The state’s inspector general tore into the Steamship Authority leadership this week in a new report that faults the ferry line general manager and board for a lack of oversight into the millions of dollars poured into a yet-to-be produced new website. 

Inspector general Jeffrey Shapiro released a 59-page report on Thursday that concluded the work on a new website, started in 2022, led to a “cascade of failures” that resulted in an unacceptable waste of public resources. 

With those findings, the inspector general has recommended that the state legislature establish a special commission to determine whether the Steamship Authority’s 65-year-old enabling legislation should be updated.

“Broadly, the Steamship Authority lacks a ‘tone from the top’ and has failed to create a culture that values employee input,” Mr. Shapiro wrote. “The Steamship Authority does not appear to have an ability or desire to implement a forward-thinking, strategic approach to managing projects, rather than a by-the-seat-of-your-pants reactive approach.”

Mr. Shapiro’s office started to investigate the ferry line in 2023 in response to public concerns and press reports about crashes to the website during peak vehicle reservation periods. At the center of the report was the decision to try and build a new website before overhauling the 1990s reservation system that serves as the bedrock for people trying to book vehicle passage, according to the inspector general.

“The [inspector general’s office] found that in attempting to address the problem the SSA and its board made a critical misstep in prioritizing a website redevelopment project instead of a badly needed overhaul of the underlying ferry reservation system,” Mr. Shapiro’s office wrote in a statement. “The [office] determined that the website project, begun in 2022, wasted at least $2 million – and possibly as much as $4 million or higher – before it was ultimately shelved.”

Mr. Shapiro did not pull punches in the report and in statements to the press. The report found that general manager Robert Davis, who is set to step down from the top role at the end of the year, made miscalculations in the planning and execution of the website project, gave overly rosy project updates and ignored the advice of the Steamship’s own consultant.

Mr. Shapiro also faulted the board for not asking enough questions about the project, and failing to exercise its fiduciary responsibilities. 

“The Steamship Authority has nothing to show after pouring millions of dollars into an effort that was doomed from the start,” Mr. Shapiro said. “Indeed, the Steamship Authority’s failure to appreciate the difference between the public-facing website and the back-end reservation system anchors the cascade of failures that ensued.” 

In a statement to the Gazette Thursday, Steamship Authority spokesman Sean Driscoll said the ferry line received the report from the inspector general and is thoroughly reviewing the extensive document. 

“As we have only recently received the report, we are unable to comment on specifics until that review is complete,” Mr. Driscoll wrote.

Members of the Steamship board acknowledged the need for improvement and oversight, and said they were eager to take these on under the leadership.

“Over the past few years, the Board has focused on the SSA’s IT infrastructure needs and has outsourced a new reservations system, engaged qualified consultants, and created an IT Executive Steering Committee, all aimed at prioritizing an efficient IT infrastructure,” Vineyard member James Malkin and Falmouth member Peter Jeffrey said in a statement.

The Steamship Authority, a quasi-public transportation agency that is tasked by the state to provide passage to the Vineyard and Nantucket, started to look into a new website and mobile app in 2020 in response to crashes earlier that year when summer vehicle reservations opened. 

Mr. Shapiro faulted the authority with moving on the website before dealing with the antiquated back-end reservation system, which is owned by a man in his 70s who lives in Wisconsin. 

“The Authority’s leadership became blind to the underlying dilemma: that developing a new website around a reservation system that needed replacing would likely result in a substantial waste of time and money,” according to the report. 

The Steamship Authority did decide to shelve the website project in 2024 to prioritize a new reservation system, but not before spending more than $4 million on the website development. Earlier this month, ferry line officials and a consultant outlined features of the new reservation system, which the ferry line hopes to get online in 2026.

The inspector general’s office report digs deep into the back and forth on the website, including numerous change orders and reports to the board before the project was halted. It also includes 15 different findings and numerous recommendations to Steamship staff, its board and state officials.

One of the issues raised in the report includes an alleged double payment for the reservation system owner’s source code. The Steamship Authority apparently purchased a license for the source code to the reservation system in 2010, but, because of poor record keeping, bought the license again at 10 times the cost 14 years later, the report claims. 

An invoice from 2010 shows the Steamship Authority paid the Saber Technologies $35,000 for source code, though ferry line employees later said that the agreement was not signed and is not enforceable. 

