FBI seeks details on
Kalihi firm’s defense contract

The FBI is conducting a fraud investigation into how a Kalihi business was awarded two defense contracts worth a total of $77 million last month, sources say.

The FBI told U.S. Sen. Daniel Inouye the contracts to Nan Inc. were suspended earlier this month, according to Jennifer Goto-Sabas, Inouye's chief of staff.

Arnold Laanui, FBI spokesman, said the agency executed a search warrant at 636 Laumaka St., Nan Inc.'s business address. However, Laanui would not comment on the investigation or its target.

The U.S. Army awarded Nan Inc., which does business as Ocean House Builders, a contract worth $54.95 million on Sept. 11 for building renovations at Schofield Barracks. The Hawaii National Guard awarded the other contract, worth more than $22 million, to a joint venture that includes Nan Inc. on Sept. 23, for renovations to the military training complex at Kalaeloa.

The Army contract was awarded through a process in which prospective contractors were evaluated against a predetermined list of criteria including past performance, experience, technical capabilities and price.

The National Guard contract was awarded through competitive bidding open only to Hawaii contractors certified by the Small Business Administration as minority-owned businesses.

Nan Inc. won millions of dollars in defense contracts in Hawaii as a minority-owned business but graduated from the program in June 2001. The other contractor in the joint venture, JHL Construction Inc., won Small Business Administration certification in October 2000.

Nan Inc. President Patrick Shin and JHL President James Lee did not return calls.


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