Pre-fab solution on the rise
Updated: Feb 9
Alleviating labor shortage on Guam and the CNMI;
Triple J designated as 'Butler Builder'
By Mar-Vic Cagurangan
Last year, the U.S. Navy awarded more than $1 billion worth of contracts and task orders for work on Guam, mostly for Marine Corps Base Camp Blaz, which will be home to 5,000 Marines being relocated from Okinawa, Japan. The contracts are part of the Department of Defense’s $12 billion investment in the troop relocation plan. Besides military construction, several civilian projects off-base are in the pipeline.
This is a big ask for an industry that has already been struggling with an acute labor deficit. The Guam Department of Labor estimated that the island will need—and hopes to bring in— about 7,000 to 9,000 workers in the next several years. The labor demand is huge and urgent, outpacing the H-2B recruitment process and the slow progress in building a local pool of workers.
The local construction industry has thus adopted the prefabrication solution to alleviate the perennial labor challenges.
Triple J Enterprises recently entered into a partnership with Butler Manufacturing to become an exclusive distributor of pre-engineered buildings on Guam and the CNMI. Having been assigned as a “Butler Builder” in the region, Triple J will be able to supply the product to local contractors.
“In the development of a project, you have a billion parts in a single facility,” said Dan Murrell, senior vice president of Triple J. “Butler specializes in one portion of those parts and pieces. That portion is the structural steel and the outer cover. That is their focus and concentration. What the Butler Builder brings to the table is the other parts to go along with the process.”
Basically, prefabrication means taking labor that would usually have to be carried out in the field and moving those operations into a plant to save time. The pre-fab option not only reduces the labor cost for the developer but also expedites the construction and moves the timeline for project completion a month earlier compared to the conventional building process, according to Scott Wilson, regional sales manager for Butler.
Butler’s team-up with Triple is “akin to a dealership like an automotive dealership. So, they (Triple J) are the authorized seller of Butler Building; we don't sell to anybody but a Butler Builder,” Wilson said. “The idea is to work with the owner, develop specifications for the building, say a retail center, a car dealership, an aircraft hangar, or a warehouse.”
The developer will engage the Butler Builder to design the building and create the structural fabrication, which will be manufactured in one of its six plants in the U.S. Once completed, it will then be shipped to Guam or Saipan, where the parts will be assembled at the project site according to specifications.
“This will be project-based purchases. They will be delivered to the job sites, so we won’t carry inventory,” Murrell said.
While some contractors may be able to order pre-engineered structures online, building a partnership with a local company ensures quality control, Wilson said.
“Construction is local. Contractors make local decisions and they want to trust a local partner. So, we also seek out companies with values that align with ours,” he said. “Other suppliers sell directly over the internet but we believe that the key part of delivering the Butler quality is making sure it is erected correctly through trained qualified sellers.”
Butler has been training Triple J’s crew for this purpose.
“When we talk about time, schedule and cost, keep in mind that 10 percent of the cost of building is the construction budget. Ninety percent is the maintenance and repairs,” said Kevin Carey, project manager for Triple J.
Wilson said the quality of its product guarantees longevity, thus cutting post-construction costs.
“We have a steel-making capability in the U.S. and we rely on our parent company for steel sourcing. We use exclusively U.S.-made steel which is very common under the Buy American agreement with the government,” he added.
Butler procures its steel supply from BlueScope.
Steel prices were volatile during the Covid pandemic, but they have since recovered to a more stable pricing, Wilson said. “Steel is 85 percent of my cost for building,” he said.
With the steel supply chain 95 percent restored, Wilson said delivery and shipment will not be an issue.
Murrell said Triple J has been embarking on residential and commercial construction, mostly internal projects, for years. On Saipan, its external undertakings mostly involve low-cost tax credit projects.
Triple J Saipan has since started looking at outside opportunities and has embarked on government projects and building in the Marshall Islands, Tinian and Palau.
Like everywhere else, Saipan is grappling with a recurring labor shortage. Triple J is working with Northern Marianas Technical Institute to train and build a local pool of skilled workers. “They’ve got a good trade school program and we do a lot of in-house training as well,” said Mario Valentino, operations manager at Triple J Saipan. “We are organically growing (a workforce) while we actively recruit in the Philippines. There is no magic wand, unfortunately.”
Nevertheless, Murrell said, Triple J Saipan has its own construction team, thus expanding the options for clients on island.
“There, we will have a choice. If the general contractor will choose to supply the material to them, we will do that,” he said. “If the developer instead chooses to have us include the labor, materials— the whole nine yards—we can do that as well.”
Doing business in isolated locations such Guam and Saipan is nothing new to Butler, which has been in operation in Hawaii for many years, Wilson said.
“With today’s internet and the ability to communicate, it’s just a matter of time zones rather than specific challenges to Guam,” Wilson said, “We have done some research, looked at climatic data, seismic loads and wind loads. We have done products that meet specifications here and we have done tests on that.”