1 

 January 11, 2023

Subject: FEDERAL RAILROAD ADMINISTRATION GUIDANCE ON DEVELOPMENT and

IMPLEMENTATION of RAILROAD CAPITAL PROJECTS 

Table of Contents

I. INTRODUCTION................................................................................................................................. 2

a. Purpose. ............................................................................................................................................ 2

b. Applicability. ...................................................................................................................................... 3

II. DEFINITIONS...................................................................................................................................... 3

a. Major Project. ................................................................................................................................... 3

b. Non-Major Project. ........................................................................................................................... 3

c. Project Sponsor................................................................................................................................. 3

d. Project Management Plan ................................................................................................................ 3

e. Schedule............................................................................................................................................ 4

f. Capital Cost Estimate. ....................................................................................................................... 4

g. Financial Plan .................................................................................................................................... 4

III. PROJECT LIFECYCLE OVERVIEW. ....................................................................................................... 4

IV. PROJECT LIFECYCLE STAGES.............................................................................................................. 5

a. Systems Planning .............................................................................................................................. 5

b. Project Planning. ............................................................................................................................... 5

i. Project Planning Objectives. ......................................................................................................... 6

ii. Completion of Project Planning .................................................................................................... 6

c. Project Development. ....................................................................................................................... 8

i. Project Development Objectives. ................................................................................................. 8

ii. Completion of Project Development ............................................................................................ 9

d. Final Design. .................................................................................................................................... 10

i. Final Design Objectives............................................................................................................... 10

ii. Completion of Final Design ......................................................................................................... 10

e. Construction.................................................................................................................................... 11

i. Construction Objectives.............................................................................................................. 11

ii. Completion of Construction........................................................................................................ 11
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f. Operation ........................................................................................................................................ 11

V. PROJECT MANAGEMENT ................................................................................................................ 11

a. General ............................................................................................................................................ 11

b. Project Management Plan. ............................................................................................................. 12

i. Content. ...................................................................................................................................... 12

ii. Process. ....................................................................................................................................... 15

c. Schedule.......................................................................................................................................... 15

d. Capital Cost Estimate. ..................................................................................................................... 16

i. All Projects. ................................................................................................................................. 16

ii. Non-Major Projects..................................................................................................................... 16

iii. Major Projects............................................................................................................................. 16

e. Financial Plan .................................................................................................................................. 17

i. Project Phasing............................................................................................................................ 17

ii. Contents...................................................................................................................................... 18

iii. Updates....................................................................................................................................... 20

I. INTRODUCTION

a. Purpose. This document provides guidance on the development and implementation of 

railroad capital projects that may be funded, in whole or in part, by the Federal Railroad 

Administration (FRA). The intended audience of this guidance includes Project Sponsors 

and partners, and the wide range of professionals who contribute to the planning, 

development, and implementation of railroad capital projects. 

FRA’s goal for this guidance is to assist Project Sponsors in developing effective and 

complete capital projects and in enhancing the management of capital projects to meet

schedules and budgets. In developing this guidance, FRA is establishing a framework for 

project oversight that helps project sponsors prepare for funding opportunities and for 

successful grant funded projects. FRA has also sought to avoid highly detailed 

prescriptive processes that can create hurdles to project implementation and the 

diversity of railroad capital project types. 

This guidance: (1) defines the stages in the railroad capital project lifecycle and project 

development process from inception to operation; (2) describes the project 

implementation tools, processes, and documentation that FRA may require when 

providing grants that fund the development or implementation of a railroad capital

project; and (3) defines a “Major Project.” 

FRA strongly encourages Project Sponsors to use this guidance when developing railroad 

capital projects. The practices contained in this guidance draw from FRA’s experience 
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administering grant programs and from the best practices of established programs under

other Department of Transportation operating administrations that have enhanced the 

delivery of major highway and transit projects. 

b. Applicability. The contents of this document do not have the force and effect of law and 

are not binding. This guidance is intended only to provide information to the public 

regarding existing requirements under the law or agency policies. While conformity with 

this guidance is generally voluntary, FRA may require, in whole or in part, compliance 

with this guidance in an FRA grant agreement funding a railroad capital project. When

FRA requires compliance with this guidance in a grant agreement, the grant agreement 

will specify how FRA will review and act on the documentation identified in this 

guidance. 

In addition, FRA may use this guidance to inform grant application reviews and decisions 

in accordance with a process described in the notice of funding opportunity (NOFO) for 

the relevant grant program. For some grant programs, the NOFO may require Project 

Sponsors to demonstrate readiness for a particular project stage in accordance with 

Section IV. of this guidance and the project implementation documentation defined in 

Section V., even if the Project Sponsor completed prior stages of the project with nonfederal funding.

