Document ID: FRA-2022-0035-0014
Agency: fra
Document Type: Notice
Title: Guidance: Development and Implementation of Railroad Capital Projects
Posted Date: 2023-01-12T05:00Z

[Federal Register Volume 88, Number 8 (Thursday, January 12, 2023)]
[Notices]
[Pages 2163-2166]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-00508]

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DEPARTMENT OF TRANSPORTATION

Federal Railroad Administration

[Docket No. FRA-2022-0035]

Guidance on Development and Implementation of Railroad Capital 
Projects

AGENCY: Federal Railroad Administration (FRA), Department of 
Transportation (DOT).

ACTION: Notice of final guidance.

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SUMMARY: FRA is publishing final guidance on the development and 
implementation of railroad capital projects that may be funded, in 
whole or in part, by FRA (``final guidance''). This final guidance 
follows publication of the proposed guidance (``proposed guidance'') on 
June 28, 2022.

ADDRESSES: The final guidance is available at https://regulations.gov 
under docket number FRA-2022-0035.

FOR FURTHER INFORMATION CONTACT: For further information, please 
contact Mr. David Valenstein, Office of Railroad Development, at 
[email protected] or 202-493-6368; or Mr. Michael Longley, 
Office of Rail Program Development, at [email protected] or 202-
493-6377.

SUPPLEMENTARY INFORMATION: 

I. Overview

    Over the next five years, the Infrastructure Investment and Jobs 
Act (IIJA) (Pub. L. 117-58, also known as the ``Bipartisan 
Infrastructure Law'') will provide unprecedented Federal funding

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for rail improvement projects in America. As a result, FRA has 
identified the need to establish clear practices and procedures for the 
development and implementation of railroad capital projects through the 
issuance of agency guidance. FRA published a notice of proposed 
guidance titled Guidance on Development and Implementation of Railroad 
Capital Projects (87 FR 38451, June 28, 2022) seeking stakeholder 
feedback on the content and applicability of the proposed guidance. 
FRA's consideration of comments and associated revisions to the 
guidance are described in Section II. FRA is now publishing the final 
guidance.
    The final guidance will assist project sponsors in developing 
effective capital projects and enhance the management of capital 
projects. The audience of the final guidance includes project sponsors 
and partners, as well as the wide range of professionals who contribute 
to the planning, development, and implementation of railroad capital 
projects. The final guidance: (1) defines the stages in the railroad 
capital project lifecycle and project development process from 
inception to operation; (2) describes the project management tools, 
processes, and documentation that FRA requires when providing grants 
that fund the development or implementation of a railroad capital 
project; (3) differentiates between Non-Major projects and Major 
projects by defining a ``Major Project'' as a railroad capital project 
with a Capital Cost Estimate equal to or greater than $500 million and 
with at least $100 million in total Federal assistance.
    FRA strongly encourages project sponsors to follow the final 
guidance when developing, implementing, and managing railroad capital 
projects. FRA may use the final guidance to inform its grant 
application reviews and decisions in accordance with a process 
described in a notice of funding opportunity for the relevant grant 
program and may require compliance with the guidance as part of grant 
agreements funding railroad capital projects in accordance with 2 CFR 
parts 200 and 1201. The practices contained in the guidance draw from 
FRA's experience and from established programs of other DOT operating 
administrations that have enhanced the delivery of major highway and 
transit projects.
    FRA is adopting the guidance largely as it was proposed, with 
changes to the guidance text as discussed in Section II.

II. Discussion of Public Comments

    FRA received a total of nine comments on the proposed guidance: 
eight generally supported the proposed guidance and provided feedback, 
and one was considered outside of the scope of the proposed guidance. 
FRA received comments from the following respondents: American 
Association of State Highway and Transportation Officials (AASHTO); 
American Public Transportation Association (APTA); National Railroad 
Passenger Corporation (Amtrak); Association for Innovative Passenger 
Rail Operations (AIPRO); Brotherhood of Maintenance of Way Employees 
Division/International Brotherhood of Teamsters (BMWED/IBT); California 
High-Speed Rail Authority (CHSRA); Front Range Passenger Rail District 
(comments were intended for Docket #FRA-2022-0031 and are not addressed 
here); Metropolitan Transportation Authority (MTA); and New Jersey 
Transit (NJT).

