AGENCY:

Federal Transit Administration (FTA), DOT.

ACTION:

Notice of proposed rulemaking (NPRM); request for comments.

SUMMARY:

The Federal Transit Administration proposes to amend its project management oversight rule to make it consistent with recent statutory changes and to modify the scope and applicability of the rule. FTA seeks comments from project sponsors, the transit industry, other stakeholders, and the public on the proposed changes to the rule.

DATES:

Comments must be received October 25, 2019. Any comments filed after this deadline will be considered to the extent practicable.

ADDRESSES:

You may submit comments, identified by the docket number at the top of this document, by any of the following methods:

• Federal eRulemaking Portal: Go to http://www.regulations.gov and follow the instructions for submitting comments.
• Mail: Docket Management Facility, U.S. Department of Transportation, 1200 New Jersey Ave. SE, West Building Ground Floor, Room W12-140, Washington, DC 20590-0001.
• Hand Delivery or Courier: West Building Ground Floor, Room W12-140, 1200 New Jersey Ave. SE, between 9:00 a.m. and 5:00 p.m. Eastern time, Monday through Friday, except Federal holidays.
• Fax: (202) 493-2251.

Instructions: All submissions received must include the agency name and docket number or Regulatory Information Number (RIN) for this rulemaking. All comments received will be posted without change to www.regulations.gov, including any personal information provided. You may review the U.S. Department of Transportation's (DOT) complete Privacy Act Statement in the Federal Register published on April 11, 2000 (65 FR 19477).

Docket: For access to the docket to read background documents or comments received, go to www.regulations.gov at any time or to the U.S. Department of Transportation, 1200 New Jersey Ave. SE, Docket Operations, M-30, West Building Ground Floor, Room W12-140, between 9:00 a.m. and 5:00 p.m. Eastern time, Monday through Friday, except Federal holidays.

FOR FURTHER INFORMATION CONTACT:

For program matters, Corey Walker, Office of Program Management, (202) 366-0826 or corey.walker@dot.gov. For legal matters, Mark Montgomery, Office of Chief Counsel, (202) 366-4011 or mark.montgomery@dot.gov.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Background

II. Section-by-Section Analysis

III. Regulatory Analyses and Notices

I. Background

Recognizing a compelling need to strengthen the management and oversight of major capital projects, in the Surface Transportation and Uniform Relocation Assistance Act of 1987 (STURAA) (Pub. L. 100-17) (April 2, 1987), Congress authorized FTA's predecessor agency, the Urban Mass Transportation Administration (UMTA), to conduct oversight of major capital projects and to promulgate a rule for that purpose. The statute, now codified at 49 U.S.C. 5327, authorizes FTA to obtain the services of project management oversight contractors (PMOCs) to assist FTA in overseeing the expenditure of Federal financial assistance for major capital projects. Further, the statute requires FTA to promulgate a regulation that includes a definition of “major capital project” to identify the types of projects governed by the rule.

Accordingly, UMTA promulgated a rule for oversight of major capital projects on September 1, 1989, at 49 CFR part 633 (54 FR 36708). At that time, UMTA's capital programs were comparatively small, relative to today, totaling a little more than $2 billion annually. UMTA promulgated a regulation that defined “major capital project” as any project for the construction of a new fixed guideway or extension of an existing fixed guideway or a project involving the rehabilitation or modernization of an existing fixed guideway with a total project cost of $100 million or more. The rule limited covered projects to those receiving funds made available under sections 3, 9, or 18 of the Federal Mass Transit Act of 1964, as amended, 23 U.S.C. 103(e)(4), or section 14(b) of the National Capital Transportation Amendments of 1979. That rule is still in effect today.

By 2011, however, the annual dollar value of the Federal transit capital programs was nearly five times the level authorized under STURAA in 1987, and the number of active PMOC task orders was more than double the number in 1987. Furthermore, FTA funded a larger number of projects with a total cost of over one billion dollars that presented significant oversight challenges. Thus, on September 13, 2011, FTA published a Notice of Proposed Rulemaking (NPRM) (76 FR 56378) that proposed to enable FTA to identify more clearly the necessary management capacity and capability of a sponsor of a major capital project; spell out the many facets of project management that must be addressed in a project management plan; tailor the level of FTA oversight to the costs, complexities, and risks of a major capital project; set forth the means and objectives of risk assessments for major capital projects; and articulate the roles and responsibilities of FTA's PMOCs.

