Audit Report of the Metropolitan Transportation Authority’s Oversight of the Access-A-Ride Program

Executive Summary

The Americans with Disabilities Act (ADA) of 1990 requires public transportation authorities to provide a paratransit system for passengers with disabilities who are unable to use public bus or subway service.  The agreement between New York City and the Metropolitan Transportation Authority (MTA) New York City Transit authorizes the MTA’s Paratransit Division (Paratransit) to administer and operate the City’s paratransit service, known as Access-A-Ride (AAR).  AAR offers shared ride, door-to-door paratransit service in the City and limited parts of Nassau and Westchester County 24 hours a day, seven days a week, including holidays.

AAR primarily delivers service through a network of Dedicated Service Contractors (DSCs) and Broker Car Service Contractors (BCSCs).  During Calendar Year 2015, Paratransit paid $321.4 million to DSCs and BCSCs for a total of 6 million combined trips.

DSCs use Paratransit-owned vehicles (specially equipped buses and cars) to perform AAR trips and are solely dedicated to the provision of paratransit service.  Although they do not own the vehicles, DSCs are responsible for maintaining these vehicles and for providing drivers, dispatchers, and all other personnel necessary to manage and perform AAR trips.  DSCs receive payments for the number of hours that vehicles are in AAR service, overhead costs, and vehicle maintenance costs, and are reimbursed for items such as tolls and vehicle insurance and registration.

BCSCs provide transportation services to ambulatory passengers through a network of subcontracted livery and black car service providers.  BCSCs’ payments are dependent on zone-based rates for each trip performed.

The contracts for Dedicated Service and Broker Car Service both specify minimum contractor-performance standards for reliable and timely service and provide remedies to the Paratransit in the event a contractor fails to meet these performance standards.  As a means of monitoring contract performance, both Dedicated Service and Broker Car Service contracts require the installation and use of Global Positioning System (GPS) devices in all vehicles used in the AAR system.  The GPS devices should enable Paratransit to determine whether contractors meet minimum performance standards related to reliable and timely service and to ensure that payment amounts are correct.  For DSCs, Paratransit used a GPS System known as Automatic Vehicle Location Monitoring (AVLM).

Audit Findings and Conclusions

Paratransit failed to effectively monitor AAR contractors’ compliance with contract requirements for reliable and timely customer service and accurate reporting of pick-up and drop-off times.  As a result, customers suffered from unreliable and unsatisfactory service.  Further, Paratransit overpaid its contracted vendors, made additional questionable payments and failed to effectively manage the contracts to ensure better service and to obtain cost savings.

We specifically found that Paratransit did not ensure that contractually-mandated GPS devices were installed, operating properly, and activated when required in all contractor-operated vehicles.  Moreover, even when GPS data was available, in most cases Paratransit did not use it to evaluate contractor performance or to determine whether the contractors’ invoiced payment amounts were correct.  Instead, Paratransit relied primarily on contractors’ self-reported trip and vehicle data, which was often inaccurate and inconsistent with or unsupported by GPS data.  Consequently, Paratransit did not accurately assess whether DSCs and BCSCs met minimum performance standards for reliable and timely service and made overpayments and questionable payments to contractors.  In addition, Paratransit failed to decrease the number of trips assigned to a BCSC that consistently failed to meet required customer service standards.

Paratransit also missed significant cost savings opportunities by failing to direct DSCs to implement service efficiencies that were available as of 2009.  These efficiencies would have enabled Paratransit to negotiate lower pricing for Dedicated Service contracts currently valued at $4.2 billion.  Finally, Paratransit also did not ensure that Reservation Agents offered customers the most cost-effective travel options.

Audit Recommendations

To address these issues, we make 21 recommendations including that Paratransit should:

• Ensure that all DSCs’ vehicles are equipped with AVLM and that AVLM is properly functioning and activated when in AAR service.
• Direct DSCs to stop recording “reconciled” times in ADEPT except upon system failure.
• Use AVLM data to evaluate DSC performance; determine whether they met minimum no show and on time performance standards; calculate liquidated damages, credits for performance deficiencies, and incentive payments; and calculate contract component payments including Vehicle Service Hours.
• Take substantive measures against DSCs that inaccurately report trip and vehicle data, including but not limited to assessing higher penalties, reducing trip volumes, not renewing contracts and terminating contracts.
• Consider all remedies available for breach of material Broker Car Service Contract provisions up to and including termination.
• Consider seeking new BCSCs and/or alternatives to the existing Broker Car Service model.
• Negotiate corresponding reductions in Dedicated Service Contract prices based on service and management efficiencies including but not limited to reduced personnel costs and recordkeeping requirements.
• Immediately issue written notifications to all Reservation Agents to remind them of the Trip Offering Policy.

 Agency Response

On April 29, 2016, we requested that Paratransit formally respond to the audit’s findings and recommendations by May 13, 2016.  However, Paratransit did not provide comments on this report.