The Download: The T’s contract problem

The Boston Globe yesterday wrote another chapter in the ongoing saga that chronicles failures at the MBTA, this time regarding the T’s relationship to Mass Bay Commuter Rail, the company that manages the commuter rail that serves 134,000 people daily. A three-month Globe investigation found that the T approved a number of contract changes that essentially rewarded the company for running trains on time and minimized financial penalties when it did not. The result: “millions in bonuses for “on-time performance’ even when the system’s overall service is lousy.”

According to the Globe, the contract changes appear to have skirted a rule requiring MBTA board approval for changes costing more than $500,000.

The T has made similar costly contract changes before. As Jack Sullivan first reported, officials apparently approved a warranty change in 1995 that allowed Rocla, the company from which the T bought faulty concrete railroad ties, to be held liable for the ties for a shorter term than originally negotiated. The dispute over the railroad ties is in court and MBTA lawyers claimed that the official who allegedly approved the warranty changes wasn’t authorized to do so because the associated cost would have required board approval. The judge in the case did not appear to buy the argument.

The T is now in the process of replacing all of the defective concrete ties with wooden ties on the Old Colony Line, at a cost of $90 million. While the monetary value of the warranty is still in dispute, Rocla could have been liable for the replacement of the faulty ties under the original warranty.

In both cases, there is no guarantee a review of a contract or warranty change at the MBTA board level would have changed anything, but a higher level of scrutiny might have stopped a small mistake from ballooning into a much larger one.

                                                                                                                                                              –CHRISTINA PRIGNANO  


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