AMTRAK MADE SIGNIFICANT IMPROVEMENTS IN 

ITS LONG-TERM CAPITAL PLANNING PROCESS

Federal Railroad Administration

Report Number: CR-2011-036

Date Issued: January 27, 2011
U.S. Department of

Memorandum

Transportation

Office of the Secretary

of Transportation

Office of Inspector General

Subject: ACTION: Amtrak Made Significant 

Improvements in its Long-Term Planning Process

Federal Railroad Administration

Report Number CR-2011-036

Date: January 27, 2011

From: Mitch Behm 

Assistant Inspector General for Rail, Maritime, &

Economic Analysis

Reply to 

Attn. of: JA-50

To: Federal Railroad Administrator

The Passenger Rail Investment and Improvement Act of 2008 (PRIIA) 

re-authorized the National Railroad Passenger Corporation (Amtrak) for the years 

2009 through 2013.

1 Not since the Amtrak Reform and Accountability Act of 

1997 (ARAA) has Amtrak received a multi-year authorization for appropriations 

to cover its capital spending.

2 As a result, the company has had to develop its

capital budget on a year-to-year basis without knowing how much funding 

Congress would provide. This method of planning has significantly affected

Amtrak's ability to maintain safe and reliable infrastructure and equipment, and 

increased its capital program's annual costs. Amtrak estimates that the State of 

Good Repair (SOGR)3 backlog on Amtrak-owned and operated Northeast 

Corridor (NEC) infrastructure alone is approximately $5.2 billion in fiscal year 

2010 dollars.

4

Because Amtrak requires significant Federal funds for its capital program, the 

House Appropriations Subcommittee on Transportation, Housing and Urban 

Development, and Related Agencies requested this audit. Our objectives were to 

determine: (1) Amtrak's five-year capital requirements and how they align with the 

 Amtrak also faces the renewal and replacement of an aging 

equipment fleet, safety and security needs, business improvement initiatives, and 

compliance with legal requirements such as accessibility for passengers with 

disabilities.

 1 P.L. 110-432, October 16, 2008. 2 P.L. 105-134, December 2, 1997. 3 State of good repair is a condition in which the existing physical assets, both individually and as a system, are (a) 

functioning within their useful lives, and (b) sustained through regular maintenance and replacement programs. 4 The Northeast Corridor Infrastructure Master Plan, May 2010.
2

company's business and strategic goals; (2) how Amtrak prioritizes its capital 

projects; (3) Amtrak’s capital needs and ability to implement its increased capital 

budget as a result of the American Recovery and Reinvestment Act (ARRA);

5

RESULTS IN BRIEF 

and 

(4) how Amtrak evaluates the performance of its capital projects.

Amtrak has established four long-range planning documents that outline the 

company's long-term capital requirements and align with the company's business 

and strategic goals. In 2009, after completing a comprehensive evaluation of its 

funding and projected ridership, the company implemented a Five-Year Financial 

Plan that calls for over $8 billion in capital investments. The company has also 

implemented a SOGR plan for the NEC, which estimates the funding required for 

eliminating the backlog of deferred investments for the Corridor's infrastructure 

and equipment. Both plans were required by PRIIA. In addition, the company has 

established long-range plans for its fleet acquisitions, required by the Fiscal Year 

2009 Omnibus Appropriations Act,

6 and information technology (IT) needs. The

Fleet Strategy Plan sets timelines for replacing rolling stock through 2040, and 

describes possible funding sources for these new acquisitions. The long-range 

plan for IT modernization describes required investments and serves as the 

blueprint for IT in the Five-Year Financial Plan. 

Amtrak prioritizes its capital needs through the use of Decision Lens, a software 

package that brings transparency to the process and facilitates collaboration among 

groups with different prioritization needs. With project evaluation criteria 

developed by Amtrak executives and staff, Decision Lens develops a prioritized 

list of capital projects from all departments. Prior to the use of Decision Lens, 

Amtrak's capital plans were too heavily weighted in favor of engineering safety 

and SOGR projects across all departments. During the initial corporate-wide 

rollout of Decision Lens, executives and staff detected problems with the new 

process, but Amtrak has made improvements. Minimum funding for engineering 

SOGR was removed from the Decision Lens process and given the highest priority 

to support the NEC SOGR plan. The remainder of the requested engineering 

projects was prioritized with all other departmental projects. As a result, funds are 

allocated to projects across departments based on weighted priorities.

Amtrak assessed its capital needs and in a short time-frame reported them in a 

capital spending plan for the $1.3 billion in funds it received from ARRA. Per 

ARRA's requirements, the company has allocated a large portion of the grant to its 

security and life safety programs for projects that will reduce infrastructure 

 5 P.L. 111-5, February 17, 2009. 6 P.L. 111-8, March 11, 2009.
3

vulnerabilities and enhance incident management, such as fire detection and 

suppression systems. As a result, many historically neglected capital projects will

receive significant amounts of ARRA funding. As part of its strategic plan for the 

funds, Amtrak has allocated over half—63 percent—of the funds to contracted 

projects in order to quickly get the resources needed to move projects along and to 

avoid layoffs once the projects are completed. While the capital plan is in place, 

Amtrak likely faces challenges in making investments by the mandated February 

17, 2011 deadline.

Amtrak developed a measurable performance plan for its capital projects. During

the 2008 planning cycle, Amtrak staff updated the Budget Manual with guidance 

on establishing project outcomes and performance measures, and later updated the

Policy Manual with requirements for conducting post-completion project reviews.

