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Industry News / Member Organizations

May 29, 2019

NYC’s Transit Authority Demands 10 Percent Cuts in A/E Contracts; ACEC/New York Fights Back

The New York Metropolitan Transportation Authority (MTA) is demanding 10 percent cuts in existing contracts with its A/E vendors in an effort to close a projected $1 billion deficit in its 2022 budget.

The MTA is only demanding rate cuts from its technical, professional, and advisory vendors. Construction firms have not been targeted. 

In total the MTA said it will demand cuts from about 110 firms, with a goal of saving an estimated $75 million over the life of the contracts. If firms are unwilling to cut their rates, MTA Chairman Patrick Foye said the Authority may terminate the contracts.

“We think it’s shortsighted,” said ACEC/New York President Jay Simson. “The MTA is in a tough situation. They have their work cut out, but we believe they should look at smarter design and not try to solve part of the financial problem on the backs of engineers.”

Additionally, ACEC/NY asserts that the reduction demands may violate federal procurement regulations on projects that receive federal funding and has asked its Congressional delegation for support.

ACEC/NY also signed on to a letter from a coalition of trade groups to the MTA stating that because federal auditing rules limit firms’ profits to 8 percent, “a 10 percent cut in rates will mean that firms are working at a loss on MTA projects.”

In an email to members, ACEC/NY reported that one member firm had accepted the rate cut, but others are concerned about losing money and may walk out on their contracts.


All comments to blog posts will be moderated by ACEC staff.

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May 29, 2019



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