{"id":2323637,"date":"2024-08-13T09:07:59","date_gmt":"2024-08-13T13:07:59","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/septa-feds-slack-on-140m-chinese-contract-report-washington-examiner\/"},"modified":"2024-08-13T09:23:28","modified_gmt":"2024-08-13T13:23:28","slug":"septa-feds-slack-on-140m-chinese-contract-report-washington-examiner","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/septa-feds-slack-on-140m-chinese-contract-report-washington-examiner\/","title":{"rendered":"SEPTA, feds slack on $140M Chinese contract: Report &#8211; Washington Examiner"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"&quot;\"><div class=\"counts mashsbcount\">22<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Fsepta-feds-slack-on-140m-chinese-contract-report-washington-examiner%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=2323637&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><p>A federal report <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/watch-jim-jordan-gives-ultimatum-on-the-upcoming-electoral-college-showdown-video\/\" title=\"WATCH: Jim Jordan Gives Ultimatum On The Upcoming Electoral College Showdown (VIDEO)\">raised concerns<\/a> regarding the oversight of a $138 million contract between SEPTA (Southeast Pennsylvania Transportation Authority) and \u200cthe China Railway Rolling \u200cStock MA Corporation (CRRC), which \u200dwas intended to \u200bsupply 45 \u200brailcars by 2025. Initially awarded in \u200b2017, the contract faced scrutiny from three congressmen \u200cby 2022 over compliance with Buy\u200c America regulations. A\u200c review by the\u200b Federal Transit Administration (FTA) \u200cconcluded that SEPTA\u200b failed to\u200c ensure the railcars met federal guidelines, resulting \u2063in the suspension of\u2062 funding and subsequent termination of the contract by April 2024. <\/p>\n<p>The report highlighted that \u2062vague guidance from the FTA contributed to\u2062 SEPTA&#8217;s inability to enforce compliance effectively, with criticisms\u2064 directed at both SEPTA and the federal agency for insufficient oversight and documentation requirements. Issues arose \u200bduring the pre-award audit when SEPTA could not access necessary information due to confidentiality agreements between CRRC and its external\u200b auditor, leading to a lack of transparency. The FTA&#8217;s non-mandatory guidelines hindered SEPTA&#8217;s\u2062 capacity to verify compliance, ultimately resulting in <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/supreme-court-could-decide-fate-of-stalled-mountain-valley-pipeline-backed-by-manchin\/\" title=\"The Supreme Court may determine the future of the delayed Mountain Valley Pipeline, supported by Manchin.\">significant financial implications<\/a> for the transit\u200c authority, \u2064which had already spent over $55\u2062 million in\u2062 federal funds on the project. The\u200b investigation revealed a systemic failure in enforcing\u2062 Buy America requirements, stressing the need for\u200c clearer guidelines and stricter documentation protocols.  <\/p>\n<p class=\"readmore\">\n    <button onclick=\"showReadMore()\" id=\"readmorebtn\">Read more&#8230;<\/button>\n<\/p>\n<hr id=\"line\">\n<span id=\"more\"><\/p>\n<p><?xml encoding=\"utf-8\" ?><?xml encoding=\"utf-8\" ?><?xml encoding=\"utf-8\" ?><?xml encoding=\"utf-8\" ?><?xml encoding=\"utf-8\" ?><?xml encoding=\"utf-8\" ?><\/p>\n<div class=\"tdb-block-inner td-fix-index\"><span class=\"tdb-mobile-menu-button\"><i class=\"tdb-mobile-menu-icon td-icon-mobile\"><\/i><\/span><\/div>\n<div class=\"tdb-block-inner td-fix-index\"><span class=\"tdb-header-search-button-mob dropdown-toggle\" data-toggle=\"dropdown\"><i class=\"tdb-mobile-search-icon td-icon-search\"><\/i><\/span><\/div>\n<div class=\"tdb-block-inner td-fix-index\"><\/div>\n<div class=\"tdb-block-inner td-fix-index\"><span class=\"tdb-mobile-menu-button\"><i class=\"tdb-mobile-menu-icon td-icon-mobile\"><\/i><\/span><\/div>\n<div class=\"tdb-block-inner td-fix-index\">\n<div class=\"tdb-drop-down-search\" aria-labelledby=\"td-header-search-button\">\n<div class=\"tdb-drop-down-search-inner\">\n<form method=\"get\" class=\"tdb-search-form\" action=\"https:\/\/www.washingtonexaminer.com\/\"><\/form>\n<div class=\"tdb-aj-search\"><\/div>\n<\/div>\n<\/div>\n<p><a href=\"http:\/\/www.washingtonexaminer.com\/#\" role=\"button\" aria-label=\"Search\" class=\"tdb-head-search-btn dropdown-toggle\" data-toggle=\"dropdown\"><i class=\"tdb-search-icon td-icon-search\"><\/i><\/a><\/div>\n<div class=\"tdb-block-inner td-fix-index\"><\/div>\n<div class=\"tdb-block-inner td-fix-index\">\n<h1 class=\"tdb-title-text\">SEPTA, feds slack on $140M Chinese contract: Report<\/h1>\n<div><\/div>\n<div class=\"tdb-title-line\"><\/div>\n<\/div>\n<div class=\"tdb-block-inner td-fix-index\"><\/div>\n<div class=\"tdb-block-inner td-fix-index\"><\/div>\n<div class=\"tdb-block-inner td-fix-index\">\n<div id=\"Brid_1729329\" class=\"tpd-featured-video bridtv\"><\/div>\n<p>(The Center Square) &mdash; A federal report warns that SEPTA&rsquo;s contract with a state-owned Chinese company lacked proper oversight and may not have met federal guidelines for Buy America requirements.