After the NPRM was published, however, the Moving Ahead for Progress in the 21st Century Act (MAP-21) (Pub. L. 112-141) (July 6, 2012) repealed the Fixed Guideway Modernization program, created the State of Good Repair program, and amended the Capital Investment Grants Program to add Core Capacity Improvement projects and streamline the New and Small Starts project development process. Moreover, MAP-21 shifted the initiation of project management oversight to the project development phase and removed the statutory requirement that recipients of financial assistance for projects with a total cost of $1 billion submit an annual financial plan. Given the fundamental changes to these competitive and formula capital programs, FTA withdrew the NPRM (78 FR 16460) to reexamine its proposed definition of major capital projects and its policy and procedures for risk assessment. Subsequently, the Fixing America's Surface Transportation (FAST) Act (Pub. L. 114-94) (December 4, 2015) further amended section 5327 to limit project management oversight to quarterly reviews, absent a finding that more frequent oversight was necessary, and mandated that the Secretary prescribe regulations outlining a process for at-risk recipients to return to quarterly reviews.

FTA has become much more knowledgeable about the risks inherent in major capital projects, having conducted its own risk assessments since 2005, witnessed some project sponsors' lack of management capacity and capability and appropriate project controls for some projects, and studied the reasons for cost and schedule changes on many major capital projects. Consequently, FTA now proposes to amend its project management oversight rule.

First, this proposed rule would change the applicability of the regulation by shifting the definition of a “major capital project” from one based on the type of project or total project cost to one based on both the amount of Federal financial assistance and the total project cost, which FTA views as a more appropriate benchmark than the type of project or total capital cost of a project alone. The current definition of a “major capital project” under 49 CFR 633.5 applies to all construction projects for new fixed guideways or extensions of existing fixed guideways, regardless of project cost, and to fixed guideway rehabilitation and modernization projects with total project costs over $100 million. The NPRM applies a project cost threshold to all fixed guideway capital projects. As a default, the proposed rule raises the total project cost threshold to $300 million or more and requires that the project receive $100 million or more in Federal investment to be subject to project management oversight. Under this default, the number of current projects undergoing project management oversight would decrease by forty-nine, out of a total of eighty-eight major capital projects under construction, allowing FTA to focus on higher-risk projects.

Second, as described in more detail below, the NPRM amends the regulation to bring it into compliance with recent statutory changes. The proposed rule limits project management oversight to quarterly reviews, absent a finding by FTA that a recipient requires more frequent oversight, and provides a process for such a recipient to return to quarterly reviews. Additionally, the rule applies project management oversight to major capital projects receiving Federal financial assistance under any provision of Federal law. The proposed changes would have no impact on safety.

II. Summary of Provisions

Section 633.1 Purpose

This section proposes an update to reflect the mandate in 49 U.S.C. 5327(a) to perform program management oversight of major capital projects for public transportation under Chapter 53 of Title 49, United States Code, or any other provision of Federal law.

Section 633.3 Scope

This section proposes an update to reflect the mandate in 49 U.S.C. 5327(a) that the regulation applies to recipients of Federal financial assistance undertaking a major capital project for public transportation under Chapter 53 of Title 49, United States Code, or any other provision of Federal Law.

Section 633.5 Definitions

This section sets forth the definitions of some key terms applicable to this rule. FTA proposes to establish a definition for “project development” and remove the definitions for “full funding agreement” and “FT Act.” Also, FTA proposes to amend the current definitions for “fixed guideway,” “major capital project,” “project management oversight,” and “recipient.”

The current definition of a “major capital project” under 49 CFR 633.5 applies to all construction projects for new fixed guideways or extensions of existing fixed guideways, regardless of project cost, and to rehabilitation and modernization projects with total project costs over $100 million. In this rule, FTA proposes to define a “major capital project” generally as a project to construct, expand, rehabilitate, or modernize a fixed guideway of $300 million or more that receives $100 million or more in Federal financial assistance. FTA believes it is more appropriate to apply the regulation to any given project based on the level of Federal investment in addition to total project cost, as opposed to the type of project or the total project cost alone. FTA further proposes that a project that does not meet the dollar-amount thresholds for the level of Federal investment and total project cost may be deemed a “major capital project” under certain circumstances.

This section would amend the definition of “fixed guideway” to add passenger ferries as a qualifying public transportation facility, to reflect amendments made by MAP-21 to the definition of “fixed guideway” under 49 U.S.C. 5302(7). FTA proposes to add a definition for “project development” to correspond with the MAP-21 requirement that oversight begins in this phase, as reflected in 49 U.S.C. 5327(d)(2)(A). The proposed changes to the remaining definitions, “project management oversight” and “recipient,” are simply for clarity.

