The Seward Phoenix Log - News of the Eastern Kenai Peninsula since 1966

By Wolfgang Kurtz
LOG Editor 

Seward Ship's wants pay for extra ferry work


Leon Youngblood | The Seward Phoenix LOG

The Alaska Marine Highway Systems M/V Tustumena makes a short voyage from Seward Ship's Drydock to the Alaska Railroad Cruise Ship Terminal in late September. This was its first trial operation since being refloated after about 10 months in drydock. After some touch up work and re-provisioning, the Tustumena sailed from Resurrection Bay and back into regular service in October.

The Alaska Marine Highways System ferry M/V Tustumena checked into Seward Ship's for drydock repairs in November 2012 and, after numerous delays, it seemed like it would never leave. The vessel overstayed its original schedule by about six months and the Seward shipyard is arguing that the state should pay for some of the extra time, effort and materials that were required for the vessel to finally meet United States Coast Guard and American Bureau of Shipping standards.

There were provisions in the contract to pay for overruns and contingencies, but the state is withholding them to the tune of around $600,000. Attorney Doug Karet, who represents Seward Ship's Drydock, says his client maintains that numerous additions to the amount of work required to make the vessel seaworthy went far beyond the terms of the contract and its allowances for overages. They've put together a claim for around $4 million which includes the contract monies being withheld.

According to SSD General Manager Pinkney Cunningham there were 60 some odd line items, but with 130 change orders, the project just got bigger and bigger. "A lot of times AMHS was approving work that had to be done to get USCG certification. They were approving the work but not time extensions," he said.

After serious complications with hull welding were resolved and it looked like smooth sailing, 11th hour additions came along that were completely unexpected. Cunningham says that the returning Tustumena crew unveiled a slew of additional issues to AMHS and the shipyard as late as August.

The differences between SSD's Tustumena claim and the state's position are being explored under an administrative process with Karet on SSD's side and Alaska Department of Law attorney Dana Burke. Burke is investigating SSD's claim and determining whether the state has any claims or counter claims. He was cautious about going into depth on the case, because he's working to resolve the situation without triggering further legal action.

The exchange of records is just about concluded whereupon a 90-day clock will start, in which time a settlement decision is required. At the close of that period, AMHS will make a decision which could be appealed administratively if SSD was not satisfied. Playing out that process could extend the dispute into the summer of next year before a lawsuit could come into play. Burke says he has no reason to believe that the differences can't be settled and that he expects both parties will work hard to that end.

In the meantime, with another troublesome project up on blocks, Cunningham is hoping that he's not experiencing the latest trend in client project management. A big Alyeska Pipeline spill response barge checked into the shipyard shortly after the Tustumena sailed for Kodiak. However, again the contract drawings and job descriptions are not matching up to reality.

"It's kinda the same situation that developed with the Tustumena," Cunningham says. "Between the things that don't actually match the boat and some things that the USCG and ABS are having problems with, it means that even with some of the drawings being approved, when you compare them, what they show as existing structure isn't actually there. Some of the stuff can't be done according to their drawings."

He says that Alyeska is more responsive than the state in working through the disparities, but that the confusion and extra work is probably going to double the amount of time that the barge ties up a berth at Seward Ship's. And, of course, it will end up being more expensive overall. Cunningham doesn't expect to pay that bill alone either.


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