A review of six Metropolitan Transportation Authority (MTA) New York City Transit (Transit) capital projects found errors throughout the project pipeline that contributed to delays and higher costs, according to an audit released today by State Comptroller Thomas P. DiNapoli. Many of the problems were tied to MTA’s failure to follow its own procedures or properly oversee contractors.

“This audit found numerous problems in the MTA’s capital projects pipeline that led to delays and cost overruns,” DiNapoli said. “These are red flags that fall within the MTA’s power to fix. As the MTA strives to improve the system for riders and overhaul its operations, we hope it takes a close look at what we found in this report and our recommendations.”

The 2015-2019 MTA Capital Program is the latest approved capital program, with an original budget of $29.57 billion. After previous additions, the program increased to $33.27 billion, with Transit’s portion raised to $16.74 billion. DiNapoli’s auditors sampled six Transit projects with a total budget of $815.7 million.

Auditors found that four of the six projects ran into design-related issues during construction, leading to delays and additional costs. For example, during an accessibility project to install elevators and make a platform comply with the Americans with Disabilities Act, Transit’s design neglected to raise the platform edge for passengers using wheelchairs. The mistake was discovered during construction, resulting in ten additional work orders (AWOs) and $617,000 in added costs.

DiNapoli’s audit found contractors did not always follow project requirements, creating problems that later needed to be corrected and cost additional time and money. Such “non-conformances” included guardrails that failed and newly installed materials that were rusting.

When problems were discovered, the contractors rarely bothered to figure out what caused them, missing an opportunity to help prevent it from happening again.

Additionally, auditors discovered that projects were understaffed on four of the sample projects, with contractors’ scheduled workers not always present. Nevertheless, in some cases, payments were still made. For one project Transit had to issue numerous reminders to the contractor to increase technical staffing to meet the critical work schedule.

As a result of these deficiencies and other factors, millions of straphangers were affected by Transit’s inability to complete improvements to its system on time or within the originally proposed budgets. All six projects fell behind their original schedules, and four – with a total budget of $672.2 million as of May 30, 2018 – were over budget by a combined $43.2 million.

DiNapoli’s report notes:

• Contractors can also submit questions about the plans or processes for a formal response, known as Request for Information. For 16 of the 35 RFIs reviewed, Transit responded after the 20-day time frame, ranging from seven to 132 days late.
• Transit is required to hold meetings about AWOs with and without the contractor as part of the AWO process. It is also required to document “lessons learned” for each AWO. The six projects contained a total of 267 AWOs, costing $11.87 million. Auditors reviewed 29 of these AWOs, totaling $3.66 million, and found that for 28, Transit did not hold the meetings without the contractor.
• In addition, no “lessons learned” were documented for 18 of 29 AWOs. The ones that were documented were brief and provided insufficient root-cause analyses to help avoid future AWOs.
• For one project, there was no evidence that the contractor’s quality staff were on site even though they are required to be full time.
• For the six projects reviewed, 53 of 101 Transit’s quality management group’s assessments were not provided to auditors. Transit opined that 13 were during times work was starting up or nearing completion, 13 were waived due to the nature of the project, and of the remaining 27, one was not performed and the rest were unaccounted for.

DiNapoli recommended the MTA:

• Assess damages when contractors: design projects that omit critical components resulting in additional costs or time for the completion of the project; provide an insufficient number of workers to finish the project in a timely manner; and do not have the necessary quality control personnel as required by a contract.
• Determine the root cause of design errors or omissions and develop corrective action plans to avoid recurrence.
• Require construction managers to verify the number and title of employees on site on a daily basis, determine whether they are authorized to be on site and document the results.
• Ensure all quality assessments are performed and document any exceptions to this requirement.
• Require construction managers to document specific “lessons learned” in any additional work orders.
• Ensure that Transit meets the response due dates for requests for information from contractors.

MTA officials generally disagreed with the audit findings and recommendations, claiming that the auditors did not provide sufficient support that the conditions noted resulted in the late completion of projects and additional costs. The MTA’s full response, and the auditors’ responses to its comments, are included in the final audit.

Read the report, or go to: https://osc.state.ny.us/audits/allaudits/093019/sga-2019-18s15.pdf

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