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DOT Restores Second Avenue Subway Funds After MTA Agrees to Corrective Actions

The decision clears the way to award the next Phase 2 contract.

Overview

  • USDOT, which notified the MTA Thursday minutes before a federal court hearing, said it will resume processing roughly $58–60 million in reimbursements after a seven-month freeze.
  • In a letter, the department said its review found the MTA and prime contractors appeared to weigh race and sex in awards, and it cited agreed corrective actions as the reason payments will restart.
  • The MTA said it can now award the excavation contract for the 106th Street station box, which the board approved in March, and it will resubmit reimbursement requests as required.
  • Gov. Kathy Hochul and Sen. Chuck Schumer credited the lawsuit for forcing action, while a USDOT spokesperson said the shift ensures federal dollars do not fund what the agency called unconstitutional DEI contracting.
  • Phase 2 will extend the Q line from 96th Street to 125th Street with three new stations in East Harlem, a $6.9–$7.7 billion effort with about $3.4 billion in federal support, and similar freezes on the Gateway tunnel were reversed by a judge in February.