In 2024, the ferry line then purchased the rights to the source code, with a licensing fee of $350,000. 

“While the General Manager has disputed the conclusion that the 2010 agreement gave the Steamship Authority full rights to Saber’s source code, the wording of both the 2010 and 2024 agreements, as well as the email from the Steamship Authority’s general counsel, make it clear that both contracts permitted access to and modification of the reservation system’s source code,” the report concluded. “The Authority’s poor record keeping prevented it from recognizing a license for which it paid $35,000.”

The website project also did not have clear goals or timelines, according to the inspector general, leading to a cycle of extending work and increasing the budget. 

The Steamship Authority management also replaced its longtime credit card processing system at the time. That swap, which included a change order for $368,962, was done without seeking board approval or seeking other potential offers, a red flag for the inspector general.

“The Steamship Authority’s poor planning in replacing its credit card processing system is yet another example of its leadership’s failure to understand the systems the Authority was using, the interrelationships of these systems, and the basic principles of project management,” the inspector general’s office wrote in the report.

The inspector general also critiqued the Steamship Authority’s decision to have the communications director initially manage the website project, given that they had no background in project management or information technology, likely leading to the delays.

The additional duties were heaped onto his existing work, leading to breakdown in duties to attend to the crisis at hand.

Mr. Davis’s portrayal of how the website project was going was another concern for the inspector general. Some issues were not fully portrayed to the board, meaning they were making decisions without the full picture. One former employee for the contractor hired to shepherd the website project felt the general manager was not being transparent with the board about the work, leading to more delays. 

“The root of our launch delays and cost overruns remains the backlog of work for your already stretched team,” the employee wrote in an email to the general manager, according to the report. 

“I am of the belief that it’s in both of our best interests to be transparent with the Board on this matter,” they wrote. “This would allow them to make an educated decision about establishing a proper funding and staffing....The longer we continue to not share the reality of the situation, the longer you and I will continue to find ourselves together in this vicious and toxic cycle.” 

Steamship Authority officials disagreed with this assessment, and claimed that the contractor was responsible for holding up the project, according to the report. 

Mr. Shapiro recommended that the Steamship Authority administration and board assess the status of the reservation system project, provide more clear reports to the board and address the potential double payment of Saber.

He also called on the Steamship to develop policies and procedures to ensure proper reviews of major projects, and urged the state secretary of transportation to conduct an audit on the ferry line.

The biggest recommendation came to the Massachusetts Legislature. Mr. Shapiro suggested that lawmakers create a special commission made of delegates from the Islands, Cape Cod and New Bedford, as well as state transportation committee members. That commission would be called to ensure the Steamship board is performing appropriate oversight and if the ferry line’s governing structure needs to be changed. 

The Vineyard’s representatives in the state house, state. Sen. Julian Cyr and state Rep. Thomas Moakley, both said that change was needed and hoped the inspector general's words could prompt action. 

“The residents of Martha’s Vineyard, Nantucket, and Cape Cod deserve a professional, accountable ferry line,” Mr. Moakley said in a statement. “I hope that these findings and recommendations coming from an unbiased and thorough source like the Inspector General’s Office will serve as a catalyst for change.”

There were some spots of optimism in the report. With a new general manager coming on board in the new year, this was a good time to examine operating procedures, consider new approaches and set a new tone from the top, according to Mr. Shapiro. 

Yet he was also wary about Mr. Davis staying on in a senior advisor position, saying it could prove to be an obstacle to Alex Kryska, the incoming manager. 

“Aside from the question of why the Board approved the employment agreement, the role’s designated responsibilities cover three areas in which the current general manager has not demonstrated strength: strategic planning, project management, and implementing large projects,” the inspector’s office said in a statement.

Mr. Shapiro hoped the report would aid the Steamship Authority in the future, and referenced a past inspector’s report from the 1980s that also dinged the ferry line’s ability to make major decisions. 

“I hope this report and its recommendations will serve as a field guide for the SSA to make needed changes in the immediate term as the incoming general manager works to set the agency’s strategic vision, culture, and agenda with a view toward a ‘best in class’ operation,” Mr. Shapiro said. “The point that the [inspector general’s office] raised in a 1985 report — that a ‘failure to properly manage major decisions can seriously impair the SSA’s future ability to provide service to the public’ — is as true today as it was 40 years ago.”