Based on this new guidance, Amtrak has made progress in developing capital 

project performance metrics. Despite this progress, however, it is too early to 

determine the effectiveness of the post-completion review process, as Amtrak still 

faces challenges in evaluating capital projects, including difficulties in identifying 

metrics for projects that cannot be easily evaluated, and the limited staffing 

resources available for thorough evaluations. 

To ensure that Amtrak maintains the recent improvements to its long-range capital 

planning and effectively spends its ARRA funds, we are making recommendations 

to the Federal Railroad Administration (FRA) regarding improvement of its 

oversight of Amtrak's capital grants. 

BACKGROUND 

Amtrak was established by the Federal government and cannot remain solvent or 

operate without substantial Federal subsidies. It is not, however, a Federal agency,

but rather a private, for-profit corporation. It receives Federal subsidies, through 

annual appropriations, which FRA administers pursuant to operating and capital 

funds grant agreements.7 Amtrak currently operates a rail network of over 21,000

track miles, providing services to 46 states, the District of Columbia, and three 

Canadian provinces, primarily using tracks owned by freight railroads. The 

company also owns over 600 miles of track, mostly located in the NEC between 

Boston, Massachusetts, and Washington, D.C. In 2009,8 Amtrak served 

approximately 27 million passengers. About one-third of its ridership takes trains 

in the NEC. 

 7 Grant agreements govern the relationship between FRA and Amtrak, detailing a number of provisions that Amtrak 

must meet in order to receive the funding from FRA. 8 Unless otherwise noted, referenced years are fiscal years.
4

Despite receiving billions of dollars in Federal funding9 throughout its history to 

cover operating losses and capital expenditures, Amtrak has struggled financially. 

In 1997, Congress passed the Taxpayer Relief Act,10 providing Amtrak with 

$2.2 billion for capital expenditures with the goal of enabling the corporation to 

make the investments necessary to reduce its reliance on Federal support and meet 

its mandate for operational self-sufficiency. Also in 1997, Congress passed 

ARAA, authorizing $5.2 billion to cover operating, capital, and debt expenses 

through 2002. Despite receiving this significant amount of funding, however, 

Amtrak did not achieve self-sufficiency. 

In 2001 and 2002, Amtrak experienced a series of financial crises that threatened 

to shut down its intercity passenger rail system and many of its commuter rail 

systems. In response to these events, Congress instituted new oversight measures 

as part of Amtrak’s 2003 appropriations that require the U.S. Department of 

Transportation (DOT) to approve Amtrak’s allocation of Federal funding. Prior to 

that time, Congress had generally given Amtrak discretion for allocating its 

Federal funding, while occasionally designating specific amounts to capital or 

operating expenses. These changes have divided appropriated funds into 

designated operating and capital expense accounts that FRA monitors on a 

monthly basis. Federal grants to these accounts are disbursed quarterly rather than 

annually, and Amtrak must submit a detailed business plan, updated as necessary, 

for approval by the Secretary of Transportation.

In 2008, Congress passed PRIIA, providing a reauthorization for Amtrak that 

included a number of provisions addressing financial reforms. PRIIA authorized 

$9.8 billion in funding between 2009 and 2013, with specific amounts allocated to 

operating expenses, capital expenditures, and debt expenses. Figure 1 shows the 

trend in Amtrak's capital appropriations since 2000. PRIIA also requires Amtrak's 

Board of Directors to submit a Five-Year Financial Plan and annual budget to the 

Secretary of Transportation and DOT's Office of Inspector General (OIG). 

ARRA, passed in February 2009, provided another $1.3 billion to supplement 

Amtrak's capital program through February 2011. 

 9 Through 2008, Amtrak received $32.1 billion in Federal subsidies for operating and capital expenditures. 10 P.L. 105-34, August 5, 1997
5

Source: OIG analysis of Federal Appropriations and PRIIA.

Amtrak's financial difficulties have contributed to its significant backlog of 

deferred investments. In 2005, the Government Accountability Office (GAO)

reported that Amtrak's annual Federal subsidy of $1.2 billion between 2004 and 

2006 was sufficient to keep the company in operation, but not large enough for it 

to avoid further deferral of significant maintenance projects.

11 By 2006, Amtrak 

had deferred an estimated $6 billion in capital maintenance spending. 

AMTRAK'S LONG-TERM FINANCIAL PLANS REFLECT ITS 

BUDGET AND STRATEGIC GOALS FOR INFRASTRUCTURE, 

FLEET AND INFORMATION TECHNOLOGY

Amtrak now has four long-range financial planning documents in place that 

outline the company's capital requirements in line with its budget and strategic 

goals for the next 5 years and beyond. In 2009, the company implemented its

Five-Year Financial Plan that calls for over $8 billion in capital investments. It 

has also established a SOGR plan for the NEC, which estimates the funding 

needed to eliminate the backlog of deferred infrastructure and equipment 

investments in the Corridor. Both plans were required by PRIIA. The company 

 11 GAO Report, "Amtrak Management: Systemic Problems Require Actions to Improve Efficiency, Effectiveness, and 

Accountability" GAO-06-145, October 4, 2005.