A. Definitions

    Several commenters provided feedback on the definitions established 
in Section II of the proposed guidance, as summarized below.
    1. Major Project, Section II(a). The proposed guidance defined 
``major project'' as a railroad capital project with an estimated total 
project cost equal to, or greater than, $300 million, and receiving at 
least $100 million in Federal assistance. CHSRA, Amtrak, and APTA 
suggested a change from the $300 million total project cost threshold 
to $500 million for consistency with the Federal Highway Administration 
(FHWA) definition and the USDOT Mega grant program.\1\ Amtrak also 
suggested amending the cutoff in Federal assistance from $100 million 
to $250 million for Major Projects. FRA agrees there is value in 
creating consistency with FHWA and Mega program definitions and 
therefore changed the major project definition threshold from $300 
million to $500 million in the final guidance. However, the final 
guidance retains the secondary threshold of $100 million in Federal 
assistance as it more closely aligns with the Federal threshold share 
used by the Federal Transit Administration (FTA).
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    \1\ The Mega program supports large, complex projects that are 
difficult to fund by other means and are likely to generate national 
or regional economic, mobility, or safety benefits. More information 
on the Mega program can be found at https://www.transportation.gov/grants/mega-grant-program.
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    2. Project Sponsor, Section II(c). APTA recommended that FRA revise 
the definition of Project Sponsor to allow for joint or multiple 
sponsors. BMWED recommended adding compliance with FRA grant labor 
requirements to the definition of project sponsor. FRA made no changes 
to the definition of project sponsor in the final guidance. The 
proposed definition is broad enough to accommodate multiple project 
sponsors and the labor requirements described in BMWED's comment are 
imposed through existing laws and authorities as well as through the 
terms and conditions of individual grant agreements.
    3. Capital Cost Estimate, Section II(f). APTA recommended including 
operations and maintenance costs in the capital cost estimate. FRA made 
no changes to the final guidance in response to this comment. The 
capital cost estimate is for delivery of the capital project, which 
typically does not include operations and maintenance costs. However, 
those costs are accounted for elsewhere in the guidance. For example, 
the project development stage includes analysis of benefits and costs 
that would include operations and maintenance costs for the project. In 
addition, maintenance costs are separately addressed in the project 
management plan and the financial plan.
    4. Financial Plan, Section II(g). The definition of financial plan 
in the proposed guidance stated that for projects involving debt-based 
financing, the financial plan identifies the up-front capital for the 
project. MTA asked for clarification that the financial plan identifies 
all project funds rather than the up-front capital. In response, FRA 
revised the language in the definition in the final guidance to clarify 
that the financial plan identifies all project funds for the project.

B. Application of the Guidance

    APTA, MTA, and CHSRA sought clarification that project sponsors 
should be able to self-certify compliance with the guidance (for 
example, self-certify that stages have been completed, documentation 
prepared, or program requirements have been met). FRA made no changes 
to the proposed guidance in response to this comment. The final 
guidance states that FRA will address application of the guidance in 
grant agreements, including when FRA will permit self-certification. 
CHSRA also suggested the guidance clarify that it would not apply 
retroactively to projects that are already in development or subject to 
a grant agreement. FRA did not make changes the final guidance in 
response to this comment, since Section I(b) of the guidance states FRA 
may require compliance with the guidance as part of grant agreements or 
notice of funding opportunity.

[[Page 2165]]

C. Comments on Project Lifecycle

    Several commenters provided feedback on the Project Lifecycle 
Stages in Sections III and IV of the guidance, as summarized below.
    1. Lifecycle Stages, Section III. APTA, Amtrak and CHSRA asked for 
flexibility in combining stages and for clarity about when procurement 
happens. Amtrak and CHSRA also asked about how innovative delivery 
methods flow through and change the stages. In response, FRA revised 
the final guidance to clarify that procurement may be initiated in the 
project development stage of the lifecycle and specify that Project 
Sponsors may use innovative contracting and delivery methods.
    2. Project Planning, Section IV(b). Amtrak asked to change the 
language about design in planning and project development to align with 
their grant process. FRA made clarifying edits to the final guidance in 
this section but did not make all changes requested, because FRA will 
continue to work to align all grants, including those to Amtrak, with 
this guidance.
    3. Final Design, Section IV(d). Amtrak suggested including final 
design as part of the development stages in the project lifecycle 
rather than as part of the implementation stages. FRA did not change 
the final guidance in response to this suggestion. The final guidance 
is consistent with FRA's approach regarding final design and 
construction as implementation stages in its grant programs.
    4. Operations, Section IV(f). APTA suggested changing the name of 
the final stage from ``Operation'' to ``Operation and Maintenance.'' In 
response, FRA added a reference to maintenance in the description of 
the operation stage in the final guidance.

D. Comments on Lifecycle Completion Measures

    Several commenters provided feedback on the Project Lifecycle 
Completion Measures in Section IV of the guidance. NJT proposed that 
the guidance include ``commissioning'' as a part of construction 
completion. FRA agrees and revised Section IV(e) of the final guidance 
to include commissioning as part of construction completion.
    Amtrak and CHSRA commented that criteria or processes for 
determining completion of each lifecycle stage should be added to the 
guidance. FRA did not add prescriptive criteria or processes that 
determine the completion of each lifecycle stages in order to provide 
flexibility for a range of projects.

