Tourism and hospitality updates:

The Commonwealth Healthcare Corp. updated guidance for restaurants and bars to “eliminate the requirement for restaurants, bars, businesses that are open to the public, or places of worship to maintain records of temperature screenings and one point of contact for each party,” according to a Feb. 17 release.

Japan Airlines announced Feb. 15 resumption of flights to Guam will not resume until between May 1 and May 31. United Airlines is continuing to fly on the Guam-Narita route.

However, Japan media are reporting that Japan will reduce the quarantine period for all arrivals who have received booster shots to three days, with potential exemption entirely from certain destinations.

Japan will increase its cap on daily arrivals from 3,500 to 5,000 and from March allow foreign students and business travelers to enter the country, as well as returning residents.

The Japan Business Federation has been among critics of the degree to which Japan closed its borders.

 

First moves related to a new hospital for Saipan; travel COVID tests vary in price   

The idea of a new hospital property in Saipan is not a new one, as Gov. Ralph DLG. Torres said in a press briefing on Feb. 18.

(See “Hospital to build; aim for comprehensive healthcare in the NMI,” in the May 3, 2021 issue of the Journal, or on www.mbjguam.com)

Esther L. Muna, CEO of the Commonwealth Healthcare Corp. said that the U.S. Department of the Interior’s Office of Insular Affairs declined to pay for a survey for a new Commonwealth Healthcare Center, but that a team from the Federal Emergency Management Agency and the U.S. Army Corp of Engineers will be arriving in Saipan. “We do have a team that’s coming in next week,” she told the Journal. Government agencies and private sector representatives – such as doctors in the community – would be involved in the discussion, she said. “It is going to be a brainstorming session.”

While the CHCC does own land opposite its current property, she said CHCC was continuing to upgrade where essential and may look to build to meet urgent requirements only.

As to issues with what specialties can be added to the CHCC to potentially alleviate travel for medical referrals, she said she had talked to Lillian Perez Posadas, CEO of Guam Memorial Hospital also. “We need to analyze what can be done here.” 

As to the demand for COVID testing for travel, the NMI offers a variety of options. Unlike on Guam, travelers are able to get free tests at community test sites – although they should be prepared to wait. Other paid options at the Commonwealth Health Care Center are Antigen tests at $57 and PCR tests at $300.

Muna said travelers are not encouraged to use the community testing, and the costs for a PCR test is “definitely reasonable when it’s done by hospital staff.”

 

More on Guam’s hospital, and the fifth sub for the island

While Gov. Lourdes A. Leon Guerrero eyes a Department of Defense-owned 102-acre plot of land in Mangilao for the site of the new medical campus and hospital at Eagle’s Field, DoD also has plans for the land. The proposed medical campus would take up about a third of the land and would limit what the military could build there.

According to Rear Adm. Benjamin R. Nicholson, commander of Joint Region Marianas, commander of the U.S. Indo-Pacific Command, commander of Task Force West, and senior military official for Guam, the Northern Mariana Islands, Federated States of Micronesia, and Palau, who held a media roundtable talk on Feb. 15, there were thoughts of putting radar and a missile defense system on the plot, but with the new hospital, it would interfere with the machinery. As is, there is a verbal contract between the Missile Defense Agency and the Government of Guam that if a hospital is built there, the DoD will not add anything to interfere.

“They will press forward with the hospital complex, and we will find somewhere else for missile defense and use that land for something else,” Nicholson said. However, he said nothing has been finalized at this point.

Other sites being looked at for the missile defense system and radar include property on Nimitz Hill, Piti and Dandan, Inalåhan. While it would be ideal to have the system in the middle of the island, due to Guam’s size and restraints from properties like the airport, the 360-degree system would be spread out on multiple points throughout the island, according to Nicholson.

Additionally, the DoD is interested in adding to the terms of the lease if the government chose this area and would include an ability to land an V 22 Osprey, or a tilt-rotor aircraft, which is currently used by the Marine Corps. and soon by the Navy. “These aircraft can’t land on a regular helicopter pad,” he told the Journal on Jan. 26.

