Law requiring that Washington State Ferries vessels be built in Washington under scrutiny

State lawmakers may reconsider the law that requires new ferries to be built in Washington.

An audit suggested ferries could be built cheaper at shipyards out of state. The audit, which cost $1.2 million and took a year to complete, is the subject of a legislative hearing today in Olympia.

The audit was designed to answer the following questions:

•· How do the construction costs of WSF’s ferries compare with those of comparable ferries built elsewhere?

•· What factors affect the cost of constructing ferries and to what extent do those factors affect total construction spending?

•· Does WSF use leading practices to develop, manage, and monitor its ferry construction contracts?

The audit looked at 39 ferries purchased in the United States in the past 20 years, including three for WSF’s 202-car Jumbo Mark II class and three for the 64-car Kwa-di Tabil class. The Jumbo Mark IIs – Tacoma, Wenatchee and Puyallup – cost the most in 2011 dollars (and also were the largest). The Kwa-di Tabils – Chetzemoka, Salish and Kennewick – were sixth, 10th and 11th most expensive.

Todd Shipyards/Vigor Shipyards built all of six of those vessels and is working on two more 144-car ferries now – Tokitae and Samish.

The state originally planned to build three ferries like Pierce County’s 54-car Steilacoom II. The only bid for the first boat – by Todd – came in at $26 million. That was $9 million more than state engineers had estimated. The bid was rejected, and 54-car boats were replaced by 64-car ferries based on the Massachusetts-based Island Home ferry.

WSF sought bids on two 64-car boats. The sole bid, from Todd, was about 30 percent over engineer’s estimates. The state decided to go with one boat and Todd was awarded a $65.5 million contract for the Chetzemoka. Later, also with the lone bid, Todd was awarded contracts for the second and third boats for $114.1 million. The Chetzemoka was over budget, but the three-boat package came in almost $7 million under.

Among other things, auditors found that the 64-car ferry Chetzemoka cost about $80 million to build (as opposed to the $65.5 estimate) compared to $43 million for a ferry of similar design that serves Martha’s Vineyard and Nantucket in Massachusetts.

The Washington ferry service says the costs were high because the Chetzemoka was the first vessel in its class and changes had to be made in the design and construction schedule.

This issue raises interesting questions regarding the balance of efficient use of tax dollars at a time when the state budget is suffering against the preservation of local jobs. The state’s Office of Financial Management estimated that if the state built a $150 million ferry in both 2013 and 2014, the work would support 322 jobs and create $28 million in shipyard wages each year. The total economic impact in all sectors of the economy is estimated at 1,335 jobs and $90 million in wages each year.