You can waste money in the public sector. You can waste money via privatization. As I mentioned a couple of days ago, putting public projects out to bid for private contractors is not a cure-all, nor a guaranteed money-saver, nor a guarantee of better quality. Our decades of experience with the fattened military-industrial complex ought to tell you that.
Public or private, results are going to depend on management and oversight. And if you bid out the work, that means you need to have expertise in contract structuring as well. Once the contract is signed, you’re pretty much locked in. The state is particularly vulnerable when there are only one or two contractors that can actually do the work, or if the state has limited insight into the contractor’s track record (hah) of similar work.
One gets the strong impression that in many respects, the MBTA control board is still flying blind:
The MBTA’S Fiscal and Management Control Board reacted with alarm earlier this week to reports of quality assurance problems on a $459 million contract with an Italian firm to install a federally mandated system to prevent commuter rail train collisions. Joe Aiello, the chairman of the board, called the reports “really disturbing” and fellow board member Brian Lang said he was sick and tired of hearing about contractors “running amok.” He even asked MBTA staff to start keeping track of how much time and resources are spent fixing “screw-ups” by private contractors.
Problems have also surfaced with a contractor given a 4.5-year, $38.5 million contract in July 2016 to consolidate three call centers for the MBTA’s paratransit service. Two of the call centers have been combined by Global Contract Services, but consolidation of the third has been delayed twice because of fears that customer service, which suffered when the merger process first began, would deteriorate further. It now appears millions of dollars in expected savings from the call center consolidation are unlikely to materialize and it’s unclear when the process will get back on track.
… The mere fact that the T had to hire a consultant, Accenture, to assess Global’s operations illustrates how badly the contracting process had gone off track. Accenture’s $171,000 report, presented privately to T officials on August 11, indicated Global was woefully unprepared for the job it was hired to do.
I’ll add, as I always do, that we have a state auditor who has done practically nothing on T contracts. Like banks to Jesse James, that’s where the money is, and I have to wonder about the lack of action from Suzanne Bump’s office. Is it lack of expertise, human capital, or interest that keeps the state’s auditor away from the T?
You really have to ask yourself if this is better than simply hiring people as state employees, with direct control and accountability by people with some political exposure. We should keep this in mind as we hear about the T’s attempts to partially-privatize bus maintenance operations. It’s all about accountability, public or private. If you couldn’t run an in-house operation efficiently, I don’t know why one would farm out the operation to a private contractor and necessarily expect better results.
Those of us who have sustained ourselves as independent contractors for any significant length of time learn some awkward things about our clients that seem relevant here:
1. Managing contractors is even more difficult than managing employees.
2. Clients generally turn to contractors because they are woefully bad at managing their employees. Clients hire contractors for must-have projects after their internal teams have already failed. Those projects seldom seldom succeed (although the contractors do very well).
3. Outside contractors ALWAYS end up as “expenses” on a balance sheet, no matter how successful they are and how well they do their job. Clients ALWAYS minimize expenses, because bookkeepers and accountants are much better at documenting cost than value.
Privatization of government services is a lie. It is a self-serving lie, promoted by the recipients of the resulting revenue stream.
The staggering problems we face at the MBTA are the result of decades of under-funding and under-investment. The notion that those problems will be solved by more budget-cutting is patent nonsense.
Mark L. Bail says
In my public sector world, I’ve dealt with some good contractors and project managers and some not so good. The unscrupulous ones underbid enough or include loopholes that escape our people’s notice and then put in change orders.
My experience with the MSBA and our current project managers and architect have not been this way. I can’t speak for other school projects in other communities, but I’m guessing the MSBA oversight, as annoying and costly as it can sometimes be, is good in the long run. Subcontractors are all pre-approved before bidding. The project managers and architects and general contractors tend to have a track record with the MSBA and an incentive not to burn their bridges. Our general contractor brought its last two school building projects in on budget or below.
In education, contractors are an easy way to make it look like a school or school system is doing something constructive. If the contractor fails, the blame falls there.
Trickle up says
Another way to waste money: Pound-foolish re-engineering that eviscerates the services to be provide.
For the T, look no further than the Green Line Extension. Originally the stops on the line were to have inclosable stations, allowing riders to pay before boarding.
To save money, these are now like bus stops.
Expect inferior, pokey service as people queue up to interact with the fare-collection mechanism at every stop.
Since now the idea of a roof for these stops is also in jeopardy, expect people to queue up in the rain. It will be a miserable experience that discourages ridership.
For every major public investment like this, there is a sweet spot that delivers the biggest bang per buck. Knee-jerk cuts leach the value out of these projects, prohibiting excellence and courting outright failure.
Bump always seems to prioritize investigating the little guy over investigating the big guys. Chasing after phantom EBT fraud cases rather than the glaring issues in the T, BRA and other major agencies.
