Posts Tagged ‘Amtrak Office of Inspector General’

Settlement Reached in Amtrak Bid Rigging Case

April 29, 2019

A settlement has been reached in a case involving three companies that were alleged to have engaged in bid rigging and inflated invoices for work performed by Amtrak.

The $466,500 settlement was announced by the U.S. Attorney for the Eastern District of Pennsylvania and involved a Michigan-based electric company and two construction firms.

The bid rigging had been discovered by the Amtrak Office of Inspector General.

The firms involved were Tooles Contracting Group LLC, Commercial Contracting Corp., G&B Electric

In a news release, the U.S. Attorney’s office said those companies along with G&B President James Gierlach agreed to pay the settlement to resolve allegations that Gierlach, G&B Electric and Tooles engaged in bid rigging and inflating invoices for work performed for Amtrak

The work involved improving accessibility at Amtrak stations in Hammond, Louisiana; Beaumont and Alpine, Texas; and Little Rock, Arkansas.

OIG Says Amtrak Needs Better Office Space Use

April 3, 2019

Amtrak’s inspector general has found that the passenger carrier has spent at least $23.2 million on unnecessary leases of office space, and could have made at least $6.8 million in additional revenue through better management of its property.

The report by the Amtrak Office of the Inspector General concluded that the carrier needs better data on its office space, citing as an example two buildings in New York City where the Amtrak offices had vacancy rates over 50 percent.

“With better data, we estimate that the company could have avoided up to $2.8 million in lease costs on one of the buildings through December 2020,” the report said.

Amtrak is spending $4.9 million for excess office space in Washington and $3.1 million in Boston.

The OIG also concluded that Amtrak needs a formal process for making decisions about leased office space.

At present, Amtrak’s facilities group seeks information from departments on the need for lease extensions, but those departments are not required to develop a business case or other formal analyses to support their requests.

The OIG said this resulted in costly lease extensions that were more than Amtrak needed as well as missed opportunities to generate revenues.

The report said that the Club Acela lounge in Boston is more than twice the size needed and the carrier will pay at least $2.8 million for unneeded space over the life of its lease.

Amtrak also needs to create a long-term facility plan to enable it to ensure that its office space fits its long-term goals.

The OIG gave an example of the planned construction for $9.6 million of a temporary police building at Washington Union Station “without fully assessing potentially less costly options, such as accommodating some police functions in a nearby building it already owns.”

Amtrak IG Report Faults Drug Use Detection

March 17, 2019

The Amtrak Inspector General has found fault with the carrier’s approach to identifying and addressing drug and alcohol use among its employees.

The Amtrak IG said in a recently released report that the matter has been  “a longstanding challenge for the company.”

Among the key findings of the report are that testing requirements are not consistently followed, testing data is not collected efficiently, testing databases are incomplete, supervisors are not trained to detect impairment in employees and Amtrak provides only limited oversight of prescription drug use.

The report said Amtrak’s oversight is “weak,” as evidenced by the fact that 33 of 783 locomotive engineers who worked at Amtrak between 2014 and 2016 never had an annual drug test.

Another 448 had fewer than the three required drug tests, which the IG said reflects a lack of an “effective procedure for tracking and monitoring” tests to make sure employees were meeting their requirements.

Only 45 of 196 supervisors of employees in safety-sensitive positions had completed the company’s had completed the required training on detecting drug and alcohol use.

As for employee use of prescription drugs, the IG report said Amtrak workers are supposed to report any use of prescription medicine to the company’s human resources department, which then assesses if the medication is “compatible with the duties of each employee.”

However, the IG report said its review determined that a “significantly low” level of reporting by employees had occurred.

An Amtrak HR official attributed that to self-reporting being an inherently weak control, adding that the carrier has no way of ensuring that all employees reported their prescription drug use.

The IG report recommends that Amtrak create a more reliable procedure to track drug testing, move to digital record-keeping of testing information, ensure its database includes all employees, establish a system to ensure supervisors are properly trains, and introduce new procedures to encourage employees to report their prescription drug use.

Amtrak OIG Critical of Private Car Practices

February 10, 2019

A report by Amtrak’s Office of Inspector General has found that the carrier has significant deficiencies in how it handles the financial accounting and policy making for its handling of private railroad passenger cars.

The IG report described it as a “longstanding management weaknesses in the company’s transport program for privately owned rail cars, including inadequate controls for cost and revenue management, a lack of standard operating procedures, and limited safety and parking guidelines.”

The report said additional steps are needed beyond those recently taken in order “to ensure the company can make sound business decisions about operating the program, covering its costs, and mitigating potential safety and liability risks.”

Between 2015 and 2017 Amtrak earned nearly $14 million for 1,144 private railcar movements and 315 long-term parking transactions,

However, Amtrak officials “did not know whether its billing and pricing model actually covered the costs of services provided to private rail car owners,” the IG report said.

