OIG: Amtrak faces MoE challenges

Amtrak faces challenges managing its $239 million inventory of parts and materials used to maintain its fleet of locomotives and rail cars, the Amtrak Office of Inspector General (OIG) said in a new report.

The railroad's approach can limit the rolling stock available for service, delay trains, limit onboard service and amenities and incur excess costs to manage surplus and obsolete inventory, the OIG found.

Although Amtrak can be credited for implementing a more automated planning process and hiring staff to better manage its maintenance-of-equipment (MoE) inventory — such as rail-car and locomotive parts, tools, chemicals and lubricants — an OIG audit identified several challenges that hinder the railroad's ability to maintain enough inventory to support operations while avoiding excess costs from having too much on hand, OIG officials said in a news release.

The OIG report states that Amtrak has an imbalance of MoE inventory, which includes more than $49 million in surplus or obsolete items.

Despite surpluses in certain items, mechanical employees told the OIG that parts are frequently out of stock, leading to operational impacts (limited rolling stock available for service), and increased workload (employees are often required to cannibalize parts while they wait to receive more stock), the report stated. The lack of available parts also can lead to hoarding.

The OIG also found that Amtrak could improve its system for ordering MoE inventory and how it safeguards its inventory. For example, 95% of the mechanical employees the OIG interviewed said names and descriptions of items in the ordering system were vague or unclear, or the accompanying photographs of the items were wrong or missing.

To more strategically manage its MoE inventory, the OIG recommended Amtrak implement processes to improve inventory data; develop strategic inventory goals; assess the costs and benefits of carrying surplus and obsolete inventory to determine which materials to sell or scrap; and implement processes to safeguard inventory.

Amtrak leaders agreed with the report’s recommendations and plan to address them, OIG officials said.