Impact of MTA Deficits to Hit Vendors – Wall Street Journal

New York’s Metropolitan Transportation Authority
New York’s Metropolitan Transportation Authority
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The MTA is demanding that vendors cut their bills as part of a cost-reduction program. PHOTO: BYRON SMITH FOR THE WALL STREET JOURNAL

By Paul Berger – The Wall Street Journal

Design and engineering firms have told an industry group they are considering walking away from contracts with New York’s Metropolitan Transportation Authority after the agency demanded that dozens of vendors cut bills by 10%.

The state-controlled MTA sent letters to certain vendors during the first months of this year, demanding the cuts to existing contracts as part of a cost-reduction program to stem a projected budget deficit in 2022 of $1 billion. Design and engineering firms say the demand forces companies to work for nothing or at a loss.

The American Council of Engineering Companies of New York said in an email sent to members Thursday that one firm has accepted a change to their contract. The email added that some firms have expressed their concerns about losing money and are talking about walking away from contracts.

A spokesman for the MTA said Friday that no vendors have …

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