Case study

The MBTA uses Fairmarkit to save over $100K every month

Fairmarkit revolutionized the MBTA's tail spend procurement process by digitizing its sourcing operations. This resulted in a reduction in source-to-award cycle times, 100% compliance with bidding regulations and an average of $100K in monthly savings.

Industry
Transportation
Location
Boston, Massachusetts
Employees
6,400
"Fairmarkit’s emphasis on transparency in bidding has resulted in new vendors, a stronger, simpler bidding process, and even more competitive prices for the MBTA."
Nick Easley
Chief Transformation Officer, MBTA

The company

The Massachusetts Bay Transportation Authority (MBTA) replaced the Metropolitan Transit Authority (MTA) in 1964. The MBTA is one of the largest domestic transit agencies that is responsible for operating all five major types of terrestrial mass transit vehicles. In 2009, the MBTA became a division of the Massachusetts Department of Transportation (MassDOT). As of 2016, the MBTA was the most trafficked light rail system and the fourth busiest subway system in the US. They are the largest consumer of electricity and the second-largest landowner in Massachusetts, handling millions of dollars in transactions daily. Despite their size, the MBTA continued to utilize outdated methods to manage their everyday spending.

The challenge

Every year, the MBTA makes around 15,000 purchases worth less than $50,000 each. Policy requires the MBTA to collect at least two bids from vendors before finalizing an order for those types of purchases. Prior to their engagement with Fairmarkit, this required an employee at the MBTA to either search for relevant vendors online, send emails or call companies, and then manually file the resulting bids where they were unlikely to be referenced again. This left the MBTA vulnerable in two areas: price and time efficiency.

The solution

Fairmarkit revolutionized the bidding process for the MBTA, changing the sourcing process from a manual, paper-and-pencil one to an automated system. The MBTA implemented Fairmarkit with the hopes of optimizing employee efficiency and becoming better stewards of taxpayer money. Using Fairmarkit’s automation and machine learning technology, the MBTA was able to streamline its sourcing and RFQ processes. Now, they import their purchasing and vendor history automatically, upload RFQs, and access their catalog of vendors to easily source the product or services needed. Fairmarkit also gave the MBTA access to a more diverse database of vendors through the Fairmarkit vendor ecosystem which increases competition and drives down costs.

In seconds, MBTA buyers now automatically send RFQs to multiple vendors, a process that would have normally taken hours or days. After vendors submit their bids, the MBTA buyers easily compare them side-by-side and choose which vendor to award the requisitions to. The MBTA is now 100% in compliance with bidding regulations, seamlessly receiving two bids before finalizing an order, and all of this data can easily be retrieved in the platform. 

The result

Since the engagement began in 2017, the MBTA has received over 36,000 bids on over 14,000 RFQs through the platform, saving almost $1,000 per RFQ. These bids have resulted in an average monthly savings of over $100K per month for the organization, with a total cost avoidance of $10M dollars since implementation. “Fairmarkit gives our buyers the tools they need to make responsible, informed decisions, based on a detailed history of purchasing information...I paid for the system in the first month, just with that functionality of making a public platform that stores how much people are quoting or bidding on my system is worth its weight in gold,” mentioned Nick Easley, Chief Transformation Officer of the MBTA.

“Fairmarkit brings our bidding for purchases under $50,000 into a new era that includes massive enhancements to transparency and efficiency, expect prices to go down and competition to increase, all done through a new system that dramatically simplifies the process and opens the door for new vendors to do business with the T.”

Luis Manuel Ramírez, MBTA General Manager