It's official: DOT settles ferry claims

Posted: Tuesday, November 27, 2001

In what they called vindication for the Alaska Department of Transportation, state officials on Monday announced the formal settling of all claims arising from construction of the state ferry Kennicott.

"Alaska will pay $500,000 to settle claims that originally amounted to some $53 million - that's less than a penny on the dollar," Transportation Commissioner Joseph Perkins said in a news release. "This settlement shows the state managed the Kennicott contract correctly and the claims of the builders were essentially baseless."

Halter Marine of Gulfport, Miss., which is undergoing bankruptcy proceedings, withdrew $46 million in claims, according to the news release. A subcontractor that asserted a claim of $7.2 million against the state will be paid $500,000 by the state and $750,000 by insurance.

Halter has been paid $74.6 million for the Kennicott, which was delivered to the state in June 1998. It was bid originally at $80.5 million.

Halter, alleging it built the vessel at a loss, sought to recover $23 million for "contractual overreaching" and "continuous changes" in the construction of the Kennicott, and another $23 million that the company said it had to forego in building other ships due to problems with the Alaska project.

"The Kennicott project came in under budget and that shows the design-build approach is the way to go," Perkins said, noting that a similar contract is being pursued for the construction of a fast ferry to be based in Sitka. Under a design-build contract, one firm is responsible for both the conception and construction of a vessel, in accordance with state specifications.

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