CAF Production Slowdown Behind Delays in Delivering New Viewliner Cars to Amtrak

Delivery of new Amtrak Viewliner cars being built by CAF USA have fallen behind schedule due in part to CAF’s decision to unilaterally slow production of the cars and mechanical defects found in the cars, a report from the Amtrak Office of Inspector General has found.

The report said that the delivery delays are likely to continue as well as increase the cost of the project beyond the original budget.

“Through December 2015, the delays have resulted in an estimated $7 million increase in overall project costs and a deferral of about $3.7 million in benefits the company expected to accrue from having the cars in revenue service,” the report said. “Our analysis indicates that cost increases and benefit deferrals will continue as the project falls further behind its original schedule.”

The reduction in production at the CAF factory in Elmira, New York, has meant that delivery of the order of 130 cars will not be completed until March 2017, which is two years beyond the original due date. Even that due date is subject to further slippage.

Thus far only baggage cars have been completed and placed into revenue service. Among the key findings of the inspector general’s report are:

• Weaknesses occurred in CAF’s process for identifying a variety of defects in the baggage cars.
• Quality issues cropped up with the initial construction of the diner, baggage dormitory and sleeping cars, which are more technically difficult to produce than the baggage cars.
• Amtrak has experienced project management challenges in addressing these issues. While actions taken by the mechanical department and procurement office resulted in improvements in the daily management of the project, other opportunities exist to improve project management and further mitigate risk by clarifying project accountability, enforcing contract terms and developing a risk mitigation plan.

The report said that Amtrak management has agreed with the recommendations made by the inspector general to address the problems.

Amtrak signed a contract with CAF in 2010 to produce the cars, which were intended to replace equipment now assigned to long-distance trains.

Although most of the Viewliner order was intended for eastern single-level trains, the baggage cars have been assigned to trains throughout the country. The cars were originally scheduled to be completed in November 2014.

The budget for the new equipment was $343 million, which included $300 million to purchase the cars, $29 million for spare parts and $14 million in project management costs.

Amtrak had through December spent sent about $195 million on the project.

CAF and Amtrak agreed in June 2014 to change the order to include 70 baggage cars, 25 diners, 10 baggage-dormitory cars and 25 sleepers. The last cars in the order were given a new delivery due date of no later than April 2016.

A revised timetable negotiated in December 2015 and subject to re-negotiation this year has pushed the final delivery date to March 2017.

For its part, CAF contends that it will lose $41 million on the contract due to having to restructure a contract with a key supplier that is having financial difficulties. The complete report can be found at:

Click to access CAF%20Final%20Report%2020160201.pdf

Tags: Amtrak, Amtrak Office of Inspector General, Amtrak Viewliners, CAF USA