Rolling Stock Programs Department – Selected Aspects of the M9 Rail Car Project Management

Issued Date
March 25, 2022
Agency/Authority
Metropolitan Transportation Authority - Long Island Rail Road

Objective

To determine whether the Long Island Rail Road’s Rolling Stock Programs Department has managed the M9 contract so that the contractor delivers the cars on time, within the required scope and quality, and within budget. The audit covered the period from September 2013 to November 2020.

About the Program

The Metropolitan Transportation Authority (MTA) is a State public authority created pursuant to Article 5, Title 11 of the Public Authorities Law. One of six related MTA agencies, the Long Island Rail Road (LIRR) is one of the oldest commuter railroads still in operation, with a charter dating back to the 1830s. LIRR maintains over 700 miles of track, serves 124 stations, and transported more than 300,000 weekday commuters across its system before the COVID-19 pandemic. It remains an important transportation artery for the New York region.

On September 18, 2013, LIRR awarded a contract to procure new M9 train cars. The procurement is managed by LIRR’s Rolling Stock Programs Department’s nine employees, with the assistance of subject matter experts representing LIRR’s operating departments. The contract includes a firm initial base order of 92 cars with options for an additional 584 M9 cars for LIRR and/or Metro-North Railroad. (Metro-North Railroad subsequently dropped out of the contract.) In July 2017, LIRR exercised its first option for an additional 110 cars for a total of 202 LIRR M9 cars. The cars will replace the M3 cars and expand the fleet in preparation for service into Grand Central Terminal via the East Side Access. The cars are assembled at the contractor’s plant in Lincoln, Nebraska with final assembly in Yonkers, New York. The first M9 cars entered revenue service on September 11, 2019. The project is funded by MTA’s capital program.

Key Findings

We found that LIRR:

  • Was behind schedule for delivery of the initial base order of 92 cars by almost 3 years and over budget by $8.9 million.
  • Did not assess or collect liquidated damages of $5.5 million from the contractor for delays as of September 2020.
  • Accepted 62 rail cars, as of July 31, 2020, with deficiencies under a Conditional Acceptance (CA) agreement. Further, the deficiencies were not corrected timely.

Key Recommendations

  • Account for the MTA Capital Program funds as originally budgeted.
  • Create a formal procedure to periodically assess and collect the liquidated damages.
  • Prioritize the correction of all outstanding items on CA cars so that they can be finally accepted.

Carmen Maldonado

State Government Accountability Contact Information:
Audit Director: Carmen Maldonado
Phone: (212) 417-5200; Email: [email protected]
Address: Office of the State Comptroller; Division of State Government Accountability; 110 State Street, 11th Floor; Albany, NY 12236