MBTA warehouse outsourcing to save more than $48M

The MBTA’s oversight board yesterday awarded a $28.4 million contract to a Virginia company to run the agency’s mismanaged warehouse and inventory system for five years — during which they hope to save more than $48 million while speeding up deliveries.

The contract with Mancon gives the Fiscal and Management Control Board the option to extend the contract by up to four years for an additional $24 million. It’s the MBTA’s largest outsourcing deal since lawmakers gave the T a reprieve from the Pacheco Law’s restrictions on privatization.

T officials said they will save up to $48 million over five years and avoid $16.1 million in needed upgrades to the agency’s central warehouse in Everett. More importantly, they said, the deal will reduce the time it takes to deliver parts from 68 hours to 10 hours.

“This is a crucial step towards improved parts management, faster repairs and better service, while reducing operating expenses,” said Andrew C. Bagley, vice president of policy and research at the Massachusetts Taxpayers Foundation.

Under the deal, 47 private employees will replace the warehouse and inventory system’s approximately two dozen unionized workers, who will have 20 months to move into other jobs at the T or retire.

Mancon won the contract over Banneker, the low bidder, and Neovia because Mancon has global train operations experience, a dedicated operations manager and the best transition plan, said Ernest A. Miller, a consultant overseeing the privatization process.