Section 633.11 Covered Projects

This section would amend the current rule by omitting obsolete legal citations and extending the regulation to all major capital projects funded from any source under 49 U.S.C. Chapter 53 or any other Federal Law, as required under 49 U.S.C. 5327(a).

Section 633.13 Initiation of Project Management Oversight Services

This section would make amendments for clarity and consistency with recent statutory changes. Per 49 U.S.C. 5327(d)(2)(A), project management oversight now begins during the project development phase unless the Secretary determines that it is more appropriate to begin the oversight during another phase of the project to maximize the transportation benefits and cost savings.

Section 633.15 Access to Information

This section would make amendments for clarity.

Section 633.17 Project Management Oversight Contractor Eligibility

This section would make amendments for clarity.

Section 633.19 Exclusion From the Project Management Oversight Program

FTA proposes revising this section as it is no longer necessary to identify the administrative funding source (now in 49 U.S.C. 5338) for FTA to conduct project management oversight. Instead, this section would provide for an exclusion from the definition of “major capital project” for projects for which the Administrator determines that project management oversight would not benefit the Federal government or the recipient.

Section 633.21 Basic Requirement

This section would make amendments for clarity and to reflect that oversight now begins during the project development phase of the project, as required under 49 U.S.C. 5327(a).

Section 633.23 FTA Review of a Project Management Plan

This section would make amendments for clarity.

Section 633.25 Contents of a Project Management Plan

The project management plan is critical to successful management of any major capital project, throughout the development and implementation of that project. The project management plan and its sub plans further enable the sponsor's staff to effectively manage the scope, budget, schedule, and quality of the project through a set of common objectives, while managing the safety and security of the public. This section would provide a summary to clarify that a project management plan is not one-size-fits-all, but rather is based on the complexity of the project. Further, as required under 49 U.S.C. 5327(a), FTA proposes adding three additional minimum elements to the plan: Periodic updates of the plan, the recipient's commitment to submit a quarterly project budget and schedule, and safety and security management. Additionally, based on industry best practice, FTA proposes adding the management of risks, contingencies, and insurance as an element of the plan.

Section 633.27 Implementation of a Project Management Plan

FTA's review and approval of a project management plan seeks to verify that a sponsor has all the relevant capabilities and resources in place to ensure successful management of the project using available best practices. A project management plan is a dynamic management tool that requires periodic updates when a project transitions from one phase to another, or as a result of other changes, such as turnover in personnel. This section would continue the requirement for regular reporting and clarify other requirements aimed at improving the management of a major capital project. Specifically, FTA's proposed amendments would limit oversight to quarterly reviews, as opposed to monthly reviews, but provide for more frequent oversight when the recipient fails to meet the requirements of the project management plan and the project is at risk of materially exceeding the budget or falling behind schedule. This section also would add a process for at-risk and noncompliant projects undergoing more frequent oversight to return to quarterly reviews.

Section 633.29 Project Management Plan Waivers

FTA proposes repealing this section. Instead, section 633.25 of this part, as amended, would provide sufficient flexibility to reflect FTA's practices. FTA may permit a recipient when developing a project management plan to incorporate applicable elements from a previously approved project management plan or to incorporate procedures that a recipient uses to manage other capital projects on a programmatic basis.

III. Regulatory Analyses and Notices

Executive Order 13771 (Reducing Regulation and Controlling Regulatory Costs)

This proposed rule is expected to be an Executive Order 13771 deregulatory action. Details on the estimated cost savings of this proposed rule can be found in the rule's economic analysis.

Executive Order 12866 (Regulatory Planning and Review), Executive Order 13563 (Improving Regulation and Regulatory Review) and Department of Transportation (DOT) Regulatory Policies and Procedures

Executive Orders 12866 and 13563 direct Federal agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits—including potential economic, environmental, public health and safety effects, distributive impacts, and equity. The proposed rule would amend the definition of a “major capital project” under 49 CFR part 633 by raising the total project cost threshold and adding a minimum Federal share, thereby reducing the number of public transportation projects subject to project management oversight. This action complies with Executive Orders 12866 and 13563 to improve regulation.

FTA has determined that this rulemaking is not a significant regulatory action within the meaning of Executive Order 12866 and within the meaning of DOT regulatory policies and procedures. FTA has examined the potential economic impacts of this rulemaking and has determined that this rulemaking is not economically significant because it will not result in an effect on the economy of $100 million or more. Additionally, this proposed rule would not have an impact on another agency and would not materially alter the budgetary impacts of entitlements, grants, user fees, or loan programs. This rule would not raise novel legal issues.

