Chapter 2 - Transit Capital Project Development Process

2.1 Overview

A lengthy and rigorous process is involved in planning, designing, programming, and implementing a transit capital project.  This process includes the following activities:

• Analysis of the existing transportation system in order to determine the need for improvements.
• Evaluation of alternatives in terms of costs, benefits, and impacts, and the preparation of the necessary environmental documents.
• Financial planning to identify funding requirements and sources.
• Design necessary to achieve the desired performance in concert with environmental and financial constraints.
• Acquisition of the required right-of-way (ROW).
• Construction of the improvement in accordance with the plans and specifications.
• Testing and start-up to assure that the system is safe and meets operational requirements.
• Continual monitoring during operations to assess system performance and identify requirements for additional improvements, such as modernization or expansion.

The time frame and specific requirements to implement transit capital projects vary greatly depending on the type of improvement being considered.  With regard to financing, for example, most projects will involve capital programming and competition for a limited amount of public funds.  FTA capital assistance generally requires consistency with the 3C (continuous, comprehensive, and cooperative) Metropolitan Planning Process, but also requires a very rigorous project justification process for New Start Projects (NSPs).

The degree of environmental impact also affects the implementation process.  An NSP, for instance, has numerous positive and negative impacts related to route alignment, station locations, relocations, land use implications, construction, and traffic generation.  Effectively mitigating the adverse potential impacts of a project requires a process of public involvement to gather input and achieve support, especially to create stable sources of local funding.

A set of typical definitions, requirements, inputs, outputs, major milestones, and decision points associated with each of the transit capital project development phases is presented in the following sections.  While these parameters may vary depending on the nature of the project, it is important for a grantee to determine the specific requirements associated with a specific project as a means of establishing a basis for effective project management.  Since the phases of project development are interrelated, proper attention to the management principles and external requirements at the earliest stage can eliminate potential problems that could result in schedule slippage and cost overruns in subsequent phases.  FTA, as a major funding source for public transportation, in concert with Congressional direction, is committed to a process of project management that results in successful implementation of the desired project at the lowest cost.  This requires a management process that controls scope, quality, cost, and schedule.

The following sections describe the FTA designation of MCPs that require special project management attention, and other projects that grantees develop with less direct Federal oversight.

2.1.1 Major Capital Projects

The following definitions are essential to understanding the FTA capital project management requirements and the role of PMO consultants:

• New Start Project (NSP): a new fixed guideway system or an extension to an existing fixed guideway system.  FTA New Start Funding is provided through Section 5309. 
• Full Funding Grant Agreement (FFGA): designated means for providing Section 5309 funds to projects with a Federal share of $25 million or more.  FFGAs establish terms and conditions for the Federal financial participation in an NSP.  Further discussion of FFGAs is provided in Section 2.2.9.1.
• Fixed Guideway: any public transportation facility that utilizes and occupies a separate ROW or rails.  This includes, but is not limited to, heavy rail, light rail, commuter rail, automated guideway transit (AGT), people movers, and exclusive facilities for buses, e.g., bus rapid transit (BRT).
• Project Management Oversight (PMO): a continuous review and evaluation of various processes to ensure: compliance with statutory, administrative, and regulatory requirements; FTA national and grantee goals are reached; and improvement of the process (FTA and grantee) and components.  Oversight can also be viewed as an increased emphasis on monitoring the adequacy of grantee systems to ensure proper planning, technical, financial, and administrative control, which will result in improved grantee compliance with statutory and administrative requirements.  PMO can be undertaken with FTA and/or contractor staff.  PMO consultant services may be assigned by the FTA Administrator when the following conditions apply:
  • the recipient is using FTA capital funds; and
  • the project is an MCP.
• Major Capital Project (MCP): a project that:
  • involves the construction of a new fixed guideway or an extension to an existing fixed guideway;
  • involves the rehabilitation of an existing fixed guideway with a total project cost in excess of $100 million; or
  • the FTA Administrator determines is an MCP because the PMO program may benefit the grantee.  Typically, this means a project that:
    • generally is expected to have a total project cost of $100 million or more for construction;
    • is not exclusively for the routine acquisition, maintenance, or rehabilitation of vehicles or other rolling stock;
    • involves new technology;
    • is of a unique nature for the recipient; or
    • involves a grantee whose past experience indicates that the implementing agency may benefit from the oversight or technical assistance available through the PMO Program.
• Project Management Plan (PMP): demonstrates a grantee's technical capacity and capability to implement and maintain a new project together with its existing system.  PMPs are required to be submitted initially prior to PE and updated through subsequent project phases. PMPs are required for all MCPs. 
• Safety and Security Management Plan (SSMP): In accordance with Circular FTA C 5200.1A [Ref. 1] (FFGA Guidance), PMPs are required to include a section on Safety and Security Management.  Section 9 of this Circular describes the SSMP.  In addition, FTA has prepared draft Guidelines for SSMPs dated November 7, 2001 [Ref. 2].

Figure 2-1 depicts the Transportation Equity Act for the 21^st Century (TEA-21) [Ref. 3] New Starts Planning and Project Development Process that includes grantee products, FTA actions and decision points, and PMO for applicable project phases.  Note that a Letter of No Prejudice (LONP) could be an initial alternative to an FFGA.  An LONP is issued in advance of an FFGA as a way of preserving the eligibility of certain long lead-time item capital costs.  It is no guarantee of FTA funding.

Figure 2-1.  TEA-21 New Starts Planning and Project Development Process
Click here for text only version

2.1.2 Other Capital Projects

The following subsections describe the types of transit capital projects that are not considered MCPs, and thus, are not subject to continuous FTA oversight and PMO involvement.  Grantees need to consider the unique project requirements and design an appropriate project management process using the principles described in the Guidelines.  Many of these projects involve modifications to an existing transit system, the continuing operation of which must be carefully considered during planning, design, construction, and start-up.  Such projects must also be included in the Regional Transportation Plan (RTP), the Transportation Improvement Program (TIP), and the Statewide Transportation Improvement Program (STIP).  The Intermodal Surface Transportation Efficiency Act (ISTEA) requires the development of a Public Transportation Facilities and Equipment Management System (PTMS), that will assist in project identification and prioritization by describing the conditions and costs of existing facilities, equipment, and rolling stock; by producing schedules for major maintenance or replacement; and by providing estimated replacement costs.  These projects will progress through the same phases as shown in Figure 2-1 for NSPs, except that an Alternatives Analysis (AA) would not be required.  Also, the environmental documentation required by the National Environmental Policy Act (NEPA) may be less than a full Environmental Impact Statement (EIS).

FTA capital funding is provided through Section 5309 for fixed guideway modernization, bus, and bus related projects.  Other capital funding sources include the Urbanized Area Formula Program (Section 5307), Non-Urbanized Area Formula Program (Section 5311), and Flexible Funding Transfers.  Additional discussion of funding sources is provided in Section 2.2.8.

2.1.2.1 Rail Modernization

Rail modernization is the process of implementing capital improvements to maintain existing rail systems in a "state of good repair" to provide efficient and effective service.  Projects can involve a variety of elements related to track, structures, stations, traction power substations and distribution, signals, communications, yards, and shops.

2.1.2.2 Bus Maintenance Facilities

The construction of completely new, or major modernization of existing, bus maintenance facilities can be a complex undertaking due to the desire to organize and optimize the bus operating and maintenance processes to produce maximum efficiency.  When new facilities need to be located, the site acquisition and development process can be difficult because of the perceived negative impacts of such a facility.

