MBTA Issues Annual Report on Flexible Contracting Authority

BOSTON – As required by statute, the MBTA has filed its annual report to the legislature regarding the waiver from Provisions of Sections 52-55 of Chapter 7 of Massachusetts General Laws for the use of flexible contracting, commonly known as the Pacheco Law.

The bipartisan waiver granted by the legislature came as a result of the collapse of the MBTA two winters ago, forcing attention on the MBTA’s problems and will to resolve them. The report filed with the legislature fulfills the requirement that the MBTA annually update the General Court on the use and effectiveness of the flexible contracting waiver.

Use of the waiver has come only in carefully selected instances after thorough review and public discussion, leading to significant cost savings and more efficient operations. Because of the waiver, the MBTA can now issue Requests for Information and Requests for Proposals for certain in-house operations or services that could lend themselves to contracts with private partners.

The waiver has also allowed the MBTA and its unions to examine internal processes and operations in ways that had rarely happened before, including a landmark agreement reached in 2016 with Carmen’s Union Local 589 to protect certain jobs of Local 589 members while enabling the T to obtain substantial savings on operating costs and, more importantly, to secure work rule and other reforms.

Applications of the waiver cited in the report include:

Cash collection and processing: Due to contracting out cash operations, MBTA money is collected, processed, and deposited more efficiently and cost-effectively with time from collection to deposit reduced by 80 percent and monthly costs dropping from nearly $1 million to under $300,000.
Warehouse and logistics operations: MBTA mechanics now receive the parts they need more quickly with contractor Mancon having achieved a 99 percent on-time delivery time and reducing the time it takes to respond and deliver parts by 85 percent to an average of ten hours, even while fully loaded costs have dropped by more than forty percent.
Overtime and absence management: Contracting for a Third Party Administrator has reduced MBTA overtime expenses and absenteeism. Better leave management has led to better performance for customers with trips cancelled because of operator FMLA absences declining 18 percent in FY17 versus FY16.
Customer service call center: A contract signed in June 2017 will provide the MBTA with a state-of-the-art call center designed to improve customer experience and reduce call volume while cutting costs by more than half over five years.
Customer service agents program: This contract, currently being phased in, will deliver improved customer service with “Transit Ambassadors” in stations using smart tablets to more quickly provide real-time information to customers and report systems issues to MBTA operations. Once fully implemented by FY19, the contract is expected to annually save the MBTA $4 million.

While these are the most advanced contracts implemented under the waiver, other efforts are currently underway, including current review of a contract to shift operation of Transit Police dispatch to a professional civilian staff in order to return about fifteen transit officers to the streets, the review of a team to implement a new automated fare collection system that will enable customers to pay fares using mobile phones and credit cards while allowing the MBTA to restructure its fares to more equitable and affordable, and the issuing of Requests for Proposals in July 2017 to provide bus maintenance of MBTA-operated buses at up to three (Arborway, Quincy, and Lynn) of the MBTA’s bus facilities.

View the full report.

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