MTA Chairman Joseph Lhota Pledges to Make Major Changes to Project Delivery

At an industry breakfast on Wednesday, August 8th, MTA Chairman Lhota announced that he would focus on making a series of “practical changes” to the way the MTA procures and builds its capital projects.

“There is no reason why our projects here in New York have to be more expensive than projects elsewhere,” he said, citing “inefficiency, bureaucracy, inaccuracy, and lack of accountability on the part of the Authority in building a number of its major projects, something that not only bogged down projects, but added time and cost to the bottom line.

The changes he proposed were all based on constructive recommendations that the GCA has presented to the MTA not only over the past year, but as part of a number of working groups over the past few years.

Lhota committed to looking at how to better scope projects up front, and how to better allocate risk, which he said had been shifted too heavily on the backs of contractors and therefore drove up their project costs.  He also pledged to offer fairer contract terms, reduce customization, and reduce the number of approvals for change orders by 80%, from 17 today, to 4. Lhota also acknowledged that liquidity is critically important for the contracting community and said the MTA will start allowing partial payment for invoices as part of a larger effort to make sure that contractors who do the work get paid in a timely fashion.

Following the announcement, GCA Immediate Past President Michael Viggiano served on a panel that discussed the new approaches.  “Unfortunately, leadership is a little transient.  It is based on the political cycle, and a lot of the workforce in the MTA has been there for a very long time,” he said.  “As contractors, we are…worried that they are going to look at this as another leadership initiative, a flavor of the week, and nothing is really going to change.”

The concern was reinforced in a release by GCA Executive Director, Denise Richardson, who said: “MTA Chairman Lhota’s announcement today about making ‘practical changes’ to the way the MTA builds projects are all positive developments that the General Contractors Association of NY (GCA) has been talking to the MTA about since 2007.  Balancing risk, fairer contract terms, reducing customization and change orders must be embraced at every level of the organization, not just at the leadership level. We trust that Chairman Lhota will make sure that everyone up – and down – the chain gets the message, loud and clear – the MTA is changing the way it does business.”