Good afternoon. I’m Andy Byford, the President of New York City Transit. So today I want to talk about this audit that the New York City Comptroller just put out this morning. And I’m aware of the points that he made at his press conference. I guess the first thing I’d like to say is that I welcome the New York City Comptroller’s report. It’s useful in that it confirms what we already knew. Mainly, that Bombardier really let us down, let the MTA down in the contract that is to supply around 300 R-179 trains.

We already knew that. We knew that there had been problems in the contract, not least of which was the hot welding problem that they discovered. So, it’s useful to have the City Comptroller’s take confirm what we already knew, and what we have already taken action to address. Where we disagree with the City Controller is the suggestion that the MTA was in any way deficient on the exercise of the contract. 

We embedded professional engineers, key resources in the various factories where Bombardier was working. So we sent people, to Plattsburg, we sent people down to Mexico, and we had engineers who themselves identified the type of problems that the City Comptroller describes in this report. We embedded resources and we had our own independent engineers and independent consultants giving us live feedback about what the status was with this contractor.

The second thing is we have held Bombardier’s feet to the fire throughout this contract. And if you look just over the last two years, I have had regular meetings with Bombardier at CEO level where we have made it very clear to them from their constant failure to perform is unacceptable. So these are regular meetings which are uncomfortable for Bombardier. I personally have attended throughout my two years here. Thirdly, and again the City Comptroller doesn’t make reference to this -- we have utilized the liquidated damages regime allowed for in the contract to the maximum.

We have insisted that Bombardier make us good for the damages we have suffered, and we have leveraged from them 18 additional trains, R179 trains, that will benefit our customers. Now, one of the questions that the Comptroller raises in the report, that you mentioned today as well, is why did we not default Bombardier on the contract? Well, as our response to the contract makes crystal clear, and as the City Comptroller’s report acknowledges, we did consider defaulting Bombardier, we did consider that.

But certainly speaking for myself, in the last two years, I would much rather have pressed on and that's what we did press on with the contract to get New Yorkers the benefits that modern trains bring. Reliable, modern trains with all the amenities that you would expect. So to me, it made much more sense to push on and get the new cars that New Yorkers wanted. But at the same time, to leverage and penalize Bombardier to the full by applying the liquidated damages. So we got 18 trains out of Bombardier, 18 cars that we would not otherwise have had. And that, I think, has been the right course of action. So just in conclusion, let's not be let's not be coy.

Let’s be crystal clear. The villain of the piece here is not the MTA. The villain of the piece is Bombardier, and that comes across not only in the Comptroller’s report but also in our response. Bombardier let the MTA down, Bombardier let New Yorkers down, that's why we held them to account and that's why I have been meeting with them on a regular basis. That's why we will continue to hold their feet to the fire until the very last trains are delivered later this month.

QUESTION

Do you think it took too long to get to that point? Do you think that maybe, at the first sign of trouble, there should have been more concern? And moving forward, how can you make sure something like this won’t happen again?

BYFORD

This was a complex issue. The welding problem took some time to identify. It was our people that found that welding problem. And where Bombardier originally thought that they had solved that early problem, it subsequently reappeared. So this is not unusual in new vehicle delivery to have problems around design, where the design itself has to be finalize. That in itself is not unusual. And this is certainly not my first experience of contractual encounters problems. But certainly I think Bombardier is frustrated that they took that long to fix that welding problem. It's extremely frustrating, that problem that we have had. So in terms of lessons learned, I think I would continue the best practices. It's always good practice to have your own people embedded in the factories. And it's always good practice to hold the contractor’s feet to the fire. That’s what we do.

QUESTION

Someone pointed out that as production began on these cars before the MTA signed off on their welding procedure. Is that the case and are you guys changing that up?

BYFORD

The contract did allow for it, does allow, did allow the contractor to start work on the design before all the details had been finalized. And that’s not unusual. Because to be fair to Bombardier, and to other contractors, what they're trying to do is get ahead of the production curve precisely because they know that often you encounter problems, and if you can get a head start on getting production or reproduction parts going, that in itself is not a bad thing. I think Bombardier have learned much less, and it’s certainly frustrating for me personally, that I should have encountered another problem with a Bombardier product and welding problems, because I’ve been round this before in Toronto with the streetcars and welding problems. Bombardier simply must get a grip on their welding techniques.

QUESTION

Has Bombardier turned a corner somewhat in recent months in terms of service reliability?

BYFORD

Bombardier have upped their game. There's no question. As I said earlier, I meet with them on a regular basis. If not monthly, it's rather six weeks I meet with their CEO. And we look at the production rates. We look at what would be called the beat rate which is the rate at which new trains are rolling off the production line. We looked at the number of defects that are inherent in the vehicle when it arrives on property and our people check it for quality reasons. And the beat rate has gone up Jose, the numbers of vehicles arriving has improved, the actual number of defects when they arrive has diminished.  So they’re getting their quality right. As you'd expect, towards the end of the production.

QUESTION

The 1900 train cars are expected for the next step. How can riders expect that these will be delivered on time?

BYFORD

Well, I think that one of the changes that we've made to the capital plan, and the record amount of investment as we’ve been given by the legislature, is to move to design-build, and also to, more than ever, focus on holding suppliers to both schedule and to budget. So it’s something that we’re very focused on.  At the end of the day, I want new cars, and that’s one of the reasons why I insisted on having cars instead of the money.  I don’t want the money, I want new cars. So to get new cars on time is very important, it’s critical actually, to our CBTC program going forward.

QUESTION  

Two things. Design-build, I understand how it theoretically saves money on bigger construction projects. How does that save money when it come s to car manufacturing?

BYFORD

What it incentivizes, more than ever, is the designer and the contractor to design modern product right from the start. Because that is imperative in the terms of their contract.

QUESTION

Have you heard anything from the Comptroller’s audit? Anything new?

BYFORD

I think that the key thing I got from the Comptroller’s audit was that it reinforced what we already knew. It confirmed what we already knew – mainly that Bombardier let New Yorkers badly down on this contract, and that they gotta get that done going forward.

QUESTION

Can you iterate a synopsis of what you just talked about in this news conference?

BYFORD

I welcome the city Comptroller’s audit report which was just released today. Into the way that the MTA managed the R179 contract, trains from Bombardier. And I welcome it for two reasons – number 1 it confirmed what we already knew. Mainly, that Bombardier let New Yorkers down. Bombardier let them down because they’re so late with the delivery of these new trains. Secondly, I welcome it because it confirms that we did the right things in embedding key engineering resources into the production factory in Mexico and in Plattsburg. So let’s be clear here. The villain of the piece is Bombardier, not the MTA. We have held Bombardier’s feet to the fire throughout this project, and we have embedded resources to make sure the trains are being built properly, and critically, we leveraged the liquidated damages, which were allowed for as part of the contact. We leveraged that to get us new trains, additional new trains that will benefit New Yorkers.