2.1.2.3 Vehicle Procurements

FTA requires fleet management plans for both bus and rail systems in support of NSPs.  Vehicle procurements for rail systems are often accomplished in conjunction with a new start or major extension.  The exception is for the overhaul or replacement of an aging fleet of railcars.  For larger systems this can be a significant undertaking costing hundreds of millions of dollars.  Bus system vehicle replacements are a more routine process due to the much shorter life expectancy and more frequent procurement.

2.1.2.4 Multimodal Transfer Facilities

For bus-only systems, after maintenance facilities and new vehicles, transit transfer facilities are the most significant capital project.  They require project planning, environmental review, and project management to assure their effective implementation.

2.1.2.5 Bus Rapid Transit (BRT) Projects

FTA is promoting the benefits of BRT.  Some of these projects exceed previous FTA bus fixed guideway initiatives related to busways and HOV lanes, and may be designated NSPs that would require an FFGA.  It is also possible to advance BRT system elements as incremental improvements to bus routes.  These could include projects to improve the exclusivity or priority of transit operations, techniques to reduce the stop dwell time, and other enhancements to improve the efficiency and productivity of the bus system.

2.1.2.6 New Technology Procurements

While many procurements to apply new technology (including Intelligent Transportation Systems - ITS) to existing transit systems may be relatively small compared to other capital projects, they are usually complex and require special planning and management attention to assure their effective implementation.  These can include advanced signal, fleet management, communications, fare media, information processing, security systems that enhance the performance, and efficiency of public transit operating and maintenance functions.

2.2 Planning Phase

The earliest phase in project development is the Planning Phase, during which the project scope is initially defined.  In this phase, a broad range of issues are considered including service parameters, community needs, ROW requirements, and environmental impacts.  Further conceptual planning will occur during AA, or in other long or short range studies that consider transit development.  Following is a description of the various activities that define transit project concepts as early as the Planning Phase, even though they may be refined in subsequent phases.

2.2.1 Systems Planning

The codification of the laws authorizing the Federal Transit Program begins by expressing the Congressional finding that "it is in the interest of the United States to encourage and promote the development of transportation systems that embrace various modes of transportation and efficiently maximize mobility of individuals and goods in and through urbanized areas and minimize transportation-related fuel consumption and air pollution."  To implement this policy, each Metropolitan Planning Organization (MPO), in cooperation with the state and public transit operators, is required to develop transportation plans and programs for its urbanized area(s) within the state.  Both the FTA and the Federal Highway Administration (FHWA) provide funds to states that are in turn provided to MPOs to carry out the transportation planning process.  The FTA and FHWA, to achieve consistency in their planning requirements, have also issued joint regulations regarding transportation planning:

• Joint FHWA/FTA regulations, "Planning Assistance and Standards," 23 CFR  450 and 49 CFR 613  (specifically Subpart B, "Statewide Transportation Planning," and Subpart C, "Metropolitan Transportation Planning and Programming") [Ref. 4]
• Joint FHWA/FTA regulations, "Management and Monitoring Systems," 23 CFR 500 and 49 CFR 614 [Ref. 5].

Each state and MPO is required to develop and periodically update a long-range transportation plan covering a forecast period of at least 20 years.  The state plan must integrate each metropolitan long-range transportation plan into a consistent plan and also plan for areas not covered by MPOs in the state.  These long-range transportation plans must address all NSP and other major facilities projects, including those earmarked in Federal authorizing legislation. 

This metropolitan transportation planning process develops a regional, multi-modal transportation plan with a twenty year horizon.  This plan, among other things, must:

• Identify the projected transportation demand in the area over the period covered by the plan.
• Identify adopted congestion management strategies including high occupancy vehicle treatments, and PTMS improvements to preserve the existing transportation system (including requirements for operational improvements, as well as operations, maintenance, modernization, and rehabilitation of existing and future transit facilities) and make the most efficient use of existing transportation facilities.
• Assess capital investment necessary to demonstrate a systematic approach in addressing current and future transportation demand and to relieve vehicular congestion and enhance the mobility of people and goods.
• Include design concept and scope descriptions of all existing and proposed transportation facilities in sufficient detail to permit conformity determinations under the U.S. Environmental Protection Agency (EPA) conformity regulations in metropolitan areas which do not meet air quality standards (known as non-attainment areas or NAA) or in areas which have recently attained such standards (known as maintenance areas).  In all areas, all proposed improvements should be described in sufficient detail to develop cost estimates.
• Reflect consideration of the area's long-range land use plan, development objectives, and social and environmental goals.

In addition, TEA-21 identified seven factors for planning processes to consider in identifying projects for inclusion in plans and programs:

• Support economic vitality
• Increase safety and security
• Increase access and mobility options for people and freight
• Protect and enhance environmental quality and energy conservation
• Enhance integration and connectivity across systems
• Promote efficient system management and operation
• Emphasize system preservation

The metropolitan transportation planning process defines future demands on the public transit system.  This information is important to determine performance and capacity requirements of the future transit system.  For bus systems, future service requirements would be needed to determine the number, size, and location of maintenance and storage facilities.  For rail modernization, future demand would be needed to size all of the subsystems, such as the system headway requirements used to design control and communications systems.

The need for new starts or other means to increase capacity can be determined once the metropolitan transportation planning process identifies transportation demand, congestion problems, land use and development plans, and social and environmental goals.  Local officials can then select and rank competing corridors in order of priority for improvement.  An AA can be conducted regarding each corridor most in need of improvement to first consider the transportation problems, alternative solutions, and likely costs and benefits of those alternatives, and then to identify a preferred solution.

In planning and programming public transit improvements, consideration must be given to the region's financial capacity to modernize, operate, and maintain its existing transit system.  This consideration becomes significant in those regions that have inadequate levels of local financing for modernization of their existing transit infrastructure.  Planning studies that address long-term modernization needs can lead to the establishment of enhanced local funding resources or recommendations to reduce the magnitude of the existing system.

One output of the metropolitan transportation planning process is the TIP.  The TIPs for the various metropolitan areas in the state then become part of the STIP.  The TIP is a list of all transportation projects proposed for funding over the next three years.  The TIP must be financially constrained by year, and thus represents a prioritized listing of the area's transportation investments.

Additional guidance regarding the relationship between Capital Program grants and the metropolitan and statewide planning process is provided in FTA Circular 9300.1A, Capital Program: Grant Application Instructions, Appendix A [Ref. 6].

2.2.2 Alternatives Analysis (Major Investment Study)

When the metropolitan transportation planning process identifies the need for a major transportation investment, an AA is undertaken.  The AA process includes what was previously known as a Major Investment Study (MIS).  At the discretion of local authorities, the AA may also include the undertaking of a Draft EIS (DEIS) or Environmental Assessment (EA). 

AA evaluates an appropriate number of mode and alignment alternatives for addressing a transportation problem.  When decision makers at the state or local level wish to initiate an AA, the specific scope will be determined cooperatively by the MPO; the state DOT; public transit operators; environmental, resource, and permit agencies; local officials; the FHWA and the FTA; and other related agencies as may be impacted by the proposed scope of the analysis.  This cooperative process will determine the range of alternatives to be studied (including alternative modes and technologies, general alignment, policies and non-capital strategies).

The alternatives evaluated in the AA must include a no-build alternative, a Transportation System Management (TSM) alternative, and an appropriate number of build alternatives.  If the local sponsors and FTA agree it is appropriate, the no-build alternative may also serve as the baseline alternative.  The AA develops information on the benefits, costs, and impacts of these alternative strategies.  Factors considered in the AA must include mobility improvements; social, economic, and environmental effects; safety; operating efficiencies; land use and economic development; financing; and energy consumption.  The conclusion of the AA process is marked by the formal adoption of a Locally Preferred Alternative (LPA), which must be one of the alternatives analyzed in the process, and its inclusion in the MPOs financially constrained long-range regional transportation plan.

