Ship’s Costs Float to New High : Repairs: The Bureau of Sanitation has paid almost $6 million since acquiring the controversial La Mer a year ago, bringing its cost to four times the original estimate.
In the year since the Los Angeles Bureau of Sanitation acquired a custom-made vessel for environmental monitoring of Santa Monica Bay, repairs have boosted the ship’s price tag to nearly $6 million--about four times the original cost estimate, documents and interviews show.
The total includes $507,000 in repairs and modifications to the 85-foot vessel La Mer, but does not account for an additional $100,000 to $150,000 in work that sanitation officials say is required to ensure the ship’s seaworthiness and provide it with additional equipment.
Further, the work already completed on the ship was performed by a San Pedro boatyard whose original $85,000 contract for repairing and servicing city vessels soared after La Mer was delivered to Los Angeles. That boatyard, San Pedro Boatworks, is owned by the nephew of former Harbor Commissioner Robert Rados Sr., whose firm designed La Mer and saw its contract greatly increase in scope and cost during the ship’s five years of design and construction.
City Sanitation Director Delwin Biagi said the repair work was required to correct the vessel’s numerous problems. Biagi also said the contract was awarded to San Pedro Boatworks because the firm had a longstanding contract to service the city’s older oceanographic vessel, the one La Mer was built to replace.
He added that he did not know that Andy Wall, the owner of San Pedro Boatworks, is Rados’ nephew and said that factor would not have changed his decision to use the company.
But city officials, troubled by the continuing costs of the vessel, said its repair contract warrants an inquiry.
“I think it’s shameful . . . it may even border on criminal,” Councilman Nate Holden said Thursday, pledging to call for a full investigation of La Mer’s repairs. “We just have to make sure there is not a sweetheart deal.”
City Controller Rick Tuttle, meanwhile, said he intends to use the example of La Mer to urge a new city policy or ordinance that greatly limits the amount a competitively bid contract can increase after it is awarded.
“Here you have a competitively bid, $85,000 contract and then in a non-bid situation, they come back for about five times the amount without any competitive bidding. And I am concerned about that,” Tuttle said.
“It seems to me this cries out for a review,” he said.
Wall did not return telephone calls seeking an interview about his company’s repair contract.
Earlier this year, The Times reported that the Bureau of Sanitation expected the vessel, commissioned for design in 1986, to cost $1.5 million and be in service two years ago. Instead, after numerous delays in designing and building the vessel, La Mer was not delivered until August, 1990, and did not begin monitoring Santa Monica Bay until April.
The ship’s cost also soared far beyond the city’s original estimates.
Before the latest repairs, a city report showed that the ship’s construction costs totaled $4.2 million and included $546,000 in change orders. In addition, Rados International’s original design contract of $441,000 eventually reached $1.1 million when the city also agreed that the company should oversee construction of the vessel. (The former port commissioner’s company was allowed to bid on the design contract because it was awarded by another city department).
The $1.1 million paid to Rados International for design work and construction management, records show, exceeded the cost of oceanographic vessels purchased recently by the city of San Diego, the Los Angeles County Sanitation Districts, and the state Department of Fish and Game.
Rados has previously said that the cost of the contract was driven by the scope of work sought by the city. He could not be reached for comment about the project’s continuing costs, and officials at the family-run Rados International declined to discuss the vessel.
La Mer’s troubled saga--and unresolved questions over responsibility for its problems--have led the ship’s San Diego builder, Knight & Carver Custom Yachts Inc., to sue the city for withholding the company’s final payment of $212,000. The city, in turn, sued both Knight & Carver and Rados International, charging that work on the vessel was shoddy.
Documents obtained from the city controller’s office show that La Mer’s continuing costs include $507,057 in repairs and other work billed under a May, 1990, contract with San Pedro Boatworks.
That contract, which allowed an estimated $85,000 a year in boat repair work for the city, was changed last November to allow up to $445,000 in repairs just on La Mer. And four months later, records show, the contract was again amended by the Bureau of Sanitation and the Department of General Services to allow San Pedro Boatworks a 15% overhead for technical services.
Invoices show the San Pedro firm billed the city for work ranging from replacing the vessel’s air system and correcting its engine room hydraulics to repairing cracked paint in the galley and repairing scratches on its fiberglass hull. They also show that the overhead allowed by the city added almost $67,000 to the cost of the work.
Frank Kawashima, a buyer for the General Services Department, said it was not unusual for the city to allow a contractor to make a markup on services if the scope of the work requires technical or specialized service by a subcontractor. In this case, he said, the repairs required on La Mer apparently led San Pedro Boatworks to hire outside technical staff.
Although acknowledging that the vessel continues to exceed their original cost estimates, city officials defend the extra time and money spent on La Mer.
“We are not happy about this, believe me,” said Felicia Marcus, president of the Board of Public Works. “But we have to pursue the remedies as best we can” to ensure the boat’s seaworthiness, she said.
City biologist John Dorsey, who directs the ocean monitoring program, added that the work by San Pedro Boatworks brings the vessel significantly closer to meeting the performance standards originally envisioned by officials. “I definitely see a light at the end of the tunnel,” Dorsey said.
At the same time, however, both officials acknowledged that La Mer will require additional work to stabilize the vessel at sea with so-called bilge keels. It also, they said, will require new winches for ocean sampling.
That work is yet to be sent out for bids, but Sanitation Director Biagi said the work is expected to cost $100,000 to $150,000.
“I guess I’m optimistic. But I believe that when all is said and done, we will look back and say La Mer was a good investment . . . even for the price,” Biagi said.
But officials of Knight & Carver continued to question the scope and cost of the ship’s repairs.
“I believe it’s excessive based on my knowledge of the vessel,” said Meri Knight, general manager of the company. “I am astonished, actually,” she said, adding that the work done by San Pedro Boatworks will be raised by her company in its lawsuit against the city.
“I don’t know that we will bring up the fact that it (the repair work) was done by Rados’ nephew or not,” Knight said. “But we will bring up the questions of what was done, why it was done and whether it was done efficiently.”