The MBTA will eliminate it’s maintenance part warehouse system, and with it around twenty union jobs, as the struggling state agency privatizes more and more departments outside of its core transit functions.
The T’s Fiscal and Management Control Board made the widely expected move Monday to grant its warehousing business to a private contractor, awarding a $28.4 million contract to the Virginia company Mancon. T officials said the move could save $64.2 million over the life of the five year contract.
“Let’s be clear. The MBTA is in the business of moving people, not parts,” general manager Brian Shortsleeve said Monday. The warehouse and stockrooms supply the T’s various repair yards and maintenance facilities with vehicle parts.
“What this is about is fixing the T and making it work better,” Shortsleeve said this past June when first floating the idea of eliminating the T’s own warehouse operation. “Warehouse-inventory logistics are not a core function of the MBTA... these are things the private sector does very well.”
After meeting on the issue in June, the MBTA’s board instructed staff to further analyze the warehouse system to determine if changes could be made to the operation to make it work as efficiently and as cheaply as a private company’s offer, while maintaining a unionized staff. In the end, the board voted unanimously to move to a private company.
The MBTA’s 15 stockroom locations employ over 30 workers who store and organize over 35,000 machine and vehicle parts for the transit system’s subways, streetcars and buses, according to the Carmen’s union. At the June meeting, Carmen’s president James O’Brien argued that years of mismanagement by MBTA executives contributed to the poor performance of the warehouse operation.
MBTA chief procurement officer Gerard Polcari said the privatization is all about adding operational efficiencies to the system.
“We do save some money, but getting the right parts, at the right time, to the right people is really more critical than anything else here. And that’s what we’re trying to do here,” Polcari said.
In a report accompanying the June discussion, MBTA managers called the Ts central warehouse in Everett poorly maintained and very inefficient compared to modern warehousing practises. The T pointed out poor performance in getting inventory out to repair stations, tracking inventory, productivity and overall discipline.
Democrats in the Legislature voted in 2015 to give Baker and his hand-picked Fiscal and Management Control Board a free hand to skip state approvals for outsourcing portions of the MBTA. The board has already acted to eliminate the in-house cash collection system that employed TK union workers, putting many of the employees back on bus driver routes.
Managers want to close the Everett stockroom and outsource the operation to an experienced third party vendor. The T’s report, based on an audit by TK, said the agency will save $22 million within three years by making the switch.
The Carmen’s union and MBTA management avoided a major clash last month when they agreed on a contract extension for vehicle operators. The new agreement saw the Carmen concede expected raises in return for more flexible scheduling options and guarantees that operator positions would not be outsourced. Under the agreement, the 23 workers out of a job because of the warehouse closure will have 20 months to find new positions within the MBTA.
The MBTA is expected to face a budget gap of over $80 million next fiscal year. The Legislature annually appropriates more than that amount in special funding, keeping the T in the black. Money left over from the Legislative appropriation has been spent on short-term infrastructure projects to help chip away at the estimated $7 billion maintenance backlog for the system.