Public review and participation is an important part of an AA.  Also, careful attention should be devoted to defining grantee roles and responsibilities.  The work conducted in an AA is performed locally by the transit operator, MPO, and agencies of municipal and state government working in collaboration with each other.  In addition, environmental agencies at all levels and local officials should be involved.  A local lead grantee must be defined and the roles and responsibilities of other agencies and consultants clearly established.  Participating local and state agencies are responsible for ensuring that the study is conducted in a technically sound manner.  FTA and FHWA are also participants in the process, along with other affected agencies such as U.S. Department of Housing and Urban Development (HUD), and other community development and housing agencies.

2.2.3 Project Management Plan (PMP)

Project management concepts are developed initially during the AA and should be documented in the PMP.  FTA requirements for the PMP are defined in section 49 USC 5327 and 49 CFR 633 Project Management Oversight [Ref. 7].  The PMP defines the scope of project implementation starting at least in PE and policies for management and control activities.  The PMP should also adhere to the FTA Grant Management Guidelines, FTA Circular 5010.1C [Ref. 8].

FTA requires that its grantees undertaking an MCP must submit a PMP for FTAs review and approval prior to PE (see Figure 2-1) and before advancing to subsequent project phases.  Although FTA has some discretion in determining which capital projects are considered major, they generally include the construction of a new fixed guideway segment, extension of an existing fixed guideway, or modernization of existing fixed guideway systems pursuant to an FFGA.  FTA requires that the grantee's PMP include as a minimum:

	adequate recipient staff organization, complete with well-defined reporting relationships, statement of functional relationships, job descriptions, and job qualifications;
	a budget covering the project management organization, appropriate consultants, property acquisition, utility relocation, systems demonstration staff, audits, and such miscellaneous payments as the recipient may be prepared to justify;
	a design management process encompassing PE and final design;
	a construction schedule;
	a document control procedure and record-keeping system;
	a change order procedure which includes a documented, systematic approach to the handling of construction change orders;
	a description of organizational structures, managerial/technical skills, and staffing levels required throughout the construction phase;
	quality control (QC) and quality assurance (QA) programs which define functions, procedures, and responsibilities for construction and for system installation and integration of system components;
	materials testing policies and procedures;
	internal plan implementation and reporting requirements;
	criteria and procedures to be used for testing the operational system or its major components;
	periodic updates of the plan, especially related to project budget and project schedule, financing, ridership estimates, and the status of local efforts to enhance ridership where ridership estimates partly depend on the success of those efforts;
	the recipient's commitment to make monthly submission of project budget and project schedule to the Secretary.

The PMP should demonstrate that all phases of the project have been thoroughly considered, giving thought to the methods to be used to execute the project, and the interfaces that will be created between various participants.  It should define the objectives of the project, the methods and resources proposed to be used in meeting those objectives, the overall management strategy including project control, and the responsibilities, authorities, and measures of performance for all parties involved.  Table 2-1 is an example outline of a PMP.

The PMP should recognize the role of FTA in the oversight and independent review of the project. PMO contractors are assigned by FTA to MCPs as an extension of the regional office staff to monitor and assess the technical aspects of the project.  FTA also has FMO contractors available to review issues of finance and accounting related to a grantee or a project, including specific methods and systems. These resources should be utilized as appropriate by the grantee's project team.

The PMP, while submitted initially prior to entering the PE Phase, is intended to be a dynamic document that should be expanded and updated as necessary throughout project implementation.  Such updates should include, but not be limited to, project budget, project schedule, financing, ridership estimates, and, where applicable, the status of local efforts to enhance ridership when estimates are contingent upon the success of such efforts.  The PMP should be updated, as a minimum, prior to advancing into the Final Design and Construction Phases.  It is suggested that for large multi-segment projects, a program PMP be developed, and modified for each phase of each major segment.  The modified PMP would reflect the unique characteristics of each segment/phase, such as the exact scope of work and specific resources, e.g., project staff, budget, and schedule.

Table 2-1. Project Management Plan Outline

The issue of standards for design should be addressed in the PMP.  Requirements of FTA and other funding agencies for the use of the metric system should be determined as part of the grant management process.  Currently, FTA encourages, but does not mandate, use of the metric system.

The PMP should address the need for environmental reviews and for adhering to the resulting mitigation measures in the design and construction phases.  The potential requirements for developing health and safety plans should also be addressed.

Even if a PMP is not formally required by FTA, it can be a very useful project management tool for non-MCPs, e.g., rail modernization, bus facilities, vehicles, and ITS projects.  While the development of PMPs, and indeed the entire management function, is a discrete activity for one-time capital projects for on-going modifications to existing systems the project management function must be continuous.  The grantee should have project management policies and procedures and an adequate staff of professionals skilled in project control, QA/QC, cost estimation, and scheduling.  FTA may review this capability periodically through its Triennial Review process.

2.2.4 Rail Modernization Planning

No single set of FTA technical guidelines exists for the planning and prioritization of projects aimed at modernizing existing rail transit systems; however the PTMS will influence this process.  Each rail transit operator should establish a planning process suited to the specific needs of their system and institutional environment to guide the modernization of existing facilities in a sound and cost-effective manner.  The PTMS will assist in project identification and prioritization by showing the condition and costs of existing facilities, equipment, and rolling stock by producing schedules for major maintenance or replacement, and by providing estimated replacement costs.

Planning of rail system modernization projects is best accomplished at the subsystem level for which the following categories are typical:

• Civil structures
• Track structures
• Stations
• Fare collection
• Elevators and escalators
• Railcars
• Traction power
• Electrical distribution
• Ventilation
• Train control
• Communication systems
• Vehicle maintenance and storage facilities

Subsystem planning involves assessment of condition, establishing modernization goals and performance specifications, performing economic trade-off analyses involving life cycle costing principles, and developing implementation priorities.  Associated with this process may be the need to perform some advanced engineering to support subsystem development.  For example, this could involve analysis to determine capacity requirements of individual electrical substations and to verify the economic benefits of replacing remotely supervised electro-mechanical substations with centrally controlled solid state equipment.  Planning also should consider the effect of old, obsolete, and unreliable equipment on the performance of the overall transit system.  Some agencies refer to this as maintaining a "state of good repair."  In addition to purely economic benefits, analyses consider service reliability and system maintainability.

There are some references to assist with prioritization of modernization projects: 

In the Rail Modernization Planning Study, LTI Consultants, Inc. developed a cost-effectiveness methodology [Ref. 9]. 

In addition, FTA sponsored a study which resulted in the report entitled: Rail Modernization Planning: Review of Current Practice [Ref. 10].

The latter study involved an investigation of the processes and techniques being used by most of the nation's largest rail transit systems.  It also documented elements of the rail modernization planning process that were used, in varying degrees, by the transit planning and operating agencies to prioritize projects for advancement to subsequent phases and includes:

• Prescribe planning/programming requirements
• Establish centralized planning organization/process
• Establish goals/objectives
• Establish quantitative performance goals
• Define performance measures
• Assess long-term modernization requirements
• Consider elimination of existing rail lines
• Plan new route(s) to complement existing system
• Establish life cycle replacement policy
• Define long-term financing requirements
• Estimate system-wide ridership and capacity requirements
• Develop subsystem plans and implementation priorities
• Perform systems engineering and analysis of alternatives
• Perform economic analyses of projects
• Predict impact of project on performance measures
• Use a project rating system
• Use a senior management review committee
• Review lessons learned

Depending on the degree to which the rail modernization project extends beyond the bounds of the existing system, environmental assessment may be required.  See Section 2.2.7 for a discussion of environmental issues.