Figure 1: Federal Capital Appropriations to Amtrak

Fiscal Years 2000 through 2011

$571

$521 $521 $528

$465 $500 $500 $500

$565

$655

$738

$1,025

0

200

400

600

800

1,000

1,200

FY 2000 FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011

Passage of PRIIA

October, 2008

Authorized

($ in millions)
6

also developed a long-range plan for fleet acquisitions, which was required by the 

Fiscal Year 2009 Omnibus Appropriations Act. Finally, the company took the 

initiative to develop a plan for determining its IT needs and modernization 

requirements.

Amtrak's Five-Year Financial Plan Calls for Over $8 Billion in 

Investments in Infrastructure, Fleet Maintenance and Overhaul, and 

Information Technology

Amtrak's 2010-2014 Five-Year Financial Plan, dated September 2009, calls for 

$8.7 billion12 in capital investments, with the majority of funding—92.5 percent—

coming from the Federal government.

13 The largest investments fall into three 

areas—infrastructure, fleet maintenance and overhaul,

14 and IT—accounting for 

$8.4 billion, or 96.2 percent, of the plan's spending (Table 1). These investments 

align with business and strategic goals outlined in Amtrak's new strategic plan—

known as the Strategic Guidance—which outlines the company's mission, goals, 

and progress criteria (see Exhibit B). The Guidance is consistent with best 

practices outlined by GAO. 

Table 1: Amtrak's Capital Spending Plan Fiscal Years 2010 

through 2014 ($ in millions)

Investment 

Category FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 Total

Infrastructure $621.2 $930.7 $1,174.7 $1,143.6 $975.2 $4,845.4 

Fleet 391.0 376.7 813.8 718.6 357.7 2,657.8 

IT 224.3 239.6 189.9 139.2 70.3 863.3 

Subtotal $1,236.6 $1,546.9 $2,178.4 $2,001.5 $1,403.1 $8,366.5 

All Other 40.0 65.4 79.2 77.1 66.1 327.8 

Total $1,276.6 $1,612.3 $2,257.6 $2,078.6 $1,469.3 $8,694.3 

Source: OIG analysis of Amtrak data

Note: Columns may not sum due to rounding.

The development of Amtrak's Five-Year Financial Plan required a comprehensive 

evaluation of the company’s funding from all sources covering the costs of 

operations, capital investments, and principal and interest payments. This process

also required Amtrak to determine: projected ridership levels; the capital funding 

 12 This figure does not include $1.3 billion in capital funding provided by ARRA. 13 The plan calls for more than the full level of authorized Federal funding in each year. 14 Overhauls extend the useful lives of fleet components, improve equipment, and return or maintain equipment in 

SOGR. They address longer-term equipment needs and involve significant investment in new components and 

systems, such as wheels, trucks, or brakes, and may include interior upgrades such as new carpeting.
7

and expenditures required to accommodate predicted ridership levels; and methods 

of estimation and significant assumptions. It also required Amtrak to assess its 

financial stability. Our November 2009 assessment of the plan found it to be 

generally in compliance with PRIIA’s requirements.15 However, we found two 

deficiencies in the plan—a lack of detailed operating expense forecasts, including 

information on the cost drivers, and a lack of detailed information on Amtrak's 

workforce planning efforts. Amtrak officials acknowledged the deficient 

information in these areas, but stated that the capabilities of the company's 

financial systems limited reporting. These officials also noted that reporting will 

improve in coming years, in large part due to the integration of key operational, 

financial, and human resources business processes and the replacement of 

outdated financial, work management, and other systems as mandated by PRIIA. 

Three Other Financial Plans Reflect Amtrak's Long-Term Investments

in its Northeast Corridor, Fleet Acquisition, and Improvements in 

Information Technology

Amtrak has developed a plan for bringing its NEC to SOGR, as required by 

PRIIA,16 This plan serves as the basis for meeting both the long-term needs for 

engineering in Amtrak's Five-Year Financial Plan and the annual engineering 

budget, and estimates of the funds needed to perform normalized replacement and 

eliminate the backlog of deferred investments for NEC's infrastructure and 

equipment. Amtrak based this plan on a 2007 report on the states of repair of the 

corporation's assets in each of four broad categories—track, electric traction, 

communication and signals, and structures. For the 2007 report, Amtrak had 

determined quantities, estimated useful life, and amount of inventory already 

beyond useful life, and estimated normalized maintenance costs and replacement 

costs for each major asset type. In May 2010, the NEC Master Plan Working 

Group17 published a more comprehensive report, which includes SOGR, safety 

and mandated programs, and growth requirements for the NEC. The report 

estimated Amtrak's costs of deferred investments in infrastructure alone to be 

$5.2 billion, and normalized replacement costs between 2009 and 2030 to be 

$7.2 billion—estimates that would result in average annual costs of approximately 

$700 million.18

While Amtrak's Five-Year Financial Plan includes approximately $650 million in 

annual infrastructure investments—investments that are consistent with 

projections in the SOGR report—engineering officials informed us that, in some 

 15 DOT-OIG Report, "Fourth Quarter Report on Amtrak’s FY 2009 Operational Reforms Savings and Financial 

Performance and Five–Year Financial Plan Review", Number CC-2009-098, November 19, 2009. 16 Northeast Corridor State of Good Repair Spend Plan, April 15, 2009. 17 The group includes representatives of the twelve states that make up the NEC, the District of Columbia, Amtrak, 

FRA, and the eight commuter and three freight railroads operating in the NEC. 18 Amtrak adjusted the figures in this report for inflation for its NEC SOGR plan.
8

cases, the Five-Year Plan's numbers will not line up with those in the SOGR 

Report because the Plan is an evolving document with numbers that fluctuate 

based on Amtrak's yearly appropriations. Amtrak has proposed that instead of 

annually updating its SOGR plan, as required by PRIIA, it annually update the 

master plan to reflect its SOGR needs. 

