Case study

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

Fairmarkit revolutionized the MBTA's tail spend procurement process by digitizing their sourcing operations resulting in a reduction of source-to-award cycle times, savings of over $5M, and improved spend oversight.

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 Technology Officer, MBTA

The company

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 Despite their size, they continued to utilize outdated methods to manage their everyday spend.

The challenge

Ever year, the MBTA makes around 15,000 purchases worth less than $50,000 each. For those types of purchases, there is a policy that requires the MBTA to collect at least two bids from vendors before finalizing an order. 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 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, the MBTA streamlined their sourcing and RFQ process using automation and machine learning technology. The organization was able to import their purchasing and vendor history to automatically fill out RFQs and able to access the list of vendors from Fairmarkit’s database that sell products listed in the specific RFQ. In combination, Fairmarkit gave the MBTA access to a more diverse database of vendors, including those that would have previously been at a disadvantage and unable to win government business, which has increased competition and driven down costs.

In seconds, MBTA buyers are able to automatically send RFQs to multiple vendors, a process that would have normally taken hours or days. After vendors receive an automated email with the RFQ information, they have the option to submit their bid to the platform. Once the bidding period is over, the MBTA buyers can easily compare bids side-by-side and choose which vendor to award the requistions to.

The result

Since the engagement began, the MBTA has received over 36,000 bids on over 14,000 RFQs through the platform. Through those bids, the organization has saved over $5M with an average monthly savings of over $100K.

“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

On average, the MBTA has saved almost $1,000 per RFQ with a total savings of $7.4M dollars since starting in the spring of 2018. “Fairmarkit gives our buyers the tools they need to make responsible, informed decisions, based on 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 Technology Officer of the MBTA.