Press Release: 2024-11-22

IG Shapiro Calls on MBTA Senior Leadership to Improve Business Management Functions

 

FOR IMMEDIATE RELEASE:

11/21/2024

MEDIA CONTACT

Carrie Kimball, Communications Officer

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Call Carrie Kimball, Communications Officer at 617-722-8894

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Email Carrie Kimball, Communications Officer at carrie.c.kimball@mass.gov

BOSTON, MA — In a report released today, Inspector General Jeffrey S. Shapiro again called for improvements in basic business management functions at the MBTA. The report, MBTA Privatization Review #4: Customer Service Call Center Contracts with Global Contact Services (2017 – 2018) and Exela Technologies (2018 –2024), is the fourth statutory review of an MBTA privatization contract required by Section 196 of Chapter 46 of the Acts of 2015 (Chapter 46).

“I have repeatedly raised concerns about the MBTA’s persistently poor business management practices, which I have asked the MBTA’s leadership to address. This is deeply troubling because the MBTA knew in advance that the OIG is required to review these contracts upon completion,” IG Shapiro said. “It certainly raises questions about the state of hundreds of other routine MBTA procurements and contracts.”

The MBTA outsourced its customer service call center functions from July 2017 to May 2024, using two vendors, Global Contact Services (GCS) and Exela Technologies, Inc. (Exela). The OIG’s Internal Special Audit Unit (ISAU)’s review found that the MBTA achieved only one of the expected four benefits of privatizing call center services due to poor contract management. While privatization did achieve cost savings, it failed to achieve the other goals of improving complaint resolution, access to information, and call center technology.

Further, the ISAU also found that the MBTA misapplied contract penalties and incentives. It failed to collect $42,500 in penalty fees from Exela and overpaid Exela $30,000 in misapplied incentives. The MBTA also did not fully utilize a third-party quality assurance vendor procured to measure quality of services. The $185,000 paid to that vendor was wasteful.

After receiving complaints about Exela’s performance, the MBTA decided to move call center services back in-house. The MBTA Customer Experience Department presented a proposed staffing plan for bringing the call center in-house, which estimated the cost at $2.25 million. The ISAU believes that figure is too low and estimates in-house annual costs of $3.37 million. The OIG is perplexed by this decision, as it is nearly triple the annual cost it paid for privatized services.

“A disregard for the sanctity of public resources has been a recurring theme at the MBTA. While being a proper steward of these public funds will not and would not have closed the financial gap facing the MBTA in the years ahead, it could provide a better sense of confidence to those in the Administration and Legislature who need to make complex financial policy decisions related to the MBTA,” IG Shapiro said. “I implore the current MBTA leadership to exercise strong decisive leadership in managing the remaining contracts dealing with inventory, cash management and automated fare collection that the OIG will be reviewing.”

In 2015, the Legislature, through Chapter 46, temporarily exempted the MBTA from requirements to privatize services. The law requires the OIG to conduct a review of privatized contracts upon their completion. Since October 2023, the OIG has reviewed contracts for absence management, transit ambassadors and police dispatch services, which included a supplemental report. There are three remaining open contracts for which the same review process is required.