Amtrak has developed a long-range fleet plan, known as the Amtrak Fleet 

Strategy, in accordance with the Fiscal Year 2009 Omnibus Appropriations Act.

Published in February 2010, this plan extends through 2040 and expands on the 

Five-Year Financial Plan by integrating timelines for vehicle condition, needs, and 

replacement with potential financing mechanisms—including direct Federal 

appropriations, and Federal and commercial loans—for the acquisition of new 

vehicles. The Plan estimates annual costs for its first 5 years at $684 million per 

year, and seeks to replace Amtrak's current rolling stock on a continual basis 

through 2040. 

Under its own initiative, Amtrak has developed a long-range investment plan—

also known as an Enterprise Architecture (EA)—for its IT needs. This plan 

describes the investments needed to modernize all primary IT infrastructure and 

systems, and serves as a strategic blueprint for guiding IT modernization in the 

Five-Year Financial Plan. According to Amtrak officials, a business case has been 

developed that justifies each project in the EA, and annual budgeting for these 

projects simply requires estimates of labor hours and the costs of other inputs, 

such as computer hardware and software. Departments must present a specific 

business case in support of any IT project not included in the EA. 

FRA will be responsible for reviewing Amtrak's new long-term plans. Amtrak's 

2010 grant agreement for capital and debt service includes specific requirements 

for FRA to review the company's Five-Year Financial, Fleet, NEC SOGR, and 

Strategic plans. However, there is no explicit requirement to review Amtrak's EA. 

AMTRAK IMPLEMENTED A CORPORATE DECISION MAKING 

PROCESS TO PRIORITIZE ITS CAPITAL NEEDS

In March 2009, Amtrak began using the decision-making software package

Decision Lens to prioritize capital projects for its budget process. Decision Lens is 

a software tool suited for decision-making by groups and facilitates collaboration 

among groups with different functions. Amtrak had previously used Decision 

Lens to select vendors for procurement and to designate projects for ARRA

funding. Although Amtrak experienced problems in the initial roll out of Decision 

Lens, officials stated that the program makes capital prioritization more 

transparent, and improves the process by calculating priority scores for projects 

based upon the corporate goals set out in the Strategic Guidance. 
9

Decision Lens differs significantly from Amtrak's previous process. Prior to the 

implementation of Decision Lens, the company relied upon a points-based process 

to rank and score capital projects. This process weighted Amtrak's capital plans in 

favor of engineering SOGR projects due to the prioritizing criteria, such as safety 

and security, used to establish project approval. When using Decision Lens, 

Amtrak executives established project evaluation criteria and their relative weights

of importance for both new and continuing projects, and loaded them into the 

application. Projects were also reviewed by departmental staff with previous 

experience in Amtrak's capital programs, referred to as subject matter experts 

(SME). The SMEs then used Decision Lens to vote on projects based on a 

15 point scale on which a score of 15 indicated that a project best met the criteria,

and a score of 1 indicated that a project did not meet any criteria. With SME 

input, and the executive criteria and rankings programmed into Decision Lens,

Amtrak created a prioritized list of capital projects.

During the rollout of Decision Lens, Amtrak executives and SMEs detected

problems with the application and the new process. Because executives provided 

their departmental priorities after Decision Lens had developed the prioritized list, 

a number of funding decisions had to be included on the list in order to address

high priorities that the Decision Lens ranking process did not recognize. In prior 

years, departmental priorities were gathered prior to the development of a ranked 

project list. A similar approach may have saved a few steps in the prioritization 

process. Moreover, with over 600 projects to prioritize, Amtrak’s capital program

proved to be too large for Decision Lens. SMEs pointed out that the package did 

not have the capacity to handle all activities, particularly at the end of the process, 

and the system crashed twice on the last day before all SMEs could complete the 

voting process. 

According to finance department officials, many of the concerns about Decision 

Lens were addressed for the 2011 capital budget process. Executives published

their prioritizing criteria before project submissions were made. Because they

make up such a large amount of the capital budget, engineering safety and SOGR 

projects were removed from the prioritization process by allocating the 

engineering department $350 million before other projects were ranked, thus 

freeing up capacity in Decision Lens. An Amtrak official pointed out that by 

removing engineering SOGR projects, the process no longer favors those projects

over those of other departments, and instead allocates funds to projects across 

departments based on weighted priorities.

According to FRA officials, Amtrak's use of Decision Lens improves the capital 

budget prioritization process because the software allows for transparency.

Furthermore, it allows Amtrak's Board and FRA to detect which projects fall 

below the funding line, creating opportunities for discussions about funding 

priorities.
10

AMTRAK HAS A SPENDING PLAN FOR ITS ARRA FUNDING, 

BUT WILL LIKELY FACE CHALLENGES IN SPENDING THE

FUNDS EFFECTIVELY

Amtrak has established a spending plan for the $1.3 billion in ARRA funds it has 

received, allocating a significant portion to its security and life safety programs as 

mandated. The company has modified a number of operational practices, 

including allocating more than half—63 percent—of its ARRA funds to contracted

projects in order to quickly get the resources needed to move projects along and to 

avoid layoffs once the projects are completed. However, the company has a 

mandated deadline of February 17, 2011 for spending all ARRA funds, and 

despite its plan, faces challenges, such as making investments by this deadline.

