Hazardous Materials Transportation: Better Guidance and Planning Could Enhance DOT's Explosives Classification Oversight
Published: 2016-07-28T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Explosives accounted for 4 million of the total 2.6 billion tons of hazardous materials transported in the U.S. in 2012. DOT's PHMSA is responsible for regulating the transport of explosives, which includes classifying new explosives prior to transportation. The classification denotes the risk level and requirements, such as which transportation modes can be used to transport the explosive. To be classified, an explosive must be examined by a PHMSA-approved third-party test lab. PHMSA must then approve the test lab's classification recommendation.
The Fixing America's Surface Transportation Act includes a provision for GAO to review DOT's oversight of this process. This report addresses: (1) PHMSA's oversight of the classification of new explosives and related stakeholder views and (2) PHMSA's efforts to improve the oversight process and any associated challenges. GAO collected PHMSA data on applications processed (2006-2015) and explosives incidents (2005-2015) and interviewed officials from PHMSA, all six approved test labs, carrier and explosive manufacturer associations, and five explosives manufacturers selected in part to represent a range of industries.
section_title: What GAO Found
paragraphs: The Department of Transportation's (DOT) Pipeline and Hazardous Materials Safety Administration's (PHMSA) oversight of the labs that issue classification recommendations for new explosives is limited by a lack of guidance, and stakeholders have mixed views on PHMSA's oversight. To receive a classification for a new explosive, manufacturers must have an approved test lab examine the explosive and submit an application to PHMSA with the test lab's recommended classification. PHMSA's oversight includes: (1) approving and monitoring the test labs and (2) reviewing applications and classification recommendations. Although PHMSA has several activities to oversee test labs, its efforts to promote test lab consistency—one objective of its oversight—are hindered by the lack of a systematic approach to developing guidance. GAO has reported that agencies benefit from procedures to improve guidance to respond to regulated entities' concerns. PHMSA officials stated that they grant test labs flexibility on how to apply standards and regulations. However, four of the six test labs said guidance could explain “unwritten rules” such as common testing modifications. Without a systematic approach to determining what guidance is needed, PHMSA's ability to achieve consistency is limited.
Stakeholder views on PHMSA's oversight processes, in particular its process for approving classification recommendations, are mixed. PHMSA officials view their role as final approver of classifications as critical. However, some manufacturers stated that PHMSA's review process is time consuming and opaque and questioned whether it adds value. In contrast, other stakeholders such as carrier associations were supportive of PHMSA's oversight role. In 2015, PHMSA began taking steps to improve the transparency of its process by, for example, posting information online on average application processing times.
PHMSA has begun oversight improvement efforts that align with its strategic goals to increase outreach, streamline its classification application review process, and enhance risk management, but it faces staffing and data challenges. For example, PHMSA has eliminated one of two technical reviews for certain explosive classification applications. According to PHMSA officials, such streamlining could help PHMSA better manage its limited staff resources—7 PHMSA officials process an average of 1,700 new explosives annually, along with other duties—a workload that creates challenges for application turnaround. However, PHMSA's data challenges reduce its ability to strategically improve its process, and PHMSA lacks a plan for data system improvements under way. Internal control standards state that management should design the entity's information system to achieve objectives and respond to risks. Currently, PHMSA's data system does not allow the agency to aggregate or analyze most information across applications, limiting PHMSA's ability to analyze its processes or outcomes in order to achieve objectives or respond to risks. PHMSA officials stated that fiscal year 2016 funds have been designated to upgrade its system, but PHMSA does not have a plan documenting what fields or information needs are required for the system in order to reach agency goals. Without a plan to guide the development of the new data system, PHMSA may miss opportunities to use it to better manage staff resources, identify future and evaluate past reforms, and meet agency goals.
section_title: What GAO Recommends
paragraphs: To improve oversight of the classification of new explosives, PHMSA should (1) develop and implement a systematic approach for improving PHMSA's guidance for test labs; and (2) develop a written plan describing information requirements for its new data system. DOT concurred with the recommendations.