<\/p>\n<p>However, much of the problem came from vague guidance from the federal government itself.<\/p>\n<p>The contract, a $138-million deal with the China Railway Rolling Stock MA Corporation, or CRRC, would have delivered 45 passenger railcars to the Philadelphia region&rsquo;s transit agency by 2025.&nbsp;<\/p>\n<p>Awarded in 2017, the contract attracted the attention of three federal congressmen by 2022 who raised concerns with the Federal Transit Administration over whether the corporation met Buy America requirements in its agreements with SEPTA and other transit agencies, worth about $3 billion.&nbsp;<\/p>\n<p>An FTA review ensued, leading to the suspension of money to SEPTA for the project in February 2024, and the contract&rsquo;s termination by SEPTA in April for cause.&nbsp;<\/p>\n<p>The FTA was &ldquo;without confidence that the multi-level railcars comply with Buy America,&rdquo; it stated in a letter to SEPTA. As of January 2024, SEPTA spent more than $55 million in federal dollars on the project and was looking to recover the money.<\/p>\n<p>Though SEPTA fell short, the fault was shared.<\/p>\n<p>&ldquo;Weaknesses in FTA&rsquo;s Buy America guidance hindered its oversight of SEPTA&rsquo;s compliance,&rdquo; the U.S. Department of Transportation&rsquo;s&nbsp;<strong><a href=\"https:\/\/www.oig.dot.gov\/sites\/default\/files\/library-items\/FTA%27s%20Oversight%20of%20SEPTA%27s%20Compliance%20With%20Buy%20America%20Rolling%20Stock%20Requirements%20Faced%20Several%20Challenges_ZA2024033_508-compliant.pdf\">Office of Inspector General<\/a><\/strong>&nbsp;argued in a July report.<\/p>\n<p>Buy America rules apply to several federal projects connected to highways, public transportation, aviation, and passenger rail. They aim to <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/pining-for-pennsylvania-how-us-steel-acquisition-could-cost-biden-in-2024-election\/\" title=\"Longing for Pennsylvania: Impact of US Steel Acquisition on Biden in 2024 Election\">protect domestic manufacturing jobs<\/a>.<\/p>\n<p>When federal agencies try to apply those rules, however, things can go wrong.<\/p>\n<p>In SEPTA&rsquo;s Chinese contract, cracks appeared when SEPTA couldn&rsquo;t effectively oversee the pre-award audit, which verifies that CRRC meets Buy America standards and happened a month after the contract was announced.<\/p>\n<p>SEPTA declined to comment when asked about whether it would update its policies to improve oversight.<\/p>\n<p>&ldquo;FTA does not require recipients to retain supporting documentation for pre-award audits or to verify suppliers&rsquo; Buy America information,&rdquo; the OIG report noted. &ldquo;Without clear guidance, FTA could not rely on SEPTA to provide oversight of rolling stock procurements and risks that recipients miscalculate domestic content costs&mdash;raising concerns about whether FTA&rsquo;s Buy America rules are being met.&rdquo;<\/p>\n<p>When the administration only suggests that transit agencies do some things, it makes oversight harder.<\/p>\n<p>&ldquo;The agency does not require recipients or third-party auditors to retain any documentation from the pre-award audit in order to maintain confidentiality regarding manufacturers&rsquo; cost data,&rdquo; the report noted. &ldquo;However, without this documentation, FTA and SEPTA have no assurance as to the quality and thoroughness of the pre-award audit work performed.&rdquo;<\/p>\n<p>In one instance, the outside auditor, Atkins, couldn&rsquo;t share information with SEPTA.<\/p>\n<p>When Atkins looked at CRRC&rsquo;s books to verify it met Buy America requirements, it signed a nondisclosure agreement.<\/p>\n<p>&ldquo;SEPTA was not able to review the cost information contained in the pre-award audit because it did not have a nondisclosure agreement with CRRC,&rdquo; the report noted. &rdquo;As such, only the Atkins auditor was allowed to see CRRC MA&rsquo;s cost information, thus positioning SEPTA to rely solely on what was written in the <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/dominion-used-a-version-of-the-solorwinds-orion-platform-which-provides-backdoor-access-into-their-voting-machines\/\" title=\"Dominion Used a Version of the SolorWinds Orion Platform Which Provides Backdoor Access Into their Voting Machines\">audit report<\/a>.