New York MTA inspector general rails at lax contractor evaluations

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The inspector general of New York’s Metropolitan Transportation Authority has called for an overhaul of contractor performance evaluations, saying capital project managers traditionally rate subpar vendors “satisfactory” in evaluations.

That creates “evaluation inflation” in a system that tracks contractor and consultant performance for capital contracts above $250,000, Carolyn Pokorny said.

She added that fewer than 1% of contractors receive unsatisfactory ratings under the current system.

“There is no use in a pass/fail test where everyone passes,” Pokorny said Wednesday. “The MTA’s contractor evaluation system has been ineffective for a long time.”

"There is no use in a pass-fail test where everyone passes," said MTA Inspector General Carolyn Pokorny.

MTA Chairman Patrick Foye had called for the review in October 2019.

Pokorny said MTA officials have agreed to overhaul the system -- formally called the All-Agency Contractor Evaluation System, or ACE -- as part of a transformation plan the board approved in July 2019.

In a response to the audit, Chief Development Officer Janno Lieber said the MTA plans to implement a new system in the third quarter of 2021.
The plan calls for centralizing construction and development functions across agencies and capital projects lifecycles.

“Transformation provides an opportunity to rethink and, ultimately, remake the ACE system at a time when the MTA is reforming many of its processes,” the report said.

Audit manager Navon Hirshaut and senior investigative attorney Jonathan Estreich led the audit team’s study.

Similar reviews in 2009 and 2015 cited “institutional reluctance” to assign poor reviews. “OIG consistently has expressed skepticism that our contractors have been so laudable,” the new report said.

The state-run MTA, which operates New York City’s subways and buses, two commuter rail lines and several interborough bridges and tunnels, has faced calls in recent years to improve its contracting process, even before the effects of the COVID-19 pandemic pummeled its revenue sources and triggered a financial crisis.

The authority projects deficits of $10 billion through 2021 and $16 billion through 2024. As one of the largest municipal bond issuers, it is already carrying roughly $46 billion of debt including special credits.

Gov. Andrew Cuomo appointed Pokorny to the position a year ago. She previously headed the narcotics and money laundering program at the U.S. Attorney's Office in Brooklyn.

She devised a national strategy for charging the leaders of Mexico's most powerful cocaine cartels, including druglord Joaquin "El Chapo" Guzman. She also led the international investigation that resulted in the conviction of more than 30 leaders of Colombia’s Norte Valle cartel.

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