Performance Audit of Transit Bus Procurement

Neither Transit nor other public transit agencies we surveyed use performance measures to track the effectiveness of their bus buying programs. Our evaluation identified three overarching findings. First, Transit has been generally successful in purchasing similar buses at lower cost than other transit entities we surveyed. Second, Transit could strengthen its bus quality assurance efforts. Third, Transit has information to develop baseline timeliness performance measures; however, Transit cannot demonstrate that buses they have purchased have been put into service in a timely fashion. We also found three areas where procurement planning and practices could be strengthened. First, Transit does not yet have a comprehensive, documented method to determine if the fleet mix they have purchased has resulted in the lowest total cost of fleet ownership. Second, Transit’s bus procurements are not specifically guided by Transit or county priorities and do not optimize the investment of resources. Third, we found that during bus procurement, roles and responsibilities were sometimes unclear and did not fully facilitate achievement of Transit goals. Finally, we found that the approach to and guidance for bus quality assurance inspections is incomplete and out of date.

We make six recommendations to Transit: First, develop a prioritized set of strategic procurement goals to guide procurement processes and decisions. Second, update procurement policies and procedures. Third, conduct and document annual retrospective processes to calculate and evaluate procurement performance measures and should develop action plans to improve outcomes. Fourth, fully analyze the costs and benefits of an array of fleet alternatives that could deliver the potential range of future service and meet strategic goals before making final procurement decisions. Fifth, for each bus procurement, Transit should estimate and compare the full cost and anticipated benefits of utilizing Transit staff to conduct on-site bus inspections versus contracting out this service and document the decision. Finally, Transit should update its inspection policy and procedure.

In the past 10 years, Transit has spent nearly $1 billion on bus purchases and maintenance ($342 million on bus purchases and an additional $653 million on bus maintenance). Transit’s current fleet consists of more than 1,350 active vehicles, including transit vans, buses, and trolleys; and over the course of our audit, Transit ordered or put into service an additional 325 buses, while retiring or planning to retire a similar number. Both the size of the financial investment and the significance of the service provided by Transit emphasize that an effective bus procurement program—one that ensures Transit buys the right buses, at the right price, and at the right time—is critical to Transit’s operational and financial success.