Purpose

We audited the Metropolitan Transportation Authority to determine whether it procures buses in a manner which results in the best value for the lowest cost. The audit covered bus purchases from January 1, 2008 through June 30, 2011.

Background

The Metropolitan Transportation Authority (MTA) is a public benefit corporation providing transportation services in and around the New York City metropolitan area. The MTA has seven operating constituent agencies; two of them, MTA Bus and New York City Transit, provide bus service. In 2008, the MTA established its Regional Bus Operations to consolidate the maintenance and transportation operations into one organization. Regional Bus Operations maintains a fleet of about 5,585 buses operating out of 28 depots and serviced at two maintenance facilities. Officials explained that they try to replace buses on a 12-year cycle but were unable to do so due to the lack of Capital Program funding. As a result, some buses have been in use for longer than 12 years. Several units participate in the bus procurement process, including Operations Planning, Bus Maintenance, Procurement and Contracts. The MTA purchased 2,278 buses for $1,148,699,434 during the period of January 1, 2008 to June 2011. Federal money was not used for these purchases.

Key Findings

• MTA did not apply for federal State of Good Repair discretionary grant monies for certain bus purchases from May 2010 to June 2011 and, as result, MTA officials potentially missed an opportunity to obtain $256 million of grant monies.
• MTA did not follow procedures by failing to notify the MTA Board when two contracts were awarded prior to a fair and reasonable determination.
• MTA officials could not justify buying 90 buses for each of five test fleets totaling about $228 million.

Key Recommendations

• Require Regional Bus Operations executive management to identify and apply for all available funding sources to maximize money available to purchase buses.
• Establish pass/fail criteria for all test fleets prior to procurement. Reassess the minimum number of buses required to be procured to permit an effective test evaluation of new buses.