Audit: state spends millions more for locally-built ferries
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OLYMPIA, Wash. -- No taxpayer wants their money spent frivolously, which is why few will be pleased with a new state audit that shows Washington pays millions of dollars more for its ferries than other states.
Auditors say the cost of ferries is higher in Washington because the state requires the boats to be built here, which cuts down on competition.
The ban on out-of-state bids has taken its toll, according to auditors. Four boats that the state has built in the last 15 years came in over budget. The Tacoma came in $20 million over, and the $87 million Chetzemoka had cost overruns of $30 million.
The Chetzmoka's problems were compounded because construction started before the boat was completely designed.
"A lot of the change orders added to that. We certainly paid a premium, based on our need to get a boat in service as soon as possible," said Washington State Ferries director David Moseley.
The state audit recommends that lawmakers consider allowing out-of-state bids on ferries when there isn't enough local competition. But the law was designed to keep jobs in Washington,.
Building two new ferries over the next two years would create 322 jobs in the shipbuilding industry and 1,335 jobs in supporting industries. The total wages would be roughly $118 million.
The State Transportation Committee took up the issue on Thursday. Ferry officials say they need boats to replace the older Evergreen class. Almost half of the state's fleet is 40 to 60 years old.
Auditors say the cost of ferries is higher in Washington because the state requires the boats to be built here, which cuts down on competition.
The ban on out-of-state bids has taken its toll, according to auditors. Four boats that the state has built in the last 15 years came in over budget. The Tacoma came in $20 million over, and the $87 million Chetzemoka had cost overruns of $30 million.
The Chetzmoka's problems were compounded because construction started before the boat was completely designed.
"A lot of the change orders added to that. We certainly paid a premium, based on our need to get a boat in service as soon as possible," said Washington State Ferries director David Moseley.
The state audit recommends that lawmakers consider allowing out-of-state bids on ferries when there isn't enough local competition. But the law was designed to keep jobs in Washington,.
Building two new ferries over the next two years would create 322 jobs in the shipbuilding industry and 1,335 jobs in supporting industries. The total wages would be roughly $118 million.
The State Transportation Committee took up the issue on Thursday. Ferry officials say they need boats to replace the older Evergreen class. Almost half of the state's fleet is 40 to 60 years old.
Let us compare the Washington State Ferry System to another ferry system based in Washington.
The M/V Coho is based out of Port Angeles, WA and makes scheduled trips to Victoria BC at
competitive rates to the WDOT ferries to Sidney(Victoria) BC from Anacortes WA. The M/V Coho is
operated by the Black Ball Transport Company.
The M/V Coho was built in 1959 in Seattle for a cost of $3,000,000 (about $24,000,000 today
considering inflation) and has NEVER missed a scheduled sailing.  That same can not be said
about the Washington State ferries. WDOT Cost overruns seem to be near than the initial cost of
the ferry Coho that has been in reliable operation for over fifty years now. The M/V Coho undergoes
an annual dry dock for maintenance and upgrades. That fact helps insure the safety and
reliability of the vessel. She has been upgraded with newer, more powerful and efficient
engines in 2004. If the Washington State ferry system were ran the same way there
would not be a need to replace the vessels as often. WDOT allowed our ferries to
develop cracks that actually leaked causing the USCG to pull the certifications for some of our
ferries. That would have never occurred if the state had performed the type of preventative
maintenance that is NORMAL for a vessel that spends its life in salt water. Hull plates
should be checked often in a vessel, specially one that transports passengers and repaired
or replaced as needed. The fact that there were leaking hull plates is indicative of poor
maintenance, or collision with something that should have required inspection immediately
after such an occurrence. Again, someone dropped the ball big time.
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The primary difference is that M/V Coho is PRIVATELY owned and does NOT receive any
government subsidies.
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Black Ball had literally controlled all of the ferry traffic on Puget Sound and most of the
inland waterways for many years before the takeover of most of its system.
There is a long history regarding the Black Ball ferries where the state of Washington
literally robbed the company of its vessels and services because of a threatened strike.
When the strike did occur Black Ball wanted to increase rates to cover the addition cost,
but the state refused to allow the rate increase. The state took over the services and
paid pennies on the dollar to Black Ball for their ferries. Black Ball was allowed to
keep their US-Canadian routes and the vessels on those routes, but lost all of the US
routes.
The state, of course then raised the rates to a level ABOVE the rates that Black Ball had
requested, and the state had denied.
The now ill fated M/V Kalakala was just one of the vessels acquired by the state during
the take over and because of her poor maintenance has become a threat to the port
of Tacoma.
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If one desires to learn of this literal theft of most of the Black Ball system, the information
is available on-line.