According to Journal sources, the fifth permanently homeported submarine in Guam will come to island later this spring and will be coming from mainland United States. Nicholson confirmed it will be a fast-attack submarine, like the other four homeported on island. The new submarine will join the USS Asheville, the USS Jefferson City, the USS Key West and the USS Annapolis, which are all Los Angeles class fast-attacks.

More than 30 Los Angeles class submarines are currently in commission within the Navy.

Nicholson also said that for the future, there are no plans to bring other types of submarines to the island, like ballistic missile submarines, as that’s not conducive to Guam’s base layout or plans.

In other military news, B-52 bombers and airmen assigned to the 96th Expeditionary Bomb Squadron at Barksdale Air Force Base, La., arrived Feb. 8 and 10 at Andersen Air Force Base, according to a Feb. 16 release. The bombers were taking part in Cope North, which is finishing Feb. 18.

 

Leon Guerrero anticipates up to $2 million for Native CHamoru registry

From 7 a.m. CHamoru Standard time, a hearing was held by the U.S. House of Representatives Committee on Natural Resources in support of House Resolution 6504, the Native Pacific Islanders of America Equity Act, which seeks to allow eligible Native CHamoru and Native Northern Marianas organizations to qualify for the U.S. Small Business Administration’s (8)a federal contracts.

Michael F.Q. San Nicolas, Guam’s delegate to Congress, introduced HR 6504, which he said “will enable Native CHamorus – American citizens – to be rightfully included in doing business with the federal government.”

In her testimony, Gov. Lourdes A. Leon Guerrero spoke of the value of 8(a) contracts.

She said that in fiscal 2020, 8(a) firms were awarded $34 billion in federal contracts, including $9.3 billion in 8(a) set-aside awards and $11.1 billion in 8(a) sole-source awards. “Such funding is critical for our small businesses to obtain the training and supplies needed to maintain their operations given the nation’s rise in the cost of goods, and to bolster the island’s rate of employment.”

Leon Guerrero requested “an appropriation be included in the bill to adequately provide for the necessary resources that will be required to establish and maintain a Native CHamoru registry.” She also requested an amendment to require rules and regulations of the registry.

Later in response to a question from Vice Chairman Gregorio “Kilili” Camacho Sablan, the Northern Mariana Islands delegate to Congress on funding, the governor said, “I was thinking $1.5 [million] to $2 million to establish and maintain it.”

Sen. Therese M. Terlaje, speaker of the 36th Guam Legislature testified that, “In 2007, CHamoru-owned businesses comprised only .01% of all the businesses in the United States. Currently, there are only seven companies located on Guam that avail of the Section 8(a) program as a minority owned business; 90% of all businesses on Guam are small or micro businesses and report less than $500,000 in annual revenue. Passage of this bill would create incentives for businesses to apply for the 8(a) program because as Super 8(a) businesses, they could continue in the program longer than the 9-year limit and they would benefit tremendously from technical assistance provided by the Small Business Administration. H.R. 6504 would boost Guam’s 8(a) portfolio numbers and thus provide a stronger platform of federal contract opportunities for Native CHamoru firms.”

Also testifying were Robert Salas II, President of Pacific Federal Management Inc., Joshua B. Duvall, a government bid contracts and protests attorney with Maynard, Cooper & Gale, PC and Matthew Schoonover managing member attorney with Schoonover & Moriarty LLC, a similar expert. 

 Salas said the legislation “comes at the most opportune time” with the development of the U.S. Marine Base Camp Blas. He said a win-win would develop Native CHamoru companies in federal contracting, but “would also help the U.S. government by creating a better marketplace.”

Schoonover talked of the worth of 8(a) and HUBZone small businesses. “These businesses provide quality stable jobs to employees and often times enable their employees to remain involved in their communities. Without exception, each takes pride in the work they perform on behalf of the government.”

As to the role of the SBA’s 8(a) program, Schoonover said it is in many respects “the grandaddy of socio-economic programs. Participation is limited to businesses that are at least 51% owned and controlled by individuals that have been controlled and subjected to economic disadvantage, to right wrongs that hampered the ability of certain individuals or groups to fully participate in the American economy.”

Admission to the 8(a) program is not easy, nor fast he said. “Establishing eligibility requires that businesses provide – and SBA scrutinizes – a trove of business and personal records.” SBA receives about 3,000 applications to the program annually, Schoonover said. “It can take months to get in.”