To calculate the benefits and annual cost savings from this proposed rule, FTA evaluated its project management oversight contracts for major capital projects from 2013 through 2018. This period was chosen to reflect changes to FTA's program management oversight procedures after MAP-21 was enacted in 2012. This period included a number of emergency relief program projects under 49 U.S.C. 5324 to repair significant damages to public transportation infrastructure resulting from Hurricane Sandy, which FTA also analyzed.

Using FTA's risk evaluation tool, FTA evaluated projects in construction during that period based on ten key risk factors to produce a risk score from 0-100. Projects were then assigned a risk range based on the calculated score, with low-risk projects in the range of 0-39, medium-risk projects from 40-55, and high-risk projects from 56-100. This evaluation indicated that a majority of high-risk projects, including eighteen of the twenty-two projects in the high-risk range, involved total project costs of over $300 million. While removing project management oversight from projects with total costs between $100 and $300 million may increase the risk of materially exceeding budget or falling behind schedule for some projects, there are currently only four high-risk projects in this range, and under the proposed rule, FTA may deem certain projects that do not meet the dollar-amount thresholds a “major capital project” to mitigate unacceptable risk. Additionally, reducing the number of lower-risk projects undergoing project management oversight will allow FTA to focus on higher-risk projects while yielding annual cost savings to FTA and its recipients.

FTA calculated the average total cost of oversight for projects in construction during that period that would not have qualified as major capital projects under the default threshold of this proposed rule. FTA estimates that an average of 38.3 projects annually, including emergency relief program projects, would no longer require additional oversight under the default threshold.

This proposed rule would reduce recipients' labor hours for oversight procedures, which include attending meetings, preparing quarterly reports and other requested documents, and accompanying contractors onto project construction sites. To estimate the potential cost savings for project sponsors, FTA staff examined the current projects in construction that would no longer qualify as major capital projects under the NPRM and estimated the level of effort required for oversight procedures. For two projects, FTA received input from recipients. Assuming variations in the level of effort based on the complexity of the project, FTA estimated that the labor hours required for recipients ranges from 1.7 to 2.3 times FTA's level of effort of approximately 39,477 hours per year for project management oversight procedures. Accordingly, FTA used an average factor of two and determined that the default threshold to qualify as a major capital project under the proposed rule would reduce the level of effort required for project sponsors by an average of 78,955 hours annually at a wage rate of $139.67 based on an average of the Bureau of Labor Statistics rate for Construction Managers and the PMOC loaded rate for contractors. This burden reduction would result in an annual cost savings to project sponsors of approximately $11 million.

In addition, the proposed rule would reduce the level of effort required under FTA's project management oversight contracts and yield corresponding cost savings to FTA. Removing oversight from an average of 38.3 projects annually would yield annual cost savings to FTA of approximately $8.1 million.

Regulatory Flexibility Act

In compliance with the Regulatory Flexibility Act (Pub. L. 96-354; 5 U.S.C. 601-612), FTA has evaluated the likely effects of the proposals set forth in this NPRM on small entities, and has determined that the NPRM would not have a significant economic impact on a substantial number of small entities.

Unfunded Mandates Reform Act of 1995

FTA has determined that this rule does not impose unfunded mandates, as defined by the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4, March 22, 1995, 109 Stat. 48). This rule does not include a Federal mandate that may result in expenditures of $155.1 million or more in any 1 year (when adjusted for inflation) in 2012 dollars for either State, local, and tribal governments in the aggregate, or by the private sector. Additionally, the definition of “Federal mandate” in the Unfunded Mandates Reform Act excludes financial assistance of the type in which State, local, or tribal governments have authority to adjust their participation in the program in accordance with changes made in the program by the Federal Government. Federal public transportation law permits this type of flexibility.

Executive Order 13132 (Federalism)

Executive Order 13132 requires agencies to assure meaningful and timely input by State and local officials in the development of regulatory policies that may have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. FTA has analyzed this action in accordance with the principles and criteria contained in Executive Order 13132, and FTA determined that this action will not have a substantial direct effect or federalism implications on the States. FTA also determined that this action will not preempt any State law or regulation or affect the States' ability to discharge traditional State governmental functions.

Executive Order 12372 (Intergovernmental Review)

The regulations effectuating Executive Order 12372 regarding intergovernmental consultation on Federal programs and activities apply to this proposed rulemaking.

Paperwork Reduction Act

Federal agencies must obtain approval from the Office of Management and Budget (OMB) for each collection of information they conduct, sponsor, or require through regulations. FTA has analyzed this rule under the Paperwork Reduction Act and determined that it does not impose additional information collection requirements for the purposes of the Act above and beyond existing information collection clearances from OMB.