section_title: Letter
paragraphs: On August 10, 2005, a truck carrying over 35,000 pounds of explosives  overturned and caught on fire on a highway near Spanish Fork, Utah. The  fire resulted in an explosion that caused $2 million in property damage  and 11 injuries. Although this type of incident is rare, it underscores the  risk involved with transporting explosives. Explosives accounted for 4  million tons of the total 2.6 billion tons of hazardous materials (hazmat)  transported in the U.S. by land, air, and water in 2012. Explosives are  used in a variety of industries, including the mining, oil and gas, and  aerospace industries. Federal regulations require that explosives be  classified before being transported. Classifications denote the relative risk  posed by the explosive and dictate transportation requirements, such as  by which modes the explosive can travel. For example, only specific  classifications of explosives, which are determined to pose lower risks,  are permitted to travel by aircraft. The vast majority of explosives are  transported by truck.
The Department of Transportation’s (DOT) Pipeline and Hazardous  Materials Safety Administration (PHMSA) is responsible for regulating the  transport of hazmat, including explosives. According to regulations, new  explosives must be classified according to risk level before they can be  transported. Under the classification process described in the regulations,  a PHMSA-approved third-party test lab must examine the new explosive  and recommend a classification. PHMSA must then review the test lab’s  report and assign an approved classification. PHMSA processes over a  thousand applications for classification of new explosives every year. In  2010, the DOT’s Office of Inspector General (OIG) identified weaknesses  in PHMSA’s oversight of the classification of new explosives. Since then,  PHMSA has made changes to improve its oversight.
The Fixing America’s Surface Transportation Act included a provision for  us to review PHMSA’s oversight of the classification of new explosives.  This report addresses (1) how PHMSA oversees the classification of new  explosives, including the performance of test labs, and selected  stakeholder views on these oversight processes and (2) PHMSA’s efforts  to improve the oversight process and what challenges, if any, PHMSA  faces. We presented our findings to committee staff on June 1, 2016.
To respond to these objectives we collected and analyzed PHMSA data  on explosive classification applications processed from 2006 through  2015 and transportation incidents involving explosives from 2005 through  2015. Through interviews with PHMSA officials on how this information  was collected and stored, we determined these data were sufficiently  reliable for our purposes. We also reviewed PHMSA documentation  related to its oversight of the classification of explosives, including  regulations, procedures, and policy memos and interviewed PHMSA  officials on their oversight process, improvement efforts, and associated  challenges. To gather stakeholder views on PHMSA’s oversight, we  interviewed associations representing explosive manufacturers (Institute  of Makers of Explosives and American Pyrotechnics Association), hazmat  carriers (Association of American Railroads, American Trucking  Associations, Owner Operator Independent Drivers Association,  International Air Transport Association, and Air Line Pilots Association),  and a hazmat education organization (Dangerous Goods Advisory  Council). We also interviewed all six third party test labs currently  approved by PHMSA and five explosives manufacturers. We selected the  manufacturers to represent a mix of industries with a preference toward  those that have used more than one test lab, which we determined using  the test labs’ 2015 annual reports submitted to PHMSA. Views of those  selected are not generalizable to all explosive manufacturers.
We conducted this performance audit from January 2016 to July 2016 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.
subsections: section_title: Background
paragraphs: Explosives, like all hazardous materials (hazmat), are subject to  regulations to ensure safe handling and transportation, among other  things. Hazmat regulations are coordinated with international standards  and generally govern the labeling, packaging, and transportation of  hazmat in commerce. Explosives are one of nine classes of hazmat. In  order to be transported, explosives must be assigned a classification. The  classification, which includes a number that denotes the risk level of the  explosive (from most to least hazardous), dictates associated  transportation requirements, such as by which transportation modes the  explosives can travel and how they are packaged. For example, class  1.1 explosives, which pose a mass explosion hazard, cannot travel by  aircraft but can travel by truck. Meanwhile, certain class 1.4 explosives,  which pose a minor explosion hazard, that meet specific requirements  can travel by aircraft or U.S. Postal Service. Classifications also include  “compatibility groups” that denote which explosives can be transported  together. For example, the regulations do not allow blasting detonators,  which are used to trigger an explosive device, to be transported in the  same truck as primary explosive substances.