II. DEFINITIONS. 

Definitions provided herein apply to this guidance and do not supersede definitions in Federal 

law or other guidance. 

a. Major Project. — Major Project means: 

i. A capital project with a Capital Cost Estimate equal to or greater than $500

million and with at least $100 million in federal assistance to improve railroad 

safety, efficiency, or reliability; improve capacity and mitigate passenger or

freight rail congestion; enhance multi-modal connections; or improve or 

establish intercity passenger or freight rail transportation, or 

ii. A capital project that FRA determines to be a Major Project. FRA considers the 

complexity of a project and how additional procedures for project development 

and management will benefit the agency or the Project Sponsor. 

b. Non-Major Project. – Non-Major Project means a capital project that is not a Major 

Project. 

c. Project Sponsor. – Project Sponsor means the entity responsible for implementing a 

capital project that may also be an applicant seeking or a grantee receiving federal 

financial assistance. 

d. Project Management Plan. – Project Management Plan means a document developed 

consistent with this guidance that is based on the information available at the relevant 

project lifecycle stage that describes how the capital project will be implemented, 

monitored, and controlled to help the Project Sponsor effectively, efficiently, and safely

deliver the project on-time, within-budget, and at the highest appropriate quality. See 

Section V.(b) for additional information.
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e. Schedule. – Schedule means a complete representation of the project's implementation 

in units of time, specifying a defined beginning and end for the capital project along with 

logical sequencing and duration information for activities needed to accomplish the 

project. 

f. Capital Cost Estimate. – Capital Cost Estimate means an estimate of the cost to 

implement the capital project inclusive of the project development stage through 

completion of the construction stage that accounts for risk to the cost elements and the 

schedule to complete the project. See Section V.(d) for additional information.

g. Financial Plan. – Financial Plan means a comprehensive document that reflects the 

capital project's scope, schedule, cost estimate, and funding structure, based on the

Capital Cost Estimate. The Financial Plan demonstrates that sufficient financial resources 

are available and describes how those resources will be managed through the 

completion of the project. For projects that involve financing, the Financial Plan

identifies all project funds raised from debt proceeds or other financing methods and the 

anticipated revenue stream to repay the financing. See Section V.(e) for additional 

information.

III. PROJECT LIFECYCLE OVERVIEW. 

FRA funding helps Project Sponsors plan, develop, and implement railroad capital 

projects following a typical project lifecycle. The project lifecycle described in this 

guidance has six stages, beginning with the identification of a railroad capital project 

during systems planning and continuing through development to implementation and 

then to project completion. Project implementation delivery approaches vary for 

different types of projects and circumstances. Project Sponsors may choose to use 

innovative contracting and delivery methods and to initiate procurement processes 

starting in the project development stage of the lifecycle. This guidance recognizes 

innovative delivery opportunities such as integrating Final Design and Construction 

stages and advancing some project elements ahead of others when necessary. 

Awareness of the project lifecycle stages can help Federal, state, regional, local, and 

private organizations and officials make informed decisions when managing railroad 

capital projects. 

For FRA-funded activities, FRA may consider the readiness of a project for subsequent 

stages of the project lifecycle when evaluating a project for funding or when evaluating 

grant agreement deliverables. As a condition of a grant agreement, FRA may require the 

Project Sponsor to obtain FRA concurrence that a project is ready to advance into project 

development, final design, or construction. Even if no FRA funds are used for a proposed 
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project, FRA encourages Project Sponsors to follow the Project Lifecyle Model and to 

seek technical assistance from FRA, as appropriate, to ensure development of the 

appropriate studies and documents and enhance eligibility for future FRA funding. 

IV. PROJECT LIFECYCLE STAGES. 

a. Systems Planning. Systems planning is a high-level planning 

process that considers creating new transportation services as 

well as enhancing and maintaining existing transportation 

systems. This planning process promotes a safe, efficient, and 

comprehensive rail system within the multi-modal national 

transportation system. At its core, systems planning examines 

broad needs, challenges, and opportunities that can be 

addressed with a transportation-related solution, including

capital projects. 

A government agency (e.g., a state department of 

transportation, authority, commission, or interstate-compact), 

railroad, or private entity may identify the need for a project through its systems 

planning processes. Systems planning involves analyzing empirical data to identify rail 

transportation needs and developing strategies and projects to meet these needs. 

Project Sponsors may, for example, accomplish systems planning through a railroad 

capital planning process, or through preparation of a regional rail study or State Rail Plan. 

Some projects may have multiple purposes and may also be identified through other 

highway or transit planning processes. The systems planning process should identify 

specific projects to address documented needs, challenges, and opportunities.

Comprehensive systems planning for a regional passenger rail network considers links 

with other transportation modes for safe, seamless, integrated transportation to carry 

travelers from origin to destination within and between megaregions. Comprehensive 

systems planning for freight movement considers how freight volumes and commodities 

move through the general rail system and are interconnected to other modes of 

transportation. 

b. Project Planning. Project planning is the first development 

stage of a project when the Project Sponsor identifies capital 

project concepts to adequately address transportation needs 

and opportunities. The purpose of project planning is to 

identify and compare the costs, benefits, and impacts of 

project options as a means of providing private and 

government decision makers with information to reach

transportation solutions. For railroad projects that may be 

utilized by multiple operators (i.e., "shared infrastructure"), 

the Project Sponsor should consider and coordinate the 

needs of the various operators during project planning. FRA 

encourages Project Sponsors to identify potentially impacted 

environmental resources and engage with interested parties, 
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agencies, and the public in order to link project planning to the subsequent 

environmental review process early-on. 

