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Guest Commentary / State construction contracts

Buy Washington! Yes, including ferries

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By David Groves
If our state government needed to buy a passenger jet, would you rather it be built by Boeing or Airbus?
Before you answer, remember that the government usually has to choose the lowest bidder. If that was Airbus, would you have a problem with that?
Most of us would.
That's why the Washington State Labor Council supports investing our tax dollars in our own businesses and workers by providing in-state preferences in the government procurement process. That could mean bid credits for in-state contractors with primarily in-state workforces. And for extraordinary purchases, like a passenger jet, it might mean passing a law that ensures Boeing gets that work. (And that it's done here instead of, say, in South Carolina.)
A law has been on the books for more than 20 years regarding construction of Washington State Ferries vessels. The Build In Washington law has been renewed several times in a bipartisan fashion, most recently in 2008 when lawmakers authorized the emergency replacement of the WSF's steel electric-class boats due to hull erosion. That work went to Seattle-based Vigor Industrial, formerly Todd Pacific Shipyards, which will soon celebrate a century in business.
But now, some legislators are wondering if we should build cheaper ferries elsewhere.
A legislative committee recently conducted a hearing on a new audit of ferry purchasing. The audit concluded that the WSF's recent vessel construction costs were higher than other systems' costs, in part because of laws requiring they be built in Washington and that bidders have apprenticeship programs, among other things.
I'll get back to "among other things" in a moment.
The Build In Washington law passed because lawmakers recognized the importance of spending our tax dollars here, to create jobs here, and to sustain an industry here. Those jobs have a multiplier effect on our state's economy, creating more jobs and sustaining more businesses.
But these days in Olympia, some legislators are stuck in austerity mode. Vaguely advocating for "reform before revenue" for transportation spending, House Minority Leader Richard DeBolt, R-Chehalis, went so far as to say, "We can't even build a ferry right without it sinking."
The WSF steel electric ferries were in service for 80 years. Our state's standard ferry service life is 60 years, according to WSF officials, which is significantly higher than the 40-year average lifespan for other systems around the country. Currently there are nine WSF boats between 40 and 65 years old.
By building these vessels in Washington, we not only get a superior product, we are creating and sustaining good jobs here. Plus we are training local workers to ensure our shipyards have a skilled workforce in the future. That's a win-win for taxpayers and our economy.
Are there ways to lower ferry construction costs? Absolutely.
Start with the audit's findings that the WSF's substantial design changes increased the costs significantly. In fact, the audit states: "The largest cost difference we were able to identify (between the locally built Chetzamoka and the comparable Nantucket-built Island Home) was in the value of change orders between the two vessels.... Of the $10 million in change orders issued by the WSF, about $6.5 million was spent to expedite the construction schedule and complete the vessel as quickly as possible."
Thanks to efficiencies gained after building the Chetzamoka, the audit found the in-state cost of the next boat in this class, the Kennewick, was "much lower ... close to the amount the Island Home's construction shipyard told us it would cost them to build that ferry today."
In other words, we paid a premium price -- initially -- to expedite construction of the steel electric replacements, and the largest single cost difference this audit identified was the "rush order."
If lawmakers in Olympia really want to save our state money and improve our business climate over the long term, the smartest thing they could do is to invest in fixing our crumbling transportation infrastructure now rather than waiting for the next crisis. That should be their priority; making a significant down payment on the $50 billion in transportation needs identified by the Connecting Washington Task Force.
The last thing they should do is divest from Washington businesses and workers. That would truly be penny-wise and pound-foolish.

David Groves is Editor of The Stand (, the Washington State Labor Council's news website.

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