Unlike some other classes of hazmat that can be self-classified (meaning  the shipper classifies the material), in order to be classified, explosives  must be first examined by one of six PHMSA-approved third party test  labs. The explosives manufacturer, which ultimately submits an  application to PHMSA for classification, first selects and hires one of the  test labs and makes a sample of the explosive available to the test lab for  examination. The test lab uses international standards to test the material  and to recommend a classification. PHMSA then reviews the  manufacturer’s application, including the test lab’s report and  recommended classification, and approves a classification for the  explosive (see fig. 1).
In 2010 and 2014, the DOT OIG reported weaknesses in PHMSA’s  management and oversight of the approvals process. For example, in  2010, the DOT OIG raised questions about the effectiveness of PHMSA’s  oversight and found that PHMSA had not inspected any of the test labs in  10 years and that test labs did not always submit annual reports as  required. In 2014, the DOT OIG reported that PHMSA had addressed  these issues. However, the 2014 report found PHMSA evaluation forms  missing for many explosives classification reviews, a situation that DOT  OIG noted was an internal control weakness. As a result, the DOT OIG  recommended PHMSA require the use of evaluation forms to document  its review of explosive classification applications. According to a DOT OIG  official, PHMSA effectively addressed this recommendation in 2015.
section_title: PHMSA’s Oversight Is Hindered by the Lack of a Systematic Approach to Guidance for Test Labs, While Stakeholders Have Mixed Views on PHMSA’s Oversight
paragraphs: PHMSA’s oversight of the classification of new explosives includes two  key parts—(1) approving and monitoring the test labs and (2) reviewing  and approving the manufacturers’ applications for classification of a new  explosive and the labs’ test classification recommendations.
subsections: section_title: PHMSA Has Improved Oversight of Test Labs, but Has Not Systematically Determined What Guidance to Provide Test Labs
paragraphs: PHMSA has several activities to approve and oversee test labs, but its  efforts to ensure consistency are limited by PHMSA’s lack of a systematic  approach to developing and issuing guidance for these labs. In response  to the DOT OIG’s findings of oversight weaknesses from 2010, PHMSA  strengthened its activities to approve and monitor test labs. Specifically,  to ensure that test lab examiners meet the requirements specified in  regulation, PHMSA established an approval process that includes  interviewing examiners and reviewing test lab and examiner qualifications  and recertifying test labs every 5 years through an on-site inspection.  PHMSA officials stated that in addition to ensuring compliance with  regulations, an important goal of PHMSA’s oversight of test labs is to  promote consistency across test labs. PHMSA officials stated that efforts  to promote consistency are particularly important given turnover—half of  test labs were approved in 2012 or later. However, while PHMSA works  to promote consistency through various types of communications with test  labs, it lacks a systematic approach to determining what guidance is  needed and to issuing such guidance. Internal control standards state  that agencies should communicate quality information so that external  parties can help the agency achieve its objectives and address related  risks. Likewise, we have previously reported that agencies benefit from  procedures that continually reassess and improve guidance processes  and documents to respond to the concerns of regulated entities.
