There are no shortage of opinions on the economic future in the islands. Experts from an array of industries have some thought-provoking opinions on economic prospects in the islands for 2022.
April 5, 2021
Marianas Business Journal
Interest high in Tinian, NMI despite award delays
BY MAUREEN N. MARATITA
The Northern Mariana Islands Procurement Technical Assistance Center, Naval Facilities Engineering Systems Command Marianas and Naval Facilities Engineering Systems Command Pacific hosted the first briefing held in the NMI, albeit virtually. The CNMI Virtual Industry Day on March 23 included presentations on the Guam military buildup, the Tinian Divert Airfield project, the capacity of Tinian, small business programs, PTAC services and how to do business with the federal government. The event was designed for subcontractors to network with prime contractors and discuss military construction opportunities within the NMI.
William Boudra, director of the Guam Program Management Office at NAVFAC Pacific in Hawaii, kicked off with the background to the military buildup, reminding attendees that about 5,000 U.S. Marines will be transferred to Guam from Okinawa. “Some global Marines are also coming to Guam,” he said. Boudra also gave attendees a brief overview of progress at Marine Corps Base Camp Blaz in Guam; and at Andersen Air Force Base, which will host Marine Corp Aviation combat forces. While one hangar is fully completed, he said, “We are still yet to award the aviation administration building and a facility for airport training.” At Apra Harbor on Naval Base Guam, improvements to wharfs are completed and a medical/dental clinic and waterfront headquarters are currently in construction. “We have an embarkation facility to be awarded,” Boudra said. “We are building a number of firing ranges,” he told attendees, including the live fire training facility at North West Field on Andersen. The Urban Training Complex at Andersen South is undergoing completion, he said (See photo on Front Page). As to the machine gun training range, he said, “That contract is to be awarded later this year.” Boudra underlined the various jobs and contracting available in Guam that will become available in Tinian related to the Divert Airfield. In general, he said of 2021 to 2023, “The bulk of the projects will be contracted during that time frame. He estimated $1 billion per year for the current year and next year. Boudra declined to speculate on the dollar amount of work to be awarded in the NMI.
Wayne Acosta, NAVFAC Pacific DC project manager, spoke on the various parts of the Tinian Divert Airfield. Both he and Boudra were at pains to correct any impression the project had been cancelled, despite the delay and official pullback of the airfield pieces announced on Feb. 25 at a joint meeting of the Guam Chapter of the Society of American Military Engineers, the Guam Contractors Association and a number of local professional organizations. “They are not canceled and will be redesigned,” Boudra said, adding that any award will be made “as soon as possible.” The postponement of any award is due to the cost of the various phase bids. (See “Costs will delay Tinian divert airfield awards,” in the Dec. 7 issue of the Journal, or at www.mbjguam.com.)
Capt. Timothy C. Liberatore, commander of Naval Facilities Engineering Systems Command Marianas told the Journal in December, “The whole program has shifted — most likely an entire year, so we won’t see it till probably the second quarter of fiscal 2022.” Original cost estimates were $109 million for the parking apron, $98 million for Phase One of the airfield development and a further $109 million for fuel tanks with a pipeline system, according to Journal files. Recent NAVFAC estimates in February capped those projects at $100 million.
Tinian’s construction capacity and ability to meet demands will be determined by the amount of work and requirements, according to Matthew O. Deleon Guerrero, owner of Hive Analytics, who presented the CNMI Construction Capacity Study, completed between 2018 and 2020 by NAVFAC Pacific. The study assessed “generally, what are the limiting factors that need to be addressed,” he said.
The construction capacity analysis is based on evaluating Tinian and the NMI’s infrastructure and utility capacities, as well as the availability and cost of labor, equipment, materials, and transportation within construction thresholds that range by dollar millions between $100 million to $400 million.
The capacity will depend on the dollar amount of construction expenditure, so for example at $100 million, “There’s sufficient capacity in some areas, but in solid waste or wastewater [disposal], and limited labor and materials capacity,” Deleon Guerrero said. At that level, roadways and harbor improvements would be needed — as well as container storage at the harbor; there would be sufficient fuel, he said. There would be a need for imported materials and about 500 workers. Needs rose with the amount of expenditure into the NMI, to include container storage needs, the number of workers and their housing.