i. Project Planning Objectives. A primary goal of project planning is to develop 

project concepts that establish the type and scope of capital improvements 

that best meet the goals and objectives identified in systems planning. Project 

planning elements may include railroad transportation market forecasting, 

operations analysis, fleet planning, station and facility planning, cost analysis, 

environmental resource consideration, resilience planning, and financial and 

economic analysis. Public disclosure of potentially impacted environmental 

resources and engagement of potentially affected communities, tribes and the 

public as part of project planning can allow for linking project planning to the 

subsequent environmental review in project development. In successful 

project planning, the Project Sponsor identifies one or more design concepts to 

advance during the project development stage. Key elements of project 

planning include:

A. a description of the transportation needs and opportunities for the 

project; 

B. the goals and objectives, including environmental factors, that the 

Project Sponsor used to assess the performance of design concepts; 

C. conceptual engineering and other design that defines project concepts; 

D. consideration of avoidance, minimization, and mitigation of potential 

environmental effects on the natural and human environment resources; 

and

E. an evaluation of how the design concepts meet the goals and objectives, 

considering capital and operating cost implications, and whether they 

have stakeholder support and a rationale for implementation. 

ii. Completion of Project Planning. A project is ready to enter the subsequent 

Project Development stage when project planning has demonstrated a 

practical project proposal to address a clear project need, and when the 

Project Sponsor has the support of participant stakeholders (e.g., host 

railroads and funding partners). FRA will review and consider applicable 

documentation1 of the following factors when assessing whether a project is 

ready for the project development stage and initiation of the environmental 

review process: 

A. identification of the project in a systems planning process, such as a 

railroad capital planning process, an interstate or regional rail study 

1 Documentation from the systems and project planning stages varies among project types and may include capital 

plans, regional or state rail plans, project study reports, design reports, demand studies, screening reports, 

condition reports, technical reports, etc. 
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(typically led by FRA), or through State Rail Plans consistent with 49 

U.S.C. § 227.

2

 Documentation should also demonstrate:

(1) the transportation market(s) to be served; and

(2) the role of the capital project in the rail system and overall 

transportation network;

B. a well-developed draft purpose and need statement;

C. documentation showing that the project alternatives developed based 

on the project’s purpose, need, and appropriateness for the type of 

project were considered. This may include operations, financial, 

economic, equity, resilience, climate, and other analyses as appropriate. 

Analysis of project alternatives may consider, as applicable:

(1) route options for new or modified rail lines and services;

(2) service options for new or modified rail operations;

(3) physical infrastructure investment options and design options;

and 

(4) the methodology and criteria for eliminating preliminary project 

alternatives screened out from further consideration. 

D. completion of conceptual engineering and other design that identifies 

one or more preliminary project alternatives that fulfill the draft purpose 

and need and transportation goals and objectives, and that at a 

minimum, consist of:

(1) the specific operational objectives and functional requirements 

of the project and the ability of the proposed design to fulfill 

them;

(2) the location of the project;

(3) the physical feasibility and general constructability of the design, 

including consideration of potential construction phasing and 

continuity of operations during the construction period; and

(4) scale design drawings of the proposed project. 

a) For new track infrastructure, scale design drawings should

include, as appropriate: turnout sizes and type (e.g.,

powered, hand thrown); proposed signal locations; distance 

between signals; limits of signalization; and the extent of 

curves and curve geometry, gradients, and proposed speeds. 

2 49 U.S.C. § 227 sets forth requirements for state rail plans and is supplemented by FRA’s Final State Rail Plan 

Guidance, September 2013, found at: https://railroads.dot.gov/rail-network-development/planning/state-railplan-guidance.
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For new track on existing rail lines, drawings should show 

both the existing and proposed track configuration.

E. completion of an environmental resource inventory and potential 

environmental concerns analysis that addresses:

(1) natural and built environmental conditions; 

(2) environmental resources and environmentally sensitive areas, 

including environmental justice communities; 

(3) potential environmental effects, including the identification of 

resources of concern on those resources to both the natural and 

human environment; and

(4) potential minimization or avoidance measures; 

F. public, stakeholder, tribal, and agency involvement; 

G. completion of an order-of-magnitude project cost estimate; and

H. for Major Projects, Project Sponsors should complete an initial Project 

Management Plan that addresses project delivery strategy including 

consideration of alternative delivery contracting methods. 

c. Project Development. After project planning, the project 

development stage is when the Project Sponsor conducts 

design, environmental, and other studies to ensure the 

project is ready for implementation. 

i. Project Development Objectives. In the project 

development stage, the Project Sponsor completes 

preliminary engineering and advances other design 

disciplines to inform detailed estimates of risks, 

costs, benefits, and impacts, and to support

completion of the environmental process required 

under the National Environmental Policy Act

(NEPA) and other laws, to advance permitting 

processes as appropriate, and to inform economic 

benefits assessments such as benefit cost 

analysis.3

 The Project Sponsor prepares or 

updates the Project Management Plan addressing

the intended project delivery strategy, including 

consideration of alternative delivery contracting 

methods, and establishing the status of agreements and the availability of

implementation funding. For Major Projects, the Project Sponsor develops the 

initial Financial Plan. During project development, the Project Sponsor may 

3 For more information on benefit cost analysis see the U.S. Department of Transportation Benefit-Cost Analysis 

Guidance for Discretionary Grant Programs, March 2022. 
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advance the level of design of certain project elements to meet critical path 

milestones or mitigate procurement risks.

ii. Completion of Project Development. FRA considers a project ready for the 

final design stage following a review of documentation from the project

development stage that indicates completion of certain milestones. 

