Port Authority of New York and New Jersey

Contracting for Services

The Port Authority operates bridges, tunnels, airports, marine ports, office complexes and industrial parks in the metropolitan New York City area. We examined the contracting practices of the Port Authority and found that competitive bidding procedures were generally used to select contractors. We also determined that an adequate system had been established for monitoring service contract payments and performance.

However, we concluded that the Port Authority could save millions of dollars annually by revising certain contracting practices and improving the administration of service contracts. For example, we noted that service contracts lasted an average of about five years. If these contracts were rebid more frequently, we believethe cost of the contracts would be significantly reduced. When we examined the costs of eleven service contracts that werere bid,we found that the costs of ten of the contracts were reduced by an average of 10 percent and the cost of the eleventh contract was reduced by almost 60 percent. 94-S-4