First I am glad KOMO news is covering this story but I am also upset with their journalistic style. Recently KOMO news coverage to WSDOT project has taken on a conservative favor and superficial sensationalized journalism. Maybe this is to boost ratings.  This story is another example.
Yes, there is a good chance the state overpaid and the manage practices on bidding and procurement practices should be examined.Â
KOMO to say, âBuilding two new ferries over the next two years would create 322 jobs in the shipbuilding industry and 1,335 jobs in supporting industries. The total wages would be roughly $118 millionâ is a joke. These are what I call core jobs. By the time this core money spins through the Stateâs economy this money $118 million will be worth about a billion. Thinks about the money trail: the employee buys a car at the local dealer paying sales tax too, buys a house, get a haircut, buys groceries, get his car work on at the service center, etcâ¦etc. Then the money goes back to the local bank that loans the money to other businesses.  The alternative to this would be buying Chinese good at Wall Mart. You purchase the good at the local store. The money goes back to cooperate headquarters, then to a big Wall Street banks, and then back to China. Who benefits: the Chinese who buy our treasury and continues spend more on their military, the big banks, and Ultra-Rich.
Do not kill the golden cow over poor journalism.Â
IDIOTS
I understand about "make local, buy local" but sometimes you have to admit that you're wrong and buy from somewhere else in the USA.
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USA. NOT China, Japan, whereeveristan. USA.
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This way IF something was to break you're not getting hosed MORE for parts.
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Just a thought.
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Realize an error has been made and get'er done. It's better than what happened this past year. Everytime you turned around more than one boat was "being fixed".
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Just a thought.
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We've know this for a long time. What a waste of $1.5 million for that audit.
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I'm all for keeping contracts local however if the state is going to get raped because of lack of competition, then maybe they should consider changing it up and allowing for other states to bid. Just because the State wants to keep the contracts local doesn't give the contractors a right to overcharge.
Now if the rest of the country and our government would invest in "Made in America" products, we'd be sitting pretty. I have what I like to call my "Flag of Irony" at my desk attached to my computer monitor. It's a small, plastic American flag, and in little, tiny letters across the bottom, it says.........you guessed it......"Made in China."
Can somebody PLEASE tell me WHY we taxpayers pay more than what the company bid for the project???? I think they should "eat it" if they go over the bid that was agreed to....
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Just sayin'
I'm waiting for Howard Beale to come and tell us that we don't waste money in this state. Â This is why more taxes is not the answer, but LESS SPENDING is.
 @Landshark How dare they support local businesses and employ local workers... the nerve!!!
 @TruthinAdverts I know right?  Imagine opening up the market for new ferries to increase competition.  The local companies can still outbid other companies for the new ferry builds and the government ends up spending less.Â
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You see, there is a Win/Win situation, but our elected officials get a paycheck no matter what they choose....especially if it's the special interest groups tossing money or votes at them in order to keep the purchasing of ferries in-state only.
 @TruthinAdverts Meanwhile, the sate is increasing taxes on just about everything, yet cutting funding for education and public transportation, all due to government overspending.Â
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I don't see how you believe the current situation is a good one.
 @Landshark  @TruthinAdverts Let's see... our workers having to compete against what amounts to Chinese slave labor costs is a "win/win"? Yeah... let's put you in charge
who passed the law that wa has to buy them from here? do you think some campaign donations from the marine industry found its way to olympia pockets? perish the thought. FOLLOW THE MONEY does anyone else feel like we're being ripped off daily in this state? where were these reports before we bought these boats? unbelievable
"The ban on out-of-state bids has taken its toll"
Crap! Is there NOTHING in this state that isn't having a toll put on it? Â (Joke)
too many holes in this report. perhaps i have missed something, but i cannot find specific details as to why out of state is less expensive than in state. i am all for WA saving money - if WA companies cannot be competive with a bid, then by all means go out of state. but someone needs to be watching the henhouse; so that the bid approximates the cost.
@jennieb What I gather is that because Washington requires that the ferries be built here, the contractor knows that they can charge whatever they want and the State will have to pay it because by law the ferries can't be built out-of-state. The ferry builders are sitting pretty. Maybe what they need is a little competition to bring them back to reality.
You needed an audit to figure that one out?
 @yeahguy Evidently a 1.2 million dollar audit from the last article.
They would still have found a way to pay an out of state company way too much for the ferries. At least here, they take our money, and spend it right here in the State where those same people buy their stuff and pay it back to the State in taxes.....
@RTNavy I'm all for keeping contracts local however if it is going to cost us millions of dollars more then I would rather other competitors throw their hat in the ring for the contract. I find it repulsive that the ferry builders are getting away with highway robbery because they can.