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Audit Audit of the Massachusetts Bay Transportation Authority — Review of Contract Management Process

Audit examines the MBTA's progress toward addressing issues identified by an external auditor in 2011. The audit examined the period of July 1, 2014 through December 31, 2016.

Organization: Office of the State Auditor
Date published: September 28, 2018

Executive Summary

In accordance with Section 12 of Chapter 11 of the Massachusetts General Laws, the Office of the State Auditor has conducted a performance audit of the Massachusetts Bay Transportation Authority (MBTA) for the period July 1, 2014 through December 31, 2016.

The scope of our audit was to determine whether the MBTA had taken measures to adequately address the management action items that were identified by an external auditor. These action items were in the areas of the MBTA’s bid and award, change order, and cost estimation processes.

Below is a summary of our findings and recommendations, with links to each page listed.

Finding 1

The MBTA did not ensure that its own staff, as well as its contracted design engineers and their estimators, properly conducted periodic cost estimates and risk analyses.

Recommendation

MBTA management should establish effective monitoring controls to ensure that periodic project estimates and risk analyses are properly conducted by MBTA personnel, its contracted design engineers, and their estimators.

Finding 2

The MBTA did not maintain an accurate Disinterested Bidders Database or investigate all prospective bidders.

Recommendation

The MBTA should develop written policies and procedures for updating information in the database and identifying and researching disinterested bidders, and it should establish monitoring controls to ensure that these policies and procedures are followed.

Finding 3

The MBTA processed change orders without adequate documentation.

Recommendation

The MBTA should codify its Contractor’s Change Order / Risk Reallocation Check-Off List as a required piece of supporting documentation for all change orders and should implement monitoring controls to ensure that its contractors complete this document.

Finding 4a

The MBTA did not ensure that information in its Bid Comparison to Cost Estimate Database was accurate.

Finding 4b

The MBTA did not ensure that contracted design engineers performed a root cause analysis on each bid that varied from the engineer’s estimate by more than 10%.

Recommendation

MBTA management should establish effective monitoring controls to ensure that information is accurately recorded in the Bid Comparison to Cost Estimate Database and that a root cause analysis is performed for each bid received that varies from the engineer’s estimate by more than 10%.

 

A PDF copy of the Audit of the Massachusetts Bay Transportation Authority - Review of Contract Management Process is available here.

List of Abbreviations

AACE

Association for the Advancement of Cost Engineering

CDD

Capital Delivery Department

DBB

design-bid-build

EON

Explanation of Necessity

FMCB

fiscal and management control board

GLX

Green Line Extension

ICE

Independent Cost Estimate

MassDOT

Massachusetts Department of Transportation

MBTA

Massachusetts Bay Transportation Authority

OSA

Office of the State Auditor

PM

project manager

RON

Record of Negotiation

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