Steamship Authority Avoids Legal Action

Boat Line Governors Allow Shipyard to Extend Delivery of Island Home, Possibly into Late January

By JAMES KINSELLA

The Steamship Authority likely will accede to a requested two-month delay in the delivery of its new 255-foot passenger and vehicle ferry, the Island Home.

SSA general manager Wayne Lamson said members of the boat line board of governors have indicated that they are prepared to honor the request by VT Halter Marine Inc. of Moss Point, Miss., to deliver the Island Home by Jan. 27, 2007, rather than by Nov. 29 of this year.

In correspondence earlier this month, Halter said ramifications from Hurricane Katrina, which slammed into the Gulf Coast on Aug. 29, 2005, have led to more delays than initially anticipated. The boat line previously had agreed to a five-month extension on the delivery of the vessel.

In correspondence with the boat line earlier this month, Halter said the delay stems from several factors, including the loss of personnel who either have left the area or gone to work for competitors, tardy delivery of the vessel's bow doors and lift decks, which then required additional work, and insufficient management and engineering overview of main switchboards, control consoles and internal engine noise.

Mr. Lamson said yesterday that SSA governors in return want VT Halter to agree to several minor change orders before completing construction of the $31.5 million ferry. Authority officials have pegged the total project cost at more than $33 million.

At last week's monthly board meeting in Hyannis, governors went into executive session to discuss possible legal action concerning the delivery of the Island Home.

Although Halter has asked to deliver the Island Home to the Authority's Fairhaven maintenance facility as late as Jan. 27, Mr. Lamson said the vessel may appear earlier than that, possibly closer to Jan. 1.

After the ferry arrives, Mr. Lamson anticipates that the boat line will take a couple of weeks to train crews on the vessel, hold open houses at the Vineyard and at Woods Hole, and conduct a commissioning ceremony before placing her into scheduled service.

The SSA could hold Halter to a liquidated damages clause in the contract signed in November 2004. Under the clause the boat line could charge Halter $3,000 per day for the first 10 days of missed delivery, and $6,000 per day for any further delay of missed delivery, up to five per cent of the contract price. The payments are in lieu of damages that result from delay, and do not preclude any other legal action.

In leaning toward an extension, Mr. Lamson said boat line officials hope to ensure a high level of quality in the finished vessel, rather than push Halter to deliver the vessel sooner.

"We're looking to get a good vessel," Mr. Lamson said.

Factored into the proposed new delivery date is Halter's annual shutdown for the week between Christmas and New Year's Day.

"We cannot deny our workforce the traditional holiday shutdown from Friday, Dec. 22 through Monday, Jan. 1 and still expect to retain them," Halter program manager Charles L. Morris wrote in a letter to the boat line dated Sept. 11.

"Although we intend to make every effort to deliver the Island Home prior to the end of the 2006 calendar year, we realistically anticipate that we will be able to make delivery in Fairhaven, Mass. no later than Jan. 27, 2007," Mr. Morris wrote.

As a precedent, Mr. Morris cited the agreement by the National Oceanic and Atmospheric Administration to extend the delivery date by 36 days on one of its vessels, the same number of additional working days that Halter is requesting for the Island Home. The federal agency also agreed to cover increased labor costs facing Halter, but the shipyard is requesting no additional funding by the Steamship Authority.

"We understand that the Steamship Authority will incur costs, as will any of our customers, when a delivery schedule is advanced," Mr. Morris wrote. "With an order book extending into 2010, it is to Halter's advantage to deliver as quickly as humanly possible; and we intend to do so."

Mr. Lamson said he is confident that the boat line also will be able to work in a planned mid-life overhaul of the ferry Nantucket, another passenger and vehicle ferry that sometimes runs on the Vineyard route, in the coming winter and spring months.

Another new SSA vessel that may show up later rather than sooner is the Iyanough, a fast ferry now under construction at the Gladding-Hearn shipyard in Somerset. Gladding-Hearn had agreed to deliver the vessel by mid-November for $9.5 million.

But Mr. Lamson said yesterday that unanticipated delays associated with ensuring a proper paint job might push back the Iyanough's delivery by two to four weeks.

So far, he said, discussions on the matter between the boat line and the shipyard remain informal. Gladding-Hearn has yet to make a formal request for extending the delivery date.