National Environmental Policy Act

NEPA requires Federal agencies to analyze the potential environmental effects of their proposed actions in the form of a categorical exclusion, environmental assessment, or environmental impact statement. This proposed rulemaking is categorically excluded under FTA's environmental impact procedure at 23 CFR 771.118(c)(4), which pertains to planning and administrative activities that do not involve or lead directly to construction, such as the promulgation of rules, regulations, and directives. FTA has determined that no unusual circumstances exist in this instance, and that a categorical exclusion is appropriate for this rulemaking.

Executive Order 12630 (Taking of Private Property)

FTA has analyzed this rule under Executive Order 12630, Governmental Actions and Interference with Constitutionally Protected Property Rights. FTA does not believe this rule effects a taking of private property or otherwise has taking implications under Executive Order 12630.

Executive Order 12898 (Federal Actions To Address Environmental Justice in Minority Populations and Low-Income Populations)

Executive Order 12898, Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations, and DOT Order 5610.2(a) (77 FR 27534) require DOT agencies to achieve environmental justice (EJ) as part of their mission by identifying and addressing, as appropriate, disproportionately high and adverse human health or environmental effects, including interrelated social and economic effects, of their programs, policies, and activities on minority and/or low-income populations. The DOT Order requires DOT agencies to address compliance with the Executive Order and the DOT Order in all rulemaking activities. In addition, on July 17, 2014, FTA issued a circular to update its EJ Policy Guidance for Federal Transit Recipients (www.fta.dot.gov/​legislation_​law/​12349_​14740.html), which addresses administration of the Executive Order and DOT Order.

FTA has evaluated this rule under the Executive Order, the DOT Order, and the FTA Circular and has determined that this rulemaking will not cause disproportionately high and adverse human health and environmental effects on minority or low-income populations.

Executive Order 12988 (Civil Justice Reform)

This action meets the applicable standards in sections 3(a) and 3(b)(2) of Executive Order 12988 (February 5, 1996), Civil Justice Reform, to minimize litigation, eliminate ambiguity, and reduce burden.

Executive Order 13045 (Protection of Children)

FTA has analyzed this proposed rulemaking under Executive Order 13045 (April 21, 1997), Protection of Children from Environmental Health Risks and Safety Risks. FTA certifies that this proposed rule will not cause an environmental risk to health or safety that might disproportionately affect children.

Executive Order 13175 (Tribal Consultation)

FTA has analyzed this action under Executive Order 13175 (November 6, 2000), and determined that it will not have substantial direct effects on one or more Indian tribes; will not impose substantial direct compliance costs on Indian tribal governments; and will not preempt tribal laws. Therefore, a tribal summary impact statement is not required.

Executive Order 13211 (Energy Effects)

FTA has analyzed this proposed rulemaking under Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use (May 18, 2001). FTA has determined that this action is not a significant energy action under the Executive Order, given that the action is not likely to have a significant adverse effect on the supply, distribution, or use of energy. Therefore, a Statement of Energy Effects is not requirement.

Privacy Act

Anyone may search the electronic form of all comments received into any of FTA's dockets by the name of the individual submitting the comment, or signing the comment if submitted on behalf of an association, business, labor union, or any other entity. You may review USDOT's complete Privacy Act Statement published in the Federal Register on April 11, 2000, at 65 FR 19477-8.

Statutory/Legal Authority for This Rulemaking

This rulemaking is issued under the authority of 49 U.S.C. 5327, which requires the Secretary to conduct oversight of major capital projects and to promulgate a rule for that purpose that includes a definition of major capital project to delineate the types of projects governed by the rule.

Regulation Identifier Number

A Regulation Identifier Number (RIN) is assigned to each regulatory action listed in the Unified Agenda of Federal Regulations. The Regulatory Information Service Center publishes the Unified Agenda in April and October of each year. The RIN set forth in the heading of this document can be used to cross-reference this action with the Unified Agenda.

List of Subjects in 49 CFR Part 633

• Grant programs—transportation
• Mass transportation

In consideration of the foregoing, and under the authority of 49 U.S.C. 5327, the Federal Transit Administration proposes to amend 49 CFR chapter VI by revising part 633, as follows:

PART 633—PROJECT MANAGEMENT OVERSIGHT

Authority: 49 U.S.C. 5327; 49 CFR 1.90.

Subpart A—General Provisions

Subpart B—Project Management Oversight Services

Subpart C—Project Management Plans