According to PHMSA officials, regulations and international standards  described in a United Nations test manual set forth certain requirements  for testing new explosives. However, PHMSA officials told us they give  test labs flexibility in how to apply these requirements on a case-by-case  basis when testing new explosives to recommend classifications. PHMSA  officials told us that granting this flexibility allows test labs to use their  expertise and professional judgment. For example, PHMSA officials noted  examiners can deviate from the proscribed tests in the test manual if they  justify their reasoning for doing so based on their expertise, and officials  at one test lab stated that, given the variation in the specific attributes of  different new explosives, such flexibility can improve their ability to  effectively test a new explosive. However, PHMSA and some test lab  officials also stated that this flexible approach can lead to inconsistencies  across test labs, such as a test lab examiner being unaware of a common  deviation from the proscribed test or similar types of explosives being  subject to different tests. For example, one examiner reported learning of  an “unwritten rule” that test labs can use alternative tests in cases where  multiple samples of the explosive cannot be destroyed due to costs, such  as for large and expensive explosives. Four of the six test labs we spoke  to said written guidance from PHMSA could help address “unwritten  rules” such as commonly used modifications to the test manual. Although  four of the five manufacturers we spoke to said the labs are consistent in  quality of testing, two noted that test lab report quality can vary.
PHMSA has ongoing efforts to promote consistency across test labs.  Specifically, PHMSA officials stated that they:
Discuss issues, best practices, and PHMSA’s recommended  approaches with test lab examiners during in-person annual meetings  and quarterly teleconferences. PHMSA also distributes agendas and  minutes associated with these teleconferences and meetings. Five of  the six test labs we spoke to said PHMSA’s quarterly teleconferences  and annual meetings are helpful to share issues and good practices.  However, three test labs noted that test lab examiners are hesitant to  volunteer information or ask questions during these meetings since  the test labs compete with one another for business. As one test lab  noted, if one test lab has information that the others do not, this test  lab has an incentive not to mention this information in order to have a  business advantage over competitors.
Issue letters of interpretation to communicate PHMSA’s views on  specific issues in response to questions or concerns, which are  posted on PHMSA’s website. However, PHMSA officials and one test  lab stated that while the letters of interpretation include topical  guidance, they are hard to find, are not organized by topic, and can  contradict each other.
As described above, PHMSA’s approach to providing guidance is not  systematic, and therefore PHMSA may be missing areas where more  guidance would be beneficial to helping test labs understand PHMSA’s  expectations and to improving PHMSA’s ability to reach its objective of  consistency among test labs. Moreover, PHMSA officials acknowledge  that they currently do not have a comprehensive written document that  encompasses all PHMSA guidance for test labs. They stated that they are  currently evaluating whether to issue such a document. PHMSA officials  stated that the development of such a document could involve compiling  the content of existing written communication such as the letters of  interpretation, which, as described above, PHMSA officials stated are not  currently easily accessible. However, PHMSA officials have not specified  a systematic approach for these efforts, including an effort to identify test  labs’ needs such as explaining the “unwritten rules” that affect PHMSA’s  expectations for test labs. Without such an approach to improving its  guidance, PHMSA may not be providing test labs with the information  needed to effectively meet PHMSA’s goal of promoting consistency.
section_title: PHMSA’s Application Review Process Has Multiple Parts, with Stakeholders Having Differing Perspectives on the Process and on PHMSA’s Overall Oversight
paragraphs: PHMSA has a multi-part application review and approval process for the  classification of new explosives, including a check for completeness by a  program officer, two levels of technical review, and the completion of an  evaluation form (see fig. 2).
According to PHMSA officials, PHMSA’s role in approving classifications,  which is outlined in regulation, is essential to fulfilling its role in regulating  hazmat transportation in the U.S. Furthermore, PHMSA officials say its  application review process serves quality assurance purposes, since test  labs, which are paid by the manufacturers, compete for business and may  be pressured by manufacturers to provide a specific classification. Two of  the six test labs we spoke to reported facing pressure from manufacturers  on how to conduct tests or which classification to recommend. A third test  lab also stated that manufacturers often aim to have their explosive  classified as class 1.4 since, as mentioned previously, such explosives  can be transported by aircraft. One manufacturer noted that having an  explosive classified as a 1.4 to travel by aircraft makes the product more  competitive since air travel is the fastest option to get the product to an  overseas customer. PHMSA officials stated that they are checking for  multiple things in their technical reviews, and that in addition to ensuring  that explosives are classified correctly, these technical reviews also help  PHMSA to improve test labs’ performance. Specifically, PHMSA officials  stated that they keep notes in an Excel spreadsheet on recurring issues  identified in application reviews, which are then used to inform topics for  annual and quarterly meetings with the test labs.
