Years after the Metropolitan Transportation Authority announced reforms intended to cut down on purchasing costs, the famously high-spending agency has little to show for them, according to a new audit by the state comptroller.
The “Transformation plan” approved by the MTA board in 2019 called for consolidating its procurement practices in hopes of slimming the $7 billion it spends each year on everything from office supplies to train cars to construction contracts. Before the reforms, the MTA had one procurement officer at each of its five operating agencies, but has now reduced that number to just one Chief Procurement Officer.
Despite that consolidation, “the actual practice of buying goods and services had not changed as of Sept. 2023, two years after the effective date,” Comptroller Tom DiNapoli’s office said in a statement on Thursday accompanying the audit. Instead, some MTA divisions are still relying on procedures that date to the 1990s.
The MTA’s Procurement Operations division, which directly buys parts for buses and train cars, reported that it had saved $152 million in 2022. But the comptroller’s office, after scrutinizing about $38 million of that total, found that none of the savings stemmed from the 2019 reforms — instead, nearly all of it resulted from canceled orders and services that were no longer needed.
Transit officials told the comptroller that there is no set timeline for fully reforming procurement, calling it an ongoing process. The comptroller’s office did find some areas of progress, like the MTA’s move to bring together three agencies to negotiate a price reduction from a major supplier of rail-car parts.
The MTA mostly disagreed with the findings, according to the comptroller’s office.
“The MTA successfully consolidated and reorganized the agency per the Transformation Plan, forging ahead with less redundancy and red tape,” MTA spokeswoman Joana Flores said in a statement. “The MTA is still continuously improving business practices with more cost savings and has achieved reduced costs – identifying an additional $100 million in annual recurring savings for a total of $500 million annually, all while providing more subway, bus, and railroad service than ever before.”
The comptroller’s lackluster findings are the latest bit of bad news for the 2019 Transformation Plan, an initiative of then-Gov. Andrew Cuomo. The authority paid $4 million to the consulting firm AlixPartners to produce the “blueprint,” which proposed an overhaul that could cut as many as 2,700 jobs.
But within two years, the picture was muddled: instead of organized cuts to administrative staff, the MTA saw waves of departures by front-line subway and bus workers during the pandemic, and some bureaucrats complained that Cuomo had offered no clear plan for what needed to be “transformed,” The City reported. The Transformation Plan also played a role in the 2020 departure of the popular New York City Transit president Andy Byford.
The comptroller’s office recommended that the MTA better define which initiatives grow directly out of the Transformation Plan, and to more clearly define what counts as cost savings.
The report was released days after New York’s state legislative leaders unexpectedly rejected the MTA’s $65 billion five-year capital plan, which will force the authority to spend the next few months negotiating in Albany about ways to fund it.