A. Environmental Review – A NEPA decision has been issued along with 

necessary documentation confirming compliance with other 

environmental laws, such as Section 106 of the National Historic 

Preservation Act and Section 7 of the Endangered Species Act.

B. Design – Preliminary engineering and architectural or other design and 

functional definition of the selected project alternative is complete and 

sufficient to define operational performance, resilience outcomes, 

construction duration, material quantities, domestic material and 

product sourcing strategy, practical construction methods, utility and 

road relocations, property acquisition, and risks, including third-party 

risks, that influence schedule and cost. For projects with track 

reconfiguration, FRA seeks documentation showing concurrence on the 

engineering track configuration to ensure that the Project Sponsor, host 

railroad, railroads with operating rights, and FRA all agree with the 

operationally relevant elements of the design (e.g., track and signals). 

C. Project Management Plan – The Project Sponsor has completed a Project 

Management Plan that addresses project implementation consistent 

with this guidance including agreements governing the construction, 

operation, and maintenance of the project such as those with governing 

bodies and partnering agencies. 

D. Schedule – The Project Sponsor has completed a project Schedule that 

has been used for preparation of the Capital Cost Estimate and is 

summarized in other documents.

E. Capital Cost Estimate – The Project Sponsor has completed a Capital Cost 

Estimate prepared using the completed preliminary design consistent 

with this guidance. For Major Projects, an independent risk review 

informs the cost estimate.

F. Financial Plan – The Project Sponsor has completed an Initial Financial 

Plan. 
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d. Final Design. During the final design stage of implementation, the 

project design is advanced to be ready for construction and the 

Project Sponsor begins to implement the project. FRA considers 

the project for implementation funding after the completion of 

project development. 

i. Final Design Objectives. In the final design stage, the 

Project Sponsor secures agreements and funding 

commitments necessary to construct and operate the 

project, completes acquisition of right-of-way, and 

produces the final engineering plans and specifications 

necessary for construction of the project. The Project 

Sponsor updates the construction cost estimate and the 

Project Management Plan, and for Major Projects, the 

Project Sponsor also prepares Financial Plan updates. 

The Project Sponsor may undertake early construction 

or relocations and procure equipment and materials 

during the final design stage, when such work is 

permissible under applicable law. The final design and 

construction stages may also be combined to utilize 

design-build contracting and alternative project delivery 

methods. 

ii. Completion of Final Design. FRA considers a project ready for construction 

when the sponsor demonstrates completion of the following milestone 

activities: 

A. Design – The Project Sponsor has completed final design documentation 

that is consistent with the environmental decision document, the 

engineering track configuration concurred upon during project 

development, and with the operational performance and other 

objectives of the project. Complete final design documentation is 

supported by executed project agreements between the Project Sponsor 

and entities who must agree to the construction (e.g., government 

entities and railroads). Capital projects on railroads require fully 

negotiated and executed agreements with the owning railroad prior to 

construction. 

The Project Sponsor obtains response from FRA appropriate to support 

phased construction and early construction (e.g., pre-construction 

activities, utility relocations and early work) during the final design stage. 

With design/build or alternative project delivery methods, the Project 

Sponsor completes applicable final design activities as part of an 

integrated design and construction process. 

B. Project Management Plan – The Project Sponsor has updated the Project 

Management Plan. See Section V.(b)(ii) for additional information. 
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C. Schedule – The Project Sponsor has updated the Schedule within the 

prior year. 

D. Capital Cost Estimate – The Project Sponsor has completed a Capital Cost 

Estimate update within the prior year.

E. Financial Plan – The Project Sponsor has completed annual Financial Plan 

updates. See Section V.(e)(iii) for additional information. 

e. Construction. During the construction stage of implementation, 

the capital project is completely built, installed, and placed into 

use. 

i. Construction Objectives. The construction stage 

includes physical construction and installation of the 

capital project, including procurement and 

manufacturing of vehicles and equipment, project 

administration, testing of equipment (e.g., signal 

equipment and rolling stock), systems integration 

testing, workforce training, system certification, 

procurement of insurance, provision of warrantees, 

pre-revenue service, and start-up testing. At this stage, 

the Project Sponsor updates management plans as 

needed and completes Financial Plan updates for 

Major Projects. With commissioning and start-up 

testing, the Project Sponsor verifies that the project 

meets the contractual specifications by performing 

system, performance, and integration testing, and validates performance to 

commission new systems.

ii. Completion of Construction. FRA considers project 

construction to be complete when commissioning is 

complete, start-up testing has validated performance 

of the project, appropriate certifications have been 

issued, and the Project Sponsor turns the project over 

for operational use. 

f. Operation. The operation stage is included in the lifecycle to 

recognize that the final stage of a project is its ensuing use. 

Project Sponsors operate and maintain the assets created and 

improved by the capital project. FRA may seek reporting on the 

performance of projects, particularly Major Projects, to further 

evaluate the benefits of investments through sponsor reporting 

on performance measures and outcomes. 

