related to the construction of a client’s property due to theft or damage. A bond guarantees that the work outlined in a contract will be satisfactorily performed within the time allotted by the contract. Being bonded and insured reassures vendors potential clients the company’s reliability and can give the company the advantage needed to compete against other businesses for federal or local government contracts. Be on the lookout for more workshops!
join our SB Community! • The GCA Small Business Committee supports small business members of the association to ensure their voices are heard and needs are met within GCA capabilities. • Do you have an issue or concern that we might be able to assist with? • Do you have an idea or suggestion that may benefit our small business community?
L-R: James Martinez, Joe Roberto, Adam Baron, Bill Bernardo, Theresa Crisostomo, Tom Roberto, Jaylene Kent, Gerardine Mendiola, Jane Ray, Philip Leddy, Ken Lujan.
HELP US HELP YOU BY JOINING US AT OUR MONTHLY MEETINGS OR CONTACT: Lucia Wood (Chair) Theresa Crisostomo (Vice-Chair)
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(671) 777-8425 lucia.wood@aptim.com (671) 588-5972 theresac@jwsguam.com
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FEBRUARY2020 | 11
VOL. 61 ISSUE 02 FEBRUARY2020 • GUAM CONTRACTORSʼ ASSOCIATION
CENTENNIAL CELEBRATION
by: R.D. Gibson
CONSTRUCTION NEWS BULLETIN
At this point in time, how can it be that the year 2000 was 20 years ago? In an age of swiping glass screens and instantaneous communication, to think that there was once a time in history when telephones and radio were novel technology - the birth of mass media; when alcohol was illegal, banned by the eighteenth amendment; Or when women could not vote, it’s an amazing time to be around. Nowadays it is a quick Google search - on Chrome or Safari, whichever you prefer - to look up the the golden age of Jazz, the flappers in their dresses and dancing, the history of the Ponzi scheme, and a time defined by elegance and decadence. Yes, the decade that started with a bang also gave us among other things some insight into the potential impact of the military and civilian engineering industry.
FEATURE STORY
knowledge of the public and private engineers would somehow break apart, so SAME was born to continue and promote camaraderie and technical skills these engineers learned while working together. These same engineers would work to maintain and augment the relationships formed during the war and foster and nurture the engineering profession and related fields in the public and private entities. For a century, members of SAME have worked toward some of the greatest engineering advancements for the United States, including the development of nuclear energy, military successes in World War II, the national highway system, space exploration, the effects of climate change, and cyber security, among others according to their website. The core values of SAME dictate how the members conduct themselves and their work. Members are expected to demonstrate Integrity, patriotism, public service, national security, technical competence, excellence, and environmental stewardship - all with the underlying ideals of serving our country with high standards throughout.
After the end of World War I, the Society of American Military Engineers was formed. According to their website, “SAME is the premier engineering association in the United States bringing together public and private sector professionals to build connections, share lessons learned, and develop solutions to strengthen our national security.“ Since a lot was learned during World War I, there was a looming fear the collective experience and Like Us On Facebook
More, SAME is still the main connector between the network of engineers throughout the world. Their website boasts more than 100 posts, student chapters, and field chapters globally. The purpose of these Posts is to engage within their localities in how they can work toward greater synergy within their respective communities. “Posts are assets in their communities,” their website states. Additionally, they also create a mentorship-mentee community, advocate for veterans, “and help identify and resolve infrastructure-related challenges.” According to their website, Posts spark interests and help students find careers in STEM (Science, Technology, Engineering, and Mathematics, while awarding over $1 million in scholarships in 2018 alone.
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FEBRUARY2020 | 13
FEATURE STORY
CONSTRUCTION NEWS BULLETIN
importantly for the military buildup to Guam. Robertson remarked how the Navy had the SAME Guam Post sponsor a forum in Guam in March 2018 - the first of many - regarding the design and construction of a Marine Corps Base, which gathered 550 participants. In addition to the forums, Robertson referenced the SAME National organization’s Small Business Conference, which gets industry professionals and small businesses to collaborate as well. On top of that, it’s an excellent outlet to connect the military and small businesses. Robertson also mentioned how out of the Guam Post, a Philippine Chapter and Student Chapter at UOG in 2016 have taken root.
