NEW YORK — The Metropolitan Transportation Authority has not done enough in streamlining its procurement process to make it more efficient, better serve customers, and save money, the New York State Comptroller’s Office says in an audit report issued on Thursday, Dec. 26, 2024.
In a response to legislation passed in April 2019, the MTA board approved a procurement reorganization, known as the Transformation Plan, in July of that year; it took effect in October 2021. That consolidated procurement from the MTA’s five operating agencies, MTA Construction & Development, and MTA headquarters into a single operation, with one chief procurement officer who oversees more than 1,000 employees and the MTA’s more than $7 billion in annual procurements ranging from office supplies to rolling stock.
However, the Comptroller’s Office report says most practices remain the same as they were prior to consolidation, and that while Procurement Operations reported cost savings of $152 million in 2022, it found that none of the $37.3 million in savings it examined could be attributed to the consolidation. Most of the 37 items covered such items as cancelled orders for parts no longer made or services no longer needed, such as subway car cleaning, the report says.
“More savings may be possible,” State Comptroller Thomas P. DiNapoli said in a press release, “if [the MTA] does more to coordinate purchasing among its agencies instead of the status quo of having them procure their needs independently. Consolidation, efficiency, and savings in this area was promised years ago, but has yet to be fully realized.”
The audit makes three key recommendations:
— To definite and distinguish between Transformation and non-Transformation initiatives required to achieve the consolidation goals, and to formally monitor progress toward achieving those goals.
— To clearly define cost savings and costs avoided in procurement, and to document the savings reported.
— To develop and issue new procedures for all agencies, where appropriate.
The MTA, in a nine-page response included with the original 8-page audit report, offered what it felt was necessary additional background on the Transformation Plan, and disagreed with a number of aspects and details of the audit. Ultimately, it disagreed with the first of the audit’s recommendations (saying “it would be of no utility to the MTA to attempt to categorize these initiatives as either Transformation-related or non-Transformation-related”); said it had already implemented the second; and agreed with the third.
“The MTA successfully consolidated and reorganized the agency per the Transformation Plan, forging ahead with less redundancy and red tape,” an MTA spokeswoman told amNY.com. “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 full report and the MTA’s response is available here.