V. PROJECT MANAGEMENT 

a. General. Project management is essential to the successful delivery of all railroad capital 

projects. This section describes four key management tools and processes that FRA may 

require when providing grant funding. Specifically, the Project Management Plan (PMP), 
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the Schedule, the Capital Cost Estimate, and the Financial Plan for Major Projects are 

significant tools in FRA’s oversight of project implementation. Project Sponsors develop, 

update, and use these tools as a condition of federal financial assistance. 

b. Project Management Plan. The PMP is an overarching plan that begins with the project 

planning stage and concludes with the construction stage. It is a guide for actions by the 

Project Sponsor and its project delivery partners. A PMP is prepared for all capital 

projects and evolves through the project lifecycle. Sample PMP tables of contents can be 

found for both Non-Major and Major Projects in Appendix X. 

i. Content. The PMP describes policies, practices, and procedures related to the 

management, design, and construction of a capital project. The Project Sponsor

should tailor the PMP elements to set forth a specific action plan for 

implementing the project, and effectively managing the cost, schedule, quality, 

and associated risks. Any intended use of public-private partnerships or 

innovative project delivery and procurement strategies should be addressed as 

appropriate in the PMP. The Project Sponsor may choose to add additional subplans. 

A. Basic PMP Content. All PMPs should include the following two elements: 

(1) Basis of Project – Describe the purpose, goals, objectives, and 

performance metrics of the capital project. This element should 

include the project history and an overview of the capital project 

scope, including design, construction, environmental permitting, 

and right-of-way activities. 

(2) Organizational Management – Describe the organizational 

structure and resources for implementing the capital project. 

Define the roles, reporting relationships, statements of 

functional responsibilities, descriptions qualifications of key jobs,

and responsibilities of the Project Sponsor and other project 

team members. This element should include a graphic chart 

representing the organization. 

B. Non-Major Projects. The following three additional elements should be 

included in the PMP for Non-Major Projects. 

(3) Management Controls – Describe the procedures needed to 

control scope, cost, schedule, risk, quality, contracts, change 

orders, grants, documentation, and records. Also describe the 

Project Sponsor’s procedures for dispute resolution, internal 

plan implementation, and reporting and visual documentation 

requirements. 

(4) Procurement – Describe how the Project Sponsor will acquire 

services, such as environmental studies, design, and construction, 

and address contracting methods, how domestic materials and 

products will be sourced, and how procurement decisions are 

made. 
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(5) Project Execution – Describe the planned approach for 

completing the funded project work, including a Schedule

described in V.(c) below, and a detailed project budget, based on 

the Capital Cost Estimate. Describe the workforce, including the

railroad labor force, necessary to implement the project. This 

element should identify the agreements governing the 

construction, operation, and maintenance of the project.

C. Major Projects. The following additional elements should be included in 

a Major Project PMP that will also address the content required by 49 

U.S.C. § 22903(a): 

(3) Management Controls – Describe the procedures needed to 

control scope, cost, schedule, risk, quality, contracts, change 

orders, grants, documentation, records, dispute resolution, 

internal plan implementation, reporting and visual 

documentation requirements and the following subsections. 

a) project budget information covering the project 

management organization and appropriate consultants, as 

well as project costs for property acquisition, utility 

relocation, systems demonstration staff, audits, and 

miscellaneous payments the Project Sponsor may be 

prepared to justify, 

b) project Schedule information with detail for construction 

consistent with V.(c) below, and

c) procedures to manage significant project risks. Project risks 

include significant threats and opportunities regarding 

schedule, cost, and funding, including operating and 

maintenance costs and consequences once the project is 

complete and placed into operation. Risks may be from 

various project activities including environmental, design, 

right-of-way acquisition, relocations, construction, and 

operation and maintenance during construction. Risks may 

also include impacts of potential funding and revenue 

changes. Address management strategies, including 

contingency or reserve funding, for factors identified during 

the capital cost and schedule Estimate risk review, risks 

related to funding, revenue, and financing, and any 

additional risks identified by the Project Sponsor. 

(4) Relations Management – Describe the plans for management of 

legislative, government, intergovernmental, community, and 

public communications, relations, and involvement. Describe 

the plans to manage labor, railroad, and third-party agreements. 

Describe the agreements governing the construction, operation, 

and maintenance of the project such as those with governing 
14

bodies and partnering agencies. Describe compliance 

procedures with relevant labor requirements.

(5) Project Planning and Concept Design – Address completion of 

project planning and conceptual design, including establishment 

of project objectives and performance measures.

(6) Environmental Compliance – Address completion of the 

environmental review. Describe the management plans for 

securing applicable permits, environmental compliance of 

project changes, environmental commitments, and mitigation.

(7) Design Management – Address design management plans 

including design standards, design criteria, site and geotechnical 

surveys, materials investigations, preliminary design, final 

design, safety and security considerations, quality assurancequality control, and change control.

(8) Project Delivery – Describe the project delivery strategy, 

consideration of alternative contracting methods, management 

procedures for procurement, domestic sourcing, contract 

administration, change orders, and claims.