Amtrak management told the IG it has not identified and accounted for costs associated with private rail car services because Amtrak has historically taken the position that it does not incur additional costs to move the cars on scheduled trains and that the program is relatively small compared to other activities the company must manage.

Amtrak officials also have provided at no cost some ancillary services as power, water and ice rather than deal with the administrative burden of tracking each time those services were provided.

The IG report also was critical of Amtrak for missing out on opportunities to generate additional revenue by not adjusting prices during periods of peak demand, such as during the annual New Orleans Jazz Festival or the Washington Cherry Blossom Festival.

Amtrak’s accounting practices have led to lost revenue because the carrier has not established standard operating procedures or guidelines to manage the handling of private cars.

The report said a review of 3 percent of transactions between 2015 and 2017 revealed that inconsistent billing practices—practices not previously established by operating procedures—led to a loss of $46,100 in revenue.

As the Office of Inspector General was undertaking its review, Amtrak “took steps to address these deficiencies, such as developing initial operating procedures for program staff, developing a safety manual to which private rail car owners must abide while in transit, establishing safety guidelines for private rail car owners parked in a Los Angeles rail yard, and establishing long-term parking permits requiring owners to adhere to company rules, regulations, and directives.”

However, the IG report concluded that these actions do not go far enough in addressing the weaknesses it found and recommended Amtrak better identify its program costs and factor them into decisions about the prices it charges private rail car owners for its services.

Another recommendation is that Amtrak “monitor the program’s financial and performance reporting, finalize and implement the program’s standard operating procedures, and implement guidelines and parking permits at all short- and long-term parking facilities.”

In an appendix, Amtrak said it agreed with all of the report’s recommendations.

Amtrak has hosted private railroad passenger cars since its 1971 inception, typically by carrying them on regularly scheduled trains.

The carrier has over the years charged various fees for such services as parking, switching, power, water and ice, septic pumping, and car washing.

Winters Named Amtrak IG

February 5, 2019

Kevin Winters has been appointed as Amtrak’s inspector general, replacing  the retiringTom Howard.

Winters has been the carrier’s deputy inspector general and counsel since 2015, after serving for 10 years as a senior executive with NASA’s Office of Inspector General.

“Kevin is a highly respected leader in the Inspector General community and has a strong knowledge of Amtrak’s business operations and critical mission,” said Amtrak Board Chairman Tony Coscia. “He also has the integrity and objectivity required for this independent role.”

Winter previously served in the U.S. Marine Corps, where he retired with the rank of Brigadier General.

He earned a B.S.C. and a law degree from the University of Louisville, and a Masters in Law from the University of Virginia.

Howard has been with Amtrak’s OIG since 2010, serving as deputy inspector general before being promoted to the top IG position in 2015.

Amtrak OIG Report Seeks Better Workload Management

November 20, 2018

Amtrak’s Office of Inspector General has recommended that the company save money by adjusting workloads and staffing, and better managing overtime.

The recommendations were made in an audit released earlier this month that estimated that Amtrak could put an estimated $2.3 million to $6.4 million to better use.

The audit focused on 62 locations where Amtrak services and inspects trains.

Those sites include 12 preventative maintenance facilities and 50 smaller outlying sites that service trains between runs.

It is the latter that occupied most of the attention of the recent OIG report because they offer the greatest opportunity for cost cutting.

These sites perform such Federal Railroad Administration-required safety inspections as cab signal tests, brake tests and interior and exterior inspections.

Workers also clean restrooms and café cars, wash windows, vacuum the cars, pump waste from toilets and replenish cars with potable water.

This work is done by Amtrak employees at 16 sites while contract employees work at 34 sites.

The OIG concluded that some work performed at facilities in Michigan and Missouri could be done at Amtrak’s service facilities in Chicago.

The audit found that schedules for several trains that originate or terminate in Chicago find the equipment assigned to them laying over in Chicago every 24 hours.

Chicago maintenance workers are already responsible for cleaning trains and have the capacity to conduct the FRA-mandated safety inspections.

Although the Michigan and Missouri sites may still be needed for train cleaning, the OIG said a minimized workload would enable staffing adjustments for service and inspections.

The OIG also singled out potential savings opportunities at 11 other maintenance facilities that, depending on the amount of additional inspection work that could be performed, could result in a better use of $1.4 million to $3.9 million.

The OIG audit found that employees worked standard eight-hour shifts even though the sites did not have enough service and inspection work to fill a full shift.

The audit quoted Amtrak managers as saying that staffing levels were based on a historical preference to ensure that sites had a full complement of staff to quickly mitigate incidents that might arise at a site or along a train’s route.

This resulted in inefficiencies, the OIG report said.

Likewise, the OIG found that at four of Amtrak’s 16 major service and inspection sites, there is not enough service and inspection work to fill an eight-hour shift.

