Press Release  Inspector General Calls on MBTA Leadership to Improve the Authority’s Contract Functions

In releasing the third statutory review of an MBTA privatization contract, Inspector General Jeffrey S. Shapiro today called on MBTA leaders to improve their procurement, contract development, contract administration, vendor oversight and records retention practices.

“While these contract issues may pale in comparison to the operational and safety challenges that the MBTA faces, they must not be excused or minimized.  These are basic, fundamental and routine business functions, and they are essential to the effective operation of any business entity. The fact that they were so poorly managed by the MBTA is troubling to say the least,” Shapiro said.

The review evaluated four aspects of the MBTA’s completed contract with Block by Block to provide in-station customer service agents or “transit ambassadors”:

• The competitiveness and fairness of the procurement process;
• The quality of the services provided under the contract;
• The expected and actual cost of the contracts; and
• Whether the costs of the contract exceeded the benefits derived from the contract

“We found that while the contract did result in increased coverage of in-station customer service agents, the MBTA overpaid by nearly $5.37 million, and the contract lacked metrics to determine how successful they were in providing better service to MBTA riders, which was a key component of the contract,” Shapiro said.

For example, the MBTA did not attempt to ascertain how the transit ambassadors were conducting and reporting elevator checks.  This simple and seemingly small detail has a potentially huge impact on MBTA riders, particularly those with disabilities.

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 Office of the Inspector General (OIG) to conduct a review of the contract upon its completion. This is the third such review and there are four remaining open contracts for which the same review process is required. The contracts for absence management services and police dispatch services were issued in October and December 2022 respectively.

“Taken together, these reports illustrate a troubling pattern that demands attention and correction.  Across these three reviews, the MBTA had consistent issues with record retention, contract development and management, and vendor oversight,” Shapiro said. “We understand that the current Block by Block contract contains performance metrics, and that the MBTA is actively reviewing Block by Block’s performance. Those are clear steps in the right direction.”

“I am optimistic that the Healey/Driscoll administration’s commitment to improving the MBTA, under the leadership of Secretary Fiandaca and General Manager Eng, the MBTA can institute the fundamental business practices detailed in our report.”

Download a PDF version of the full report.

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