OIG: Amtrak Delaware building plans based on faulty assumptions

Amtrak's cost-saving relocation plans for a $41.1 million building in Wilmington, Delaware, have not materialized due to faulty planning assumptions, according to a new Amtrak Office of Inspector General (OIG) report issued last week.

Amtrak did not effectively verify the feasibility of its plan before it purchased the building, OIG officials said in a press release. The railroad estimated that it would save close to $50 million over time in its original business case, but early in the planning process, it became clear that the savings were unrealistic due to the significant operational disruptions required for a move to the new building. The OIG recommended that Amtrak verify the assumptions in its business case before proceeding.

In December 2018, Amtrak began planning the relocation of several vital customer care functions under its Unified Operations Center program, which would relocate a specialized Amtrak Police group based in Wilmington as well as a small group of employees who manage social media. Information technology personnel would also move into the new building, relocated from Atlanta and Washington, D.C.

Another reason the railroad chose to relocate was to mitigate flooding risks at the current Consolidated National Operations Center, located on the Christina River in Wilmington.

Amtrak finalized the purchase in May 2020 before ensuring it could reasonably accommodate its business needs, OIG officials said. Some examples of feasibility concerns include redesigning part of the building to house its dispatching and police personnel, and the addition of a large generator for emergency power.

"Amtrak’s finance department officials told the OIG that they have issued guidance and taken other actions to ensure that the company validates future business case assumptions and vets them with relevant stakeholders," OIG officials said in the release. "The finance department has also established a new group to help prepare and review the business cases that departments submit to support funding requests."

In 2019, there were signs that relocating 250 dispatchers to a single location from multiple cities in the Northeast and Midwest would not materialize. In current plans, only 40 dispatchers would relocate to Wilmington, an 83% reduction.