The Steamship Authority (SSA) unanimously approved entering a contract nearing $30 million to convert two newly purchased freight boats.
The authority had estimated spending $9 million per vessel conversion, but the lowest bid that came in, from Alabama Shipyard, turned out to be $20 million per vessel conversion.
The negotiations paid off, although only two of the three freight ferries that the authority purchased will be converted under this contract. SSA general manager Robert Davis said converting the Aquinnah and the Barnstable will cost $13.6 million each. The Monomoy is included in the contract, but Davis said the SSA will continue to negotiate with Alabama Shipyard for the scope and pricing for that vessel’s conversion.
Davis said the Aquinnah and Barnstable are expected to be delivered to the SSA by next April, in time for the 2024 summer season.
The board was still not thrilled with the underestimate on the conversion fees.
“I think you put the board in a very tough position, given the colossal failure in terms of the estimates for converting these boats,” board member and Falmouth representative Peter Jeffrey said. “Now we’re left with what is the most financially prudent thing to do for the Steamship Authority, and not as the best of circumstances.”
Jeffrey said he’d been asked by the public whether the SSA considered reselling the vessels and restarting the process. Davis said that was not an option they were considering.
“We’re not pleased either that we put the board in such a position,” Davis said. “We missed this by a wide margin, and we’re going back and seeing how this was done.”
Davis pointed out that during a recent forum, Ferries Now, others in the industry said they’ve also seen costs going up. “Regardless of that, we do feel these vessels remain a very viable avenue for us to be able to modernize our fleet,” Davis said.
Jeffrey said he would like the board to receive the progress report in “real time” so they can stay on top of any change orders and other costs throughout the process.
Martha’s Vineyard board representative Jim Malkin asked whether parts of the contract could be delayed for a better price, but SSA director of marine operations Mark Amundsen said they were at the reduced scope already. He said they could decide to make fewer changes to the vessels, but that could limit them to just the Martha’s Vineyard route.
After further discussion, board vice chair and Barnstable representative Robert Jones suggested going ahead with the presented contract, rather than changing course.
“Let’s just go lick our wounds and be done with it,” he said.
After the unanimous vote, Malkin said he looks forward to the audit report on how the SSA ended up in this situation. He’s also curious how the contract will impact other capital projects.
Jeffrey agreed, and said it may be beneficial to have Mark Higgins, who recently joined the SSA as the COO, review the process and bring an outside perspective.