2.2.5 Bus Maintenance Facility Planning

While more narrowly defined in scope and impact, bus maintenance facilities, nevertheless, require adequate planning to achieve their objectives in a cost-effective manner.

FTA sponsored the development of Bus Maintenance Facility Planning Guidelines that can be used as a resource [Ref.11].

Recognizing that planning for a new or modified bus maintenance facility requires engineering and economic analyses to support effective decision-making, the following ten-step process has been recommended:

1. Adopt a design year fleet size
2. Determine space adequacy
3. Determine structural adequacy
4. Determine alternatives (rehabilitation, new construction, expansion)
5. Sketch plans for adequately sized facilities
6. Estimate construction costs
7. Estimate cost of changes in non-revenue operating costs for each new site
8. Analyze facility optimization, locations, and route allocations (for multiple facility systems only)
9. Analyze engineering economics
10. Assess environmental issues

An assessment of environmental impacts may also be required.  See Section 2.2.7 for a discussion of environmental issues.  Following a local decision to implement a specific bus maintenance facility, PE can advance with FTAs concurrence and funding support.

2.2.6 Project Risk Analysis and Procurement Planning

As early as the Planning Phase, alternative project delivery methods should be considered within the context of project risk analysis and procurement planning.  Given the nature of the project to be implemented and the experience of the grantee, the project delivery and contracting approach should be selected that minimizes project risks and provides the greatest likelihood of implementation success.  Success can be measured in terms of minimizing costs (and cost overruns) and schedule (and schedule slippages).  The general philosophy is that risks should be assigned to the party best able to manage them.  There are also tools available to manage project risk factors in terms of contract provisions that can provide a variety of incentives and disincentives.  Project delivery and contracting approaches include, but are not limited to, the following:

• Design-Bid-Build (D/B/B) - there are separate contracts and procurement processes for design and construction often with numerous prime contractors that require coordination by the grantee who is responsible for the operation of the resulting system.
• Design-Build (D/B) - a single contractor is given responsibility for both design and construction, thus eliminating an intermediate procurement step with possible time saving, and more effective coordination and opportunities for cost savings.  A preliminary design is developed by the owner or another third party contractor.
• Design-Build-Operate-Maintain (DBOM) - an expansion of D/B to also give a single contractor responsibility for the operations and maintenance (O&M) of the completed transit capital project, usually for a period of 5 to 15 years.
• Build-Transfer-Operate (BTO) or Build-Operate-Transfer (BOT) - as an alternative to a public agency owning a transportation project, a private entity could be responsible for building (and possibly designing) and operating a project, and either transfer ownership to the public agency prior to assuming operating responsibility (BTO) or after performing operations for a period of time, e.g., 20 years (BOT).  Because of liability risks, ownership is usually transferred to the public agency prior to starting operations.  Maintenance facilities or parking garages may be good candidates for this approach.
• Turnkey/Superturnkey - a further expansion of D/B or DBOM in which the contractor assumes project financing responsibilities, possibly including the implementation of joint development.
• Fast Track - the overlap and coordination of design, procurement, construction, and other project development activities by the grantee in DBB contracts to expedite project implementation.  This is an inherent capability controlled by the contractor in a D/B contract.
• Construction Manager/General Contractor (CM/GC) - the contractor is selected during the design process by a qualifications-based process, and provides value engineering and constructability reviews.  The contractor assumes responsibility for the entire construction package with a dual role as the construction manager for all project work, and the general contractor.  Subcontracted work is competitively obtained, primarily as low bid.  The construction price is negotiated once final design is complete.  The contractor and grantee could agree on a Guaranteed Maximum Price (GMP) for the contract package, or the CM/GC could manage the contract for a fee, controlling general conditions and holding the construction contracts that would be a direct reimbursement from the owner.

The rationale for early decisions on the overall contracting approach is that it can influence the PE scope of work, which, for instance, would need to be different for turnkey than for D/B/B.  It should be recognized that a large fixed guideway transit project can involve combinations of contracting approaches to implement the overall project.  The Bay Area Rapid Transit (BART) San Francisco International Airport (SFO) Extension, for instance, included a traditional D/B/B contract for site preparation and utility relocation plus four separate D/B contracts for line, track work, systems (1), and station and parking (3).

The identification and management of project risks are discussed in Section 3.5.5.  Section 3.6 addresses procurement issues, along with contracting approaches and their relation to risk management, and the experience and potential benefits of project implementation approaches that are alternatives to D/B/B.

2.2.7 Environmental Planning

Environmental planning is an integral part of the overall transportation planning process.  Environmental planning must meet the requirements of the relevant NEPA regulations, conformity regulations related to air quality, and requirements for historical preservation and protection of public lands.  The process for complying with NEPA is defined in the joint FHWA/FTA regulation, Environmental Impact and Related Procedures (23 CFR 771) and 49 CFR 622.  In addition, in non-attainment areas (NAA) or in maintenance areas, transportation plans must contain enough detail to allow conformity findings as defined by the U.S. EPA conformity regulation [Ref. 12].

Three types of environmental actions have been defined, each with separate requirements to guide planning to address their potential impacts, as follows:

• Class 1 actions normally have a significant impact on the environment and thus require an EIS.  Major projects, both new starts and modernization, fall into this category.
• Class 2 actions normally do not entail a significant impact on the environment, and therefore do not require an EIS or an EA.  These projects are known as Categorical Exclusions (CE) and typically include rail or bus modernization projects constructed within the bounds of the existing ROW, or new bus facilities constructed in industrially zoned areas without major impacts on traffic. 
  
  A list of actions that fall into this class is contained in 23 CFR 771.117(c).  Additional projects can also fall within this category if suitable documentation is provided pursuant to 23 CFR 771.117(d).
• Class 3 actions are those in which the significance of the impacts on the environment are not clearly established and for which an EA is prepared to determine the probable impacts.  If significant impacts are uncovered, an EIS will then be required, otherwise a "Finding of No Significant Impact" (FONSI) determination will conclude the NEPA process.

Within the NEPA process, other applicable environmental laws and regulations are complied with, including those related to historic preservation and protection of public lands.  Early in the planning process, it should be determined if there are any environmental issues.  Coordination with FTA planning and environmental specialists to develop and carry out the scoping process, outlined in Section 1501.7 of the Council on Environmental Quality (CEQ) Regulations, before the NEPA process formally begins, ensures that all significant environmental issues are addressed.

There are two options for developing an EIS or EA.  In the first option, an AA will provide sufficient environmental information and investment analyses to support the selection of a preferred alternative.  In this case the AA provides input into subsequent NEPA documents.  In the second option, a DEIS or draft EA is part of the analysis contained in the AA.  The DEIS or EA then becomes the decision document that must be approved by FTA before it is circulated for public comment.  The Final Environmental Impact Statement (FEIS) or final EA then is developed during PE.  FTA staff is available to provide technical assistance.

2.2.8 Financial Planning

A financial analysis must be undertaken and a financial plan must be developed by the MPO before programming a project into the TIP.  The MPO financial plan must demonstrate that TIP projects can be carried out while the existing transportation system is being adequately operated and maintained, and that only projects for which funds can be reasonably expected to be available may be included in the TIP.