(9) Construction Management – Describe the construction

management resources, approaches, policies, responsibilities, 

and procedures for:

a) safety, site logistics, inspection, materials testing, quality 

assurance and quality control functions, independent 

verification, and validation,

b) contractor organization, skills, and staffing levels, and

workforce required to implement the project, and

c) system component construction, installation, and 

integration.

(10) Construction Close Out, Start-Up, Revenue Operation – Describe

management plan for readiness testing and start-up of

operations including criteria and procedures for testing 

operational systems and major components, training of 

operational staff, obtaining necessary certifications, and the 

administrative close out of the project delivery organization.

Describe approach to obtaining warranties, test results, 

operations and maintenance manuals, spare parts, etc.

(11)Workforce Sub-Plan – Describe the plan for the workforce 

necessary to implement the project, including railroad labor 

forces if applicable.
15

(12)Real Estate Acquisition and Management Sub-Plan – Describe 

the plan for real estate acquisition and property management, if 

applicable. 

(13) Rolling Stock Acquisition and Management Sub-Plan – Describe 

the plan to manage the acquisition of rolling stock, if applicable. 

ii. Process. When receiving FRA financial assistance, Project Sponsors should 

prepare and periodically update the PMP as described below. 

A. PMP Preparation. The Project Sponsor should prepare an initial PMP 

during project planning for Major Projects and should prepare a PMP 

for all capital projects during project development. When receiving 

FRA financial assistance for a Major Project, Project Sponsors must 

prepare and carry out a PMP in accordance with 49 U.S.C. § 22903(a).

B. Final Design and Construction Stage PMPs. The Project Sponsor

updates the initial PMP during the project development stage with 

added detail about the final design and construction Stages. Project

Sponsors receiving FRA financial assistance for final design should 

update the PMP prior to initiating final design and further update the 

PMP to describe management of the Construction Stage prior to 

initiating construction. 

Once construction begins, the Project Sponsor should revise the PMP at the 

following key points in the project lifecycle: 

C. Organizational Changes. When the Project Sponsor makes 

organizational structure changes to the project management team, 

including: the addition or removal of key consultant support; or 

significant changes in the size, key positions, or organization of the 

project management team.

D. Procedural Changes. When the Project Sponsor changes management 

procedures, including changes to implement project controls; 

addresses a specific contract requirement; addresses scope changes; 

or addresses substantial changes in project risks.

E. Major Project Updates. For Major Projects, when appropriate and 

consistent with updates to the Financial Plan.

c. Schedule. The Schedule is a management tool that describes the duration and 

interrelationship of all implementation activities of a project from beginning to

completion. It is documented in the PMP and is an input to the Cost Estimate and 

Financial Plan. For Major Projects, the schedule is subject to the risk assessment and 

review described in Capital Cost Estimate sections V.d.iii. A. and B. The Schedule should 

address:

A. the activities needed to accomplish the project work along with 

duration of each activity, 

B. logical sequence of the activities and major milestones, 
16

C. relationships between the activities, 

D. narrative description of schedule basis and assumptions in the 

schedule; along with a summary of schedule risk, and

E. project completion (month and year), which is usually the date when 

the Project Sponsor anticipates accepting all of the construction work.

d. Capital Cost Estimate. The Capital Cost Estimate includes all costs associated with 

developing and implementing the capital project. In developing a Capital Cost Estimate, 

Project Sponsors should consult, as appropriate, the FRA Capital Cost Estimating 

Guidance for Project Sponsors,

4 which discusses how to apply the U.S. Government 

Accountability Office best practices for capital cost estimating guidance5 to railroad 

capital projects. A Project Sponsor should prepare a Capital Cost Estimate for both NonMajor Projects and Major Projects. 

i. All Projects. A Capital Cost Estimate should include all costs and the value of 

any resources needed or incurred for the project development, final design, 

and construction stages of a capital project. This includes applicable costs for 

design, right-of-way activities, environmental mitigation, public outreach, 

construction, overall project management, appropriate contingency for 

unknowns, etc., as well as costs and resources paid to third parties for work 

related to the project such as utility relocations. At the conclusion of project 

development, a Capital Cost Estimate should be prepared by using the 

preliminary project design to estimate specific quantities for each work 

element. The Project Sponsor should consider when work is performed 

according to project schedule and account for anticipated cost escalation due 

to inflation. The Capital Cost Estimate should use a midpoint of construction or 

annual escalation to year-of-expenditure method to account for cost 

escalation. The estimate should include documentation of methodologies and 

sources used. Any financing costs to implement the project are not included in

the Capital Cost Estimate and should be estimated separately.

ii. Non-Major Projects. In addition to the content for All Projects described in 

subsection (i) above, the Capital Cost Estimate for Non-Major Projects should

address risks with clearly identified and appropriate contingencies. 

iii. Major Projects. In addition to the content for All Projects described in 

subsection (i) above, the Capital Cost Estimate for Major Projects should 

incorporate a narrative describing and explaining the logic, methods, 

assumptions, and calculations used in the estimate, and should account for 

varying risks related to materials, labor, and project activities necessary for an 

independently conducted risk review. The Major Project risk review should use

a disciplined and comprehensive method of assessing and reassessing project 

4

 https://railroads.dot.gov/rail-network-development/training-guidance/capital-cost-estimating-guidance 5 U.S. Government Accountability Office, “GAO Cost Estimating and Assessment Guide -- Best Practices for 

Developing and Managing Capital Program Costs, GAO-09-3SP,” Mar. 2009
17

cost and schedule risk and uncertainty, and should incorporate costs 

associated with identified risks as contingency amounts. 

