Amtrak watchdog says $41 million purchase of Delaware building based on ‘faulty assumptions’

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Amtrak’s purchase of a building in Wilmington, Delaware for a massive $41 million was based on “significant yet faulty assumptions,” according to the agency’s internal watchdog which criticized the purchase in a report.

The Amtrak Office of Inspector General said that the purchase of the building for a Unified Operations Center (UOC) program in President Biden’s home state was “largely premised on two significant yet faulty assumptions.”

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Those assumptions were, first, that it could centralize its dispatch and police teams, while also bringing in its IT personnel from leased offices. The second, linked assumption, was that the purchase would save money to the tune of $50 million.

“Neither has materialized because the company did not effectively verify the feasibility of centralizing these personnel and functions including retrofitting the building to accommodate significant IT requirements before purchasing the building,” the report said.

The plan was to move dispatchers, currently working not only in Wilmington but also in Boston, New York City, Chicago and Washington D.C., into one consolidated building. It would also bring in IT personnel from Atlanta and Washington D.C., saving money on leased space.

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The building was purchased in May 2020, however the auditors found that it was done “before ensuring that the building could accommodate its UOC program, and other business needs, which not only impacted its estimated long-terms savings, but also introduced additional risks.” Elements including emergency standby power and the needs of dispatching and police communications were not appropriately considered.

The report also found that the company has had to reduce the scope of the functions it was combining, “calling into question whether the UOC program will unify operations as the company intended.” The number of dispatchers relocated was reduced from 250 to just 40, and the number of IT staff relocated will be between 25-35, down from the initially estimated 400.

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Additionally, the report found that the predictions of savings made by the move were inaccurate, and early in the project it was found to be unrealistic.

The report said that Amtrak is updating its business case with more accurate information, and has made a number of moves to stop similar events happening in the future — including updating guidance on how to develop better business cases in the future, and control to make sure adequate approval is sought first.

“Such steps will also better position the company to make informed decisions as it prepares to execute at least $22 billion in money set aside for it in [the Infrastructure Investment and Jobs Act] to modernize its assets and improve its infrastructure,” the report said.