As stated in the FTAs 2003 Annual Report on New Starts [Ref. 13], FTA continues to encourage project sponsors to fund NSPs with the highest possible local share.  The Conference Report that accompanied the FY 2002 Department of Transportation Appropriations Act requests "FTA not to sign any new FFGAs after September 30, 2002 that have a Federal share of higher than 60 percent."  Consistent with this Congressional request, projects seeking a Federal New Starts share over 60 percent have been given a "low" rating for local financial commitment, which results in a "Not Recommended" rating overall.  In addition, the Administration is seeking legislation that would limit the Federal New Starts share to no more than 50 percent beginning in FY 2004.

As the maximum Federal share decreases, alternative funding sources become increasingly important.  Those sources can include taxes, assessments, fees, negotiated investments, private donations, joint development, and other types of public-private cooperation.

Section 3(a)(2) of the Federal Transit Act states that "No grant or loan shall be provided under this section unless the Secretary determines that the applicant has or will have the legal, financial, and technical capacity to carry out the proposed project."  The basis upon which the FTA makes determinations of financial capacity is set forth in FTA Circular 7008.1A, Financial Capacity Policy [Ref. 14].  The FTA also has provided guidance regarding the content and layout of a financial plan that accomplishes the objectives of the legislative mandate placed upon the FTA and encourages all transportation agencies to prepare financial plans consistent with this guidance (Guidance for Transit Financial Plans, June 2000 [Ref. 15]).

A financial plan is intended as an integral component of the planning and development of transit projects.  A financial plan should include information on the current financial health of the grantee, such as existing O&M costs and funding, existing and forecast capital spending, and anticipated capital funding sources.  The financial plan should also include data on specific new projects that are in planning or development.  The details of the project financial information will necessarily change and become more reliable as projects advance through planning and development.

A project financial plan is required to adhere to a specific outline contained in the guidance, including a description of the project, agency-wide and project capital plans, an agency-wide operating plan, project operating revenues and costs, and a 20-year cash flow projection.  Section 3.3 provides more detailed guidance on cost estimating and project financial planning.

A wide variety of funds can be used for planning activities, including, but not limited to, FTA Section 5303 Metropolitan Planning Grants, FTA Section 5307 Urbanized Area Formula Grants, State Planning and Research Program funds, Surface Transportation Program funds, Congestion Mitigation and Air Quality (CMAQ) Improvement Program funds, and FHWA Planning Program Funds.  Capital Program Funds, including New Starts funding, can be used to support, and, in limited circumstances, planning prior to Final Design.  Transportation Infrastructure Financing and Innovation Act (TIFIA) loan guarantees are another source of project financing that should be considered.

As a part of transit project financial planning, it may be necessary to coordinate and interface with ancillary projects that are being developed in conjunction with the transit project (street/highway construction or utility modernization) or otherwise complement and reinforce the objectives of the transit project (joint development).  These coordination opportunities offer potential efficiency benefits for both the transit and the other projects.  Opportunities for leveraging local funds can be achieved.

2.2.9 Other FTA Grant Requirements

2.2.9.1 Full Funding Grant Agreement

FFGAs are authorized by 49 U.S.C. § 5309 (e) (7) and are the designated means of providing Section 5309 New Starts funding for projects in the amount of $25 million or more.  An FFGA:

• Establishes the terms and conditions for Federal financial participation in a New Starts project.
• Defines that project in detail, both in project scope and in project description, including the schedule and budget.
• Obligates the grantee to complete construction of the project, as defined, to the point of initiation of revenue operations, and to absorb any additional cost incurred, except under certain specific, extraordinary circumstances.
• Sets the maximum amount of Section 5309 New Starts funds that will be made available for that project.
• Establishes the Federal funding schedule, subject to annual appropriations, in support of the project.
• Ensures a grantee's efficient management of the project in accordance with all applicable Federal statutes, regulations, and policies.
• Provides the grantee's commitment to perform a before and after study.

FFGAs can only be executed by the FTA after a New Start project has advanced into Final Design.  Additional guidance on FFGAs is provided in the "FFGA Guidance Circular", FTA C 5200.1A [Ref. 1].  Requirements were recently added to the FFGA to include Safety and Security Management Plans (SSMPs), discussed in Section 2.2.11.

While the actual negotiation of the FFGA occurs during the Final Design Phase, except in the case of a non-traditional (e.g., D/B, turnkey, DBOM) project when it must be completed earlier, much of the information required is initially developed during the Planning Phase.

2.2.9.2 Other Requirements

Circular 9300.1A [Ref. 6] provides guidance regarding all capital program grant applications.  Requirements include the following:

• The project proposed is a product of the metropolitan / statewide planning process (included in TIP and STIP).
• The grant applicant has or will have the legal, financial, and technical capacity to carry out the project.
• The grant applicant has or will have satisfactory continuing control over the use of the equipment.
• The grant applicant has or will have the capability to maintain the equipment or facilities, and will maintain the equipment or facilities.

Additional sources of FTA requirements include the following:

•  FTA Circular 7008.1A, "FTA Financial Capacity Policy" [Ref 14], governs the determination of financial capacity. 
• The determination of technical capacity is based on FTA Circular 5010.1C, "Grant Management Guidelines" [Ref. 8], which sets forth guidelines and management procedures for Metropolitan Planning grants, Capital Program grants, and Urbanized Area Formula grants.  FTA will make this determination based on its experience with an applicant or on an applicant certifying that it has the capacity to comply with this circular.
• Standards regarding the issue of satisfactory continuing control are set forth in FTA Circular 5010.1C, as well as 49 CFR Part 18 "Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments", specifically 49 CFR § 18.31 for real property,  49 CFR § 18.32 for equipment, and 49 CFR § 18.33 for supplies [Ref. 16].

2.2.10 Joint Development Planning/Coordination with Transit Project Planning

A wide variety of joint development opportunities may be available in association with major transit projects.  These include opportunities that reduce capital and/or operating and maintenance costs of a specific project (e.g., shared use of a freight railroad ROW by a commuter railroad), opportunities that generate revenue for a specific project (e.g., allowing development of space within or adjacent to a rail station), and opportunities that increase ridership (e.g., development of intermodal stations or transit-oriented-development).  Opportunities for joint development should be considered during systems planning, AA, environmental review, and PE.  Once joint development projects are initiated, there must be careful coordination with the transit capital project or the existing transit system to minimize disruption of transit customers and/or to achieve maximum mutual benefits.

Over 25 different transit organizations have used joint development arrangements to augment transit capital projects in many different ways. These arrangements provided a source of private sector financing for a transit project that included ongoing revenue to the grantee in the form of lease payments or fees, utilities or maintenance services for common areas, or just improvement of access to the transit project from surrounding developments.

Joint development projects, however, have not proven to be significant sources of funding for transit.  Rather, these projects often are undertaken for mutually beneficial reasons to provide compatible land-use, site design, amenities, or to incorporate customer or community services as might be encouraged through the FTA's Livable Communities Initiatives Program.

Joint development projects require transit agencies to be entrepreneurial and to be good negotiators.  Also, most joint development projects require transit agencies to reach agreements with local governments as well as with private developers. Experience in several locations has shown that a good working relationship between the grantee and the local government leads to better joint development projects.

Joint development projects can have a major impact on project schedules. The average time to develop an agreement is 25 months, and the average time between finalization of a joint development agreement and project completion is 22 months. Also, the larger the project, the bigger the market risk. Only an entrepreneurial, development-oriented grantee can properly appraise such risks and minimize them.