A. Risk Assessment. The Major Project cost and schedule risk assessment 

is an unbiased, risk-based, probabilistic analysis that verifies the 

accuracy and reasonableness of the current Cost Estimate and 

Schedule and results in a probability range that represents the 

project's cost. It also documents how the estimate accounts for the 

range of potential costs associated with project uncertainties. FRA 

recommends combining two approaches to cost and schedule risk 

assessment to provide the best estimate of project’s risk exposure. 

Project Sponsors should create and maintain a risk register and should 

estimate and account for risk in the cost estimate. Project Sponsors 

may account for risk using: (1) a traditional Monte Carlo risk 

quantification considering uncertainty around individual component 

estimates with robust parameters (e.g., large number of simulations, 

avoiding a simplistic 3-point estimation of risk exposure in a Monte 

Carlo model, etc.); and (2) a top-down cost-risk assessment using 

broad parameters derived from historic parametric sources. These 

two approaches should provide similar results at around the 65th 

percentile confidence level (P65) of the range of Monte Carlo results. 

B. Risk Review. The risk review of the Project Sponsor’s risk assessment 

should be conducted by a qualified party independent of the Project 

Sponsor. FRA may conduct the risk review when providing federal 

funding. In all cases, FRA and the Project Sponsor should participate 

during the entire risk review. The risk review may involve changing the 

risk assessment cost models and assumptions. If results of multiple

approaches to estimating risk are significantly different then FRA 

would seek to establish the cause and seek remedies to the cost 

estimate.

e. Financial Plan. The development of a sound financial plan for Major Projects is critical in 

securing adequate funding and financing for a project. After cost estimates are defined 

during the project development phase, the preparation of an initial Financial Plan should 

document the availability of sufficient financial resources to implement the project as 

planned. When FRA provides funding for a Major Project, the Project Sponsor should 

prepare an Initial Financial Plan prior to initiating the final design stage. The Project 

Sponsor should also periodically update the Financial Plan as described below.

i. Project Phasing. – In the event that the Project Sponsor determines that there 

are insufficient financial resources immediately available to complete the 

entire project, the Financial Plan may identify fundable incremental 

improvements or phases. For initial Financial Plans or Financial Plan updates 

that include phasing of the project, the cost of the overall project—not the 

cost of any single fundable incremental improvement or phase—is used to 

determine whether the project meets the cost threshold to be considered a 
18

Major Project. The Project Sponsor should prepare the initial Financial Plan and 

Financial Plan updates for the overall project and should detail any defined 

fundable increment or phase as appropriate. 

ii. Contents. 

A. Basic Sections. The initial and Financial Plan updates should include: 

(1) Project Description – This section presents the scope of the 

project, including a map of the project location.

(2) Schedule – This section presents the schedule summary, 

including major milestones, for completing the project. 

(3) Project Cost – This section presents the current Capital Cost 

Estimate and the remaining cost-to-complete in year-ofexpenditure dollars. This includes all costs and the value of all 

resources necessary to perform engineering, environmental 

permitting, right-of-way acquisition, environmental mitigation, 

construction, project management, public outreach, and 

external third-party work (such as utility and transportation 

infrastructure relocations). 

a) To complete an initial Financial Plan, at least one cost 

estimate risk review should have been conducted for the 

entire project. The estimated cost presented in the initial 

Financial Plan should reflect the results of the cost estimate 

risk review and the 65th percentile costs. 

b) Each Financial Plan update should show the cost estimate for 

the initial Financial Plan and each Financial Plan update. 

(4) Funding – This section describes all project funding sources and 

amounts expected to be necessary to complete the project

including contingency funds. It should also include an evaluation 

of the likelihood of the anticipated amounts becoming 

committed and reasonably available, including federal funding. 

This section documents the sources, amounts, and stability of 

each tranche of funds, including source documentation, to verify 

any funding sources that are already committed to the project.

6

 

This section should explain if the availability of these funds is 

limited to certain parts or phases of the project. 

a) This section should include a narrative that identifies all 

project funds raised from debt proceeds or other financing 

methods according to their financing source. The narrative 

should demonstrate the Project Sponsor’s ability to borrow 

6 Documentation examples include an official board resolution or an adopted budget committing the funds to the 

project, or evidence that the project and funding amounts are included in the sponsor’s adopted multi-year capital 

program.
19

the needed funds, focusing on the adequacy of the revenue 

source(s) pledged for repayment. The narrative should also 

describe the revenue forecasts, including sources of 

information, methodology, assumptions, and any 

independent validation or sensitivity analysis. 

b) This section should address the potential for unanticipated 

changes in expected revenue and the impact on the project. 

Such changes might include delays or shortfalls in the receipt 

of project funding, changes in governmental rules impacting 

the project, etc.

c) If the project is to be phased, funding documentation should 

only be provided for the funded phase covered by the 

Financial Plan. 

(5) Financing – This section describes the cost of project financing, 

which should be estimated separately from the Capital Cost 

Estimate described above. Such costs include issuance costs, 

interest costs, and other costs of borrowing funds for the 

project.