According to PHMSA officials, its overarching goal in reviewing  applications is to ensure that every new explosive is classified correctly,  and as a result, application review processing times can vary greatly  depending on many factors, such as the quality of the application; the  complexity of the application and the explosive device; and the timeliness  of test-lab response when PHMSA technical reviewers reach out with  questions or requests for additional information. PHMSA officials also  noted that technical reviewers may give some applications by more  recently approved test labs or examiners a closer look to develop a  “comfort level” with their testing procedures, which can slow the review.  Similarly, officials noted there has been turnover among PHMSA’s  technical reviewers, which can slow the process since the second-level  technical reviewer provides guidance and feedback to the first-level  reviewers as part of their training. PHMSA officials also noted that they  began emphasizing the process step of completing an evaluation form for  each application in response to DOT OIG’s 2014 report, which affected  application review times.
Other stakeholders we spoke with had varying views on PHMSA’s review  process. The manufacturers and the explosives manufacturing  association we spoke to generally had two key complaints about  PHMSA’s process, seeing it as overly time consuming and opaque.
Time-Consuming: Industry stakeholders noted that the time required  for PHMSA’s review can be lengthy. Specifically, four of the five  manufacturers and an explosives industry association said PHMSA’s  review takes too long, while one manufacturer noted that turnaround  times have recently improved. For example, three manufacturers told  us that in their experience PHMSA’s review often takes up to 6  months. Manufacturers and the association stated that PHMSA’s  review process delays manufacturers’ ability to get a return on  investments made in developing a new explosive.
Opaque: Some manufacturers noted that PHMSA’s review process is  opaque, leaving the manufacturer unsure of their application’s status.  In particular, four of the five selected manufacturers and an explosives  manufacturing industry association we spoke to stated that PHMSA  could better communicate where applications are in the review  process. Manufacturers and the explosives industry association stated  that the uncertainty surrounding PHMSA’s review process creates  business planning uncertainties, such as when to allocate staff and  resources to manufacturing and sales.
Furthermore, some manufacturers and the manufacturers’ association  questioned the value of what they see as an overly time-consuming and  opaque process and suggested that PHMSA should place more trust in  the test lab results to reduce the amount of time PHMSA takes to review  applications. For example, one manufacturer noted that PHMSA’s review  adds little value since, in the manufacturer’s experience, PHMSA rarely  changes a classification from the one recommended by the test lab. This  manufacturer noted that PHMSA’s efforts would be best suited to  overseeing the test labs rather than reviewing applications and that the  test lab should have the final determination on the classification.
In contrast to some manufacturers’ views, other stakeholders, including  carrier associations and test lab examiners, were supportive of PHMSA’s  oversight role, including the review and approval of test labs’ classification  recommendations. One air carrier association stated that PHMSA’s  oversight is critical given what the association believes to be the test labs’  potential conflict of interest since test labs are paid by manufacturers and  since explosives, if misclassified, could pose a major risk during air  transport. The carrier associations we spoke to that represent air, rail, and  trucking modes noted that PHMSA’s oversight is effective insofar as  explosives are classified correctly and incidents are rare. Specifically,  according to PHMSA data, PHMSA receives about 16,000 hazmat  incident reports each year, and of that number, an average of about 35  per year involved explosives between 2005 and 2015. A total of 388  such incidents occurred during that time period. Over the same time  period, excluding fireworks, only two incidents involving explosives  resulted in injuries, but no such incidents resulted in fatalities. In addition,  all of the six test labs we spoke with were generally supportive of  PHMSA’s oversight role. For example, one test lab noted that PHMSA’s  review is important for liability protection for the test labs, and expressed  discomfort at the notion of test labs becoming responsible for assigning  approvals without PHMSA’s review, noting that while such a change  could speed the approval process, it could also decrease quality and  consistency across test labs.