An organization’s longevity and legacy rely on a lot of things. For the SAME, it has taken a synergy of things, but past and current presidents point to a handful of things, including collaboration, the members and its volunteers, and the network that spans military branches and, even places that do not have any military bases. According to past president, John M Robertson, PE, “In many ways, SAME represents that (military=industrial) complex from the industry side but in close coordination with active duty and retired military officers from all branches of military service.” He pointed to how “the organization provides for networking possibilities and the opportunity for technical presentations and discussion” where they have posts. The world is not the same now as it was in 1920. According to current president, Scott Thompson, “The function of SAME has evolved as our nations (sic) needs evolved,” he began. Though the SAME Guam Post was chartered in 1952, the focus still remains in ensuring preparation, network, and collaboration. “SAME now has a larger role in industry-government engagement, meaning we bring industry and government organizations together to help solve our national security infrastructure challenges,” Thompson stated. Additionally, Thompson alludes to the the organization’s evolution in working toward providing and expanding STEM opportunities and education for engineering students. For 68 years, the SAME has been connected entities both governmental and military. The organization’s members have made a concerted effort in shining a spotlight on the roles engineers play in the contracting industry. Whether it’s through recognition or through forums, SAME members have connected and strengthened government and industry relationships - more 14 | FEBRUARY2020
For past president, Noel Enriquez, it’s been about the collaboration between engineering and non-engineering communities “to gather in one place to share experiences, expertise, lessons learned and even educate to improve and sustain local and national infrastructure not only to support national defense but also to improve the local community’s infrastructure.” Additionally, Enriquez commented on the establishment of the four-year Engineering program at the University of Guam. In addition to supporting, the organization has gone on to financially support the program through scholarships and donations to the UOG Endowment Foundation, “which will allow students to earn a Civil or Environmental Engineering Degree without leaving the island.”
“SAME believes that the students today are the future engineering leaders of tomorrow and we want to bring as many to the table to learn about STEM as we can,” said Thompson. Additionally, he spoke about scholarships for the engineering students, school presentations during Engineers, Architects, and Land Surveying week, a STEM camp, and support for school robotics programs.
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Enriquez spoke about how the STEM camp that started in 2017, gives students experience in different areas of STEM. “Established the STEM camp to allow not only GDOE students but all students on Guam to experience difference STEM opportunities,” added Enriquez. He also talked about the first LEGO League Robotics program, which was introduced in Guam almost a decade ago, and would later become a Robotics competition in Guam Department of Education Schools. This has helped students throughout the GDOE system realize their potential in a STEM field for the future. Part of building for the future of any community is taking a look at its options and potential for sustainability. This goes hand-in-hand with reaching out to their network, and teaching and learning about sustainable practices throughout the industry and region. This includes their participation as part of the University of Guam Conference on Island Sustainability and working with community partners to learn more. Enriquez commented how it’s a matter of working with the organization’s members to understand what other efforts SAME should be working toward and developing to promote sustainability on island moving into the future.
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As Thompson said, over time organizations change - they evolve to reflect the times. Nowadays, it is vital to examine the impact an organization has on its community continuously. As the Society of American Military Engineers turns 100, it is commendable to see how their organization maintains its values, its work to collaborate and share, and the the strength and fortitude of its network across oceans and regions. It still maintains a mission to educate the future professionals in the industry and manages to come up with ways to spark interest in the next generation of engineers. What was once its focus to preserve relationships between wartime engineers in the military has expanded beyond that and so much more; it has given and created an opportunity to share and collaborate with, meet, and learn from a network of professionals. Congratulations to the Society of American Military Engineers on 100 years of opportunities, educaiton, collaboration, and so much more! Sen dangkulo’ na Si Yu’os Ma’åse yan Inorabuena!
