A new audit has found Metro overpaid a contractor by potentially hundreds of thousands of dollars to help reduce safety problems at the transit agency and continued making mistake-riddled payments without enough internal oversight -- even as the agency weathered the worst safety record in its history.
Metro Inspector General Helen Lew audited the agency's ongoing five-year contract with DuPont Safety Resources, a division of the giant chemical company. Metro paid DuPont $13.7 million through June 2011. The contract is slated to end next month.
Under the terms of the contract, DuPont was supposed to improve safety at the agency and reduce the rising costs of workers' compensation and outside legal claims stemming from injuries -- with its pay based on the savings it helped the agency make. But it used an "excessively high standard" to determine payments that were "not properly supported with clear ties to delivered services."
Furthermore, the audit documents at least seven cases in which DuPont and Metro logged different numbers, meaning that Metro may have overpaid the company by more than $750,000.
Under the contract, DuPont's bills were adjusted for inflation twice, not just once, effectively doubling the rate of inflation. At one point, the contract's costs were growing so quickly that Metro capped them at $950,000 per quarter.
Another problem: Metro did not have a full-time project manager over the contract starting in October 2009.
Metro agreed with the findings, according to a memo, and pledged to adjust the remaining payments. But Metro did not overpay DuPont, spokesman Dan Stessel said Wednesday. "There was a full reconciliation, and all counts were found to match the invoices, except on one invoice where the count was off by one claim and subsequently reconciled in a later invoice," he told The Washington Examiner.
DuPont also defended its work. "We've met our contract deliverables," said spokeswoman Christine O'Brien. "We've been working with [Metro] to understand how the auditor came to the conclusions. We believe the issues have been resolved."
Metro hired the company in 2007 after a series of deadly accidents involving pedestrians and workers. But since the contract began, the agency logged its deadliest period ever, with the 2009 Red Line train crash, four Metro track workers killed in three incidents, the electrocution of a contractor, and the deaths of at least two people in separate Metrobus crashes. The agency's broken "safety culture" was blamed for many of the problems.
During the first four years of the DuPont contract, though, the number of workers' compensation and third-party claims dropped dramatically, the audit said. But the cost of workers' compensation claims increased in the past two fiscal years.
The audit notes it's not clear if the DuPont work caused the drop, because the auditors were unable to directly measure the impact of its work. And a Metro employee deleted key targets for DuPont to meet from the contract during a modification in 2008, the audit said. Metro officials "could not explain how this happened," the audit said.