Participation is advantageous, he said. “In fiscal 2020, 8(a) companies earned $59 billion in awards from the federal government – far outpacing any other socio-economic designation.”

Unfortunately, he said, “HUBZone businesses are at the other end of the contracting spectrum. [Guam is designated as a HUBZone.] Federal agencies continue to fall short of their 20%  Congressionally mandated goal. In fiscal 2020, HUBZone businesses earned only about $13.6 billion in federal contracts.” Schoonover called that “indefensible.”

Questions after testimony related to the Organic Act’s definition of Guam citizenship rather than “blood quantum” as in the Northern Mariana Islands and whether the structure and restrictions of the 8(a) program led to abuse.

See www.mbjguam.com for various stories on (8)a companies doing business in Guam.

             

GEDA grants update:

As of Feb. 17, the Guam Economic Development Authority’s Pandemic Assistance Grant 2021 had 1,524 eligible applicants, totaling $16.8 million, with about another $500,000 to go out.

“We’re closing it out right now,” said Melanie Mendiola, CEO and administrator for GEDA. With that disbursement, 100% of the applications will have been processed. GEDA will then meet with the governor to determine what will become of any leftover money.

For the Local Employers Assistance Grant, there have been 1,173 applications, with 807 eligible. The 237 were mostly ineligible due to the business not meeting the interruption threshold. Using the first $25 million of the program, 444 businesses have received checks right away American Rescue Plan funding. The next $25 million will come from Guam’s general fund, which might take longer.

“As the general fund revenue comes in, then it’s drawn down,” Mendiola said. “The important thing is to communicate … to manage expectations along the way.”

A notice of fund availability was published for the Growth Accelerator Program, which is aimed at working with local businesses to serve as an incubator-type program.

 

CQA on its way to nine drug detection dogs

Through a Memorandum of Understanding, the Office of the Attorney General has committed up to $60,000 to Guam Customs and Quarantine Agency “for the procurement and transportation of drug detection canines.” The funds are estimated to add four drug detection dogs to CQA to support drug detection, according to a Feb. 17 release.

The Drug Detector Dog Unit told the Journal it has five dogs.

 

Compact countries face shortages without change in status quo

The U.S. Government Accountability Office was asked to project the effects of the ending of certain assistance under the Compacts of Free Association, as well as the sustainability of Compact trust fund disbursements to replace grants and financially support the three nations. According to a Feb. 14 report, GAO found the following:

The Federated States of Micronesia: The FSM relied on Compact sector grants and a supplemental education grant ending in fiscal 2023 for 28% of expenditures in fiscal 2019. “GAO projects that disbursements from FSM’s compact trust fund will not cover all of the value of these grants, resulting in annual fiscal gaps.” Because of rules governing the Compact trust fund, the FSM faces a 36% likelihood of zero disbursements from its Compact trust fund in one or more years before fiscal 2034, even though the fund may have a substantial balance, the report said.

The Marshall Islands: The [Marshall Islands] RMI relied on Compact sector grants and a supplemental education grant ending in fiscal 2023 for 21% of expenditures in fiscal 2019. “GAO projects that disbursements from RMI’s compact trust fund will not cover all of the value of these grants, leading to annual fiscal gaps,” Because of rules governing the Compact trust fund, the Marshall Islands faces a 12% likelihood of zero disbursements from its Compact trust fund in one or more years before fiscal 2034, even with a projected increasing fund balance, the report said.

Palau:  Palau relied on Compact grants as well as disbursements from its Compact trust fund for 13% of expenditures in fiscal 2019. The GAO projects minimal disbursement risks to Palau’s compact trust fund before fiscal 2044. “As of September 2021, the Department of State, working with {the Department of the] Interior, had not established timeframes to constitute the Palau Advisory Group on Economic Reform, which the Palau Compact Review Agreement stipulates is to recommend reforms to enhance long-term economic sustainability,” the report said.

Grant assistance ends after fiscal 2023 for FSM and the Marshalls and after fiscal 2024 for Palau.

FSM, Marshalls and Palau’s total government expenditures, by revenue source for fiscal 2019