Deleon Guerrero said some of the data had changed since the survey. “Triple J has taken on acquiring significant property in Tinian for construction housing,” he said. In addition, the Philippines has been restored as a location to provide H-2 contract workers as of January. In addition, after speaking to contractors regarding importing goods, he said, “There is opportunities of scale if conditions demand it.”
Philip T. Mendiola-Long, corporate consultant to Bridge Investment Group LLC and president of Fiduciary Resources LLC told the Journal in February that businesses have been receiving support in supplying Seabee needs in Tinian. These include Sherman Consulting LLC which does business as the Marianas Business Center, for office hosting; FPA Inc. and Power Builders International, for manpower and heavy equipment rental; Paradise Security Services LLC, for security services; Tinian Fuel Service Inc., which does business as TLC Landscaping and Custodial Services, for portable toilet rental and cleaning, Tinian Fuel Services inc., for fuel supply, Avis Car Rental, for vehicle leasing, the JC Café for food services, Tinian Fuel Services Inc., which does business as Primo’s Diner for food services and the Tinian Diamond Hotel for lodging.
Mendiola-Long — who is also president of the Tinian Chamber of Commerce — told the paper at the time, “USA Environmental tried to utilize all services locally and the Tinian business community is grateful to Navy contractors such as them.”
Triple J Enterprises has also invested $2 million in the Tinian Western Lodge (the former Tinian Hotel) and Bar-K Diner and Hertz locations, plus one at the airport, with additional funding on its rental car fleet and the wholesale operation, due to open in April, adding 32 jobs to the market.
Regina K. Pasqualucci, deputy manager for NAVFAC Pacific Small Business Programs and Norma Borja, small business professional with the Small Business Program office at NAVFAC Marianas underscored the need for small businesses to research and connect with PTAC, as large projects may not have small business set-asides. But for prime contractors, she said, “It does come up in their performance assessment.” Pasqualucci said businesses may need to do project-by-project research and look for opportunities at the sub-contracting level. However, she said, there are sometimes set asides with a contract, even if not specifically required. “I am proud to say DoD has done that.”
Sixto K. Igisomar, director of the NMI PTAC office, said, “We do have a lot of applicants who are not contract-ready.”
About 135 business representatives attended the event. There was no charge for registration. mbj
Dec. 7, 2021
Marianas Business Journal
BY MAUREEN N. MARATITA
While the future for Tinian is still bright, construction awards for the huge Tinian Divert Airfield project will not happen any time soon. The latest estimates were that Phase 1 would be awarded in fiscal 2021.
Capt. Timothy C. Liberatore, commander of Naval Facilities Engineering Systems Command Marianas told the Journal that will not happen. “The whole program has shifted — most likely an entire year, so we won’t see it till probably the second quarter of fiscal 2022,” he said. Delays on moving forward with the airfield work are due to the original designs being over budget, according to Journal files. Bids are also believed to have been higher than expected. “That’s unfortunate. The reality of the cost of doing projects out there are more costly than expected,” Liberatore said.
Phase 1 — for which bids were due June 16 at Naval Facilities Engineering Pacific — covers the Cargo Pad with Taxiway Extension and Maintenance Storage Facility and Phase 2 covers the Airfield Development and Apron.
Original cost estimates were $109 million for the parking apron, $98 million for Phase One of the airfield development and a further $109 million for fuel tanks with a pipeline system. According to Journal files, there were three bids for Phase 1 in June, and expectations were that an award would be made in October, or close to it.
A live site visit was organized for September, but despite a list of attendees those who did show represented companies based in Tinian or Saipan, barring one company that has a presence in Guam also, due to the challenges of quarantine. NAVFAC Pacific and the Naval Mobile Construction Battalion 5 Seabees coordinated a May virtual site visit.
Liberatore said, “Some of the contractors were able to go out and get a better feel for it; it’s everything from all the logistics to supply, the subcontractors — where are they going to live? Where are they going to buy groceries? All those things — the unknowns make … it harder.” As to other construction in Tinian, he said, ““We really haven’t started building on Tinian yet — the larger construction projects where I would get involved.” The U.S. Navy’s Task Force 75 Seabees are doing engineering and construction work in Tinian and completed a survey of Tinian Harbor in October which identified areas needing repair, as well as an assessment of roads leading to and from it. A groundbreaking was held in Marpo Heights in August for road work, according to Journal files. The work also serves as readiness training. “They’re paving the way — literally and figuratively — with the road project,” Liberatore said. “We’re really just establishing our footprint right now,” he said. Liberatore said he is aware the Seabees are currently building Camp Tinian, with the aim of “continuing work and follow-on deployments in Tinian.” Various Seabee details have also been cleaning beaches in Tinian, with the latest of those being Chiget Beach. “We’re seeing about eight different subcontractors and suppliers — multiple small businesses supporting that project,” Liberatore said.