Recently, PHMSA has taken some steps to respond to manufacturers’  concerns about the uncertainty and lack of transparency of the process.   PHMSA established an internal goal of 120 days for average application  processing times and, since the second quarter of fiscal year 2015, has  posted quarterly average application processing times on its website. For  the second quarter of fiscal year 2016, PHMSA reported the average was  99 days. In addition, in a February 2016 memo on reforming the  explosive classification approval review process, PHMSA noted that to  increase transparency, it had increased the information provided to  manufacturers in its online status reports so that manufacturers could  have better visibility into where each application is in the process.  Representatives from one manufacturer we spoke to stated they  appreciated the new ability to better track the status of applications  through PHMSA’s review process.
section_title: PHMSA’s Oversight Improvement Efforts Align with Goals, but PHMSA Faces Staffing and Data Challenges and Lacks Sufficient Data System Planning
subsections: section_title: PHMSA Has Outlined Improvement Efforts That Align with Its Goals
paragraphs: In its February 2016 memo, which cited manufacturers’ concerns with the  approval process, PHMSA outlined improvement efforts that align with  goals in PHMSA’s Office of Hazardous Materials Safety 2013-2016  strategic plan. These goals include increasing outreach, streamlining the  regulatory system, and enhancing risk management. To increase  outreach, as described above, PHMSA increased the amount of  information about applications online. PHMSA also described several  efforts that align with the goals of streamlining the regulatory system and  enhancing risk management. For example, in the memo, PHMSA stated it  would immediately begin a one-level technical review for certain  applications, including explosives classified as 1.1. Although these  explosives pose the greatest risk of mass explosion, PHMSA officials  stated that the review is relatively low risk since these explosives have  the most stringent packaging and transportation requirements. To be  classified as 1.1, the explosive must meet the standard of being stable  and not forbidden from transport but does not need to undergo further  testing and scrutiny that would be required to determine whether an  explosive could be classified at a lower risk that, for example, might allow  it to go on an aircraft. In the reform memo, PHMSA also indicated that it  would continue to look for future opportunities for streamlining. In  particular, PHMSA said it would look for (1) other types of applications  where a streamlined one-level technical review is appropriate and (2)  specific types of explosive approvals that could be standardized in the  regulations, which could allow for self-classification, meaning the  manufacturer could determine the classification. PHMSA officials stated  that identifying areas for self-classification involves research conducted  either by PHMSA or by the industry to determine whether the standard is  sufficient to reduce the amount of time PHMSA takes for its review  without increasing the risk of misclassifying explosives.
section_title: PHMSA Faces Staffing Challenges
paragraphs: Despite these recent reform efforts, PHMSA officials stated that limited  staff resources create challenges for application turnaround. According to  data provided by PHMSA, between 2006 and 2015, on average, PHMSA  officials reviewed 1,700 applications for new explosive classifications  annually. As mentioned previously, each of these applications is subject  to a multi-step review process, including a completeness check by a  project officer, a two-level technical review, and approval or rejection  letter signed by an approving official. As noted in figure 3, as of the time  of our review, there were seven PHMSA officials involved with this review  process—two project officers, four technical reviewers (three first level  and one second level), and one primary approving official.
Furthermore, these seven officials have other responsibilities outside of  reviewing explosives classifications. For example, technical reviewers  assist with high priority hazmat issues such as crude oil by rail and lithium  ion batteries, and the second level technical reviewer also supervises the  work of the first level reviewers and represents PHMSA in international  working groups. According to PHMSA officials, although these activities  are important to the agency, they can take time away from explosives  approvals.
section_title: Lack of Data and a Data Plan Limit PHMSA’s Improvement Efforts
paragraphs: Another challenge that affects PHMSA’s improvement efforts is a lack of  sufficient data and data planning. Internal control standards for the federal  government state that management should design the entity’s information  system to achieve objectives and respond to risks. These standards state  that an information system includes both manual and technology-enabled  information processes and represents the life cycle of information used  for the entity’s operational processes. To effectively design an entity’s  information system, the standards state that entities should consider the  information requirements, including the expectations and needs of both  internal and external users.
