Press Release  IG Shapiro Concerned That Favoritism May Have Influenced Selection of MBTA Police Dispatch Vendor

Boston, MA — In a report released today, Inspector General Jeffrey S. Shapiro expressed concern that the MBTA could not demonstrate that its selection of a police dispatch vendor was conducted fairly, due to the authority’s chronic poor record-keeping.

“The need for clear, transparent and fair procedures for the selection of contractors by public entities is a bedrock principle. It is essential that the public have confidence in government when it conducts public procurements and expends the public’s money,” Shapiro said.

The report released today is a supplement to a statutory review of the 2017 MBTA contract with IXP Corporation (IXP) to provide police dispatch services for the authority’s Transit Police Department. The Office of the Inspector General (OIG)’s Internal Special Audit Unit (ISAU) released its first report regarding the IXP contract on December 23, 2022. At that time, the ISAU determined that it needed additional information from both the MBTA and IXP to properly evaluate the fairness and competitiveness of the MBTA’s procurement process.

“Based upon our investigation, significant concerns were raised regarding whether or not the selection process was fair; furthering that concern, the MBTA’s poor recordkeeping and records retention practices meant that the authority could not conclusively demonstrate that its selection of IXP was free from favoritism. That is not acceptable,” Shapiro said.

The ISAU found that in 2016 the authority posted a Request for Proposal (RFP) for police dispatch services on its own Business Center website, where companies interested in doing business with the MBTA can receive notification when new bid opportunities arise. In this instance, while over 1,000 companies were notified of this RFP, few provided police dispatch services. The deadline for responses was extended three times and three companies, including IXP, responded. Ultimately, however, the 2016 procurement did not result in a contract and the authority had to issue a revised RFP in 2017.

When the revised RFP was issued, it was posted on COMMBUYS, a public procurement website managed by the Commonwealth’s Operational Services Division, where companies interested in doing business with the Commonwealth can view open bids and can receive notification of bids in specific categories of goods and services. In this instance, while 33 companies were notified of the procurement opportunity, including IXP, the other two companies who had previously bid were not. The deadline for response to the RFP was only 22 days long and ultimately only one company, IXP, submitted a proposal.

The MBTA did not complete or maintain records related to its evaluation of IXP’s response to the 2017 RFP and therefore could not demonstrate that the evaluation process was fair. Furthermore, communications between the Transit Police and IXP during the evaluation process raise significant concerns of a potential bias in favor of IXP. This raises troubling questions on two fronts – records management and impartiality.

“Recordkeeping and records retention are basic functions of any business or organization. It is essential for a public entity to properly record and retain information concerning its decision-making on spending public funds (among other things). This has been a chronic problem at the MBTA and has been documented at length in the OIG’s previous reports,” Shapiro said. “The OIG is pleased to have learned that concerted efforts are underway at the authority to address these issues. Nonetheless, the test will be how the MBTA conducts itself during future procurements and with future contract administration and how its actions align with the results from future oversight reviews.”

Shapiro further expressed cautious optimism in the new leadership at the Massachusetts Department of Transportation and the MBTA to remedy these issues for future procurements and redouble its efforts in reviewing the contract administration for active contracts across the MBTA.

In 2015, the Legislature eased the requirements to privatize services for the MBTA for a three-year period. The law, Section 198(c) of Chapter 46 of the Acts of 2015 (Chapter 46), requires the OIG to conduct a review of the contract upon its completion.  In addition to today’s supplemental report, three reports have been issued on contracts for transit ambassadors, police dispatch services and absence management.  There are four remaining open contracts for which the same review process is required.

The full report can be found here.

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