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GCA LUNCHEON January 15, 2020 Westin Resort Guam
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SBA's Proposal Would Help Small Business Teaming
By Franklin Turner, Alexander Major and Ethan Brown
Federal contractors can finally look forward to simplified small business mentor-protege programs, but also must become keenly aware of wide-ranging changes affecting certain 8(a) business development and Native American-owned programs, new recertification requirements for certain multiple award contracts, or MACs, and small-business joint ventures. On Nov. 8, 2019, the U.S. Small Business Administration issued a proposed rule announcing its intent to merge its 8(a) Business Development and “All Small” Mentor-Protege programs, in addition to, inter alia, proposing revisions to some of its size and socioeconomic status recertification requirements.[1] This proposed merger is welcome news for small-business contractors, as navigating the various requirements of the two current SBA mentor-protege programs can be confusing and burdensome. Teaming relationships are also addressed in the relief offered by the proposed rule for three-time contract award-winning joint ventures who would be freed from the burden of needing to form identical joint ventures to compete for new contracts. The removal of this procedural hurdle — along with a variety of other proposed changes discussed below — may signal a favorable sea change in small business teaming. Below, we’ve provided a short history of the SBA’s mentor-protege programs and summarized key aspects of the proposed rule that will likely be of interest to all federal contractors — from large and small entities to Native American-owned, Alaska Native corporations and Native Hawaiian organizations. The SBA is accepting comments on the proposed rule on or before Jan. 17, 2020. In addition, the SBA will hold a series of tribal consultation meetings around the country throughout January to address the potential impact of the proposed rule on Native American-owned corporations, Alaska Native corporations and Native Hawaiian organizations. Changes to Mentor-Protege Relationships The highlight of the proposed rule for many is the welcome consolidation of the two existing mentor-protege programs into one. The older of the two programs, the 8(a)
[1] 84 Fed. Reg. 60846 (Nov. 8, 2019).
18 | FEBRUARY2020
Mentor-Protege Program, was established in July 1998 with the stated purpose of utilizing mentors to assist in the development of 8(a) firms and to “improve [their] ability to successfully compete for contracts” by providing various forms of technical, management, or financial assistance.”[2] As the designation of this program implies, only a narrow subset of small-business contractors — i.e., those contractors who meet the SBA’s 8(a) program eligibility requirements — are eligible to participate in the program. In light of the successes of the 8 (a) Mentor-Protege Program, Congress passed subsequent legislation expanding the scope of this SBA program. First, under the Small Business Jobs Act of 2010, the SBA was authorized to create new mentor-protege programs for women-owned small businesses, or WOSBs, service-disabled veteran-owned small businesses, or SDVOSBs, and historically underutilized business zone, or HUBZone, programs. Second, under Section 1641 of the National Defense Authorization Act for FY 2013, Congress authorized the SBA to establish another mentor-protege program — similar in scope to the 8(a) program — for all small businesses. In response to these dual legislative mandates, the SBA decided to forego establishing separate mentor-protege programs for WOSBs, SDVOSBs and HUBZone programs, and instead opened its mentor-protege program to all small businesses, regardless of socioeconomic designation.[3] Although separate programs, the 8(a) Mentor-Protege and All Small Mentor-Protege programs essentially share the same goals and member benefits. For example, the 8(a) mentor-protege relationship “[enhances] the capabilities of proteges and ... [improves] their ability to successfully compete for both government and commercial contracts.”[4] Similarly, “the All Small Mentor-Protege Program is designed to require approved mentors to aid protege firms so that they may enhance their capabilities, meet their business goals, and improve their ability to compete for contracts.”[5] Additionally, under both the 8(a) and All Small
[2] 13 C.F.R. § 124.520(a); 84 Fed. Reg. 60846. [3] 81 Fed. Reg. 48558 (July 25, 2016) (Final Rule) (i.e., the “All Small Mentor-Protege Program”). [4] 84 Fed. Reg. at 60847.