Currently, according to PHMSA officials, PHMSA stores classification  application information in a system—called the FYI system—that is a  document management system, not a database. PHMSA officials stated  that the FYI system does not allow for standard fields to be entered that  could then be easily analyzed across applications. Instead, PHMSA  reviewers complete a separate Microsoft Word document evaluation form  for each approval that is filed electronically. PHMSA officials noted that in  addition to not being designed for evaluation or analysis across  applications, the manual process of filling out the evaluation form can  cause delays in the application review process.
Due to the limitations of this current data system, PHMSA was unable to  provide us data that we requested in several areas. Specifically, PHMSA  was unable to provide data on the following:
The number of applications in which PHMSA approved a classification  that was different from the one recommended by the test lab. PHMSA  officials stated that to compile this data would be a manual process  requiring staff to go through each application file and manually  compare the recommended classification from the test lab to the final  approved classification. PHMSA officials stated that as a result of  these limitations, PHMSA does not know how many applications  required such a change. A manufacturer’s association suggested that  information on how often PHMSA changes a test lab’s recommended  classification could help inform the extent to which PHMSA’s final  review adds value to the process. PHMSA officials stated they did not  think that such information would be instructive in the level of value  the final PHMSA review adds since currently, the quality of test labs’  recommendations may be influenced by the knowledge that PHMSA  will be providing a final review. However, PHMSA officials stated that  they would like to be able to analyze this type of information.
The amount of time applications spent in each part of PHMSA’s  review process. PHMSA officials stated that although they had  developed a method to track information on applications’ total time in  PHMSA’s review process, to obtain more detailed information on how  long applications spent in each part of the process would be difficult  and time consuming given the limitations of the current system.
The amount of time different types of applications spent in PHMSA’s  review process. Because of the effort involved in this type of analysis,  PHMSA officials stated that PHMSA does not have historical  information on timeframes for different types of explosives  applications. However, officials stated they had implemented a  software fix that would allow them to obtain this information going  forward.
The number of applications for which PHMSA had to request  additional information from test labs, which PHMSA officials cited as a  common reason for extended timeframes of application reviews, or  any information on the reasons PHMSA had to request additional  information from test labs. Such information could potentially help  PHMSA target guidance efforts to labs.
The extent to which the length of PHMSA’s review of new applications  varied by test lab, which could potentially help PHMSA analyze the  consistency of test lab reports and target guidance efforts to labs.
PHMSA officials described several ongoing efforts to improve the  agency’s data systems. PHMSA officials stated that PHMSA’s goal is to  develop a risk-based, data-driven system that allows PHMSA to use data  to identify potential risks, to address workflow process weaknesses, and  to use resources more effectively. Moreover, PHMSA officials stated that  fiscal year 2016 funds have been designated to transition the FYI system  to a PHMSA-wide portal to better capture information in applications and  develop the ability to analyze information across applications. In addition,  PHMSA officials stated that a statistician has joined their staff to assist  with data analysis, and PHMSA has three contracts with outside  organizations to improve PHMSA’s use of data for analytics, enhanced  risk management, and quality assurance.
While PHMSA has taken these steps towards improving its data system,  and officials described some desired information fields and capabilities,  the agency does not have a plan documenting the data fields or  information needs required to reach its stated goals. PHMSA officials  stressed one narrower aim for the new system—to provide greater  transparency and predictability in the review process to better meet the  needs of explosives manufacturers. For example, PHMSA officials stated  that they would like the ability to track and report average processing  times for each review process step. PHMSA officials stated that  processing time information could also help the agency manage its  staffing resources.