Other than Healey, all our statewides are doing a fairly lousy job. Goldberg hasn’t set up the marijuana markets like she was supposed to and doesn’t seem to be doing all that much. I’ve long thought those offices should be merged and appointed rather than elected, but I know I’m in the minority here.
Mark L. Bail says
I agree with “seems,” but I think the auditor’s office audits entire departments, and some items are more newsworthy than others.
I found several auditor reports related to the MBTA by searching mass.gov: https://www.mass.gov/search?q=mbta%20audit%20bump#gsc.tab=0&gsc.q=mbta%20audit%20bump&gsc.page=1
You are, sadly, absolutely correct. That train left the station in 2006 when the MBTA replaced its antiquated token system with a brand-new and very expensive new system that solved very few of the problems. Most importantly, that new system completely ignored the experience of cities across Europe that had already solved this issue.
We still, today, embrace an obsolete “scarcity” paradigm for fare collection — if you don’t pay, you’re not supposed to ride. We treat “fare evasion” as a criminal offense. We inconvenience the great majority of riders who happily pay their way in order to punish the occasional few who do not, will not, or cannot pay.
Bus, subway, and commuter rail services across Germany and Austria face the same problem. Few of their stops are enclosed. They carry far more people and do with a far less intrusive approach.
What do they do?
1. Each rider is expected to have a paper receipt for each trip.
2. Each bus and subway or train car has an automated receipt printer in the middle of the car (somewhat similar to self-service kiosks now at airports).
3. The automated receipt printer takes cash, credit cards, or previously issued “smart cards” (like the Charlie Card)
4. Passengers board and exit freely through all doors at each stop. The driver/engineer is not part of the fare collection process at all.
5. Inspectors board conveyances at random intervals, and ask each rider to show their receipt.
6. Each rider who does not have a receipt is charged a significantly higher price for the ride. SIGNIFICANTLY. There is no civil or criminal penalty, it just costs more.
7. Inspectors, inspections, and penalty fares are adjusted pretty much real time to optimize whatever mix of concerns local authorities and schedulers have.
People who occasionally take a trolley from one part of Berlin to another (for a lunch date, for example) often don’t bother to pay and often ride free. Nobody cares. People who ride frequently (commuters, students going to and from school, etc) inevitably pay the penalty and end up buying the receipts to save money.
We could have done this a decade ago when we replaced the fare system. We could do it now. It solves the problems, and does so in a way that enhances the rider experience rather than maintaining a hostile pay-up-or-else relationship between the MBTA and its riders.
In my view, it all starts with a government that values the rider experience, and voters (and a political system) that holds that government accountable for doing so.
Amsterdam has a similar system and my brother has been calling for the T to do that for years. I think we should switch to free buses and raise the fare on trains to adjust. Buses are primarily use during by the poor and elderly, and fare collection really can slow them down. A receipt system could be piloted on buses where they would benefit most.
We also should consider bus only lanes on the highways for BRTs.
By trains I hope you don’t mean commuter rail. That’s already way too expensive as it is.
I think these two concepts should be unlinked.
Fare collection slows down buses and subways. I strongly suspect that we’d see net fare revenue increase even with no increase in fares because:
1. More people would ride
2. More riders would pay
3. Fare evaders would pay more
I’m not sure that free buses are the answer (tragedy of the commons and all that). I’m not opposed to the concept, I just think it can and should be separated from the question of how we more effectively collect whatever fares are in place.
I agree with Christopher that we should not increase commuter rail fares, they are already high. Of the three (commuter rail, subway, and buses), commuter rail is the least impacted by this issue.
I remind us that this specific thread is talking about the GLX. The Green Line desperately needs this, and is used by the poor and the elderly.
Oh, and subway fares are already higher than bus fares.
I really think we’d see an increase in net revenue from this change.
Two co-workers split a lyft this morning since the bus was FUBAR in JP. We stopped taking the green line to Trader Joe’s since walking there is almost as fast and more enjoyable.
I will say the 19 is a great bus route and fairly reliable (when it’s not full of snarky Latin brats…)
I hope by Latin you mean Boston Latin students, otherwise – ouch!
To clarify I definitely meant Boston Latin students. They take that bus to get to their school. I have never used derogatory language like that, and see how it could be misinterpreted. I was being unfair to Boston Latin students too. The underlying thing is, we need to fix the T.
@ fixing the T:
I need to say, again, that while Mike Dukakis was governor, the Green Line was FAR BETTER than it is today. While Mike Dukakis was governor, you and your colleagues could have taken the Green Line directly from JP, changed at Symphony, and come back out the C line to Trader Joes.
Mike Dukakis rode the Green Line every day. No governor since, from either party, has done that.
It is no accident that our public transportation sucks. The people who control it don’t use it.