FTA Administrator Peter M. Rogoff dismissed the idea that MWAA officials didn’t know procurement rules.
“They took on the responsibility to run a multibillion-dollar transit project. Certainly they should have known,” Rogoff said. “They certified to us that they were following all those rules.”
The Transportation Department has committed nearly $1 billion for the first phase of the 23-mile rail extension, which extends Metro to Tysons and into Reston, Rogoff said. Phase one is scheduled to be completed in August. The authority recently began the bidding process for the second phase, which will extend Metro to Dulles and into Loudoun County.
The review also found weaknesses in the MWAA’s contract manual, which the authority was ordered to revise.
“One of the things we found troubling was the inadequacies of the manual,” Rogoff said.
The authority agreed to modify questionable contracts, revise its manual and make other changes. The FTA gave the agency up to 90 days to take corrective action, depending on the deficiency.
But it took up to a year for the agency to implement many of the changes, including revising its manual. The authority had 30 days to establish contract amounts and performance periods for the three largest contracts. It failed to take action for nearly four months on at least one of the contracts, records show.
Margaret E. McKeough, the MWAA’s executive vice president and chief operating officer, said delays occurred because the FTA dragged its feet on reviewing the authority’s draft contract manual revisions.
Rogoff disagreed. “If this process took longer, I wouldn’t attribute it to our dragging our feet,” he said. “I would attribute it to ensuring the procurement process for a multibillion-dollar rail project is done correctly.”
Rogoff said his agency will conduct a follow-up review early next year to make sure the MWAA is “walking the walk.”
“We’re going to go in again and look at procurements that have followed this audit to further ensure that they are, in fact, following the procedures,” he said.
Despite the changes, this month’s inspector general’s report says that the authority’s “contracting policies and practices are insufficient to ensure compliance with the Airports Act and the lease agreement between DOT and MWAA.”
Those rules say that all contracts larger than $200,000 must be competitively bid. The inspector general found that the authority used categorical exceptions in nearly 66 percent of the 125 contracts reviewed. The audit examined contracts from January 2009 through June 2011. Although they were allowed in some instances, the MWAA failed to provide “adequate justifications” for using the exceptions, the inspector general said.
The 2002 GAO review found similar contract deficiencies, including failing to competitively bid 15 of 35 contracts. In one instance, the MWAA modified a contract at least 10 times, adding “about $2.1 million in work that it had originally planned to compete separately.”
“Since the Authority specifically excluded the additional work from the scope of the original contract, this work was not subject to competition,” the GAO found. “Thus, obtaining the work through contract modifications was tantamount to a series of sole-source procurements.”
The MWAA, which is part of an interstate compact, is not governed by federal or state laws on contracting, ethics or transparency. The Airports Act and the authority’s agreement with the federal government, though, impose some governance requirements.
Mary Pat Flaherty and Lori Aratani contributed to this report.