Amtrak Has Established a Capital Spending Plan for Its ARRA 

Funding

Amtrak has established a spending plan for its $1.3 billion in ARRA funds.

Amtrak used Decision Lens to prioritize projects according to both corporate goals 

and the goals of the Recovery Act, which require the company to commit 

$450 million to security and life safety programs and no more than 60 percent of 

the remaining $850 million, or $510 million, to projects within the NEC. As a 

result, Amtrak can use ARRA funding for capital projects with a history of 

neglect, including a number of large bridge and tunnel replacements. Amtrak has 

allocated $447.5 million to security and life safety projects, $841.0 million to 

other projects, and $5 million to the Amtrak Inspector General (IG). FRA retained 

0.05 percent or $6.5 million for administrative costs. Fifty-two percent of the

funds have gone to the NEC and the remainder to projects outside the Corridor.

The security and life safety projects are intended to reduce infrastructure 

vulnerabilities and enhance incident management at Amtrak facilities nationwide, 

including stations, bridges, tunnels, maintenance facilities, and other buildings. 

Enhancements to safety installations include fire detection and suppression 

systems and emergency exits from buildings and tunnels. Other funded projects 

involve expansion of Positive Train Control19

The company budgeted the vast majority of its ARRA funds (91.5 percent) for 

three departments—engineering, police and security, and mechanical. See Table 2

for a breakdown of Amtrak's ARRA funding by department.

safety systems in the NEC.

 19 Positive Train Control refers to communications technology that will improve railroad safety by significantly 

reducing the probability of collisions between trains, casualties among roadway workers and damage to their 

equipment, and over speed accidents.
11

Table 2: Amtrak ARRA Budget by Amtrak Department

Department Budget 

($ in millions) Description of Projects

Amtrak Technologies $24.1

Mechanical and Engineering wireless 

access, employee information system, 

and enterprise data management.

Contract Administration 15.0 Wheelchair accessibility improvements

Engineering 846.7

Infrastructure improvements and 

upgrades to bridges, stations, facilities, 

implementation of positive train control.

Marketing and Product 

Management 9.3

Station signs, Passenger Information 

Display System, Amtrak.com re-launch, 

train communications.

Chief Financial Officer 55.4 Program administration.

Mechanical 140.8

Return cars and locomotives to service, 

construct progressive maintenance 

facilities in FL and CA.

Procurement 1.1 Procurement system improvements (IT).

Police and Security 196.1 Strategic infrastructure protection and 

police equipment modernization.

Amtrak IG 5.0 Amtrak ARRA Oversight.

FRA 6.5 Administrative costs.

TOTAL $1,300.0

Source: OIG analysis of Amtrak data.

Amtrak Has Modified Certain Operational Practices to Meet Its 

February 2011 Deadline, but Timely Completion is Uncertain

ARRA requires all projects and activities funded by the Act to be completed 

within 2 years of its enactment, and Amtrak's grant agreement with FRA imposes

a deadline of February 17, 2011, by which Amtrak must spend its ARRA funds. 

Not only does the agreement require that measures be taken to complete projects 

within 2 years, it also requires Amtrak to apply to FRA for a waiver after proving 

that, despite its best efforts, a project that it has initiated, is under construction, and 

has been diligently pursued, cannot be completed by the deadline. 

To ensure that it spends the funds efficiently and timely, Amtrak planned to 

contract out a majority of its projects, and then modified a number of operational

practices. The procurement department required vendor certification of timely 

accomplishment for these contracts, and changed language in requests for 

proposals and bids. It also held weekly management meetings to address delay 

issues. By July 2010, Amtrak had awarded 789 contracts worth $820.4 million, or

63 percent of its total ARRA appropriation. According to Amtrak officials, 

reliance on contractors was an important strategy for mitigating the risks of 

initiating projects with the one-time funding under ARRA. For example, Amtrak's 

information technology department relied on contractors in order to avoid the risk 
12

of having to support employees hired to implement the new projects with 

uncertain future funding. Project managers also took extraordinary measures, 

including the addition of second and third work shifts on construction projects, 

reductions in project scope, and the division of projects into phases. Despite its 

actions to ensure that it spends the ARRA funds by the deadline, Amtrak had 

actually spent only 31.9 percent of its total grant (Table 3) by the beginning of 

July 2010, even though it had drawn down a large portion of its ARRA funding by

June 2010 in anticipation of its funding needs for the busy summer construction 

season. 

Table 3: Amtrak ARRA Funds Obligated, Drawn, Spent, and 

Cash on Hand through July 10, 2010 ($ in millions)

ARRA Spending Category Obligated Drawn Spent Cash on 

Hand

Security and Life Safety $447.5 $248.4 $133.4 $115.0

Non-Security and Life Safety 841.0 726.2 279.2 447.0

Economic Stimulus Projects $1,288.5 $974.6 $412.6 $562.0

Amtrak Inspector General 5.0 5.0 $0.8 4.2

ARRA - Total $1,293.5 $979.6 $413.4 $566.2

Source: OIG Analysis of Amtrak Data

It is also not certain that the investments Amtrak has made with ARRA funds are 

sound and effective. By May 2010, the company had not bid out or awarded a 

number of projects due to concerns over design or because the projects still lacked 

agreements with third parties. Amtrak revised its estimates of what it could 

realistically achieve by the deadline. In June and July 2010, Amtrak made 

requests to its Board of Directors to approve reprogrammings

20 that would shift a 

total of $166 million in ARRA funding from the engineering and other 

departments to the mechanical department primarily for fleet overhauls, which 

could be completed within the prescribed timeframe. Amtrak did not ask for funds 

in its 2010 request to Congress to cover these fleet overhauls. Internal documents

state that Amtrak's primary objective for the reprogrammings was completion of 

the ARRA capital programs by the February 2011 deadline. 

