EDITORIAL
Huge Army contract should stay at home

Consider this for context: The biggest public works project ever in the history of Hawai'i was the trans-Koolau H-3 freeway, which came in at around $1.3 billion.

Now we have word that the Army is about to name a private contractor to build and renovate some 7,700 military homes on O'ahu at a price tag of $1.7 billion.

But that's not all. This "privatization" contract also comes with a 50-year maintenance and management contract that will push the overall tab to something like $6.9 billion.

In the words of U.S. Rep. Neil Abercrombie, that represents an "avalanche" of money for Hawai'i, a "torrent."

This is, indeed, good news for the Hawai'i economy. But as reported by staff writer Dan Nakaso, there are some concerns about how much of the money will actually remain in the Islands.

The apparent prime contractor is Actus Lend Lease of California. Local representatives of Actus insist they intend to use local subcontractors for the work ahead whenever and wherever possible.

"We're going to run this like it's a local operation," said regional vice president Robert Scott. "We don't plan on importing anybody."

Those are impressive and hopeful words. But balanced against the desire to keep the local contracting industry afloat is a natural desire to get the best possible bang for the taxpayer's buck.

The rub is that most local contractors tend to come at a slightly higher price because of union wage rates. It may be that, for some jobs at least, Actus might find it cheaper to subcontract to companies from out of state that do not have Hawai'i's high cost structure.

The trick will be to subject this work to careful analysis that takes more than the bottom-line price of a bid into account. There is value in keeping local contractors active and working, so that when they are needed they are ready to go.

There is also the fact that when local contractors are used, they have an incentive to do the job properly and stand by their work. After all, they aren't going anywhere.

It is not parochialism to say this massive task should be contracted out locally whenever possible. It makes good sense. And if it is, Hawai'i's construction industry can look forward to decades of stability.

That, too, is something worth fighting for.