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Out-of-state companies may get chance to bid on ferry work

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By Jerry Cornfield
Herald Writer
Published: Tuesday, February 18, 2014, 1:00 a.m.
OLYMPIA — Simmering frustration with the cost of building state ferries has lawmakers again considering stricter controls on contracts and relaxing a requirement to build vessels only in Washington.
The state House approved a bill Monday to allow out-of-state companies to compete if bids from in-state shipbuilders are substantially higher than estimated constructions costs.
House Bill 2759 also would require contracts issued in the future to be for a fixed-price, contain a smaller contingency fund than permitted in the past and be overseen by an independent project manager hired by the state.
"We finally got here because everybody wanted reform in the transportation bill," said Rep. Larry Seaquist, D-Gig Harbor, the bill's prime sponsor. "It should save us a lot of money."
Rep. Norma Smith, R-Clinton, called it a "step in the right direction" to help contain costs and should not prevent Washington firms from continuing to garner all the work.
It would only allow bids from out-of-state firms if those from Washington companies are greater than 5 percent above the estimates of Department of Transportation engineers.
"We are talking about transparency, sustainability and wise oversight of tax dollars," she said. "That's what this bill is about."
House Bill 2759 passed on a 97 to nothing, and now goes to the Senate where leaders of the Republican-led Senate Majority Coalition Caucus are pushing a similar bill as part of a broader transportation revenue package.
Sen. Curtis King, R-Yakima, co-chairman of the Senate transportation panel author of the Senate bill, said he isn't encountering much disagreement with the reforms from members of either party.
"I think they are pretty much common sense reforms to try to make the ferry system more efficient and less expensive," he said Monday.
Many of these changes stem from a state audit issued in 2013 that found the Build in Washington requirement was a key factor in why it was more expensive to construct vessels in the state than elsewhere. That audit also concluded the state could save time and money by ensuring design of new vessels is completed before construction begins and an independent project manager is hired to keep tabs on the progress.
Democrats and Republicans, especially those serving in districts with ferry services, were angered by audit findings that Washington paid $83.6 million for the 64-car ferry Chetzemoka in 2010, nearly $50 million more than what a Massachusetts ferry operator paid three years earlier for a boat with a comparable design.
State ferry officials have said they paid a premium price to get the boat built months faster than the industry standard so it could be deployed on the Port Townsend-Coupeville route to replace the Steel Electric-class ferries yanked from service out of safety concerns.
Ferry officials said, and the audit confirmed, the price paid for the two subsequent 64-car vessels were substantially less.
The Build in Washington provision dates back to a 1993 law paving the way for construction of the 202-vehicle Jumbo Mark II class of ferries.
Since then, it's been included in laws authorizing four new 144-car Olympic class ferries— two are under construction now— and the three completed 64-car Kwa-di Tabil class ferries used in rotation on the Port Townsend-Coupeville route. These are the Chetzemoka, Salish and Kennewick.
In each case, only one ship builder— Todd Pacific Shipyards— qualified to bid on those projects. This lack of competition added untold millions of dollars to the projects, the audit found.
The state is ready to build a third 144-car ferry once it figures out how to pay for it.
On that front, the House approved a bill last week to add a $5 service fee onto some vehicle registration renewals and an extra $12 service charge to vehicle title transactions.
House Bill 1129 passed on a 62-36 vote Feb. 12 and is scheduled for a public hearing Wednesday in the Senate Transportation Committee.
Under that bill, the new fees would apply only to transactions handled through the Department of Licensing, a county auditor's office or the auditor's designated agent. Privately-run vehicle licensing businesses are already required to collect these fees.
These new fees are expected to bring in about $22.75 million per year, funds that will be deposited in a separate account for ferry construction.
Jerry Cornfield: 360-352-8623; jcornfield@heraldnet.com.

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