Objectives

To determine whether Metropolitan Transportation Authority (MTA) Capital Construction is monitoring and evaluating its contractors/consultants in compliance with its All-Agency Contract Evaluation (ACE) review process and taking action where performance ratings are less than satisfactory. In addition, we sought to determine whether MTA officials are reviewing and using the ACE ratings prior to awarding contracts. The audit covered contracts active between January 1, 2015 and May 14, 2019. The fieldwork was conducted until March 13, 2020.

About the Program

In 1997, the MTA implemented the ACE system, a performance evaluation system developed and operated by MTA Headquarters for use by all agencies to report on contractor and consultant performance. The MTA-adopted ACE Guidelines (Guidelines) help the agencies to uniformly obtain and record reliable information on performance on MTA capital contracts equal to or greater than $250,000.

MTA’s Office of Construction Oversight is responsible for oversight of MTA agencies’ use of the ACE system and for issuing guidelines on ACE. Each agency has the flexibility to create its own policies and procedures, which must adhere to the Guidelines. The Assistant Director of Construction Oversight chairs the ACE Committee, which consists of representatives from each agency. The ACE Committee deliberates on matters of policy governing the ACE system.

To implement the Guidelines, MTA Capital Construction (one of the six MTA agencies) issued “Project Procedure - MTA’s All-Agency Contractor Evaluation System” (Procedures). The Procedures require an interim performance evaluation within six months of the Notice-of-Award, with subsequent evaluations conducted twice a year. This shall continue through completion of the work or default. A summary performance evaluation will follow the last interim evaluation. Beginning August 1, 2017, due dates for the interim evaluations were changed to make them the same six-month period ended March 31 and September 30. Evaluations must be filed in the ACE database within 45 days of the evaluation period end date.

Evaluations consist of two to five categories depending on the type of contract. For instance, architect and engineering post-construction contracts have two categories and construction contracts have five categories. They are: Safety; Quality; Scheduling; Management; and Minority, Women and Disadvantaged Business Enterprise. Each category has several components, which are rated individually. The ACE administrator at each agency is responsible for ensuring that the evaluations are completed, reviewed, approved, and properly recorded.

Key Findings

• MTA Capital Construction did not always follow the Procedures when monitoring and evaluating contractor/consultant performance. As a result, it did not fully benefit from the established processes.
• Our review of 11 contracts found that, generally, the project managers and construction managers who completed the evaluations maintained documentation to support each Marginal and Unsatisfactory rating, as required. However, documentation was not consistently maintained to support projects rated Satisfactory, and, in some cases, either the work performed or the information in the file did not appear to support or contradicted the ratings. Moreover, lack of clarity in the Procedures gave the project teams broad discretion, introducing the risk that contractors are being treated inconsistently.
• Although required, evaluations were not done for two contractors. Both contractors went one year without ACEs, even though they are required to be conducted twice per year. In both situations, the contractors would have received a less-than-satisfactory overall rating, which may have impacted their chances of being awarded future contracts. While MTA Capital Construction stated that this was done in the best interest of the agency, this determination was not documented.
• Letters notifying contractors of their deficiencies were sent late. For one contractor, the letters were sent 114, 296, and 192 days, respectively, after the end of the corresponding evaluation periods. Such delays hinder efforts to improve contractor performance while work is still underway.

Key Recommendations

• Train the MTA Capital Construction ACE evaluators and administrators regarding issues including, but not limited to, adherence to deadlines, compliance with the Procedures, retention of documents that support the ACE ratings, and guidance for rating common situations for ACE components.
• Update the Procedures to implement a clear process on how to handle “N/A” (not applicable) ratings.
• Establish a time frame for when critical documents (e.g., notification letters) should be sent, and identify patterns in component issues and work with contractors while they are on site.
• Require documentation in the procurement file to support the rationale for awarding or rejecting a contract, as required by the Procedures.