WMATA released a request for proposals for a private company to maintain and operate the full Silver Line rail extension. This represents the 51-year-old organization’s largest foray into private-sector involvement: WMATA has always used its in-house staff for the maintenance and operations of its network.
This kind of service contract, which falls short of “privatization,” is very common in the area. Private companies contract with Virginia to operate the Virginia Railway Express commuter train and high-occupancy toll lanes on Interstates 95, 495 and 66. Private companies are under contract to run the District’s Circulator bus system and the H Street Streetcar. In each case, the government agency retains system ownership, pays a private company for providing service and is responsible for ensuring the safe and efficient operation of the system.
Transit service contracting does not preclude a unionized workforce. While not all transit vehicle operators and maintenance workers are unionized, the Teamsters, Amalgamated Transit Union and the Brotherhood of Maintenance of Way Employes, among others, represent many public- and private-sector workers in the transit industry. WMATA does not state that the workforce has to be unionized, but Article 81 of the request for proposals states that the contractor must pay at least the WMATA $13.85 hourly living wage, including health benefits. In its evaluation, the agency could reward a bidder with a higher score if it promises to pay a higher wage and contribute to a pension plan.
The Silver Line contract, as proposed, lays out transparent performance metrics that align with public-sector goals, tying them to financial incentives. WMATA will require the contractor to be evaluated on nine measures that include things riders care about: delays, safety, and elevator and escalator availability. For example, if elevators and escalators aren’t working at least 98.5 percent of the time, the contractor gets financially penalized. If the Silver Line track is open less than 99.98 percent of the time WMATA can fine the contractor. These performance measures incentivize the contractor’s management team to make smart maintenance decisions.
This is a good start, but WMATA should further improve the contract incentives to reward good behavior rather than solely focus on poor performance: adding bonus payments for exceeding targets while simultaneously keeping the penalties for falling behind. Of course, there is additional cost associated with bonuses, but riders on WMATA are craving excellence, not just the end of poor service. Bonus payments for exceptional service, such as no delays and 100 percent escalator availability in a given month, would be worth the cost.
Finally, WMATA needs to put less of an emphasis on cutting costs. General Manager Paul J. Wiedefeld cited the request for proposals as a way to save money, saying competitive contracting can help “hold down pension cost growth.” WMATA’s stated problem with its defined-benefit pension plan is much larger than this contract and must be addressed directly and separately. Instead, WMATA needs to clarify how price will be evaluated with respect to the overall quality of the bidders’ proposals. Again, area transit riders and taxpayers are looking for high-quality service, not just the cheapest deal.
Contracting the Silver Line represents a major departure from how WMATA handles service operations and maintenance. To fully know whether this succeeds in the long run, the public agency must keep close track of the safety, costs and quality of its entire system in a clear and transparent way. How the Silver Line measures up to the rest of the system and how WMATA holds the private-sector operator to task will be key to the future success of Metro.