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Could outsourcing fix this T problem?

Employee Michael Herman pulled items off shelves at the MBTA Central Warehouse in Everett.Josh Reynolds for The Boston Globe

When maintenance workers at the Massachusetts Bay Transportation Authority request spare parts from the T’s central warehouses in Everett and Charlestown, it generally takes more than three days for those parts to arrive — part of a “completely broken” system that officials want to privatize, the MBTA’s chief procurement officer said.

T officials Monday plan to make the case for privatizing the sprawling warehouse department, which employs about 38 employees for approximately $4.2 million annually. Officials say it could lead to major improvements to the T’s maintenance operations and will represent one of the first efforts by Governor Charlie Baker’s administration to test the suspension of the so-called Pacheco law, which puts up hurdles for outsourcing state jobs.


Gerald J. Polcari, chief procurement officer for the T, said outsourcing the warehouse operations to a more efficient company could be a “game-changer” that would eventually improve service for riders.

“We are wasting a lot of time and effort,” said Polcari, who was hired last May. “The No. 1 complaint we receive is from the mechanics: They can’t do their job because they don’t have the parts.”

The MBTA has more than $62 million worth of spare parts in 21 locations that store inventory for its rail and bus operations, officials said. But Polcari said the MBTA often doesn’t know what it has in storage: An audit has discovered that warehouse workers across the system are accurate in reporting their inventory only about 56 percent of the time, a rate that a consultant said is shocking. The industry standard for accuracy is more than 95 percent, the T said.

T officials hired Ernest Miller, a managing partner at consulting firm Optio Tempore, to evaluate how the agency could better improve its warehouse operations, so that they could better support the T’s maintenance work. Miller said he was floored by the dysfunction within the system.


“It was kind of shocking that every single element of the process that you would look at inside of a warehousing and materials management operation was not functioning well,” Miller said. “There wasn’t one thing where you said, ‘That’s pretty good, we’d like to keep that and build on it.’ ”

The majority of the T’s inventory — about $38 million — is at two central warehouse locations in Everett and Charlestown. Maintenance workers usually call upon the warehouses when their own supplies — for things as simple as cables, brake rotors, and air filters — at their garages run out.

T officials say that process, which can take up to 80 hours, should take about 12 by industry standards. That’s partly because the main warehouse is only open for eight hours a day, five days a week, compared with the maintenance department, which is working around the clock.

Because the warehouses operate only until early afternoon, workers don’t usually transport parts during the evening, unlike many private-sector warehouse operations.

The audit also found that the T has about $22.7 million in excess inventory, an amount that the agency could be saving. In addition, officials say the entire inventory doesn’t get used for about 24 months — a rate that is high, even for transit authorities. Miller described seeing parts on the shelves that haven’t been used for 10 years, or parts for decommissioned vehicles that are no longer being used.


Giana Gibson, a stocker, moved a pair of air filters at the MBTA Central Warehouse in Everett.Josh Reynolds for The Boston Globe

Officials also said the productivity of the workers — measured by how many types of parts they gather for delivery to maintenance workers every hour — is about five times below the industry standard. On an average day, officials say, a worker will gather about 6½ types of spare parts per hour. On a peak day, that number jumps to 20.2. At other companies, workers would gather 95 to 265 different types of spare parts per hour.

Officials say fixing the system internally could prove to be too expensive, especially as the agency looks for ways to balance its books. Polcari said the T would need to upgrade its warehouses and equipment, which could cost about $14.5 million.

Officials hope the agency’s fiscal control board will sign off on a timeline that would allow the T to put out a request for proposals later this month, then select a bidder by the middle of August. But the agency will find staunch opposition from the unions representing the workers, who plan to flood Monday’s meetings with supporters.

Brian Shortsleeve, the MBTA’s chief administrator, said the agency has been focusing on outsourcing areas where the T does not have “core expertise.” He said private companies can often deliver such services at a better price and with more reliability.

That’s why the Baker administration pushed for the Legislature to lift restrictions required by a law that puts up hurdles to privatization. In addition to the warehousing operation, the MBTA is also targeting aspects of its fare collection department, where workers count cash fares.


But James O’Brien, the president of the Boston Carmen’s Union that represents 34 of the warehouse positions, said the T needs to invest in the services to improve them.

He agrees that the warehouse system at the T is broken. But he says the workers are not the problem: The T and its managers have not set up a successful operation and have continually kept the system understaffed, he said.

O’Brien said the workers have asked the T to add extra staff and shifts to the system, but the agency has not listened. The system currently has three unfilled positions and hasn’t moved to fill them, he said.

“There’s been no investment to really build this department up so that they can handle a 21st-century transportation system,” O’Brien said.

Jeanne Breare, who has worked in the stockroom at the Quincy bus yard for about 15 years, also said that she doesn’t understand why the T doesn’t run the warehouse operation with extended hours to match the system.

“It seems like we’re taking the fall or they’re making us the scapegoats in a system that’s not working,” Breare said.

Nicole Dungca can be reached at Follow her on Twitter @ndungca.