The Massachusetts Bay Transportation Authority’s oversight board voted Monday to privatize the agency’s warehousing department, signing Virginia-based Mancon Inc. to a five-year, $28.4-million contract.

MBTA officials had previously panned the warehousing department, which orders, stores, and moves mechanical parts for the agency’s vehicles, as “completely broken,’’ and said privatizing it could save more than $25.4 million in operating costs.

The savings could eventually total as much as $64 million, counting forgone building improvements and incorrectly ordered inventory items.

“Let me be clear, the T is in the business of moving people, not parts,’’ Brian Shortsleeve, the MBTA’s interim general manager, said at the fiscal and management control board’s weekly meeting.

The contract marks the second major privatization effort by Governor Charlie Baker’s administration after it pressed the Legislature to suspend a law that puts up hurdles to outsourcing public work.

It comes after the MBTA and its largest labor group, the Boston Carmen’s Union, reached a new contract that protected most of its driving and maintenance jobs, but left warehouse and customer service jobs open to outsourcing.

The contract comes with a pair of two-year extensions that would pay Mancon an additional $24 million.

MBTA officials said the decision to hire Mancon, one of three finalists for the contract, will save the agency about $5 million a year.

That does not account for some 20 MBTA employees who are guaranteed jobs for 20 months even after Mancon has begun its work. Those workers will then be shifted to other jobs in the agency.

Mancon beat out two other companies, Banneker Industries and Neovia Logistics, even though its contract price was higher than Banneker’s.

Ernest Miller, a consultant hired to oversee the process, said the MBTA’s committee chose Mancon because of its experience with the Ohio Department of Transportation and other transit agencies.

The company had a deeper knowledge of global train operations, and the “strongest culture of customer service and flexibility,’’ he added.

The contract would be Mancon’s first foray into the Boston market, said Rick Clarke, the company’s president, who attended­ Monday’s meeting.

Gerard Polcari, MBTA chief procurement officer, called the move to privatize the department a “game-changer’’ that would make the maintenance department more efficient.

The MBTA estimated that the warehouse has been taking three days to acquire parts but the new contractor would take just 10 hours.

While employees at the ­MBTA’s central warehouse generally work Monday through Friday, Mancon will operate around the clock, officials said.

MBTA officials also said the accuracy of the warehouse inventory would greatly improve. Under the current system, just 61 percent of the inventory was accurately reported. Mancon is expected to increase that rate to about 95 percent.

Four of the agency’s five board members approved the proposal, including Lisa Calise, who attended the meeting by phone. Board member Brian Lang was not present.

The warehousing department used to have close to 40 workers, but many took buyouts as the MBTA signaled that privatization was coming.

James O’Brien, president of the Boston Carmen’s Union, said he does not expect any layoffs from Mancon’s arrival. He said he did not believe the company will be more efficient or create savings.

He pointed to the agency’s commuter rail contractor, Keolis Commuter Services, which received an extra $66 million for service and equipment changes after winning its bid with a significantly lower price than its competition. Other companies will follow suit, he said.

Nicole Dungca can be reached at nicole.dungca@globe.com. Follow her on Twitter @ndungca.