Boston's commuter rail agency pays the highest labor rates and has the lowest revenue to cost ratio (37%) of any major U.S. transit operation. Yet, the Massachusetts Bay Transportation Authority (MBTA) rejected $119 million in maintenance outsourcing savings in May 2000 by canceling its 5-year contract with Bay State Transit Services (BSTS). Under intense pressure from the U.S. Department of Transportation (US DOT), Amtrak, its unions, and 14-term South Boston Congressman Joe Moakley, MBTA recently renewed with Amtrak on a sole-source basis for another 3 years, starting July 1, 2000. For years, MBTA and several other transit agencies had been encouraged by the Federal Transit Administration (FTA) to lower costs by unbundling services and outsourcing the work. However, FTA's policy was reversed in the fall of 1999 by its parent agency, US DOT, which threatened to withhold MBTA's transit capital grants unless it guaranteed life-time employment to all of Amtrak's maintenance workers. BSTS was awarded a 5-year maintenance contract in September 1999 but was never allowed to begin work, partly because Amtrak's employees refused to negotiate terms with BSTS, which offered a signing bonus and higher benefits, plus membership in the Laborers' International Union. In addition to foregoing the $119 million contract savings, MBTA may be subject to treble damages for BSTS's lost profits over 5 years and other potential business lost because of MBTA's alleged breach, plus attorney's fees.

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  • Corporate Authors:

    Public Works Financing

    147 Elmer Street
    Westfield, NJ  United States  07090-2433
  • Publication Date: 2000-6


  • English

Media Info

  • Pagination: p. 1-2
  • Serial:

Subject/Index Terms

Filing Info

  • Accession Number: 00795761
  • Record Type: Publication
  • Files: TRIS
  • Created Date: Jul 28 2000 12:00AM