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METRO SERIES: WMATA’s problems meeting FTA grant, procurement standards continue on

Metro LogoWASHINGTON D.C. – The Washington Metropolitan Area Transit Authority (WMATA) once again finds itself in trouble with the federal government – this time for allegedly dodging Federal Transit Administration (FTA) procurement regulations.

Metro managers spoke to accusations of dodging procurement requirements in 2014. According to the proposed fiscal year (FY) 2018 budget, WMATA was again having difficulty complying with FTA requirements, necessitating Metro to charge $23 million worth of railcars to the operating budget that should have been charged to the capital budget.

According to a March 23, 2017, Metro Board of Directors Finance Committee document titled “Approval of FY2018-2023 Capital Improvement Program and CFA (Capital Funding Agreement) Extension,” that $23 million was spent on parts “necessary for railcar safety and reliability.”

According to the same report, the money was moved not only because some parts were not procured in compliance with federal regulations, but also due to “a lack of available non-federal capital funding.”

Tom Bulger, a member of the Metro board of directors, said he wasn’t aware of this specific move of money, but he was aware of alterations to the procurement process to ensure that Metro had parts to repair things.

“I’m aware of the fact that we were running out of spare parts at a fast clip since 2016 and (Metro) needed to get more supplies in order to keep up with maintenance and the procurement process was accelerated,” he said.

When asked why Metro was running out of parts, Bulger assigned blame to the suppliers.

“Supply. Logistics. The suppliers were behind. We weren’t able to obtain the parts on a schedule that would meet Metro’s requirements,” he said.

Those alterations to the procurement process are part of The Parts Bridging Program, a program started by WMATA to “temporarily purchase parts using non-Federal funds and procurement rules until December 2017,” according to “Approval of One-Year Extension of Parts Bridging Program (PMP) and Update on Parts Procurement Program,” an Oct. 13, 2016 board Administration Committee document. Last October, the enrollment deadline was extended until December 31 of this year and the initial contract end date was extended until June 30, 2023. According to that report, the program was started after a board resolution imposed “heightened standards on parts procurement.”

However, that same report states Metro was also running out of parts.

“In the 2015 Annual Vital Signs Report, the Office of Performance (CPO) noted its findings that the high non­availability rates of revenue service vehicles were attributable in part to inventory part shortages throughout the warehouse system. This shortage of inventory parts was having an adverse effect on safety and on­time service within the transit system,” the report read.

According to that report, “the existing procurement methods used by Metro could not correct this deficiency.”

That document stated a goal of the program is to “restore the volume of spare parts available to perform vehicle maintenance.” The strategies include finding ways for each part purchase to be eligible for reimbursements from the FTA, if necessary, WMATA will apply for a waiver from the FTA of the requirements that prevent a procurement project from being eligible for reimbursement.

FTA spokesman Steven Taubenkibel said the use of local funds is a local decision.

WMATA has been accused of breaking FTA regulations before.

In 2014, a damning FTA audit revealed WMATA’s misuse of grant money, which included WMATA incurring unallowable expenditures and underreporting $42 million in federal expenditures, the report said. WMATA also offered a contract without soliciting the three bids necessary to make that contract competitive. That 2014 audit stated that Metro didn’t have the internal controls to properly manage their grant money, although the final report of the audit included documents that acknowledged Metro’s progress on improving their internal controls.

Carol Kissal, the chief financial officer (CFO) of Metro at the time and the person to whom some of the problem departments reported, has since left the agency.

“It’s all been cleaned up as far as I know,” Bulger said. “It better be.”

“When the changeover came there was a different way for accounting for hours spent and parts and personnel that seems to be working better,” he said about the changes to Metro’s operations after the audit. “And we brought in a new CFO from Chicago.”

Today, FTA still requires Metro to carry out corrective actions for safety and they oversee how WMATA uses federal grant money. According to the FY2017 budget, WMATA’s operating personnel budget decreased by $21.6 million, primarily because WMATA moved expenses for the required safety actions to the Capital Improvement Program. In that same year, that decrease was offset by increases for FTA required safety actions.

Earlier, FTA diverted a large sum of money into safety spending.

According to FTA correspondence with WMATA, FTA diverted $20 million of non-safety spending into safety spending, $10 million away from pressure washing and cosmetic maintenance of the stations and $10 million away from open bankcard and automatic fare collection systems. They then put that money into SafeTrack.

FTA is also unhappy with the local governments and their failure to provide for adequate safety oversight for local transit. According to FTA correspondence with local governments in early 2017, FTA withheld federal grant money from local transit companies, including Metro, until a new safety oversight program could be certified.

“The U.S. Department of Transportation advised the Governors and Mayor that their respective jurisdictions may be subject to the withholding of up to five percent of their FY 2017 Urbanized Area formula funds if they did not collectively establish a State Safety Oversight Program (SSOP) for the rail operations of the Washington Metropolitan Area Transit Authority (Metrorail), certified by FTA, by Feb. 9, 2017,” reads the correspondence. “They have not met that deadline.”

Since that correspondence was sent, the legislatures of Maryland, Virginia and the District of Columbia have passed legislation to create a new safety oversight body. The U.S. Congress passed the same legislation in July, and President Donald Trump signed it into law Aug. 23.

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