E. Comments on Project Management Tools

    Several commenters provided feedback on the Project Management 
Tools in Section V of the guidance.
    1. Project Management Plan (PMP), Section V(b). Several commenters 
suggested that the PMP should allow for flexibility to define project 
budgets. FRA finds that no change is necessary because the final 
guidance does not specify how Project Sponsors structure budgets, 
providing the appropriate flexibility. BMWED asked that that 
statutorily mandated employee protections be recognized in the PMP. FRA 
recognizes the importance of these statutorily mandated employee 
protections but believes they are more appropriately addressed in the 
context of the grant agreement and are thus outside of the scope of the 
guidance. However, FRA added a workforce sub-plan element to the PMP 
for major projects to address railroad labor forces required to 
implement the project, if applicable.
    2. Capital Cost Estimate, Section V(d). NJT, APTA, and MTA 
commented that the capital cost estimate should use a midpoint of 
construction instead of year-of-expenditure. FRA agrees and revised the 
text accordingly. MTA suggested the final guidance specify that the 
independent party conducting major project risk reviews may be Project 
Sponsor internal staff independent from the project team. FRA did not 
incorporate the suggestion to allow Project Sponsor staff to conduct 
the risk review into the final guidance; FHWA and FTA practice is for 
independent parties to conduct the risk review for Federally funded 
projects and the guidance is consistent with this approach. MTA also 
suggested that FRA oversight of risk review be limited to FRA 
participation in a workshop led by the Project Sponsor. This approach 
would also be inconsistent with FHWA and FTA practice of direct Federal 
agency involvement or leadership of the entire risk review for 
Federally funded projects. Therefore, FRA did not modify the final 
guidance in response to this comment.
    3. Financial Plan, Section V(e). APTA and MTA sought certainty that 
documenting the ``availability of funding'' in the Initial Financial 
Plan means that all required approvals for funding from governing 
bodies have been secured, such as an approved capital plan. FRA 
determined the suggested edits are unnecessary because the guidance 
addresses availability of funding and associated documentation in 
Section V(e)(ii)(A)(4), which provides as examples 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. APTA and MTA also 
suggested adding internal project sponsor review of the Initial 
Financial Plan and annual updates that the project sponsor self-
certifies. FRA did not modify the final guidance in response to this 
comment because self-certification measures, if appropriate, would be 
addressed in the grant agreement.

F. Comments on Project Delivery and Public Private Partnerships

    Several commenters provided feedback on the lifecycle progression 
of project delivery planning and implementation. CHSRA, APTA, and 
Amtrak sought clarification on when procurement happens and how 
innovative delivery is recognized in the lifecycle stages. FRA made 
edits to Section III.a. to recognize sponsor flexibilities, early 
procurements, and early works.
    BMWED commented that the guidance should specify railroad labor 
organizations as stakeholders in project planning and consider labor 
from initial construction to established maintenance. FRA made edits to 
Section V.b by modifying the PMP contents to address labor agreements 
at Section V.b. BMWED also proposed that the guidance require Project 
Sponsors to be Railroad Labor Act (RLA) at 45 U.S.C. 151 et seq., 
Railroad Retirement Act (RRA) at 45 U.S.C. 231 et seq., and Railroad 
Unemployment Insurance Act (RUIA) 45 U.S.C. 351 et seq. compliant and 
employ railroad employee protections. FRA finds that no change to the 
guidance is necessary because grant programs address statutory railroad 
labor requirements.

G. Other Comments

    FRA received several miscellaneous comments to enhance the 
guidance.
    1. Amtrak suggested broadening the guidance to address technology 
integration and other project types. In response, FRA amended the 
construction stage definition at Section IV(e) and the PMP language at 
Section V(b).
    2. APTA commented that the guidance should address climate 
resilience. FRA responded by adding resilience consideration to the 
project planning and project development at Sections IV(b) and (c), 
respectively.
    3. AIPRO, NJT, and APTA commented that effective maintenance should 
be recognized in early analyses and the

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operations stage. FRA made several changes to the final guidance to 
incorporate maintenance. FRA amended the description of the Project 
Development stage in Section IV(c)(ii)(c) to state that the PMP should 
include maintenance agreements and made related revisions to the PMP 
content language at Section V(b)(i). FRA also amended the description 
of the operations stage to clarify that maintenance of assets is part 
of operations in Section IV.f.
    4. BMWED commented that capital projects that are fully covered by 
RLA, RRA, and RUIA should be prioritized. FRA finds that no change is 
necessary because grant programs address statutory labor requirements.

    Issued in Washington, DC.
Paul Nissenbaum,
Associate Administrator, Office of Railroad Development.
[FR Doc. 2023-00508 Filed 1-11-23; 8:45 am]
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