(6) Cash Flow – This section demonstrates that sufficient cash will 

be available to fund obligations and expenditures based on the 

project schedule.

a) This section should include an annual schedule of cash 

revenues and expenditures. This will demonstrate the ability 

to meet the payout schedules for contractors and in-house 

costs. The cash flow analysis should show all expenditures 

through project completion.

b) Financial Plan updates should include the original projected 

cash flow updated for actual expenditures and revised 

estimates for future years. The narrative should explain 

significant deviations from the initial Financial Plan. 

Previously expended funds should be included so that the 

entire estimated cost is included in the cash flow analysis.

B. Update Sections. Financial Plan updates include the following additional 

sections: 

(7) Summary of Cost Changes Since the Prior Year’s Financial Plan – 

This section provides a listing of changes, including any project 

scope changes, that have reduced or increased the cost of the 

project and/or funded phase since the prior year's Financial Plan. 

The discussion should clearly identify the primary reason(s) for 

the change and should also include actions taken to monitor and 

control cost growth (such actions may include conducting an 

additional risk review). 
20

(8) Cost and Funding Trends Since Initial Financial Plan – This section 

should identify the trends that have impacted project costs and 

funding since the Initial Financial Plan. This section should 

include the probable reasons for these trends and assess the 

implications for the remainder of project implementation. 

(9) Summary of Schedule Changes Since Last Year's Financial Plan – 

This section should provide a listing of those changes, including 

project scope changes, that have caused the completion date for 

the project and/or funded phase to change since the last 

Financial Plan update. The section should clearly identify the 

primary reason(s) for the change and should include actions 

taken to monitor and control schedule growth. 

(10) Schedule Trends Since Initial Financial Plan – This section should 

identify the trends that have impacted the project schedule since 

the Initial Financial Plan. This section should include the 

probable reasons for these trends and assess the implications for 

the remainder of the project. 

iii. Updates. Financial Plan updates supplement the initial Financial Plan and 

serve as an important planning tool. In a Financial Plan update, the Project 

Sponsor should provide information on actual costs, expenditures, and 

revenue performance in comparison to the initial estimates, and track funding 

shortfalls. This will allow Project Sponsors to make the necessary financial 

adjustments to assure the completion of the project. The Project Sponsor 

should also describe the current project status and provide a comparison of 

baseline information to actual performance and provide updated forecasts of 

future project performance in a Financial Plan update. The Project Sponsor 

should track the progress of the project over time using the Schedule by 

highlighting significant deviations from the initial Financial Plan and 

subsequent Financial Plan updates and explaining the mitigating actions or 

response strategies taken to address the deviations. With each update, the 

Project Sponsor should provide a comprehensive view of the project's 

background and status without requiring the reader to refer to previous 

submissions.

A. Update Cycle – A Project Sponsor should update the Financial Plan 

annually throughout the final design and construction stages. The 

Project Sponsor should include any changes to the nine initial Financial 

Plan sections in the update. The cost-to-complete estimate should be 

adjusted to reflect expended costs. The funding and cash flow sections 

should be revised to identify the funding sources used for actual 

expenditures and those proposed to fund the remaining cost-tocomplete. Changes since the previously approved Financial Plan update

should be clearly presented, and the major causes of such changes

should be clearly described.
21

Appendix X – Sample Project Management Plan Tables of Contents

Sample Non-Major Project PMP Table of Contents

1.0 Basis of the Project (Purpose, Goals, Objectives, Scope, Performance Metrics, History)

2.0 Organizational Management (Project Leadership, Team Organization, Capacity and Capability)

3.0 Management Controls (Control Procedures, Dispute Resolution, PMP Implementation, Reporting)

4.0 Procurement (Procurement, Domestic Sourcing, Contracting Methods)

5.0 Project Execution (Schedule, Budget, Cost, Agreements, Workforce)

Sample Major Project PMP Table of Contents

1.0 Basis of the Project (Purpose, Goals, Objectives, Scope, Performance Metrics, History)

2.0 Organizational Management (Project Leadership, Team Organization, Capacity and Capability, Workforce)

3.0 Management Controls (Scope, Budget, Schedule, Risk, Reporting, Documentation)

4.0 Relations Management (Government, Community, Labor Relations, Railroad Agreements, Third Party 

Agreements, Agreements for Construction, Operation, and Maintenance)

5.0 Project Planning and Concept Design (Project Planning, Conceptual Design, Objectives, Performance 

Measures)

6.0 Environment (Environmental Review, Permitting, Project Changes, Commitments, Mitigation)

7.0 Design Management (Standards, Criteria, Surveys, Preliminary Design, Final Design, Safety & Security, QA-QC, 

Change Control)

8.0 Project Delivery (Procurement, Domestic Sourcing, Contract Administration, Change Orders, Claims)

9.0 Workforce

10.0 Construction Close Out, Start-Up, Revenue Operation (Readiness, Start-up, Training, Certifications, Closeout)

11.0 Workforce Sub-Plan

12.0 Real Estate Acquisition and Management Sub-Plan (If Applicable)

13.0 Rolling Stock Acquisition and Management Sub-Plan (If Applicable)