Objectives

To determine whether the Metropolitan Transportation Authority’s (MTA) Long Island Rail Road (LIRR) has a formal capital project management process that its employees and contractors/consultants are required to follow; and whether LIRR followed the capital project management process and was successful in completing scope of work timely, with quality, and within budget. The audit covered from January 1, 2015 to March 4, 2020.

About the Program

LIRR is the busiest commuter railroad in North America, carrying an average of 301,000 customers each week day on 735 daily trains. LIRR is an essential component of the region’s transportation infrastructure, helping to develop the Long Island communities it serves and facilitating economic growth in the region. A subsidiary of the MTA, it comprises over 700 miles of track on 11 different branches, stretching from Montauk – on the eastern tip of Long Island – to Penn Station in the heart of Manhattan. Nearly 500 of LIRR’s daily trains originate or terminate at Penn Station. Most of the remainder originate or terminate at the Atlantic Terminal (formerly Flatbush Avenue) in Brooklyn, with a number of others originating or terminating at Hunters Point Avenue in Long Island City, Queens. All of these terminals provide convenient connections to MTA New York City Transit subway service. Ten of the 11 branches pass through the important Jamaica hub, where customers may change trains to connect to other branches or terminals.

The MTA must submit a five-year Capital Program to the State’s Capital Program Review Board (CPRB) for approval and can amend the program annually thereafter. For the 2010-2014 and the 2015-2019 Capital Programs, the CPRB approved $2.3 billion and $2.9 billion, respectively, for LIRR.

One objective of the Capital Program is to bring the MTA’s capital assets to a “State of Good Repair” and keep them there through capital maintenance and replacement schedules. However, the MTA and its agencies have a history of not delivering capital projects on time, on budget, and within scope.

Key Findings

LIRR’s capital management process is guided by a series of Department of Program Management (DPM) Procedures (Procedures); however, project managers do not always comply with, and contractors/consultants are not required to follow, these Procedures. We believe that this contributed to LIRR completing 10 of our 11 sampled projects late, ranging from three months to over four years.

In addition, eight of the projects sampled were over budget, two projects came in on target, and one was under budget for a net over budget of $69.9 million, or almost 20 percent. The cost overruns range from $675,049 to over $35 million. We found budgeting issues, including the MTA not allowing LIRR to account for inflation when preparing project budgets. Additionally, LIRR’s Estimating Unit was not always involved in the initial budget process, for example, when bids show substantial variance from initial estimates.

Key Recommendations

• Comply with all the Procedures examined and listed in Exhibit B.
• Revise and strengthen the Procedures by incorporating terms used by other MTA agencies, including, but not limited to: defining and requiring a project start date and testing materials and compliance with related regulations.
• Require, in writing, that contractors/consultants comply with DPM Procedures.
• Develop protocols for reassigning LIRR employees to other projects that deviate from the original project plan and document the impact to the project schedule in the project records.
• Work with the MTA to calculate and include in the budget an inflation factor for projects that begin in subsequent years of the Capital Program.