Objective

To determine whether the reorganization of the Metropolitan Transportation Authority’s MTA Capital Construction to the renamed MTA Construction & Development as part of transforming the MTA resulted in improved service levels for customers, process efficiencies, and cost reductions. This audit covered the period from January 2017 to February 2024.

About the Program

The Metropolitan Transportation Authority (MTA) is North America’s largest transportation network, serving a population of 15.3 million people across a 5,000-square-mile travel area surrounding New York City through Long Island, southeastern New York State, and Connecticut. The MTA network comprises the nation’s largest bus fleet and more subway and commuter rail cars than all other U.S. transit systems combined. The MTA’s operating agencies are New York City Transit (Transit), MTA Bus Company (MTA Bus), Long Island Rail Road (LIRR), Metro-North Railroad (Metro-North), and MTA Bridges and Tunnels (B&T). As of December 2023, the MTA reported a total of 70,000 employees.

Section 1279-e(1)(a) of the Public Authorities Law, which became effective in April 2019, required the MTA to “develop and complete a personnel and reorganization plan” by June 30, 2019. According to the Transformation plan adopted by the MTA Board on July 24, 2019, “the MTA’s transformation seeks to change the fundamental ways in which the Agencies do business in order to drive improved service levels for the customers, process efficiencies and cost reductions.” 

At the December 2019 Board Meeting, MTA Capital Construction was renamed and reorganized to Construction & Development Company (C&D). C&D’s four departments collaborate to plan, develop, and deliver capital projects to the MTA’s operating agencies. Planning, Development, Contracts, and Delivery work together to identify project benefits and handover plans, and tailor contracting strategies to award and deliver projects most effectively. Historically, the MTA’s Capital Program was delivered on an agency-by-agency basis, with each running its own capital division. Now, C&D has the responsibility of assembling and overseeing the Capital Program; planning, developing, and awarding projects; delivering said projects; and leveraging MTA assets to generate revenue for the agency.

C&D’s mission is to execute its capital program better, faster, and cheaper—from project conception to award all the way through construction and handover to its operating agency partners. According to C&D, this will be accomplished through improved estimate and cost forecasting, faster vendor payment, and reductions to change order and submittal processing times.

Key Findings

C&D officials advised that Transformation was completed in June 2021 when approximately 2,000 employees were reassigned to C&D from the operating agencies. Although C&D provided evidence that it had been organizationally transformed, sufficient time has not passed to comprehensively assess whether the change delivered capital projects faster, better, or cheaper, as was its plan. The data that was available was at times incomplete or insufficiently supported, and a definition of what constituted cost savings was not clearly defined and included some questionable items. When we requested documentation to support statements regarding completing projects faster and at lower costs, we were advised that it was still too soon to tell, or that the changes, such as new capital project procedures, were still not in progress. 

Pre-transformation, projects were evaluated by teams in the operating agencies, with different timelines and weighting criteria. Post-transformation, C&D’s Planning officials perform a comparative evaluation of the projects using consistent and comparable criteria and timelines. They evaluated 29 projects for the 2025–2044 20-Year Needs Assessment. We selected four projects for review and requested supporting documentation to determine if they were evaluated as stated by C&D. The results of the forecasting model were, however, not retained.

While Development managed the MTA 2020–2024 Capital Program, it has not issued new or updated policies and procedures since the Transformation. C&D officials stated that Development and C&D continue to draft new policies and review and update its current policies as needs arise. However, no drafts or reviews of current policies were provided.

Contracts’ functions did not change during Transformation; however, they expanded to cover capital construction for all MTA operating agencies. The MTA 2020–2024 Capital Program asserts that by combining responsibility for both design and construction into one group, and then letting the resulting contracts, the MTA is shortening project schedules, identifying potential issues earlier, increasing accountability, and better sharing risk with contractors and, as a result, projects are delivered faster, better, and cheaper. Contracts officials, however, stated it was too soon to demonstrate any realized savings. However, they did cite an increase in the number of bidders as a positive result of Transformation, claiming an increase in the number of bidders gives them better competition and pricing. Pre-transformation data, however, is not available.

Key Recommendations

• Prepare documentation to support the Transformation of C&D improved efficiency and saved time and money. The documentation should include interim reports as the information about projects at milestones becomes available.
• Formalize procedures to the new processes that have been established since reorganization of C&D, including but not limited to, bid estimates and schedules.
• Promptly develop new and continued practices into procedures and document them.