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MBTA hires McKinsey to study more privatization

Kayana Szymczak for the Boston Globe/file 2013/Boston Globe

Even more privatization for the Massachusetts Bay Transportation Authority could be on the horizon, after agency officials recently agreed to pay nearly $1 million to consulting giant McKinsey to explore saving money on driving and maintenance costs.

The September contract indicates that consultants will focus on making its subway, light rail, and bus lines more efficient through “new operating models.” The contract, which pays for a month and a half of work at a $156,000 rate, also suggests that its bus operations could be particularly vulnerable for outsourcing.

“For example, the presence of a viable external market for bus operations and maintenance, and the upcoming renewal of the Red and Orange line fleets could indicate areas of particular focus,” the contract said.


Joe Pesaturo, an MBTA spokesman, defended the six-week contract by saying outside experts such as McKinsey have been crucial to saving money for the agency.

“The MBTA has proven to lack internal expertise in some areas and has already seen improvements by engaging third party vendors” for several issues, he wrote in a statement.

Members of the fiscal and management control board have already indicated in recent months that the agency would look closer into bus maintenance and operations for outsourcing, and the new deal with McKinsey indicates those changes could be fast approaching.

The board recently approved a deal to privatize its cash counting department, which officials had painted as dysfunctional and plagued with problems.

Under the new contract, McKinsey officials said they could identify a range of options for using more outside companies, including “performance-based vendor contracts for some maintenance activities.”

McKinsey has done similar work for the MBTA before. The company was retained by the state to create a special panel that essentially paved a roadmap for the ways Governor Charlie Baker’s administration would try to remake the agency.


According to the contract, the deal with McKinsey could be extended by eight to 12 weeks, if the company is retained to help implement some of the recommendations.

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