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Mentor-Protege programs, mentors may (1) form joint ventures with proteges and bid on certain set-aside contracts, and (2) provide technical, management, financial, or contract performance assistance to proteges.[6] These overlapping goals and benefits, and the resulting duplication, inefficiency and confusion in government and private industry serve as the impetus for the SBA’s proposed rule.[7] By proposing to consolidate its two mentor-protege programs, the SBA hopes to “eliminate confusion regarding perceived differences between the two [mentor-protege] Programs, remove unnecessary duplication of functions within SBA, and establish one, unified staff to better coordinate and process mentor-protege applications.”[8] In pertinent part, the proposed rule revises the SBA’s applicable rules to, in essence, merge the 8(a) Mentor-Protege Program into the All Small Business Mentor-Protege Program. In other words, the proposed rule seeks to revise the SBA’s regulations to recognize that an 8(a) Mentor-Protege Program participant, similar to all other small businesses, may participate in the SBA’s All-Small Mentor-Protege Program, thus facilitating the advancement and ease of the overarching mentor-protege purpose. Additional Highlights of the Proposed Regulatory Changes Clarifying the SBA’s Position on Recertification for MACs Presently, size certifications at the order level for MACs are not required unless a contracting officer requests a recertification in connection with a specific order. The proposed rule would require a small-business concern to submit a recertification or confirm its size and/or socioeconomic status for all set-aside orders under unrestricted MACs, except for orders or blanket purchase agreements issued under federal supply schedule contracts. Further, the proposed rule would also require a small-business concern to either submit a recertification or confirm its socioeconomic status for all set-aside orders where the required socioeconomic status for the order differs from that of the set-aside MAC. Reducing Burdens on 8(a) Participants and Applicants Owned and Controlled by American Indian Tribes, Alaska Native Corporations, Native Hawaiian Organizations and Community Development Corporations The SBA’s proposed rule will also benefit tribes, Alaska Native corporations, Native Hawaiian organizations and community development corporations by: • Eliminating the prior approval requirement for changes of ownership involving the addition or removal of a wholly-owned entity of the tribe/Alaska Native corporation/Native Hawaiian organization/community
[5] Id. [6] Id. [7] See, e.g., 84 Fed. Reg. at 60847 (“Because the benefits and purposes of the two programs are identical, SBA believes that having two separate Like Us On Facebook
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development corporation and the 8(a) participant; • Reducing the number of rules associated with a tribe/Alaska Native organization/Native Hawaiian organization/community development corporation owning more than one 8(a) participant; • Clarifying the admission requirements for how a tribally owned applicant to the 8(a) program demonstrates the potential for success, and • Authorizing a process for an 8(a) participant to challenge an SBA-initiated change to its primary North American Industry Classification System, or NAICS, code. Loosening Regulations Regarding Joint Ventures The current version of Title 13 of the Code of Federal Regulations Section 121.103(h) generally limits joint ventures to receiving no more than three contract awards over a two-year period. In order to “lessen the burden on small business, while preserving the SBA’s belief that a joint venture is not intended to be an ongoing business entity,” the proposed rule seeks to eliminate the three contract limit, but also to keep in place the two-year restriction on joint ventures. Thus, under the proposed rule, a joint venture may be awarded an unlimited number of contracts within the two-year life of the agreement. Eliminating SBA Prior Approval for 8(a) Mentor-Protege Joint Venture Awards The proposed rule also seeks to eliminate the current requirement under 13 C.F.R. Section 124.513(e) that requires SBA preapproval of a joint venture agreement prior to the awardof an 8(a) contract to the joint venture. In effecting this revision, the SBA seeks to “significantly lessen the burden imposed on 8(a) small business Participants,” as 8(a) participants would, under the revised regulation, neither be required to submit additional paperwork to the SBA nor wait for SBA approval in order to seek competitive 8(a) awards. This proposed change only applies to 8(a) opportunities awarded through competitive procurements — the SBA’s prior approval will still be required for 8(a) sole source contract awards to 8(a) joint ventures. Eliminating SBA Approval for Minor Changes in Ownership of 8(a) Participants In order to lessen the burden on 8(a) participants seeking minor changes in ownership, the SBA proposes to eliminate the need for prior SBA approval of ownership changes in situations where an owner holds less than a 20% interest in the concern both before and after the transaction. This proposed revision expands the current requirement that only permits an 8(a) participant to change its
