Small businesses seeking military construction work

By Dan Nakaso
Advertiser Staff Writer

Some 300 small businesses and others interested in getting a share of more than $2 billion in new military construction on O'ahu asked hard questions yesterday about what role, if any, they might play in the projects.

"I can't speak for the developers," Faye Hirono, the Air Force's privatization manager, told the group. "... You'll need to approach the developers and do a marketing plan."

After the forum, Lucien Wong of Actus Lend Lease, one of the Mainland contractors on the short list for each of the military branches' projects, said the recent history of similar projects on the Mainland shows that local small businesses will be needed.

California-based Actus Lend Lease has built some of the military's first housing projects under the so-called privatized model where the developer is responsible for constructing, maintaining and managing the homes for 50 years. The Department of Defense hopes the new formula will improve military housing much faster and help retain service members.

On the Mainland, 86 percent of Actus Lend Lease's construction crews come from nearby companies, said Richard Crawford, vice president of Actus Lend Lease business operations and military relations.

Actus Lend Lease has built 1,002 military homes on O'ahu under the old formula over the last 12 years and the percentage of local construction crews has jumped to 90 percent here, Wong said.

"We need local workers," said Wong, who used to work for local developer Castle & Cooke Hawai'i.

Actus Lend Lease co-sponsored yesterday's forum with the Building Industry Association-Hawaii, in part to collect names and numbers of local businesses in case it gets any of the projects, Wong said.

Chuck Canada, who represented Hawaii Engineering Group, Inc., was among those who left the forum wondering if Hawai'i businesses would play a role in the projects scheduled to begin early next year.

Like many others, Canada would have preferred to see a certain percentage of contracts dedicated to local small businesses — something that won't be required of the primary contractors, the military representatives said.

"Small businesses really have no control," Canada said.

Wanda Kakugawa, the incoming chairwoman of the Chamber of Commerce of Hawai'i's small-business council, said the questions at the forum were hard and pointed.

"I understand their skepticism," Kakugawa said. "They feel they can't be competitive with a huge conglomeration from the Mainland. They feel, 'What's the motivation for using Hawai'i's small businesses?' "

But the chamber and the BIA asked the small businesses to fill out forms describing their companies and the areas where they could use more training.

Over the next three weeks, the groups will sort through the responses to prepare a more specific forum on July 9 to help Hawai'i's small businesses become better prepared.

"There were many questions," said Bev Harbin, the chamber's small-business advocate. "The real question is: Are we ready?"

Reach Dan Nakaso at dnakaso@honoluluadvertiser.com or 525-8085.