Overtime payments above base wages ranged from 11 percent to 38 percent per employee at the sites. Managers at some sites did not know why or how much overtime their employees were earning.

Managers were unable to manage employee overtime or ensure that overtime was necessary.

Better management of overtime could result in an estimated $900,000 to $2.4 million being put to better use.

In a statement, Amtrak officials agreed to implement all of the OIG recommendations contained in the audit.

Amtrak IG Outlines Problems Carrier Must Address

October 5, 2018

A report by Amtrak’s inspector general has highlighted eight areas that the passenger carrier must address in fiscal years 2019 and 2020.

This includes improving safety, noting that Amtrak’s employee and passenger fatalities in thje past year have increased to the highest levels since fiscal year 2015.

The IG also said Amtrak may lack the capacity to handle multiple initiatives simultaneously.

The report said size and scope of the carrier’s ongoing and planned asset purchases make managing any one of them a problem given its history of weaknesses in planning and managing major programs. “Pursuing them concurrently is a daunting undertaking,” the report said.

IG Tom Howard in his report provided a detailed review of each of the problem areas – Safety and Security, Governance, Financial Performance, Asset Management, Customer Service, Acquisition and Procurement, Information Technology, and Human Resources.

However, Howard also noted Amtrak has made progress in some areas. It reduced operating costs to the lowest amount in the past five fiscal years, improved customer relations through a series of focused initiatives, and “institutionalized more effective management processes and tools.”

The report can be downloaded at

Amtrak to Change WUS Project Procedures

August 1, 2018

Following a report from its Office of Inspector General, Amtrak said it will take steps to improve project management processes regarding a series of projects at Washington Union Station.

An audit conducted by the IG found the projects to be at risk of delays and cost overruns.

The projects are part of the Washington Union Station’s 2nd Century Plan. The audit found that there are “weaknesses in [project]scheduling, cost estimating and project management practices.”

The projects are designed to triple passenger capacity and double train capacity over a 20-year period at Amtrak’s second busiest station.

The Amtrak IG recommended that Amtrak use its Enterprise Program Management Office standards and other commonly accepted project management standards such as project charters, an integrated master schedule, well-supported cost estimates and risk mitigation plans.

Amtrak agreed with the recommendations and outlined a schedule to address them. Amtrak’s timeline for the implementation ranges from August 2018 to January 2019 depending on the task.

Amtrak OIG Identifies 8 Challenges Facing Carrier

April 5, 2017

A report released last week by the Amtrak Office of Inspector General has identified eight challenges facing Amtrak management as it seeks to address the passenger rail carrier’s top performance issues.

The OIG has singled out these areas in past reports, including governance, financial excellence, asset management, acquisition and procurement, safety and security, human resource issues, customer service and information technology.

The report said Amtrak has made progress in such matters as replacing aging Acela equipment on the Northeast Corridor.

“Continued management focus is needed to ensure sustained progress,” OIG officials said in the report’s introduction.

Three long-standing and systemic issues that have kept Amtrak from making further progress are:
• Inconsistent use of the company’s strategic goals to drive budget and operating decisions.
• A governance structure that does not hold managers accountable for achieving program results.
• A workforce culture at odds with the company’s goals and mission.

“Until these underlying factors are addressed, the company’s efforts to remediate the top management and performance challenges will continue to face obstacles,” the report stated.

Under current Amtrak President Charles “Wick” Moorman, Amtrak has been implementing organizational changes and attempting to improve oversight and management of core functions.

“Whether these changes and initiatives achieve their intended results will depend on the company’s leadership and top management sustaining its focus on them, providing the necessary resources for implementation and reinforcing that every employee is responsible for embracing and promoting the company’s values of safety, service and financial excellence,” the report said.

Amtrak OIG Urges Budgeting for PTC

October 21, 2016

Amtrak’s Office of Inspector General is urging the passenger carrier to budget for the installation of positive train control.

Amtrak logoIn a report, the OIG, said that although Amtrak has has made strides in implementing automated braking technology, it still has several tasks to complete before it reaches full implementation before the end of a federally-mandated deadline of 2018

The report said Amtrak still needs to complete 33 percent of its planned trackside installations, submit a safety plan to the Federal Railroad Administration, resolve potential radio frequency spectrum issues and install onboard systems in its locomotives.

The OIG report said Amtrak has not properly accounted for the full cost of PTC technology. Those costs may be “millions more than is currently budgeted.”

Amtrak had spent about $183 million on PTC implementation through June 30 and plans to spend about another $35 million through 2018.

But those estimates are “incomplete” and don’t include other potential contingency costs, the OIG report concluded.

The OIG encouraged Amtrak to update its costs estimates in order to ensure that sufficient funds are available for the project and to enhance project schedules to better track the completion of key events and remaining tasks and clarify the roles of managers who are responsible for PTC implementation.

The report said that Amtrak management agreed with all three recommendations.