The first forum of its kind sold out and attracted people from 175 Hawai'i companies.

Gov. Linda Lingle told the gathering that she hoped much of the money that goes to primary contractors from the Mainland stays in Hawai'i through sub-contracting work to local companies.

Afterward, Lingle said the forum was an important step for small businesses to better understand how the military operates.

"You don't walk into the military with a box of manapua and say, 'Thanks for the contract,' " Lingle said. "It just doesn't work that way. It's coming to realize what is the process at the federal level. It doesn't matter where you went to school and who your friends are."

One of the forum's sessions focused on the Department of Defense's plans to build or renovate 16,756 homes for all branches of the military in the next 14 years — beginning in early 2004. Under a new formula devised by the Department of Defense, private developers will build, maintain and manage the homes for 50 years.

But most Hawai'i businesses are unprepared to compete for sub-contracting work, said Beverly Harbin, who attended the forum and is working to get companies better prepared as small business advocate for the Chamber of Commerce of Hawai'i.

And the primary contractors from the Mainland will demand higher standards than on current military construction projects because they'll be required to maintain the homes for half a century, Harbin said.

She has spoken to primary contractors who currently build homes under the old military model and they say 10 out of 12 local businesses don't even fill out their applications correctly.

"Only two small businesses get it almost correct," Harbin said. "The rest are almost in the garbage."

The Chamber of Commerce of Hawai'i and Building Industry Association-Hawai'i have organized workshops on understanding the gap between the needs of small businesses and the demands of the military and primary contractors.

By the next session on Aug. 19, Harbin hopes to have helped organize one-on-one training sessions to cover a range of topics.