The East Side Access project, not often in the news, made a headline for all the wrong reasons this morning. As William K. Rashbaum of The Times reports, New York Dirt Contracting, one of the project’s subcontractors that has earned over $2 million hauling away dirt, has been barred from doing business by the city’s Business Integrity Commission in because of the company’s close ties to organized crime.
In the short run, this development, says the MTA, won’t impact the timeline for the East Side Access tunnel. Another company will take its place in June. But for the MTA, this embarrassing development, in the words of Rashbaum, “underscores what some critics say is the authority’s persistent failure, despite its budget problems, to aggressively vet subcontractors in an industry where corruption, fraud and abuse are widespread.”
Referencing a February MTA inspector general report, Rushbaum writes:
In recent years, a steady stream of troubled companies have done work for the authority, which oversees the city subways; the commuter rail lines to Long Island, the counties north of the city and Connecticut; and many of the city’s bridges and tunnels.
The authority’s inspector general, Barry L. Kluger, has been lobbying to standardize the vetting process for contractors and subcontractors since 2008, when a moving company rejected by one of the authority’s constituent agencies because its owner had been convicted of racketeering was hired by another.
That case, Mr. Kluger said in a report last year, “brought to light certain systemic inconsistencies among M.T.A. agencies involving the depth of their due diligence reviews.” And, noting that well over 50 percent of the construction work for the authority was done by subcontractors, he said in an interview on Wednesday, “More attention must be given to the vetting of subcontractors in terms of both integrity and their performance on prior jobs.”
For its part, the MTA defended its business practices. It asks companies to respond to a questionnaire and cross-checks responses accordingly. However, as The Times notes, these companies are not asked to respond under oath, and in this instance, MTA Capital Construction had to make company determinations based on what amounts to an honor system. In this instance, the process failed.
Although this development concerns a subcontractor, I’ve often wondered about the MTA’s relationships with its contractors and the legislative mandate that the authority accept the lowest bids on all projects open to competitive bidding. Over the last few years, we’ve seen numerous instances of construction projects. We’ve seen the Second Ave. Subway fall four years behind its initial schedule. We’ve seen engineering errors at South Ferry delay the opening and later lead to leaky walls. We’ve seen costs raise across nearly every Capital Construction project, and we’ve seen other big-ticket items — the camera surveillance system and a plan to wire six stations for cell service — falter.
From a cost perspective, the MTA runs into more problems choosing the lowest bids than it would if it were able to select the most reliable company. We would probably see fewer missed deadlines, better quality of work and more efficient spending. Currently, MTA CEO and Chair Jay Walder is overhauling how the MTA does business, but in this instance, he would need legislative approval to do so. It probably won’t be forthcoming, but the MTA should explore how better to work with its contractors and how better to vet its subcontractors. If anything, the public would have more faith in the work.
