Proposal adds $10B to cost of buildup

BY CONNOR MURPHY • PACIFIC DAILY NEWS

A proposal to sharply increase the wages of Guam workers on military buildup construction projects would add $10 billion to the price tag of the buildup, according to a new Congressional Budget Office report.

The National Defense Authorization Act for fiscal 2010, which authorizes yearly spending for the Department of Defense, was passed by the House of Representatives Friday.

While the bill was in the House Armed Services Committee, Hawaii Rep. Neil Abercrombie submitted an amendment requiring that workers on military buildup construction projects here are paid at least as much as workers on similar projects in Hawaii.

Those Hawaiian wage rates are about 250 percent higher than those in Guam, according to the June 22 Congressional budget report, which cites the Joint Guam Program Office.

The $550.4 billion House bill includes a record $934.5 million for military construction projects on Guam in fiscal 2010 as the island prepares for the move of 8,000 U.S. Marines, as well as their 9,000 dependents, from Okinawa by 2014.

The Senate currently is working on its version of the defense funding bill, and the two will be reconciled before a final version is sent to President Obama.

The Department of Defense already planned to contribute $4.2 billion for the buildup, but the higher labor costs could increase the cost by about $10 billion, according to the report.

"Because labor costs account for about 40 percent of project costs, increasing wage rates as required by (the amendment) would double the cost of completing the construction projects necessary for the realignment of forces," the report states.

Japan's share of the buildup is expected to be $2.8 billion, but an increase in wages would be paid for by the U.S. government, the report states.

"Although the cost of all projects would increase, (the budget office) does not expect that the Japanese government would increase its share; thus, the U.S. government would need to provide the additional funds necessary to complete construction," it states.

Guam Delegate Madeleine Bordallo has said the Abercrombie proposal raises serious concerns. Both the Guam Contractors Association and the Guam Chamber of Commerce oppose it.

Abercrombie has said he included the measures to ensure that buildup-related jobs go to Americans at good wages.

Abercrombie also included an amendment that limits foreign labor to 30 percent of each project, but the financial impact of that measure wasn't included in the budget report.

Another measure, which would authorize $126 million to compensate Guam residents who suffered when the Japanese occupied the island during World War II, and their survivors, also wasn't discussed.