Shipyard debates ferry costs with state

Overruns threaten Ketchikan shipyard

Posted: Friday, October 26, 2001

Alaska Ship and Drydock officials say they are encouraged by discussions with the state this week about who is responsible for delays in returning the ferry Columbia to Southeast waters after months of repairs.

The Columbia went through a $10.5 million refurbishment project at the Ketchikan shipyard earlier this year. The project included repairs after a switchboard fire as well as upgrades to the ship's staterooms and public spaces.

The ship was due to be turned over to the state May 26, but was delivered July 19, according to Bob Doll, Southeast regional director for the state Department of Transportation. Under federal rules, the shipyard is responsible for about $4 million in damages for the delay, according to the state.

In a move to keep the struggling shipyard afloat financially, Alaska Ship and Drydock argued this week it is not solely responsible for the delay and asked the state for about $2.8 million in compensation.

"Essentially our position is that the state has some responsibility for the delay," said Doug Ward, director of shipyard development. "There were problems with the initial specs put out by the state and change orders."

As an example, the shipyard is arguing the specified cabin bulkheads didn't meet requirements and acceptable switchboard breakers weren't available. Asbestos led to schedule delays throughout the project and the state's contractor didn't finish abatement until July 14, days before the vessel sailed, according to the shipyard.

DOT's Doll described the meeting, which lasted a day and a half, as an "informal presentation" by the shipyard. The state has not received a formal claim from Alaska Ship and Drydock asking for compensation, he said.

"We're considering the presentation. There was a lively discussion about the validity of various assertions made by ASD," Doll said.

The state will ask for more information about costs and employee hours, he said. Whatever decision is made, Doll said the state must adhere to federal procurement rules.

"It has been asserted by some, including people at Alaska Ship and Drydock, that the AMHS does not want a shipyard in Ketchikan or doesn't want to send its ships there. Let me state as emphatically as I can that that is not correct," Doll said. "DOT's attitude is that the shipyard is important to the success of our operations and we will do everything we can to encourage its success."

Ward said the shipyard hopes to avoid a formal dispute-resolution process.

"We're encouraged the state is looking for ways to find early resolution and is working in good faith," he said.

Because of the Columbia delays, the shipyard has had a difficult time attracting new work, he said.

The Ketchikan Borough Assembly in August allowed the shipyard to use $1 million in local funds as a bond guarantee so it could qualify for routine state ferry maintenance overhauls, Ward said. Other projects, such as the Annette Island ferry construction and the $15 million reactivation of the National Oceanic and Atmospheric Administration ship Fairweather, hang in the balance, Ward said. ASD was unable to bid on the third phase of Columbia upgrades, he said.

The Columbia is now in Ketchikan and a Portland, Ore., shipyard is the apparent low bidder on the federal upgrade project, Doll said.

The shipyard now employs 41 people, down from 100 workers at this time last year. Winter is the busy season for the shipyard, and peak employment last year was 200 people, Ward said.

"This is the time of year we should be going into our repair season and we should be ramping up," he said. "Instead, we're having to reduce our work force."

Meanwhile, Piledrivers and Divers Local 2520 is pursuing a collective bargaining agreement to represent Alaska Ship and Drydock employees. Union representative Jim Strassburg said the shipyard could have managed the Columbia project better. ASD didn't staff the project efficiently and workers didn't have the materials they needed, he said.

"I hate to wish them any ill will, but at the same time, they have to play by the rules, too," he said.

The state should turn the shipyard over to another operator when ASD's agreement with the state is up in July, Strassburg said.

"I think the future for the Ketchikan Shipyard is quite bright. We just need to get another operator in here," he said.

Alaska Ship and Drydock has an agreement with the Alaska Industrial Development and Export Authority to operate the shipyard. As the landlord, AIDEA is not involved in the Columbia discussions but is mindful of the shipyard's position, executive director Bob Poe said.

"ASD has been the first operator to make this a financial success and is a significant employer in Ketchikan," he said. "We've enjoyed working with them and think they've done a good job."

Poe said AIDEA will continue to work with ASD to help it move ahead, but is cognizant it will need to get other operators interested if things can't be resolved.

"(ASD) has been in regular communication with us and has been frank about the challenges. They've been a great partner in this," he said. "We want to stay focused on jobs in Ketchikan."

Joanna Markell can be reached at joannam@juneauempire.com.



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