FRA did not have concerns over Amtrak's process for reprogramming of ARRA 

funds. FRA officials stated that the company's use of Decision Lens gave the 

process transparency, allowing FRA staff to understand the projects that received 

the transferred funds. However, the need for the reprogrammings did raise 

concerns for FRA. For example, one FRA official expressed concern over the fact 

that bridge projects in the NEC were bid well over budget because Amtrak's initial 

 20 The ARRA grant agreement allows Amtrak to make revisions or reprogram funds in its approved budget under 

certain circumstances with written approval from FRA.
13

budget estimates did not include either costs to operate on a live railroad, or the 

cost of performing the work in 2 years (which actually meant a single construction 

season because of the procurement process). This official believed that the 

estimates may have actually been budget placeholders because Amtrak did not 

originally believe it would receive enough money to fund the projects. In another 

example, an FRA official informed us that Amtrak's Police and Security 

Department's lack of experience in managing large grants has affected its ability to 

spend the money to date. Finally, these officials stated that FRA's goal is to 

ensure that Amtrak spends the money in a timely manner and that it reaches 

ARRA's goals of job creation and infrastructure investment.

While FRA has not expressed concern over the company's reprogramming of 

ARRA funds, Amtrak's IG recently identified a number of risks associated with 

the company's ARRA projects. A May 2010 Amtrak IG report identified five out 

of nine engineering projects that contained a number of high-risk areas, including 

environmental and acquisition risks. Environmental risks are caused by 

unpredictable environmental factors such as soil contamination and timeliness of 

environmental approvals, while acquisition risks arise when untimely deliveries of 

materials and equipment may prevent the achievement of project deadlines. The 

report also notes that the February 2011 deadline has stretched the capabilities of 

Amtrak's procurement function, and that projects operate under tight schedules 

with few buffers. The report recommends that Amtrak apply to FRA to amend 

provisions in the grant agreement that require Amtrak to take these costly 

measures.

AMTRAK HAS ESTABLISHED A PROCESS FOR EVALUATING 

CAPITAL PROJECT PERFORMANCE, BUT QUESTIONS REMAIN 

REGARDING EFFECTIVE IMPLEMENTATION

Amtrak has developed a measurable performance plan to evaluate the outcomes of 

its capital projects. To address criticisms by its IG, Amtrak updated its Budget 

and Policy manuals and made progress in developing capital project performance 

metrics. Despite this progress, however, it is too early to determine the 

effectiveness of the post-completion review process. Amtrak still faces challenges 

in evaluating capital projects, including difficulties in identifying metrics for 

projects that cannot be easily evaluated, and the limited staffing resources 

available for thorough evaluations. In addition, FRA's capital grant agreement 

does not require any review of Amtrak's new capital project performance 

evaluation. 

 
14

To address its IG's concerns, Amtrak recently developed guidance for its Budget 

and Policy Manuals. In 2007, Amtrak's IG reported that the company's capital 

budget submissions did not consistently include strategies for measuring capital 

projects' outcomes to determine whether the investments achieved their intended 

results. The Amtrak IG recommended that the company develop operational and 

financial metrics linked to corporate goals, and that Amtrak conduct these reviews

within 1 year of project completion to assess how well each project's outcomes

were measured and whether the project achieved its intended results. 

In 2008, Amtrak included an addendum to its Budget Manual, which required

project submissions to include explanations of intended outcomes and department 

plans for verifying these outcomes. Subsequent Budget Manuals required project 

justifications to include outcomes and performance measures, and introduced 

language stating that the finance department will coordinate with project managers 

to evaluate the performance of projects and implementation success. Amtrak's

2008 Policy Manual required project managers to conduct post-completion

reviews, the finance department to audit the reviews on a sample basis, and

reviewers to verify that projects have realized anticipated benefits and were

completed on time and within budget. The December 2009 Policy Manual 

included additional guidance21 requiring project managers and the finance 

department to verify that projects have realized anticipated benefits and achieved

their intended objectives based upon performance metrics defined during the 

budget process.

By applying this new guidance, Amtrak has made progress in developing capital 

project performance metrics. It included outcome metrics for the first time in most

project submissions with its 2008 budget. In our review of the company's capital 

budgets for 2008 through 2010, project justifications spanned a spectrum from 

broad, qualitative descriptions of project impacts to specific, quantifiable estimates 

of costs and expected revenues and performance metrics. For example, in the 

2008 budget, the mechanical department's submission for the overhaul of 

36 baggage cars included a project justification stating that the work would 

improve the units' serviceability and reduce mechanical delays by replacing major 

components instead of repairing them. A finance department submission in 2009,

for the automation of credit card acceptance, included a justification describing 

specific expenditures and revenues that the project would generate if it were

implemented. Project submissions in the 2010 capital budget were generally tied 

to corporate goals and key performance indicators outlined in the Strategic 

 21 This version refers to the 2008 manual's section on post-completion reviews, but the section appears in a different 

location in the manual. Although the 2008 and 2009 sections on post-completion reviews focus on different areas of 

review, one on the accountability of resources and the other on measuring project performance, it could be beneficial 

for Amtrak to have all guidance on these reviews incorporated into one section of the Policy manual. 
15

Guidance—indicating Amtrak's attempt to align its capital program with the 

strategic plan and accountability measures.