&rdquo;<\/p>\n<p>When asked by the OIG if signing an NDA with corporation would help SEPTA get better oversight of its project, officials &ldquo;said they hadn&rsquo;t thought about it before since they relied on Atkins but were open to the idea.&rdquo;<\/p>\n<p>SEPTA also declined to comment about whether it agrees with the OIG report calling it &ldquo;ill-positioned&rdquo; to ensure compliance, and whether it made any efforts to figure out how much of the money paid to CRRC came from federal or SEPTA funds.<\/p>\n<p>Nor could the FTA get the information they needed from CRRC.<\/p>\n<p>&ldquo;CRRC MA was often resistant when responding to requests for documentation, lacked sufficient documentation, or provided voluminous amounts of irrelevant documentation that make it difficult to identify specific items for review,&rdquo; the report noted. &ldquo;All of which has led to significant delays in FTA&rsquo;s enhanced compliance review.&rdquo;<\/p>\n<p>The FTA gave SEPTA and CRRC &ldquo;numerous opportunities&rdquo; to demonstrate the contract complied with Buy America rules for over a year and &ldquo;did not receive satisfactory responses,&rdquo; the report noted.<\/p>\n<p>In the end, information requests turned into a circular game. CRRC refused a request from SEPTA for more information and claimed they gave the information to FTA and Atkins, but SEPTA could not verify the information.<\/p>\n<p>&ldquo;SEPTA was ill-positioned to ensure Buy America compliance on the CRRC MA contract,&rdquo; the report noted.<\/p>\n<p>If SEPTA couldn&rsquo;t verify the <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/more-on-pennsylvania-another-statistical-analysis-shows-roughly-300000-biden-votes-are-questionable\/\" title=\"More on Pennsylvania - Another Statistical Analysis Shows Roughly 300,000 Biden Votes Are Questionable\">work independently<\/a>, it wasn&rsquo;t because it ignored FTA guidelines: State agencies aren&rsquo;t expected to collect the relevant information.<\/p>\n<p>&ldquo;FTA does not require recipients or its auditors to retain any workpapers, formal or informal notes, or other records to support the pre-award audit,&rdquo; the OIG report noted. &ldquo;Instead, FTA suggests only that manufacturers &lsquo;may&rsquo; maintain records of the information and documentation for the audit.&rdquo;<\/p>\n<p>The FTA only suggests keeping those records as a best practice.<\/p>\n<p>&ldquo;Without actual requirements for recipients, third-party auditors, or manufacturers to retain pre-award or post-delivery audit documentation, the lack of audit evidence hinders FTA&rsquo;s ability to evaluate and validate Buy America compliance for rolling stock procurements,&rdquo; the report noted.<\/p>\n<p>The OIG recommended that the FTA create requirements for how grant awardees or third-party auditors review documentation for audits; ensure that awardees have the same access to confidential information as third-party auditors; establish requirements to document verification of suppliers&rsquo; Buy America information; and develop policies for when to initiate compliance reviews for Buy America.<\/p>\n<p>The difficulty of verifying that agencies and private companies follow Buy America rules extends to the difficulty of knowing whether these rules boost American manufacturing.<\/p>\n<p>&ldquo;Although the Buy America provisions have been in place in some form for more than 40 years in transportation, it is difficult to know how they have affected steel and rolling stock&nbsp; manufacturing in the United States, whether measured by jobs, output, or any other indicator,&rdquo; a&nbsp;<strong><a href=\"https:\/\/crsreports.congress.gov\/product\/pdf\/R\/R44266\/9\">2019 report<\/a><\/strong>&nbsp;from the Congressional Research Services noted.&nbsp;<\/p>\n<p>The report did warn, however, that Buy America rules may drive up project costs.