Metro Needs To Better Manage Its Railcar Procurement

NSIAD-83-26: Published: Aug 10, 1983. Publicly Released: Aug 10, 1983.

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GAO examined a Washington Metropolitan Area Transit Authority (WMATA) procurement of 294 railcars. The review was conducted because of public and congressional interest in the completion of the rail system, which represents the largest Federal investment for a subway system under construction, and indications that slippages in the railcar delivery schedule are delaying new station openings.

GAO found that the first two railcars in the procurement arrived 22 months behind schedule and that subsequent deliveries were delayed by testing problems at the assembly facility. Initial testing of the first two cars is behind schedule and serious technical problems have been identified. Therefore, testing, delivery, and station opening schedules are in doubt pending WMATA review. GAO found that WMATA increased its acquisition risk by supplementing an original 94-car order with 200 additional cars without the benefit of test and evaluation. WMATA also increased its acquisition risk by agreeing to pay the contractor more than half the contract price of the additional 200 cars before delivery. Quality assurance activities during production and testing of railcars could reduce acquisition risk, but WMATA has neither enforced contract provisions which call for submission of quality assurance plans nor developed a master test plan. Federal oversight of the railcar acquisition has been limited. The Urban Mass Transportation Administration (UMTA) has not complied with requirements for monitoring this procurement and has made funding decisions without sufficient knowledge of WMATA management or the contractor's performance. GAO believes that UMTA needs to strengthen its oversight to adequately assess how Federal funds have been spent and that it needs information more detailed than WMATA has provided to determine whether funding for a remaining 34 railcars is justified.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: UMTA procedures do not provide for onsite visits of third-party contractors. UMTA is in compliance with the provisions of Attachment I of OMB Circular A-102 with respect to the monitoring and reporting of program performance. However, no provision is made for onsite visits to third-party contractors.

    Recommendation: The Secretary of Transportation should direct the UMTA Administrator to make periodic onsite inspections as required by Office of Management and Budget and UMTA operating procedures.

    Agency Affected: Department of Transportation

  2. Status: Closed - Implemented

    Comments: UMTA has expanded the range and depth of information to be provided in progress reports, is reviewing such reports thoroughly and is clarifying visits. UMTA is aware of the status, schedule, and extent of the problems encountered by WMATA in the procurement of railcars. Although UMTA disputed and did not fully implement the recommendations, it has strengthened oversight.

    Recommendation: The Secretary of Transportation should direct the UMTA Administrator to enforce existing reporting requirements to provide more information on the progress and difficulties encountered by the railcar contractor. In connection with the enforcement of these requirements, UMTA also should ensure that it receives sufficient information to evaluate WMATA progress in obtaining quality assurance plans and performing comprehensive tests on railcars.

    Agency Affected: Department of Transportation


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