More competition for military construction work in 2011

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MILITARY – OUTLOOK PARTY SUNNY: This industry expects next year to look promising, but there are a few variables that could limit growth.

The U.S. Army Corps of Engineers is projecting a banner year in 2011 for military contract work in Hawaii, but some local contractors say a growing number of Mainland firms entering the market here is making winning the work increasingly difficult.

The Corps of Engineers Honolulu district office issues contracts for construction of military facilities and civil works projects. In fiscal year 2010 [Oct. 1, 2009, to Sept. 30, 2010] the corps awarded 685 contracts valued at $272.6 million, including $147 million to small businesses, the corps said.

That was a significant increase from 2009, when $195.3 million in contracts were awarded, including $41.2 million to small businesses. In 2008, $219.9 million in work was awarded, of which $30 million went to small business, according to the corps.

Based on current projections, the corps said contract awards in 2011 could be almost twice the amount issued in 2010 and total $500 million.

The huge increase in military work normally would be good news for local contractors, who have relied on federal government work the past two years because of the scarcity of work in the private sector. But the heads of two firms here that do a lot of military contracting work said that isn’t necessarily the case.

Roger Peters, executive vice president and general manager of dck pacific construction, said many Mainland contractors have begun to bid on the lucrative federal projects in the Islands. An example, he said, was the awarding of a $131.9 million contract to Chicago-based Walsh Construction Co. in September to build the National Oceanic and Atmospheric Administration’s main facility on Ford Island.