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As the state ferry system struggles to recover from years of diminished service and a lack of boats, just two U.S. shipyards submitted bids Monday to build a new generation of hybrid-electric boats for Washington State Ferries.
The proposal from the sole in-state company — Nichols Brothers Boat Builders, in Freeland on Whidbey Island — was significantly higher than the other bidder, Eastern Shipbuilding Group from Panama City, Fla.
A third company that was expected to bid, Hanwha Philly Shipyard in Philadelphia, didn’t submit a proposal.
Eastern’s bid estimated the first boat would cost $251.3 million, and put its total bid for three boats at $714.5 million.
Nichols estimated a first boat would cost $338.6 million, and its three-boat bid is more than $1 billion.
The state estimated that boat one would cost $256.8 million, meaning Nichols’ bid was 32% higher than the state’s figure and Eastern’s is 2% lower.
The lower estimate from Eastern Shipbuilding doesn’t automatically result in it being awarded the contract. The state will examine the bids over the coming days, and declined to comment on the bids’ specifics for this story.
John Vezina, WSF’s deputy assistant secretary, said the agency hopes to award the contract in a week or two and sign it by the end of June.
The work to build new ferries comes at a perilous time for the state system. WSF has an aging fleet of 21 ferries with hundreds of millions of dollars in deferred maintenance. It needs 26 boats to run at full service, and has been running a reduced schedule for years.
A year ago, the state had high hopes that numerous companies would bid to build a new fleet.
At the time, 15 companies had asked for more information on the bidding and building process, and the state sent them invitations to bid. WSF said then that the process would be relatively quick, and estimated bids could come as early as last September.
Yet when the bidding process began in the summer, WSF updated its timelines, saying bids would be due in January and work would begin in March. As potential bidders raised questions and concerns with the process and due date, WSF postponed the schedule a few times, leading to Monday’s deadline.
WSF’s new ferries are part of a nearly $4 billion project to, by 2040, completely electrify the fleet, which currently burns 19 million gallons of diesel fuel a year. That includes retrofitting six diesel ferries to hybrid electric, building 16 new hybrid-electric vessels and adding charging stations to 16 terminals.
The new boats will be capable of being powered by battery, diesel or a combination of the two, but officials say the diesel will be only for backup power, even though each boat will carry nearly 55,000 gallons of it.
So far, the Legislature has put $1.68 billion toward the work, funding construction for up to five of the 16 boats. To hurry the process, the state hopes to issue two contracts at once, which could mean that two ferries are delivered and begin sailing primarily on the Seattle-Bremerton and Clinton-Mukilteo routes in 2029, the latest year for initial sailing cited by WSF.
The new ferries will each have space for 1,500 passengers and 164 vehicles. Below deck, water-cooled batteries will fuel the hybrid-electric propulsion system, both built by the Swedish-Swiss electric equipment manufacturer ABB.
The state is adding charging capability at 16 terminals, and has agreements with Seattle City Light and Puget Sound Energy to power the first five that will be electrified: Seattle, Bainbridge Island, Bremerton, Clinton and Kingston.
The state anticipates terminal construction will start in Seattle in 2026 and be completed in 2029.
Charging the vessels will take 20 minutes. That’s about the typical time a ferry sits at the terminal while passengers and vehicles unload and load.
One notable local company missing from Monday’s bidder list is Vigor Shipyards, a local builder that the state had contracted with to build its vessels since the late 1990s.
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The shipyard was on deck to build a new fleet of hybrid-electric boats for the state, but WSF cut off negotiations when Vigor said the first hybrid-electric ferry would cost more than $400 million — more than double the state’s estimate.
Vigor, however, is still in business with the state. It is currently converting the Wenatchee from diesel power to hybrid-electric, a complicated process that was expected to be completed last year but was delayed after workers discovered that blueprints didn’t match what was found on the boat.
The work, originally estimated to cost $50 million, is now estimated at $86 million, and the Wenatchee is expected back on the water this summer.
Following the delay of the Wenatchee, Gov. Bob Ferguson put the remaining conversions of the state’s Jumbo Mark II-class vessels — the Tacoma and the Puyallup — on hold until sometime after the 2026 FIFA World Cup comes to the region. When they begin again, the conversions are expected to take between 12 and 16 months.
Coupled with Ferguson’s decision to delay conversion was his announcement that ferry service would return to pre-pandemic levels this summer by putting 18 boats on the water. That would give the Bremerton-Seattle and Port Townsend-Coupeville routes two-boat service. The “triangle route” between Fauntleroy, Vashon Island and Southworth will have three-boat service.
Until this process, the state required its fleet to be built not only in the U.S., but in Washington state.
A provision in a century-old federal law — the Merchant Marine Act of 1920, often referred to as the Jones Act — requires that all goods transported on water between U.S. ports be carried on ships that are built in the U.S., fly the U.S. flag and are owned and crewed by U.S. citizens.
After the failed contract with Vigor, the Legislature loosened its rule requiring the ferry fleet to be made in-state. To offset costs related to the state’s relatively stringent environmental and labor rules, the state will provide a 13% bid credit to in-state contractors, which means Nichols’ high bid will come down some as the state examines the proposals.
Nichols Brothers is among dozens of shipyards in Washington, but one of the few with the ability to build state ferries. Requests for comment from Gavin Higgins, the company’s CEO, were not returned Monday.
The local shipbuilder was identified in a 2016 report commissioned by the Legislature as one of three in the state able to build ferries — along with Vigor and Dakota Creek Industries in Anacortes. The report also noted that Nichols did not “currently have the capacity to be the lead shipyard in constructing” vehicle ferries.
The shipyard, however, has been involved in various aspects of building the state ferries Samish, Tokitae, Kennewick, Salish and Chetzemoka.
Eastern Shipbuilding Group has built hundreds vessels, including U.S. Coast Guard offshore patrol cutters, tugboats, passenger ferries, fishing boats and fireboats, according to its company website. Jessica Ditto, a company spokesperson, declined to comment Monday.
Nicholas Deshais: 206-464-2932 or [email protected]. Nicholas Deshais covers transportation for The Seattle Times.