ACQUISITION AND PROCUREMENT: Company’s Electronic Procurement System Limits Effective Contract Oversight

We initiated this work as a survey of Amtrak’s practices for developing and managing construction contracts. During our review, however, we identified other relevant challenges, which we are raising to inform key stakeholders as the company plans to receive its first tranche of funding from the Infrastructure Investment and Jobs Act.

We found that the company’s electronic procurement system, Ariba on Demand, is not operating as a centralized and automated repository for storing its procurement contracts. This has led to contracting officers storing contract files and supporting documentation in multiple systems (in addition to Ariba on Demand) like SharePoint—a web-based collaboration platform—and on personal drives. As a result, using Ariba on Demand, our auditors were unable to determine the total number of company contracts, suppliers, and change orders. Amtrak also cannot readily find such data in Ariba on Demand or any other system. The lack of a centralized and automated repository limits companywide oversight of contracts and poses legal and financial risks. These risks will persist and be exacerbated by the influx of Infrastructure Investment and Jobs Act funds and the initiation of new construction projects.

In addition, we identified six challenges with Ariba on Demand—as the company is currently using it—including a limited ability to protect sensitive information, difficulties registering suppliers, and various technical limitations that require manual workarounds and increase the time and effort necessary to develop and manage construction contracts.

The company may want to determine whether Ariba on Demand has the capability to meet its needs for an automated contract repository and, if not, to explore other viable solutions. In addition, it may want to assess the relative risks of the other challenges we identified and prioritize addressing them.