Alabama Shipyard, LLC of Mobile, Ala. has won the contract to convert two former offshore service vessels into freight ferries, following a unanimous vote by the boat line board of governors Friday afternoon.

At a cost per vessel of $13.6 million, the $27.2 million contract is less than the shipyard’s first bid of more than $20 million apiece — but remains significantly more than the $8 million to $9 million SSA general manager Robert Davis had estimated when the Steamship Authority purchased the boats last year, a fact that still rankles some of the governors.

“I think you’ve put the board in a very tough position, given the colossal failure in terms of the estimates for converting these boats,” said Peter Jeffrey of Falmouth. “Have we looked at selling these vessels, putting them on market and starting again?”

Mr. Davis said even with the higher-than-estimated costs, the former oil industry boats are important to the Steamship Authority’s future.

“These vessels remain a very viable avenue for us to be able to modernize our fleet,” he said, noting that the SSA’s existing freight boats are all more than 40 years old. “We’ve been spending more and more money on [fixing] items on those, and that will continue,” Mr. Davis said.

At the governors’ next regular meeting, Mr. Davis said, he will report on how the original estimate for conversion fell short by such a striking amount.

“We missed this by a wide margin, and we intend on looking back and finding out how this was done,” he said.

The Steamship Authority was able to trim the original bid by negotiating with the shipyard, lengthening the job’s timeline and reducing the scope of work, Mr. Davis and director of marine operations Mark Amundsen told the board of governors Friday.

The two vessels, renamed M/V Barnstable and M/V Aquinnah, will need less mechanical work in Alabama than previously thought, because documents showed they were both overhauled just before they were taken out of duty several years ago, Mr. Amundsen said.

At the shipyard, they will be lengthened, widened and reinforced with new bulkheads, tanks and other equipment, much of it required by Coast Guard rules for passenger ferries, he said.

The contract calls for delivering one ferry in early April 2024 and the second one about three weeks later, Mr. Davis said.

That schedule allows time for the Steamship Authority to bring each boat to New England, train crews and undergo Coast Guard inspections before next year’s summer season, he said.

Mr. Davis said the authority is now negotiating with the shipyard on converting the third former offshore service vessel, M/V Monomoy, which was not serviced as recently as its two sister ships.