The ultimate value of the Army project is worth $6.9 billion over its 50-year life because Actus will also maintain and manage the housing, said U.S. Rep. Neil Abercrombie, D-Hawai'i.

"This will mean an avalanche of money for Hawai'i, a torrent," Abercrombie said.

Robert "Scotty" Scott, Actus Lend Lease's regional vice president of construction, called it "the largest privatization contract in the nation."

Napa, Calif.-based Actus Lend Lease technically has been "selected" to build, upkeep and run the Army's O'ahu homes for the next 50 years. The company will begin negotiating the fine points of its new partnership with the Army over the next six months before the Army officially "names" its prime contractor.

Army officials have scheduled a signing ceremony for Sept. 12 at Schofield Barracks.

As word of the contract spread, local small businesses were calling Actus Lend Lease's Bishop Street offices yesterday trying to get a piece of the subcontracting work.

"The phone's been ringing off the hook," said Lucien Wong, the company's regional vice president.

But even as Actus Lend Lease officials celebrated yesterday, some small-business owners were questioning whether they will ever see a piece of the billion-dollar prize.

"I hope Actus does the right thing," said George Toyama, the owner of a flooring contractor and facility maintenance company called General Trades and Services.

At forums designed to close the gap between the needs of the primary contractors and the skills of small businesses, Toyama has repeatedly asked military representatives whether the Mainland primary contractors will be required to pay often-higher local wages.

Each time, Toyama has failed to get a clear answer.

"People like myself won't be able to compete if it just goes to the low bidder," Toyama said. "Actus Lend Lease, I think, is a pretty good company and they said they intend to do the right thing. I guess we're going to find out."

Construction could begin as early as mid-2004. The work involves new and refurbished homes at Schofield Barracks, Wheeler Army Airfield, Fort Shafter, Tripler Army Medical Center, Aliamanu Military Reservation and Helemano Military Reservation. It also includes 100 Marine Corps homes and 318 Coast Guard units in or around Aliamanu Military Reservation.

The Navy and Air Force are also expected this month to select their prime contractors for similar new homes and renovations on O'ahu worth another $1.1 billion. Actus Lend Lease remains in the running for the projects.

The work is possible because of legislation co-authored by Abercrombie that changes the way the Department of Defense builds and overhauls military homes. It's intended to speed up home construction and help keep soldiers, sailors, airmen and Marines in the military.

Under the old system, the Department of Defense estimates, it would take 30 years to 40 years — at a cost of $30 billion — to upgrade the 168,000 military homes around the country that have been deemed "inadequate."

But since 1996, private developers have been controlling housing allowances and in return must commit to maintaining and managing the homes for 50 years.

"The quality-of-life side of things — the housing, upkeep, maintenance, landscaping — tends to fall to the edges and we could never come up with the dollars to meet the needs of an all-volunteer service that increasingly is made up of families with children," Abercrombie said.

"An initial hit of $1.7 billion, with a total expenditure of $6.9 billion — that kind of money simply isn't available in the defense department."

Actus Lend Lease has been building military homes throughout O'ahu for more than a decade. It also built two of the first "privatized" military projects — Army housing at Fort Hood, Texas, and Fort Campbell, Ky.

For the O'ahu Army project, company officials expect to subcontract 90 percent of the work to local, small businesses.

"We're going to run this like it's a local operation," Scott said. "We don't plan on importing anybody. We all live here. ... Part of our credibility here is that we do employ local folks."

But local small-business owners interviewed yesterday were either unsure what they need to do next or outright cynical that they would ever see any of the business.

"Actus has their subcontractors already," said Thomas Aceves, owner of Landscape Services Corp. "I gave them my (pricing) numbers and they didn't call me. I cannot dwell on those bids I don't get. There's not much I can do about it."

Glenn Shiroma, owner of M. Shiroma Painting, isn't sure whether his company will be hired because of the salaries of his 50 employees, who belong to two unions — Painters Union Local 1791 and Carpenters Union Local 745.

"Because we're a union company, it's going to be tough to compete," Shiroma said. "I guess all we can do is offer our services."

Abercrombie plans to ensure that Actus Lend Lease follows through on its promise to hire local subcontractors.

"It's my legislation," he said. "This is my baby. You bet I'll be monitoring them in the years ahead."