mentor-protege programs is unnecessary and causes needless confusion in the small business community.”). [8] Id. at 60846
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ownership interest without SBA's prior approval where the previous owner held less than a 10% interest. In addition, the proposed rule eliminates the requirement for SBA approval in situations where the disadvantaged individual/entity controlling the 8(a) participant will increase their percentage of ownership interest as a result of the change. Confirming That a NAICS Code for a Task Order Issued Under a MAC Reflects the Principal Purpose of the Task Order The proposed rule also confirms that specific NAICS codes and size standards must be an accurate reflection of the contracts and orders being awarded and performed. In particular, the proposed rule requires a contracting officer to assign a single NAICS code for each order issued against a MAC, and specifies that the NAICS code must be included in the underlying MAC and represent the principal purpose of the order. This proposed revision aims to end unintended confusion over which regulations apply to contractors working under certain NAICS codes, such as when a MAC is assigned a NAICS code for supplies but a particular order under that MAC is almost entirely for services. Altering the Lifetime Limitation on the Number of Mentor-Protege Relationships The proposed rule also revises 13 C.F.R. Section 125.9(e)(6) so as to not count any mentor-protege relationship toward a firm's two permitted lifetime mentor-protege relationships in the event that the mentor-protege agreement is terminated within 18 months from the date SBA approved the agreement. Although the SBA notes that it has “informally permitted a mentor-protege relationship not to count against the limit of two such relationships in total where the protege can demonstrate that it has not received any assistance from its mentor under the mentorprotege relationship,” this proposed revision codifies the SBA’s informal policy. Impact on Native American-Owned 8(a)s In light of the significant changes in the proposed rule that will impact the Native Hawaiian organizations, Alaskan Native corporations, community development corporations and Native American-owned companies, the SBA has also announced a series of tribal consultation meetings to address the proposed revisions across the country.[9] With the meeting in Minneapolis recently passed, the upcoming meetings will be held: • Wednesday, Jan. 8, 10 a.m. to 4 p.m. Alaska Standard Time, Anchorage, Alaska. ◊ The preregistration deadline for this tribal consultation meeting was Jan. 2. • Tuesday, Jan. 14, 10 a.m. to 2 p.m. MST, Albuquerque, New Mexico. ◊ The preregistration deadline for this tribal consultation meeting is Jan. 7.
• Thursday, Jan. 16, 10 a.m. to 2 p.m. CST, Oklahoma City, Oklahoma. ◊ The preregistration deadline for this tribal consultation meeting is Jan. 9. Notably, the testimony presented at these tribal consultations will become part of the administrative record that SBA will consider before finalizing the proposed rule. If your company is interested in the contemplated changes discussed above, consider attending these sessions to better understand the effects should the proposed rule become final. Practical Guidance As noted above, the proposed rule includes sweeping changes that are designed to consolidate overlapping programs, streamline regulatory requirements and reduce confusion for contractors of all sizes. Accordingly, we recommend that small and large businesses carefully review their existing policies, plans and ongoing contractual efforts to determine the extent to which they can maximize the beneficial impact of the proposed rule if it is adopted without change. Of course, as federal rulemaking is an iterative process, remember that the final rule may add, revise or eliminate certain sections of the proposed rule based on public comments and/or further consideration. Until the proposed rule is finalized, contractors should ensure that their policies and procedures remain compliant with all existing regulations.
Franklin C. Turner and Alexander W. Major are partners, and Ethan M. Brown is an associate at McCarter & English LLP. The opinions expressed are those of the author(s) and do not necessarily reflect the views of the firm, its clients, or Portfolio Media Inc., or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.