<\/p>\n<p> <script data-cfasync=\"false\" src=\"http:\/\/www.washingtonexaminer.com\/cdn-cgi\/scripts\/5c5dd728\/cloudflare-static\/email-decode.min.js\"><\/script><script>!function(){var g=window;g.googletag=g.googletag||{},g.googletag.cmd=g.googletag.cmd||[],g.googletag.cmd.push(function(){g.googletag.pubads().setTargeting(\"has-featured-video\",\"true\")})}();<\/script><script>var _bp=_bp||[];_bp.push({\"div\":\"Brid_1729329\",\"obj\":{\"id\":\"27789\",\"width\":\"1280\",\"height\":\"720\",\"stickyDirection\":\"below\",\"video\":\"1729329\"}});<\/script><script defer src=\"https:\/\/services.brid.tv\/player\/build\/brid.min.js\"><\/script><\/div>\n<div class=\"tdb-block-inner td-fix-index\"><\/div>\n<div class=\"tdb-block-inner td-fix-index\"><\/div>\n<p><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>A federal report has raised concerns about SEPTA&#8217;s contract with a state-owned Chinese firm, indicating that it lacked adequate oversight and may not have complied with federal Buy America standards. The issues largely stemmed from unclear directives from the federal government. This $138 million agreement with China Railway Rolling Stock MA Corporation (CRRC) was intended to supply 45 passenger railcars to Philadelphia&#8217;s transit system by 2025. Awarded in 2017, the contract drew scrutiny from three congressional representatives by 2022, who questioned whether CRRC adhered to Buy America requirements in its contracts with SEPTA and other transit agencies totaling around $3 billion. Following an FTA review, funding for the project was suspended in February 2024, leading to SEPTA terminating the contract in April due to compliance concerns.<\/p>\n<p>The FTA expressed doubts about whether the railcars met Buy America standards in a letter to SEPTA. By January 2024, SEPTA had already spent over $55 million of federal funds on this project and sought ways to recover that money. While SEPTA faced challenges, responsibility was shared; a July report from the U.S. Department of Transportation\u2019s Office of Inspector General highlighted deficiencies in FTA\u2019s guidance that hampered effective oversight of SEPTA\u2019s compliance.<\/p>\n<p>Buy America regulations are designed to protect domestic manufacturing jobs across various federally funded projects related to transportation but can lead to complications during enforcement. In this case, problems arose when SEPTA struggled with overseeing a pre-award audit meant to confirm CRRC&#8217;s adherence to these standards shortly after the contract announcement.<\/p>\n<p>SEPTA did not provide comments regarding potential policy updates for better oversight or its stance on being labeled &#8220;ill-positioned&#8221; for ensuring compliance as per OIG findings. The report also noted difficulties faced by both FTA and SEPTA due to CRRC&#8217;s reluctance or inability to provide necessary documentation during audits.<\/p>\n<p>Despite numerous opportunities given by FTA for both parties involved\u2014SEPTA and CRRC\u2014to demonstrate compliance over more than a year, satisfactory responses were not received according to the report findings. Ultimately, communication between all parties became circular; requests for information led nowhere as each entity claimed they had provided what was needed without verification possible on either side.<\/p>\n<p>The OIG recommended establishing clearer requirements for documentation retention during audits and ensuring equal access between awardees and auditors regarding confidential information related specifically backtracking suppliers&#8217; adherence under Buy America rules.<\/p>\n<p>While these provisions have been around for decades within transportation sectors aimed at bolstering American manufacturing output or job creation metrics remain uncertain according reports suggesting they could inadvertently increase overall project costs instead<\/p>\n","protected":false},"author":1,"featured_media":2323638,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"https:\/\/www.washingtonexaminer.com\/wp-content\/uploads\/2024\/08\/chinese-president-xi-jinping.webp","fifu_image_alt":"","footnotes":""},"categories":[538],"tags":[37980,36513,37979,8068],"class_list":["post-2323637","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-washington-examiner","tag-chinese-contract","tag-federal-funding","tag-septa","tag-transportation"],"fifu_image_url":"https:\/\/www.washingtonexaminer.com\/wp-content\/uploads\/2024\/08\/chinese-president-xi-jinping.webp","_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2323637","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=2323637"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2323637\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/2323638"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=2323637"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=2323637"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=2323637"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}