The NMI’s Bureau of Military Affairs received a Department of Defense grant for Tinian in September for $335,000, to enhance utility infrastructure in support of life, health, and safety for service members rotating on/off the island of Tinian from Joint Region Marianas, which will be used for repairs to roads 205 and 206.
Liberatore said the divert airfield will benefit the island. “It’s going to be joint use. … Tinian will be able to use that airport. … That’s probably what we’re looking at when we start looking at Palau and some of these other island nations; how can we go in and provide joint use between the host nation and the Department of Defense.”
While the award process waits, the contracting community can look forward to an industry forum. “The first step certainly was with the government of the CNMI — what this extent of construction will bring from an economic perspective,” Liberatore said. That would be extended to the contracting and small business communities. “Our plan is, while the prime contractors may be from Guam or stateside, the subcontractors, the suppliers — the much larger portion of the project is local, as much as we can,” he said. The approach will be similar to what happens in Guam, which. has led to local prime contractors in Guam. “We build the small business capability, so they can become larger businesses, or stand-alone.” Gov. Ralph DLG. Torres said in a media briefing on Nov. 20, “There’s a lot of promises that have been made throughout the years, and we’re seeing those promises … in place now; it’s happening. We’re seeing more projects coming in.” The governor said he expects more work in Tinian in the coming years.
Phillip T. Mendiola-Long, president of Sherman Consulting LLC and president of Fiduciary Resources LLC said off-island contractors are bidding high for a reason. “The issue is because of the COVID, they haven’t been able to send people [to be] on the ground, so they’re bidding in the dark essentially.” Mendiola-Long said not all equipment is available on Tinian but local businesses have the ability to procure requirements for contracts, a fact which may be unknown to bidders. “We have to have a buyer before we bring in inventory.” He said local supplies will depend on what becomes known. “If the buyers are sincere and there’s a concrete effort to actually do these projects on Tinian and NAVFAC is committed to pushing forward … then you’re going to see the local market start to buy in and start building up capabilities that right now are being priced in absence of.” Pricing now is based on a prime contractor bringing in all sub-contractors, employees, housing and catering, he said. Tinian already has companies such as USA Environmental Inc. doing business in Tinian, which has experience working in Guam and the Northern Mariana Islands and in providing various services, to include munitions response. “We have those capabilities,” Mendiola-Long said. Tinian also has a qualified labor force, he said, due to previous projects on the island. “You have certified drivers here, certified heavy equipment operators, crane operators … you just have to pick them up.”
In the meantime, Seabees activity is proving a boon to local businesses – particularly at such an economically challenging time. Mendiola-Long said current economic opportunities come from the military. “We do have exercises once a year that occur on the island; right now we have a one-year deployment for the Seabees that are on the island that are doing some community work because of Yutu damage that was done to the roads here.”
Liberatore said there are several companies providing rock and aggregate to the Seabees. “They need trash service; they have private food service; they need fuel,” Mendiola Long said. DynCorp International LLC is providing operations management, but local and locally based companies are providing all manner of goods and services through DynCorp, to include housing and transportation. “The Seabees have been a godsend,” he said, without tourism. Mendiola-Long also does business as Tinian Fuel Services Inc., which has a variety of services, aside from fuel. “We provide the trash service for them and then the portable toilets.” As to the future, he said, “… There is a gigantic expectation in the local community of participation. … I think the military has to go over and above their standard practice for procurement and really ensure that the local community in Tinian is prepared.”Mendiola-Long would like to see a Procurement Technical Assistance Center opened on Tinian. “That’s probably the most important place for it to be,” he said. “What that does it alleviates any animosity buildup for lack of participation once opportunities start to take place.”
There are no expectations that construction will begin anytime soon, Mendiola-Long said. mbj