Franklin Turner
Alexander Major
Ethan Brown
[9] See 84 Fed. Reg. 66647 (Dec. 5, 2019). 20 | FEBRUARY2020
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Healthy Employees Increase Productivity Enroll now for your employee’s health insurance
The Guam Contractors Association offers many benefits to its members. One of those benefits, through TakeCare Insurance Company, is group rate health insurance for GCA employees. TakeCare’s partnership with the GCA provides its members with affordable health insurance for companies with a few or large number of employees. Health insurance can be out of reach for small businesses. TakeCare’s plans are flexible to meet a small business’s employee health insurance goals. Since 2012, when the GCA employee health insurance program began with TakeCare, the
number of employees and dependents with health insurance increased almost nine times, from 269 to 2,307 in 2020. In 2012, 59 GCA employers participated in the program. Today, 165 GCA employers are participating in the program. TakeCare’s nationally accredited programs encourage GCA employers and employees to live a balanced lifestyle. Programs help individuals and families make healthy choices through preventive care, being active, eating right, relaxing and unwinding, and being socially connected. TakeCare offers the island’s largest selection of free fitness classes and health education programs for all ages.
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EPA, Army Corps of Engineers Announce Revised WOTUS Definition by: Kiet Ngo
On Jan. 23, the U.S. Environmental Protection Agency and U.S. Army Corps of Engineers signed a final rule revising the definition of “waters of the United States,” which are federally regulated under the Clean Water Act. The final rule will go into effect 60 days after publication in the Federal Register. According to an EPA news release, the revised definition identifies four clear categories of waters that are federally regulated under the CWA: Territorial seas and traditional navigable waters; Perennial and intermittent tributaries; Certain lakes, ponds and impoundments; and Wetlands that are adjacent to jurisdictional waters. The final rule also details waters that are not subject to federal control, including features that only contain water in direct response to rainfall; groundwater; many ditches, including most farm and roadside ditches; prior-converted cropland; farm and stock watering ponds; and waste treatment systems. An unpublished version of the final rule, titled “The
Navigable Waters Protection Rule: Definition of ‘Waters of the United States,’” can be found on the EPA website. Previously, EPA and the Corps issued a final rule rescinding the 2015 final Clean Water Rule: Definition of "Waters of the United States," also known as the WOTUS final rule, on Sept. 12, 2019, as the first of a two-step process to repeal and replace the 2015 rule. That final rule went into effect on Dec. 23, 2019. ABC has long been a vocal opponent of the Obama-era WOTUS rule since it was first proposed in April 2014 ABC submitted comments on EPA and the Corps’ proposals on step one and step two of the WOTUS rulemaking, stating its continued commitment to work with the agencies and ensure the clearest possible regulations so that its members have the information they need to comply with the law. Additionally, ABC filed comments as a member of the Waters Advocacy Coalition. More information on the final rule can be found on the EPA website.
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FAMILY OF TRIPLE J MATRIARCH PRESENTS CHECK FOR $31K TO GMHVA
GMHVA Check Presentation (group photo); Standing in center back row, the Jones family representatives, (standing L tor R) Julie Jones Murrell, Jay Jones Senior VP, Robert H. Jones, Chairman and CEO, Jeff Jones, President and COO, along with the board and volunteers of the Guam Memorial Hospital Volunteers Association
On Tuesday, January 21st, the family of the late Margaret A. Jones, co-founder of Triple J Enterprises, Inc. presented a check for $31,500 to the Guam Memorial Hospital Volunteers Association (GMHVA). Margaret Ann Jones passed away peacefully in June 2019, the family held memorial services in July 2019 in North Carolina and Guam, respectively. In lieu of flowers, they had asked that Margaret be honored with donations made to the Guam Memorial Hospital Volunteers Association, of which she was a founding member in 1965. Members of the association, also known as the Pink
Ladies, were also in attendance. President of GMHVA, Christine Calvo fondly remembered Margaret, her warm smile an d compassion, and praised her for her initiative in launching the association's Patient Care Program, which is a program open to volunteers in the community and is intended to compliment and enhance the quality of care and quality of life for the Guam Memorial Hospital patients. The donation honors not only Margaret and what she was most passionate about, but will support the mission of GMHVA and its founders, which is to continue to serve the island community in a significant and lasting way for years to come. Kristine Lujan VP Marketing & Public Relations Triple J Enterprises, Inc.
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