Objectives

To determine if Metropolitan Transportation Authority (MTA) – New York City Transit’s (Transit) Department of Capital Program Management (CPM) has a formal capital project management process that its employees and contractors are required to follow; and whether that process was followed and was successful in managing scope, time, quality, and budget to the satisfaction of stakeholders. The audit covered capital projects that were in active status between January 1, 2015 and May 30, 2018.

About the Program

The MTA is a public benefit corporation established by the State Legislature. Transit is an affiliated agency of the MTA that operates New York City subway and bus service 24 hours a day, 7 days a week.

In 1981, the State Legislature mandated that the MTA prepare five-year capital programs to rebuild and improve its transit network. To establish the planning context prior to the development of each of these five-year capital plans, the MTA prepares a 20-year capital needs assessment that sets forth long-term capital investments that would be made in a program. These investments focus on rebuilding and expanding the system. A five-year capital program identifies capital projects and equipment purchases, provides a planning schedule, and identifies options for financing the plan. Each capital program is broken down by agency (e.g., Transit).

The 2015-2019 MTA Capital Program (Program) is the latest approved capital program, with an original budget of $29.57 billion. As of May 2018, the Capital Program Review Board had amended the Program to increase the budget up to $33.27 billion, with Transit’s portion at $16.74 billion.

CPM’s mission statement is to improve New York City’s transit system by designing and building world-class capital projects. As of May 30, 2018, CPM had 2,111 projects in various stages listed in its Project Status Report (PSR) system.

During the construction phase, a Construction Manager (CM) takes over the project. During this phase, additional work orders (AWOs) may be used to address any issues that occur. Transit has also developed a set of Project Management Procedures (PMPs) and Project Management Guidelines to help ensure that capital projects are completed on time and within budget.

Key Findings

For our review, we sampled six projects with a total budget of $815.7 million. We determined that Transit’s PMPs were not always followed, and found that there were process deficiencies both before and after contracts were awarded to contractors, which contributed to delays and additional costs, including:

• Design errors and omissions: Four of the six projects in our sample encountered design-related issues during construction, leading to delays and additional costs. For instance, in one project, an omission by Transit’s design team was discovered during construction, resulting in ten AWOs and additional costs of $617,000.
• Contractor non-conformances: Contractors did not always comply with documented requirements, resulting in the work needing to be corrected. These included broken speed bumps, debris left by the contractor within train yards, and missing certifications and credentials for crane operators. Additionally, despite the significance of these non-conformances, on four of the projects, the contractors did not perform the required root-cause analysis, which would help prevent future non-conformance.
• Insufficient contractor personnel on site: On four of our sampled projects, we determined that the contractor’s scheduled personnel were not always present at the site, with an average attendance rate as low as 52 percent on one of the projects. For one project, Transit had to issue continuous reminders to the contractor to increase technical staffing to meet the critical work schedule.
• Based on the construction start and substantial completion dates reported in PSR for each project, we estimated that Transit should have completed about 101 Quarterly Quality Assessment Reports (Assessments) for the six projects we reviewed. As of February 6, 2019, we had not received 53 Assessments. For 13 of those, Transit explained that the projects either were not in active construction yet or were close to substantial completion. For another 13 missing Assessments, Transit noted that the nature of the project necessitated Assessments to be done bi-annually instead of quarterly; however, we noted gaps of up to two years between Assessments. For another missing Assessment, Transit confirmed that it was not conducted, without providing any reason. We received no explanation for the remaining 26 missing Assessments.

As a result of these deficiencies and other factors, Transit was unable to complete improvements to its system on time or within the originally proposed budgets, ultimately impacting the millions of passengers who rely on Transit.

Key Recommendations

• Determine the root cause of the design errors or omissions and develop corrective action plans (e.g., additional training) to avoid recurrence.
• Require the CM office to verify the number and title of employees on site on a daily basis, determine whether they are authorized to be on site, and document the results. If all scheduled employees do not report on site, the alternate work site should be recorded. Cross-reference payroll documents to daily access reports.
• Ensure all Assessments are performed and document any exceptions to this requirement.
• Require the CM office to document specific lessons learned in the AWO. Monitor the lessons learned for all projects and exchange information among CMs to determine if there are trends or patterns that can be applied to future projects.