Federal DOT inspector general launches audit of CRRC contract with Philadelphia

Trains at he CRRC factory in Springfield.Suzanne Kreiter/Globe Staff

The Department of Transportation’s Inspector General’s office announced Friday that it is launching an audit of the Southeastern Pennsylvania Transportation Authority’s contract with CRRC, the Chinese rail car manufacturer with a factory in Springfield.

CRRC is making new rail cars for SEPTA at its facility in Springfield, where it is also making 404 new Red and Orange Line cars for the MBTA. Both projects are years behind schedule, and the factory is plagued with quality problems that forced the MBTA to stop deliveries of its new cars in June, the Globe previously reported.

The federal audit will assess how well the Federal Transit Administration is overseeing SEPTA and CRRC’s adherence to so-called Buy America requirements and SEPTA’s calculation of the value of its train components, the inspector general office announcement said. Buy America rules require that U.S. parts for rail cars make up more than 70 percent of the total cost of all components for these kinds of projects.

In a letter to the DOT’s inspector general last year, three federal Republican lawmakers on the transportation committee called for a thorough review of SEPTA’s contract with CRRC citing a Philadelphia Inquirer article featuring photos of the cars being made in China. Buy America rules also require that “final assembly” of railcars happen in the U.S.

In a statement, a spokesperson from SEPTA said the agency has complied with all Buy America requirements.

“SEPTA is currently participating in a Buy America compliance review initiated by the Federal Transit Administration in December 2022, and we look forward to fully cooperating with the Inspector General’s Audit,” the statement said.

The MBTA was the first U.S. transit agency to ink a rail car deal with CRRC in 2014, followed by SEPTA, Los Angeles County Metropolitan Transportation Authority, and Chicago Transit Authority. Cars for the T, SEPTA, and Los Angeles are being assembled at the company’s factory in Springfield. The Chicago cars are being assembled at a similar plant in Illinois.

A February 2022 letter from SEPTA General Manager Leslie Richards and SEPTA board chairman Pasquale Deon to CRRC management obtained by the Globe raised “continuing concerns about delays and production shortcomings” with the company. At that time, SEPTA estimated that the project was delayed by about two years.

“These delays are exacerbated by CRRC’s refusal or inability to adequately staff the Springfield, MA facility with personnel dedicated to the SEPTA multi-level project,” the SEPTA leaders wrote.

The letter cited problems including “repeated failures of water tightness tests and CRRC’s refusal, over the past [four] years, to provide required as-built drawings and a Structural Repair Manual . . . faulty interior panels, the need for changes to plans for electrical locker wiring, repeated failed friction brake dynamometer tests and unsafe emergency exit windows.”

CRRC spokesperson Lydia Rivera said in an e-mail, “CRRC MA is fully aware of Buy America provisions and meets the requirements.”

The MBTA halted deliveries of new Red and Orange Line cars from the Springfield facility in June amid concerns about the quality of the vehicles. The Globe previously reported on chronic problems at the Springfield factory cited by former employees, including cars with missing parts being advanced along the assembly line without the correct paperwork, workers watching movies for months while waiting on parts to arrive as suppliers went unpaid, and a culture of fear and retaliation for raising concerns.

Deliveries from CRRC to the MBTA resumed last week with two new Orange Line cars arriving at Wellington yard, T General Manager Jeff Gonneville told board members Friday. Two more arrived this week after getting separated from the tractor trailer transporting them to Boston and trapped on the highway for several hours, he said.

Governor Maura Healey said the T recently hired consultant firm, Hatch (formerly LTK Engineering) and two law firms, Wilmer Hale and Holland & Knight, to address the longstanding issues at the Springfield factory and assess what can be done to speed up the deliveries. The old Red and Orange Line cars that the new cars are supposed to replace are decades past the end of their useful lives, and the old Orange Line cars never received a major mid-life overhaul.