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Nichols will not back ferry boat suit

Rather than joining in a legal challenge against the state, South Whidbey’s largest employer hopes to pick up a piece of a profitable ferry-building contract.

J.M. Martinac Shipbuilding of Tacoma recently challenged the state’s decision in February not to award Martinac or Nichols Brothers a ferry building contract worth approximately $250 million. Martinac officials argued that the state did not fully consider financial information provided by bidders on the contract, according to Mike Anderson, director of the Washington State Ferries.

Martinac and Nichols Brothers status as private businesses prevents the state ferry system from divulging exact reasons for picking one bid over another, Anderson said.

The contract to build the four new ferries went to Todd Shipyards of Seattle.

Matt Nichols, CEO at the Freeland-based Nichols, said his company does not plan to challenge the decision made by the state Department of Transportation. Rather, he said, he hopes to pick up contract jobs with Todd Shipyards, such as superstructure work on the ferries. In fact, Nichols said, the state’s denial of the Nichols Brothers bid worked out for the best: The four years needed to build the ferries would have clogged up his company and prevented it from doing any other work.

Nichols said he prefers to pursue contract work on the ferries with Todd and to continue to pick up contracts for other shipbuilding work.

“This is better for us,” he said.

Nichols said no agreement is set in concrete, but a potential share of the workload looks promising. He said if Todd does use Nichols Brothers as a contractor, Nichols will not hire any new employees. Instead, the 310 full time employees at the shipyard will have a guaranteed additional workload through the expected completion date for the ferry boats in 2011.

In addition to the challenge of the state contract decision, Martinac launched a challenge against a Senate bill that would allow the state to negotiate with only one shipbuilder for some work. Celia Schorr, a ferries spokesperson, said the bill allows this type of negotiation if all other bidders on a construction contract are eliminated in earlier rounds of the bid qualification process.

The bill is also encountering resistance in the state auditor’s office. Brian Sonntag, the state’s auditor, sent two letters last week to Sen. Mary Margaret Haugen, the senate transportation chair, about the bill. He said the bill concerns him because the government could set a precedent by allowing sole-source contracting and purchasing without competitive bidding. Both those practices discourage competitive business, he said.

Sonntag said he hopes proposed amendments to the bill will create a more open bidding process.

Washington State Ferries’ Mike Anderson said the bill will only increase accountability for Todd Shipyards. Under the present law, the state provides ferry designs and contractors bid on those designs as they are drawn. Any additional costs due to changes are added onto the final bill.

The bill “opens up the book,” Anderson said. The ferries and state will negotiate the contract, the ship builder will be involved in the design process and the state will examine any additional purchases.

When asked whether the bill seemed unfair to other boat builders, Matt Nichols said the contractors knew the rules when going in. All the companies except Todd were eliminated from the ferry bidding process because of the magnitude of the project, he said.

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