Construction executives are practically tearing their hair out to find locally qualified minority companies to work on upcoming federal contracts and to fill U.S. set-aside requirements.

Federal projects are certain to be in the millions of dollars in the coming years and locally owned companies that qualify could share in contracting mega-profits as the military upsizes on Guam.

The office in charge of construction at the Navy expects about $230 million in military work to be awarded in fiscal 2005 and that is only what has been budgeted so far. Of that $100 million could go to local companies on Guam although minority work can be awarded to off-island companies for skills not available on-island.

The federal preference for 8(a) firms— 3% to 10% of the value of each project — has major construction companies searching for small business and disadvantaged partners.

John M. McSweeney chief estimator for Black Construction Corp. whose major customer contracts are with the federal government told the Journal that Black’s door is wide open for fostering relationships with small businesses that have gone the extra mile to become 8(a) certified. “We are looking for reliable subcontractors that can perform service and construction jobs. A new wave of federal contracting money is headed this way and today there are not enough companies. Our advice is to get as many designations as possible. In terms of the 8(a) program it works because it is a business mentoring and evolution process for small disadvantaged businesses and we are currently set up to work with those.”

Jasper “Jack” Corbett business opportunity specialist in Guam for the SBA told the Journal that in 2001 and 2002 $60 million in federal contracting money directly went to 8(a) certified companies doing business in Guam and that amount is expected to increase in the next few years. “Large prime contractors bidding on federal and military projects are required to have sub-contracting plans that include 8(a) development plans with small companies. The SBA is set to help qualified firms get certified ” Corbett said.

Keith L. Farrell is vice president for Micronesia for Dick Pacific Construction Co. Ltd. and Dick Pacific has been actively advertising for small disadvantaged firms to contact his company for partnering interviews. “It’s very difficult to put a figure on the amount of money that will be available for subcontracting because each contract is different. However if we mentor with an 8(a) company in a joint-venture agreement a 5% preference can be given on federal contracts and that can be competitive.”

There are presently 295 businesses on Guam that are recognized as small businesses by the U.S. Small Business Administration and registered with the federal government’s Central Contractor Registration database. Of those only 36 are designated 8(a) making them eligible for special preference contracting privileges as they are recognized as economically and socially disadvantaged. Other businesses on Guam with SBA special designations include 95 women-owned businesses; 17 small disadvantaged; 55 veteran owned; eight veteran service disabled; and five with HUBZone recognition an additional federal program for Historically Underutilized Business Zones. HUB was opened in 1999 and is designed to stimulate economic development and create jobs in urban and rural communities by providing federal contracting preference to small businesses.

In the Northern Mariana Islands only 17 firms are registered as small businesses on the CCR. Of those only one is certified 8(a).

Corbett said the number is likely to rise as the incentives of 8(a) certification become apparent. “Modern International Inc. was the first firm on Guam to get its certification in 1998 and many more have followed. There is more room as federal spending increases here.”

About 8 300 companies are presently certified nationwide in the 8(a) program. During fiscal 2003 $9.56 billion in federal contracts was awarded to companies participating in the program.

The military in the Mariana Islands has recognized the mutual satisfaction that comes from creating small-business opportunities to the extent that both the Navy and the Air Force have small-business liaison officers.

At the Navy Margaret "Peggy" Williams is the small business and labor advisor. She told the Journal there is a need to enhance the 8(a) pool of contractors. “We need to foster a new group of 8(a) contractors. It would be good if they were to create an association where they would circle their collective wagons and support each other and lobby for bonding and insurance issues that are beginning to arise.”

Williams said that on construction projects there are no more set-asides for small businesses. “We can only go 8(a) HUBZone or unrestricted where big companies like Dick Pacific and Black construction compete and they have mentor and protégé programs for 8(a) firms.”

The Air Force has Richard C. Jedlinski director of business operations who is working part time on small business interests.

“We have a process here at Andersen that any construction project that comes in is reviewed for small-business opportunities and to determine if we have any 8(a) contractors on the island and if in fact they meet the bonding requirements and have a satisfactory performance record. If in fact we do have two or more qualified contractors then we compete it. If we find that one 8(a) contractor has a unique expertise in a discipline we will set it aside for that 8(a) contractor ” Jedlinski said.

He said that part of the 8(a) certification is the learning process. “The learning part for contractors is how to compete for business and we try to level the playing field so that they can win work and grow from the experience.”

Maria Elizabeth V. Christie is one of the principal engineers for Pacific Soil Engineering & Testing. The firm is a small locally owned civil engineering consulting firm performing civil-geotechnical engineering and construction materials testing services for more than 20 years.

The firm became 8(a) certified on Oct. 12 2001. “Although we have been unsuccessful in obtaining direct federal contracts we believe the 8(a) program has benefited our company through the subcontracting plan requirements of federal projects. We will continue to pursue direct federal opportunities and it is our hope that the prime contractors such as Black Construction Corp. Dick Pacific Construction AMEC Earth and Environmental Inc. and J.A. Jones Management Services will continue to utilize our office not only for the services we provide but to assist them in fulfilling their 8(a) small disadvantaged business and woman-owned categories in their subcontracting goals.” MBJ