It is too soon to determine the effectiveness of the new review process. Per the 

Policy Manual, Amtrak's IG will periodically audit post-completion reviews, and

officials acknowledged that Amtrak is making progress in addressing the related 

recommendations. However, because the process changes have only occurred 

over the last year, there is not yet enough quantifiable data for a good 

understanding of how well it is working. Amtrak finance officials informed us 

that they plan to begin conducting post-project reviews in early 2011.

Amtrak still faces challenges in evaluating capital project performance. Finance 

officials described two challenges in particular. The first arises from difficulties in 

identifying evaluation metrics for projects that cannot easily be evaluated. For 

example, it is difficult to link an engineering project that replaces a certain number 

of railroad ties22 to larger corporate outcomes such as reduction in travel time, 

improvements in on-time-performance, and cost savings. The second challenge 

stems from the fact that the finance department has limited staffing resources to 

perform thorough evaluations. Due to Amtrak's limited staffing, the new guidance

calls for evaluations of only a sample of completed capital projects. 

FRA's capital grant agreement does not include specific requirements to review 

the performance of Amtrak's capital investments. The 2010 grant agreement for 

capital and debt service does require Amtrak to provide a return on investment

calculation for all proposed capital projects, with the exception of SOGR and fleet 

overhaul projects. This calculation is used in part to determine which projects get 

funded. However, the agreement lacks any explicit requirement for Amtrak to 

provide information which would allow FRA to review the company's

performance against expected outcomes for its capital investments. This 

information would allow FRA to determine whether or not Amtrak is making 

effective and efficient capital investment decisions.

CONCLUSION

Amtrak's long-term capital planning processes have evolved. Most notably, 

Amtrak's Five-Year Financial Plan and Decision Lens tool will allow the company 

to make adjustments to both its short and long-term capital plans. However, given 

the amount of money at stake and the need for sound capital investment decisions, 

it is imperative that Amtrak sustain improvements to its long-term capital 

planning. ARRA and PRIIA have provided Amtrak with both the funds and 

 22 Ties are the portion of the track structure placed under the rails to hold them in place and distribute the weight of the 

rails and rolling stock. 
16

opportunity to implement its strategic vision, particularly for its capital program.

However, if Amtrak does not receive the level of Federal funding authorized in 

PRIIA, it will not have the resources to carry out its current plans, and its 

continuing financial struggle may hamper the company's ability to sustain the 

improvements made to its long-term capital planning processes. Enhanced FRA 

oversight will be critical to ensure that needed actions are carried out.

RECOMMENDATIONS

To ensure that Amtrak successfully integrates and maintains recent improvements 

to its long-term capital planning processes and effectively spends ARRA funds, 

we recommend that the FRA Administrator:

1. Amend the 2009 ARRA grant agreement to make the requirements for 

waiving the project completion deadline less stringent.

2. Enhance its oversight of Amtrak's capital grant agreement by including 

specific requirements for post-project reviews to evaluate the results of 

capital investments.

AGENCY COMMENTS AND OFFICE OF INSPECTOR GENERAL 

RESPONSE 

We provided a draft of our report to FRA on December 3, 2010 and received their 

response on January 11, 2011, which can be found in its entirety in the appendix 

of this report. In response to recommendation 1, FRA fully concurred with our 

recommendation and amended Amtrak's ARRA grant agreement to better ensure 

that ARRA funds are well spent, and not just expended to meet the February 17, 

2011 deadline. FRA also provided sufficient documentation to support the actions

taken. Accordingly, we consider this recommendation closed. For 

recommendation 2, FRA plans to amend Amtrak's fiscal year 2011 capital grant 

agreement to require post-project reviews for certain project categories. FRA 

provided a target completion date of April 15, 2011. We believe FRA's actions 

will enhance its oversight of Amtrak's future use of capital resources from the 

Federal government. Accordingly, we consider this recommendation resolved 

pending completion of FRA's planned actions. 

ACTIONS REQUIRED 

Based on the actions taken by FRA and our review of the supporting 

documentation provided by the Agency, we consider recommendation 1 closed

subject to follow-up provisions in accordance with Department of Transportation 

Order 8000.1C. Based on the information provided by FRA, we consider 
17

recommendation 2 resolved but open pending completion of FRA's planned 

actions. 

We appreciate the courtesies and cooperation of FRA representatives during this 

audit. If you have any questions concerning this report, please call me at (202) 

366-9970 or Toayoa Aldridge, Program Director, at (202) 366-2081. 

cc: Audit Liaison, OST, M-1 

Audit Liaison, FRA, RAD-43
18

Exhibit A. Scope and Methodology

EXHIBIT A. SCOPE AND METHODOLOGY 

We prepared this audit in response to a directive in the House Appropriations 

Subcommittee on Transportation, Housing and Urban Development, and Related

Agencies committee report accompanying the fiscal year 2008 appropriations 

bill.