To exploit the full potential of joint development in enhancing transit ridership and generating revenues for potential capture by the transit system, attention must be devoted to its design integration with the transit facilities and the adjacent community. The design development process should strive to optimize the site for the benefit of the transit users and to encourage greater transit usage by providing direct and convenient access from all modes to a fixed guideway system and/or from the transit system to local destinations including the joint development.  Factors such as location, market, connectivity, access, information, image, user comfort, safety and security, O&M, and management should be addressed.  Guidance in this regard is offered in the following reference:

Market Based Transit Facility Design [Ref. 17].

Numerous issues can typically arise in each step of the process of advancing joint development projects for which the following guidance is offered to fully comply with the statutes of the Federal Transit Act:

• Establish the physical and functional relationship of the joint development to transit.
• Coordinate the site and functional plans, particularly in relationship to transit facility operation and maintenance, so as to avoid non-incidental uses.
• Design transit and related services in an integrated manner.
• Determine the market and financial feasibility of the transit-related components.
  Have supportive land use policies, urban design guidelines, and transportation management strategies to increase transit ridership.
• Establish a joint development agreement to address specific issues and institutional arrangements.
• Comply with statutory and regulatory requirements of applicable Federal laws which typically impact Federally-funded projects, but may not affect private development.

Grantees should refer to the FTA Grant Management Guidelines [Ref. 8] and the Capital Program: Grant Application Instructions, FTA Circular 9300.1 [Ref. 6]. Appendix B specifically relates to joint development.

2.2.11 Safety and Security Management Plan (SSMP)

2.2.11.1 Introduction and SSMP Content

Recent revisions to FTA Circular 5200.1A "FFGA Guidance" [Ref. 1] require the development of a Safety and Security Management Plan (SSMP) as part of the PMP. 

This requirement formalizes safety and security program management activities.  A grantee may choose to develop a single SSMP or to develop separate plans for safety and security, respectively.  FTA's Office of Safety and Security has prepared Draft Guidelines for Safety and Security Management Plans [Ref. 2] for industry review and comments.  The following draft outline of an SSMP was taken from the Draft SSMP Guidelines, where additional information is available on the suggested approach to developing an effective SSMP:

• Section 1: Commitment and philosophy to actively sustain safe and secure transit operations
  • Safety and Security Policy Statement
  • SSMP Purpose, Scope, Goal, Objectives
• Section 2: Integration of the safety and security function during design, testing, and start-up phases of the project
  • Safety and Security Activities Matrix
  • Procedures and Resources
  • Interface with PMP
• Section 3: Assignment of organizational safety and security responsibilities for the project
  • Responsibility and Authority for SSMP
  • Approach to Safety/Security Responsibilities
• Section 4: Safety hazard and security vulnerability management process
  • Identification
  • Categorization
  • Resolution
  • Design Reviews
• Section 5: Development of safety and security design reviews
  • Approach to Design Criteria (Codes, Standards, other Requirements)
  • Approach to Specifications
  • Technical Baseline
  • Deviations and Changes
• Section 6: Process for verifying conformance with specified safety and security requirements during design, in equipment and materials procurement, and during testing/inspection and start-up phases; formal safety certification to enter revenue service
  • Design Criteria Verification Process
  • Construction Conformance Process
  • Testing/Inspection Verification
  • Operational Readiness Reviews
  • Certification Requirements
  • Certification Process
  • Endorsement by Transit Management
• Section 7: Construction safety management activities
• Section 8: Implementation schedule for meeting State Safety Oversight (SSO) requirements and approvals (when applicable)
• Section 9: Waiver application to Federal Railroad Administration (FRA) for transit operations sharing corridors or track with the general railroad system (when applicable)

2.2.11.2 Implementing the SSMP

States in which FTA-funded fixed guideway transit systems are being developed or are operating are required to designate a State Safety Oversight (SSO) Agency to review the implementation and operation of all covered systems (see 49 CFR 659 [Ref. 18]). 

Coordination with the SSO Agency should be addressed within the SSMP.  SSO relies on the SSO Agency development of System Safety Program Standards (SSPSs, in accordance with FTA requirements) that define the responsibilities and requirements of the fixed guideway transit systems operating within their jurisdiction.  The transit agencies, in turn, are required to develop System Safety and Security Program Plans (SSPP, either as one or two documents) to guide their internal approach to meeting the FTA SSO requirements and the state's SSPSs. 

While the grantee's SSPP(s) address both system development and operations, the SSMP relates only to the capital project development process for projects receiving an FFGA.  For agencies that are already subject to SSO, the creation of an SSMP for a new project can draw extensively from the safety and security processes established in the SSPP(s).  Figure 2-2 describes the core management functions associated with an effective safety and security program for a capital project, with the goal to implement a safe and secure project.   A key element of this process is Safety Certification that is completed prior to the start of revenue service of the transit capital project.  FTA has developed the Handbook for Transit Safety and Security Certification [Ref.19] that provides guidance for implementing an effective certification program.

Additional FTA Guidance documents available for various aspects of safety and security include the following, plus some of the older security documents are being updated to address terrorism and weapons of mass destruction (WMD):

• Compliance Guidelines for States with New Starts [Ref. 20]
• Implementation Guidelines for State Safety Oversight of Rail Fixed Guideway Systems [Ref. 21]
• Hazard Analysis Guidelines [Ref. 22]
• Guidelines for Managing Suspected Chemical and Biological Agent Incidents in Rail Tunnel Systems [Ref. 23]

Figure 2-2.  Safety and Security Core Management Functions
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• The Public Transportation System Security and Emergency Preparedness Planning Guide [Ref. 24].

FTA has also sponsored the development of a course on Crime Prevention Through Environmental Design (CPTED) that is available through the Transportation Safety Institute (TSI) (http://www.tsi.dot.gov/).

A typical process of advancing safety and security issues through the PE and Final Design Phases includes the following activities and products:

• Concept Reviews and Preliminary Design
  • PMP
  • SSMP
  • Certification Program for Safety and Security
  • Safety and Security Policy and Schedule Control
  • Preliminary Safety and Security Certifiable Elements and Items
  • Preliminary Hazard List
  • Preliminary Vulnerability List
  • Existing Safety and Security Design Criteria/Technical Specifications
  • Applicable Codes, Standards and Regulations
  • Safety and Security Design Reviews and Approvals
• Complete Preliminary Engineering
  • Update PMP, SSMP, and Safety and Security Certification Program
  • Update Safety and Security Certifiable Elements and Items
  • Preliminary Hazard Analysis
  • Threat and Vulnerability Analysis
  • Preliminary Safety and Security Design Criteria (or Manual)
  • Preliminary Safety and Security Performance Requirements
  • Safety and Security Design Reviews and Approvals
• Initiate Final Design
  • Update PMP, SSMP, and Safety and Security Certification Program
  • Update Safety and Security Certifiable Elements and Items
  • System, Subsystem, and Software Hazard Analysis: Security Analysis
  • Final Safety and Security Design Criteria
  • Final Safety and Security Performance Requirements
  • Preliminary Technical Specifications
  • Preliminary Safety and Security Design Conformance Verification Checklists
  • Safety and Security Design Reviews and Approvals
• Complete Final Design
  • Update PMP, SSMP, and Safety and Security Certification Program
  • Final Safety and Security Certifiable Elements and Items
  • Complete Hazard Reports and Assessments
  • Complete Vulnerability Reports and Assessments
  • Final Safety and Security Technical Specifications
  • Final Safety and Security Design Conformance Verification Checklists
  • Preliminary Test Plan Requirements
  • Safety and Security Design Reviews and Approvals
• Design Verification and Specifications
  • Update PMP, SSMP, and Safety and Security Certification Program
  • Complete Safety and Security Design Conformance Checklists
  • Final Testing Requirements
  • Manage Deviations and Work-Arounds
  • Issue Certification for Design

