Sparks fly as shipfitter Duane Hunt grinds and cuts an opening for a stack at Nichols Brothers Boat Builders in Freeland on Whidbey Island last December. The vessel is bound for the San Francisco Bay ferry system. (Andy Bronson / The Herald)

Sparks fly as shipfitter Duane Hunt grinds and cuts an opening for a stack at Nichols Brothers Boat Builders in Freeland on Whidbey Island last December. The vessel is bound for the San Francisco Bay ferry system. (Andy Bronson / The Herald)

Nichols Bros. wants new bid for ferry

Boat builder says bills could steer work on hybrid boat to competitor

A Whidbey Island boat builder is creating waves around a plan to build the state’s next 144-car ferry — and the first to be partially powered by electricity — through an old contract held by one of its competitors.

Nichols Brothers of Freeland wants lawmakers to put the potential $187 million project out for public bid rather than modify and extend a contract with Portland-based Vigor, the firm which oversaw construction of the four newest 144-car Olympic Class vessels in the Washington State Ferries fleet. Vigor has major shipbuilding facilities in Seattle.

Officials of Nichols Brothers are concerned bills under consideration in the Senate and House could not only steer work on the hybrid boat to Vigor but another four vessels after that.

“All Nichols Brothers is looking for is a fair process for new boats that are going to be procured by the state,” said Jeff DeVere, the company’s lobbyist.

Some lawmakers share his concerns and are working to retool the legislation in both chambers.

“I want to do what is in the best interests of the citizens,” said Sen. Curtis King, R-Yakima, the ranking Republican on the Senate Transportation Committee, who has questioned proceeding without bids. “How do we know we are getting the best bang for our buck?”

Given the urgency to get new ferries launched and a potential for a protracted bidding process, majority Democrats seem likely to sign off on at least one boat without going to bid.

Rep. Jake Fey, D-Tacoma, chairman of the House Transportation Committee, sponsored legislation allowing construction of up to five new ferries under modifications to the old contract. But he said his intent is to seek bids on at least the last three.

“I think it’s always been the plan to go out to bid, but to go to bid takes awhile and we need boats sooner,” he said.

This conversation focuses attention on the pressing needs of the ferry system and stirs up memories of a contentious bidding process won by a Vigor predecessor more than a decade ago.

It’s no secret the Washington State Ferries fleet is aging. Periodic breakdowns strain the system and, in some cases, force a reduction in service if only smaller replacement vessels are available on a stricken route.

The agency has a long-range plan that calls for 16 new ferries in the next 20 years. These include 13 to replace vessels slated for retirement and three backup boats. It is the agency’s goal to rely on electric-fuel hybrids to reduce fuel use, emissions, noise and maintenance costs.

This year, Democratic Gov. Jay Inslee and the Democrat-led House and Senate majorities want to get going on the first and have it be an Olympic Class vessel. Both chambers are looking to spend $99 million in the 2019-21 budget to start the work and $88 million in the 2021-23 budget to finish.

To pay for it, lawmakers want to increase the vessel replacement surcharge that is now 25 cents on each fare. Proposals in the House and Senate could push up the cost between 75 cents and $1.25 in each direction.

Until last week, it was presumed the work would go to Vigor, which in 2007 secured the original contract for four Olympic Class vessels.

That contract didn’t come easy.

The Legislature authorized their construction in 2001 and allocated the money in 2003. Subsequent state decisions on the ferry design, propulsion systems and bid process led to discord, delay and lawsuits.

Finally, in 2007, rivals Todd Pacific Shipyards Corp. of Seattle, later acquired by Vigor, along with J.M. Martinac Shipbuilding Corp. of Tacoma and Nichols Brothers, submitted an agreement to the state laying out how they would divvy up the hundreds of millions of dollars of work. Todd was to be the lead contractor with Nichols Brothers and Martinac, which has since shut down, as subcontractors.

The last of the four boats and Washington’s newest ferry, Suquamish, was launched into service in October on the Mukilteo-Clinton route.

Nichols Brothers built superstructures — the portion above the water — for three of the four boats.

In the next go-round, they’d like a shot at being the lead contractor. Company officials became concerned with Senate Bill 5992 and House Bill 2161 which empower the state Department of Transportation to “modify an existing option contract executed prior to July 6, 2015, to allow for the purchase of up to five additional class 144-auto ferries, for a total of nine 144-auto ferries.”

On Wednesday, in a hearing on the Senate bill, Vigor executive Jill Mackie told the Senate Transportation Committee that if the contract is modified the company could “begin immediately” on design and engineering work. Construction could start in July 2020 and be done in late 2022.

She said they would invite Nichols Brothers and other firms to compete for portions of the work. Going to bid could push the delivery date back two years, she said.

DeVere appeared, too, telling lawmakers the company wanted a chance to compete for the entire contract.

On Monday, a hearing is planned on Fey’s bill in the House Transportation Committee.

Rep. Dave Paul, D-Oak Harbor, who serves on the committee, said it is a difficult issue.

“We need to try to balance the need for getting replacement vessels quicker while also allowing Nichols Brothers, which is a major employer in my district, to have a fair shake in the bid process,” he said.

Rep. Norma Smith, R-Clinton, who has worked on ferry reforms throughout her tenure, said the situation is “presented as an either/or and it doesn’t need to be.”

Even as Vigor receives the go-ahead for the next ferry, a bid process could commence right away for the remaining boats.

“We don’t need to lose time,” she said. “Do a parallel process so we as ratepayers and taxpayers have a degree of assurance that we are getting the best price we can on these ferries.”

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