1 We conducted this performance audit from January 2008 through November

2010 in accordance with generally accepted government auditing standards. Those 

standards require that we plan and perform the audit to obtain sufficient, 

appropriate evidence to provide a reasonable basis for our findings and 

conclusions based on our audit objectives. We believe that the evidence obtained 

provides a reasonable basis for our findings and conclusions based on our audit 

objectives.

To determine Amtrak's five year capital requirements and how they align with its 

business and strategic goals, we reviewed Amtrak's 2010-2014 Five-Year 

Financial Plan, 2010 Fleet Strategy Plan, IT Enterprise Architecture Plan, NEC 

SOGR Plan, and NEC Master Plan, and compared the plans with Amtrak's 2009 

Strategic Guidance. We interviewed officials from Amtrak's engineering, 

mechanical, finance and information technology (IT) departments to understand 

their respective plans and how each department aligned its planning with Amtrak 

business and strategic goals.

To determine how Amtrak prioritizes its capital projects among competing needs, 

we interviewed engineering, mechanical, and IT department officials to 

understand their department-level prioritization processes for capital projects that 

are submitted to the finance department. Moreover, we interviewed finance 

officials to understand their roles in prioritizing the company's capital needs and 

their improvements to the prioritization process using Decision Lens software. We 

compared the old prioritization process with the existing Decision Lens process to 

document differences in the processes and outcomes. 

To determine Amtrak's ability to implement its increased capital budget provided 

by ARRA, we reviewed Amtrak's capital appropriations history and ARRA spend 

plan, and interviewed finance, engineering, IT, and mechanical department 

officials to understand their ability to meet the ARRA deadline and how the 

departments prioritized ARRA spending with ongoing projects. We reviewed 

documentation on Amtrak's Board of Directors to understand the reprogramming 

of ARRA funds to meet the mandated ARRA deadline. Additionally, we 

interviewed FRA and Amtrak IG officials to understand their views of Amtrak's 

abilities to meet the ARRA mandated deadline.

 1 House Report 110-238 (July 18, 2007) 
19

Exhibit A. Scope and Methodology

To determine how Amtrak evaluates the performance of capital projects, we 

interviewed finance department officials to understand their progress in 

performing post-completion reviews of capital projects. We reviewed Amtrak's 

capital programming policy and capital budget manuals to document Amtrak's 

process for evaluating capital project performance and conducting post-completion 

reviews. We also reviewed capital project budget submissions to determine if 

submissions included justifications that were tied to corporate goals. Finally, we 

met with officials from Amtrak's IG and FRA to understand their views of 

Amtrak's new capital project performance reviews. 
20

Exhibit B. Amtrak Mission, Goals, and Progress Criteria

EXHIBIT B. AMTRAK MISSION, GOALS, AND PROGRESS 

CRITERIA 

Amtrak Mission, Goals, and Progress Criteria

Amtrak Mission: 

To operate intercity passenger service on the existing national network, operate high speed 

services, operate and maintain the Northeast Corridor (NEC), and partner with the states to 

provide the resources and expertise they need to develop rail service nationwide. 

Corporate Goals:

1. Safer: Operate the safest possible passenger railroad.

2. Greener: Increase efficiency, reduce emissions, and make better use of resources.

3. Healthier: Improve the condition, durability, and wholesomeness of every aspect of the 

company.

4. Improve financial performance: Improve Amtrak's bottom line.

5. Improve customer service: improve the quality and attractiveness of Amtrak's service to 

passengers.

6. Meet national needs: help with disaster relief and mobilization efforts, and help advance 

national policies and plans.

Efficiency Measures:

1. Cost per Available Seat Mile - cost to move a seat one mile.

2. Cost Recovery Ratio - proportion of expenses that are covered by revenues.

3. Passenger Miles per Core Employee - total passenger miles divided by employees in core 

business lines.

4. Revenue per Available Seat Mile - income produced by moving a seat one mile.

Effectiveness Measures:

1. Safety Ratio - number of reportable injuries per 200,000 man-hours of work.

2. Customer Service Index - survey-generated measure of performance.

3. Host Railroad Performance - minutes of delay per ten thousand train miles.

4. On-Time Performance - percentage of trains that arrive at their destination within the 

“threshold of tolerance” for delay.

5. Ridership Growth - percentage of increase (or decrease) in riders.

Source: Amtrak Strategic Guidance, October 2009
21

Exhibit C. Organizations Visited or Contacted

EXHIBIT C. ORGANIZATIONS VISITED OR CONTACTED

Federal Agencies: 

Federal Railroad Administration, U.S. Department of Transportation, 

Washington, DC 

Amtrak: 

Amtrak Finance, Information Technology, and Inspector General, 

Washington, DC

Amtrak Engineering and Procurement, Philadelphia, PA

Amtrak Mechanical, Wilmington, DE

Host Railroads: 

BNSF Railway, Fort Worth, TX 

Norfolk Southern, Norfolk, VA

Union Pacific Railroad, Omaha, NE

Other: 

Association of American Railroads, Washington, DC
22

Exhibit D. Major Contributors to This Report

EXHIBIT D. MAJOR CONTRIBUTORS TO THIS REPORT

Name Title

Toayoa Aldridge Program Director

Matt Williams Analyst

Aaron Schwarz Analyst

Susan Neill Writer/Editor
23

Appendix Management Comments

APPENDIX MANAGEMENT COMMENTS 
24

Appendix Management Comments