During the Construction Phase, there should be a process to verify and audit that designs have been properly executed in conformance with the specified safety and security requirements.  Steps in that process should include the following:

• Design Criteria Verification Process - to verify that safety and security design criteria have been addressed in project specifications and contract requirements and that all required tests have been incorporated into project test plans.
• Construction Specification Conformance Process - to ensure that elements of the system provided under construction, procurement, and installation contracts conform to the specifications.
• Testing/Inspection Verification - to ensure that the as-built (or delivered) configuration contains the safety and security related requirements identified in the applicable specifications and other contract documents.  Key interfaces should be identified for ensuring safety and security involvement in those tests and reviews.
• Operational Readiness Reviews - to ensure that any changes to the established design baselines do not degrade safety and security, and that the system has developed procedures and training, and provides qualified personnel to initiate revenue service.
• Certification Requirements - to ensure that the project is safe and secure for passengers, employees, public safety personnel, and the general public.

During the system Operations Phase, safety and security reviews and audits should be conducted by both the operating organization and the SSO Agency.  These reviews, coupled with an analysis of security incident statistics, will permit an assessment of the need for additional safety and security measures to improve the existing system. 

2.2.11.3 Safety and Security Considerations When an SSMP is not Required

While the process just described is oriented to MCPs usually involving a fixed guideway, the principles are also applicable to other transit capital improvement projects.  Projects can include new and modernized equipment and facilities that support all modes of transit operations, both fixed guideway and bus/paratransit systems.  Elements could include vehicles, maintenance garages, passenger stations and transfer facilities, and control centers.  The SSMP process should be adjusted based on the scale and requirements of the project being implemented.  The grantee's SSPP and SSO requirements should dictate specific approaches to safety and security during project planning and implementation.

2.3 Preliminary Engineering (PE)

After an LPA has been selected for an MCP, the grantee may submit a request to the FTA regional office to initiate the PE phase of the project development.  The request must provide information that demonstrates the readiness of the project to advance, including:

• the project has been adopted by the MPO into the metropolitan transportation plan;
• the PE work has been programmed in the TIP; and
• the grantee has the technical capacity and capability to undertake the PE effort.

The request must also address the FTA project justification criteria and local financial commitment criteria set forth in 49 CFR Part 611, Major Capital Investment Projects [Ref. 25]. 

The project justification criteria are: mobility improvements, environmental benefits, operating efficiency, cost effectiveness, and transit-supportive land use.  Federal statutes provide that the FTA may only approve the advancement of a proposed project to PE if it meets the statutory project evaluation criteria, and is likely to continue to do so.  However, the FTA rule states that the standards on specificity, costs, and benefits are lower at earlier stages of the process.  The rule provides an example of local financial commitment which, for entry into PE, may only need to demonstrate a reasonable financial plan that identifies proposed sources of local funds for both capital and operating costs without having ballot measures passed and funds programmed.

PE takes the project from a planning state to a level of design that defines all significant elements and allows a more accurate estimate of project costs and impacts.  The resultant technical and financial information will be a basis for subsequent funding and implementation decisions.  A major objective of PE is to investigate the merits of all sound configurations and designs.  These investigations require in-depth analysis of all components, their interrelationships, and their costs.  In addition, environmental review requirements are completed.

The PE portion of the total design effort, when properly conducted, will permit the project to move rapidly through Final Design with a minimum of design changes, disruptions, or delays.  Figure 2-3 depicts the process of PE including the typical inputs and outputs.  While the figure establishes the requirements for NSPs, the general process is applicable to rail modernization, bus facilities, and other transit projects.  Some differences may exist, however, such as the ability to be excluded from the preparation of an EIS or the need to consider continuity of operations during construction.  The inputs in Figure 2-3 are the direct result of the Metropolitan Planning process and the outputs become the basis for the next phase - Final Design.  A major aspect, and significant in assuring the success of the project development process, is the continued refinement of the PMP.

Figure 2-3.  Preliminary Engineering Phase Process
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Some rail modernization subsystem projects can be packaged by corridor, rail line, or line segment to facilitate coordination in design and construction.  The subsystems for which this is most beneficial are civil structures, track structures, utilities, control and communications, and power.  This permits work on four different subsystems to be accomplished during a single track outage, minimizing operational conflicts.  Coordination is also required between the railcar and maintenance/storage facility elements, especially when new railcars are acquired.  Stations tend to be somewhat isolated from other subsystems in their modernization, except for assuring physical interfaces such as between the railcar and the platform, and between station security systems and the control center.

Projects to modernize an existing transit system may consider the utilization of grantee staff for roles including design, design reviews, construction, and testing, in addition to start-up.  Design reviews should consider compatibility with the existing system from both an operating and maintenance perspective, and constructability, especially while maintaining safe operations.  Force account labor may also be utilized for certain track, signal, and electrical work, in addition to providing for the safe working environment of contractors. 

The utilization of force account resources to support project design and implementation should be planned during PE, but must be justified in accordance with FTA Circular 5010.1C [Ref. 8].

The FEIS is completed during PE as well as the definition of the more detailed design features for the project.  FTA, as well as all state and local requirements, must be identified to guide the design process.  These encompass, but are not limited to, safety, security, environmental, and design standards including compliance with the Americans with Disabilities Act (ADA). 

2.4 Final Design Phase

The purpose of the Final Design Phase is to prepare final drawings, technical specifications, and contract documents required to obtain construction contract bids.  This includes clear statements of testing requirements and acceptance criteria for the safety and functionality of all subsystems.  Typically, this phase also includes the preparation of the engineer's estimate and schedule, analysis of the construction bids, and award or recommendation for award and real estate acquisition.

Final Design is the last phase of project development prior to construction.  FTA policy is that final design cannot begin prior to NEPA completion as denoted by an FTA Record of Decision (ROD), FONSI, or CE determination.  In addition, FTA final design approval is necessary, and currently the FTA must evaluate the proposed project according to the same statutory evaluation criteria used when progressing to PE.  The FTA can only authorize the project progressing to final design if the project meets these criteria, and is determined to be likely to continue to do so.

FTA may issue an LONP to an applicant indicating a willingness to obligate funds for a project from future budget authority.  Other instruments available to FTA are Early System Work Agreements and FFGAs.  The Early System Work Agreements allow for reimbursement of preliminary costs of project implementation, including land acquisition, utility relocation, long lead procurements for which specifications are determined, and other activities which will promote completion of the project more rapidly and at less cost.  The FFGA commits a Federal share of the cost of construction and a funding schedule, subject to appropriations by Congress.  FFGAs are discussed in Section 2.2.9.1.

Figure 2-4 depicts the process of final design, including the typical inputs and outputs.  While the figure establishes the requirements for New Start type projects, the general process is applicable to rail modernization, bus facility, and other transit projects.  The inputs are the direct result of PE and the outputs become the foundation for the subsequent phases - Construction, Testing, and Start-Up, and Revenue Service.  Final design can extend well into the Construction Phase in that portions can be designed while other portions are being built and/or operated.

Figure 2-4.  Final Design Phase Process
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To avoid delays and substantial added costs that are likely to accompany changes in the detailed final design, the project scope should be decided by the completion of the PE and "frozen" at the initiation of final design.  Changes should be permitted only for compelling reasons, i.e., substantial economies achieved through value engineering, accommodation of changed conditions in construction, reduction in funds or changes in funding agency criteria, and other reasons for which the consequences of not changing are substantially more adverse than the risk of delay and the increase in design cost.

