Amtrak OIG on making Amtrak capital management better

Link.

A couple of highlights:

The Engineering department did not consistently employ best practices in managing projects. Three of the five projects we reviewed encountered overruns and delays that forced the company to reprogram funds between programs and departments, and to delay or forgo other projects. For example, a cost estimate did not accurately forecast project costs; personnel did not ensure that schedules were developed to accomplish a projects objectives; and the oversight of replacement projects was informal and inconsistent.

The Mechanical departments project management practices for equipment overhauls have similar weaknesses in cost estimating, scheduling, and project oversight. Data on the hours expended on overhauls from FY 2009 through FY 2012 shows that the departments project management practices have not improved the efficiency of overhauls: an overhaul completed during FY 2012 required up to 28 percent more average labor hours to complete than an overhaul completed in FY 2009.

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Of the departments 404 projects, funded from a Federal Railroad Administration grant, 172 were over budget (43 percent) in FY 2012. These overages led to reprogramming funds from other projects. In FY 2012, the department reprogrammed about

$56.4 million (15 percent) of its $365 million annual grant budget. When considering all funding sources, the department reprogrammed $76.3 million and received an additional $32.4 million from other departments to cover its activities.

Organizations similar to Amtrak that we used as a benchmark reprogram an average of about 3 percent of their capital budgets. When developing capital budgets, these organizations grouped similar projects together as one line item in the budget and allowed the individual departments to manage each line item as a program. The Engineering department budgets and manages at the project level. In FY 2014, Amtrak proposed to budget and manage at the program level.

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For example, the number of hours required to complete the same type of overhaul on 237 of the same model of equipment (Amfleet 1 Coach) had increased by 37 percent from FY 2009 through FY 2012. The increases in actual hours expended on this type of overhaul for this model of equipment outpaced the increases to the hours budgeted. As shown in Figure 3, the hours expended to complete each Amfleet 1 Coach Level 1 overhaul fluctuated significantly during the period reviewed. During this time, the average labor hours to complete these overhauls increased by 37 percent; the labor hours expended on these overhauls varied from 34 percent less than to 95 percent more than the estimate. All 44 overhauls completed in FY 2012 required more than the estimated hours to complete.

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The departments data on equipment overhauls showed great variability when compared to the departments estimates. For example, in FY 2012, the department estimated that it would take 1,950 hours to overhaul a Superliner 2 Transition Sleeper Dormitory Level 2. However, of the 10 overhauls completed, 2 were under budget, and 8 were over budgetranging in total hours from 1,846 hours up to 2,746 hours. Because of these variations, we question the usefulness of historical data in developing overhaul cost estimates.

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Mechanical department project schedules did not define when and how long tasks will occur, which limited the ability of project managers to measure progress or promote accountability. When performing overhauls, the three back shops use Maintenance Analysis Program books to track the progress of each overhaul;17 however, these books do not identify the amount of time it takes to complete specific tasks. Best practices show that an attribute of successful projects is a reliable schedule that defines when and how long work will occur and how each activity relates to the others.

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I'm surprised that there are no follow-up comments on the OIG report. This is NOT a positive report on Amtrak's capital project management or the management of the spending on equipment overhauls. Cost overruns and adjustments are to be expected on major construction and maintenance projects, but Amtrak project managers are not going a particularly good job of the keeping tabs on the expenses and updating the cost projections. This report will not help Amtrak in its requests to Congress for more capital funding, which it badly needs for the NEC and acquisition and overhauls of rolling stock. I would expect Congressman Mica and others will wave this report at Boardman and other Amtrak executives at future hearings.

As stuff gets older, it takes longer to overhaul. *SHOCK*

As funding gets jacked with, uncertainly applied, and an organization staggers funding cycle to funding cycle, long term projects run into delays and overruns. *SHOCK SHOCK*

This looks like an ISO style audit, which in any organization is going to find inconsistencies.

Not that much longer. The issue is a lack of employee management. If Amtrak is that bad with training and maintaining competence and friendliness on the part of public facing employees, do you really think they are better at it with the car shop employees?

JoeBas said:

As stuff gets older, it takes longer to overhaul. *SHOCK*

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And as you do things more often, it takes less time and money to do so thanks to greater experience. At worst these should cancel out. It shouldn't lead to major increases. And quite frankly the lack of a "standard book time" for each job is absolutely atrocious, that's been standard practice in automotive repair for I don't know how long.

Until you start having to fabricate parts. It's not like you can run down to Home Depot and just buy a bunch or repair parts for an Amfleet.

There's no discussion here because there's nothing surprising here. Amtrak could do better. In a perfect world they'd be given the tools to do so, but even today they can use the tools they're given in a better fashion.

In related news, the sun is going to set in the West this evening.

Ryan, if they are not going to utilize best practices, they deserve to be called for it. Labor, especially in non CS situations, as a group, will tend to work as slowly and as little as possible during the work day.

Good management is what keeps workers doing their job properly. That includes keeping on top of lazy employees so that they can be adequately documented and canned. It includes acknowledging the good employees so that they know bothering to do a good job is appreciated. It includes keeping moral up and irritation down.

Nobody hates lazy labor more than labor who wants to do a good job.

Delayed completion of repairs is par for the course at Amtrak. There was, and probably still is, a rule prohibiting Mechanical Dept. from repairing a car by taking fixtures from another. Of course, nobody makes the part in question any more, so this can mean two cars are out of service for an extended period instead of one. The I.G. may criticize Amtrak for this, but they are pretty tight-lipped about solutions, except to tell Amtrak "You should do better." A nice idea, but not very helpful.

GML: How does the employee do a good job installing a part that the Company has no way of obtaining for him?

My impression of the I.G. office is that they can be very glib about subjects like this, but they seem to ignore causative factors. Their approach to the food service issues last fall sent up some red flags for me because I suspect some inflated numbers were used in estimating losses from complementary beverages. However, I don't have access to everything they studied, and cannot say FOR CERTAIN that they used improper methodology.

Just remember, Amtrak lives in the mysterious world of D.C. politics. If anybody in Washington claims not to have a political agenda, that's because it fits his political agenda to say he doesn't.

Tom