While PHMSA officials discussed their desire for this added capability,  they did not describe in a systematic way and have not documented in a  plan how an improved information system could potentially help meet  their goals of streamlining the review system and enhancing risk  management, or how it could help them meet their stated goals of using  data to identify potential risks, address workflow process weaknesses,  and use resources more effectively. For example, while, as described  above, PHMSA identified several factors, such as an application’s quality  and complexity of the application and the explosive device, that can result  in a longer application review time, PHMSA did not discuss or provide  documentation considering how an improved information system could  allow it to better track and analyze these issues. Similarly, while PHMSA  officials stated that test labs’ quality and experience could affect the  length of its review, PHMSA officials have not developed data fields that  could highlight such information in applications and be incorporated into  the new system, potentially improving PHMSA’s ability to analyze the  quality and consistency both across test labs and the reviewers. This  could help the agency target efforts to streamline its process. Finally, as  mentioned previously, PHMSA has recently identified reforms such as a  one-level technical review and proposed standardization for certain types  of explosives, and has noted that it would like to explore new areas for  these opportunities. Without defining the necessary data elements to  capture during the classification application review process, PHMSA may  be unable to analyze the effects of previous reform efforts or identify  opportunities for further reform. Without a systematically developed plan,  PHMSA may miss opportunities to create an information system that  allows PHMSA to better meet the expectations of both external  stakeholders, such as manufacturers, and internal stakeholders—i.e.,  PHMSA officials themselves.
section_title: Conclusion
paragraphs: Although PHMSA has taken steps to strengthen its oversight of the  explosives classification process that align with its strategic goals,  PHMSA’s ability to be responsive to stakeholder concerns and to  overcome challenges may be limited without a more systematic approach  to improvements in two areas: guidance to test labs and information  systems. Without systematically determining what guidance would most  benefit test labs and how to best communicate this guidance to test labs,  PHMSA’s efforts to support increased consistency among test labs and  respond to test labs’ desire for clearer guidance in certain areas may fall  short. Similarly, without developing a data plan that clearly defines what  information PHMSA most needs to meet its various objectives, the  effectiveness of PHMSA’s data improvement efforts to meet the  expectations of internal and external users may be reduced. In contrast, a  carefully developed and implemented data plan could potentially help  PHMSA respond to manufacturers’ concerns about the timeliness of  PHMSA’s review process and mitigate PHMSA’s challenges related to  limited staff resources while also helping it meet its goals related to  outreach, transparency, and developing a risk-based approach.
section_title: Recommendations for Executive Action
paragraphs: To improve PHMSA’s oversight of the explosives classification process,  the Secretary of Transportation should direct the PHMSA Administrator to  take the following two actions:  1.  Develop and implement a systematic approach for improving the  guidance PHMSA provides test labs.   2.  Develop a written plan describing information requirements for  PHMSA’s new data system. Such a data plan should include  information requirements needed to meet PHMSA’s goals and  address risks.
section_title: Agency Comments
paragraphs: We provided a draft of this product to the Department of Transportation  (DOT) for comment. In written comments, reproduced in appendix I, DOT  concurred with our recommendations. DOT stated that it continues to  dedicate resources to improve the safety, oversight, and system  efficiency of the explosives classification approval program and described  several recent actions taken to enhance its oversight. In addition, DOT  provided a technical comment that we incorporated as appropriate.
We are sending copies of this report to the appropriate congressional  committees, the Secretary of the Department of Transportation, and other  interested parties. In addition, the report is available at no charge on the  GAO website at http://www.gao.gov.
If you or your staff have any questions about this report, please contact  me at (202) 512-2834 or flemings@gao.gov. Contact points for our  Offices of Congressional Relations and Public Affairs may be found on  the last page of this report. GAO staff who made key contributions to this  report are listed in appendix II.
section_title: Appendix I: Comments from the Department of Transportation
section_title: Appendix II: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Staff Acknowledgments
paragraphs: In addition to the contact named above, Alwynne Wilbur (Assistant  Director), Tim Bober, Tara Carter, David Hooper, Emily Larson, SaraAnn  Moessbauer, Malika Rice, Amy Rosewarne, and Kelsey Sagawa made  key contributions to this report.