While the definitions for the Final Design and Construction Phases presented here are typical for transit projects, there may be a situation where design and construction tasks could be integrated and the overall implementation time frame could be compressed.  Examples include "fast track," D/B, turnkey, an emergency situation, or in conjunction with a joint development project.

During the Final Design Phase of a fixed guideway project, FTA and the grantee will negotiate a construction grant contract (e.g., a FFGA for an NSP) with a fixed ceiling on the Federal contribution, subject to a defined method of adjustment for inflation (see Section 2.2.9.1).  An FTA grant contract is required for non-NSPs, but is not typically a "full funding" grant.

2.5 Construction Phase

The Construction Phase includes the physical building of all structures of the transportation improvement, the fabrication or manufacturing of the components and subsystems which will be installed with the fixed facilities to form the system, and the testing of all subsystems.  Construction bid packages are prepared during final design and are bid upon by contractors for various aspects of work.  Construction management is performed by the grantee or its consultant and involves oversight of the work in progress, both contractor and force account; cost and schedule control; subsystem inspection and testing; quality assurance; and documentation of as-built configurations, QC inspection records, and deficiency lists.

Prior to the award of each construction contract, all real estate necessary to the contract work should be acquired, including land that may be leased for construction plant and access.  During the Construction Phase, revisions of the design or even redesign may be necessary to accommodate unanticipated site conditions, accepted value engineering proposals, final manufacturer's drawings, errors, and other factors.

Figure 2-5 depicts the process of accomplishing the Construction Phase, including the typical inputs and outputs.  While the figure establishes the requirements for NSPs, the general process is applicable to other transit capital projects.  The inputs are the direct results of the Final Design Phase and the outputs are the fixed facilities, equipment, plans, and procedures required for the Testing Phase.  To facilitate implementation of the Construction Phase, a construction management plan should be developed to assure implementation of the proposed transit improvements in accordance with the designs, specifications, and resources established in the previous phases.  Special attention must be devoted to construction activities adjacent to an operating system to assure the safety of transit riders, operating employees, and construction workers during modifications to existing transit facilities.

Figure 2-5.  Construction Phase Process
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2.6 Testing and Start-Up Phase

The Testing Phase culminates with the acceptance of an operating transportation system improvement in accordance with predetermined criteria, based on the satisfactory completion of the construction of fixed facilities, the installation and test of all subsystems and components, and their integration into a system.  Tests include plant and on-site performance testing of major systems, and integration testing of the entire system in its operating environment.  Acceptance of the system by the grantee implies that all design requirements and specifications related to both safety and functionality have been met.  Figure 2-6 depicts the process of testing, showing the inputs in terms of plans, procedures and resources which were defined during final design, and the output -- the final test report.

Figure 2-6.  Testing Phase Process
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Start-up involves operation of the accepted transportation improvement in a test and training mode by the grantee's personnel prior to its use in revenue service.  Figure 2-7 shows the key inputs to the Start-Up Phase in terms of the plans, procedures, and resources defined in the previous phases and the resulting plans and reports which create a baseline for the initiation of Revenue Service.  While Figures 2-6 and 2-7 establish requirements for NSPs, the general processes are applicable to other transit capital projects. 

Figure 2-7.  Start-Up Phase Process
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2.7 Revenue Service Phase

2.7.1 Operations and Maintenance

The Revenue Service Phase is the period of normal system operations that occurs after the transit capital project has been completed.  It should be based on the Operating Plan developed previously.

From the perspective of effective transit project management, during the Revenue Service Phase, attention should be focused on the maintenance of the facility.  An ongoing process of planning and analysis of performance statistics should be structured to define the need for future projects to modernize or supplement the operating transit system.   A continuous quality improvement program should be instituted to identify opportunities for improving the cost-effectiveness of transit service and making modifications to improve performance.  There should also be a formal configuration management process governing design, implementation, and ongoing operations that approves and documents system changes.

2.7.2 System Performance Monitoring/Assessment

Efforts during the Revenue Service Phase should be directed toward maintaining system performance and planning for modifications of the existing system, if needed.   At the same time, planning initiatives related to new routes and extensions, which would be encompassed within the Planning Phase as discussed in Section 2.2, may be undertaken.  The experience of several transit authorities in planning the modernization of their existing rail systems has been documented in Rail Modernization Planning: Review of Current Practices [Ref. 10], and is relevant to the considerations in this section.

In particular, the experience of the Bay Area Rapid Transit (BART) system in San Francisco is applicable to other newly constructed fixed guideway transit systems.  Supported by an effective operational performance information system, BART has focused its planning and analysis efforts related to its existing system on overcoming design deficiencies, improving system performance, and increasing capacity.  This process involves periodically revising the organization's goals and operating performance objectives, developing capital and operating programs to best achieve the goals and objectives, and monitoring ongoing system performance both in general terms and against specific performance objectives.

BART's Reliability Improvement Program (RIP) is a model process that was instituted in the years after the system was originally constructed to systematically improve system reliability and safety.  The RIP included a definition of key system problems, analysis of their affect on service and measurable performance units, establishment of performance goals, careful assessment of the primary causes of the unsatisfactory performance, design and implementation of the most potentially effective projects to solve the problems, and measurement of the impact of the changes.

2.7.3 Capital Replacement Planning

FTA has sponsored two studies [Ref. 9 and 10] that address rail modernization planning and analysis issues.  Because of the FTA funding categorization, the term "modernization" has become synonymous with "capital replacement" that encompasses the following:

• Refurbishment - The restoration of equipment and facilities to adequate standards of performance, which, if neglected, could cause safety hazards or serious disruption of service.  Refurbishment should result in the capability to sustain the existing system performance for at least five years with only a nominal increase in life cycle costs.
• Rehabilitation - The substitution of new materials, components or subsystems having basically the same fit and function for the worn or weakened original equipment.  Rehabilitation should result in an improvement in system performance for a range of 5 to 20 years and a reduction in life cycle costs.
• Modernization - The use of proven new materials, components or subsystems to meet higher standards of productivity than are possible with the original equipment or materials.  Modernization should result in reasonable improvements in system performance for a period ranging from 10 to 30 years at no increase in life cycle costs [Ref. 9].

The system operator should develop a methodology for planning and programming capital replacement projects based on a variety of performance and cost criteria.  A system should be instituted to assist in project identification and prioritization by showing the condition and costs of existing facilities, equipment, and rolling stock; by producing schedules for major maintenance or replacement; and by providing estimated replacement costs.

The capital cost of a modernization project could be justified by the corresponding reduction in O&M costs.  The ratio of the annual O&M cost savings to the capital cost of the improvement is called the Return-on-Investment (ROI).  The time it takes for the annual O&M cost savings to equal the initial capital investment is called the payback period.  The greater the ROI or the shorter the payback period, the more attractive is the associated capital investment.  An example is the replacement of a manual system with a partially or fully automated system.  The new system could be economically attractive if the net reduction in O&M cost was high in relation to the capital cost of the automation equipment.

2.7.4 State Safety Oversight

Rail fixed guideway systems subject to SSO will be governed by the grantee's SSPP and the activities and requirements of the SSO Agency.  These include internal audits, triennial safety reviews, accident investigations and statistical analysis, configuration management, and conformance with policies and procedures to assure the safety and security of the system's employees, passengers, facilities, and the general public.