The Rail Passenger Service Act of 1970 created Amtrak to provide intercity passenger rail service because existing railroads found such service to be unprofitable. Amtrak operates a 22,000-mile network, primarily over freight railroad tracks, providing service to 46 states and the District of Columbia. Amtrak owns about 650 miles of track, primarily on the Northeast Corridor between Boston, Massachusetts, and Washington, D.C. In fiscal year 2004, Amtrak served about 25 million passengers, or about 68,640 passengers per day. According to Amtrak, about two-thirds of its ridership is wholly or partially on the Northeast Corridor. The Northeast Corridor is the busiest passenger rail line in the country, and some 200 million Amtrak and commuter rail travelers use the Corridor, or some part of it, each year. On some portions of the Northeast Corridor, Amtrak provides high-speed rail service (up to 150 miles per hour). The high-speed Acela program is the centerpiece of Amtrak’s intercity passenger rail system, with its financial contributions to the company exceeding that of all other routes combined. Acquisition of the Acela trainsets occurred as part of NHRIP. NHRIP, and its predecessor the Northeast Corridor Improvement Project, date back to the late 1970’s and represented a multiyear, multibillion collection of capital improvements to the Northeast Corridor that included electrifying the line between New Haven, Connecticut, and Boston, Massachusetts, improving tracks, signals, and other infrastructure, and acquiring high- speed trains. These efforts were designed to achieve a 3-hour trip time between New York City and Boston. As of March 2003, Amtrak, commuter railroads, and others had spent about $3.2 billion on the project. In 1996, Amtrak executed contracts with train manufacturers Bombardier and Alstom to build 20 high-speed trainsets and 15 electric high- horsepower locomotives; construct three maintenance facilities; and provide maintenance services for the Acela trainsets. The trainsets, locomotives, and facilities contracts totaled $730 million. Bombardier and Alstom, referred to as the Consortium, created the Northeast Corridor Management Service Corporation (NecMSC) to manage the facilities and maintain the trainsets, including supervising Amtrak maintenance employees. Amtrak pays NecMSC a per-mile rate—that is, a fixed rate for each mile the Acela trains travel—on a monthly basis to provide management and maintenance services at three maintenance facilities. Amtrak’s Acela program has undergone a number of events since its inception, which has included the execution of the original contracts in 1996, delivery of the first trainset in October 2000, and the filing of lawsuits by both Bombardier and Amtrak in November 2001 and 2002, respectively(see fig. 1). The trainsets were also withdrawn from service for several weeks in August 2002. In March 2004, Amtrak and Bombardier signed an agreement to settle the lawsuits, which calls for Amtrak to conditionally assume trainset maintenance in October 2006, assuming conditions of the settlement have been met. The last warranties for the trainsets expire in 2021. Significant issues and controversy have impacted the Acela program since its inception. What started out as a relatively simple procurement of train equipment evolved into a complex high-speed rail program, according to an Amtrak official. The Acela trainset is a complex piece of equipment with state-of-the-art electronics and was considered new technology for the United States. As such, it required additional time to develop and test, and the probability of expected and unexpected problems was high. Among the issues that the Acela program has encountered since its creation are the following: Potential difficulties due to new technology. Instead of purchasing “off- the-shelf” technology—that is, train equipment that was already designed, engineered, and in use—Amtrak decided to acquire “new” technology. An FRA official told us some components on the Acela trainset (such as power components and the tilt mechanism) were similar to that used on train equipment in other parts of the world but much of the technology on Acela trainsets was new. In addition, many of the components, whether new or existing technology, had never been used together. Further, this official said that because the components in the Acela trainsets had never before been designed as one unit, Acela was not an off-the-shelf technology train. Although Acela trainsets were essentially new technology and could be expected to require additional time to develop and test, Amtrak developed an ambitious schedule that called for shipment of the first trainset 32 months—just over 2½ years—after the notice to proceed was issued. According to an Amtrak official, the calendar and electrification delivery date drove the planning for the trainsets. Amtrak worked backwards from these due dates to try and fit project work into the timeline. Impacts from new safety standards to accommodate high-speed rail. During the 1996 to 2000 time frame, the same time period when the Acela trainsets were being acquired and manufactured, FRA, in consultation with Amtrak, was developing safety regulations related to high-speed rail operations. These included new rules covering track safety (to accommodate speeds of up to 200 miles per hour), passenger car safety, and train control. According to FRA officials, Amtrak was intimately involved in developing these standards to accomplish its vision of high- speed rail operations on the Northeast Corridor. FRA officials also noted that passenger car safety regulations did not exist prior to the mid-1990’s. Developed for safety purposes, these standards had a significant impact on the Acela trainsets. For example, the passenger car safety regulations required a crash energy management system in passenger cars that was designed to increase the strength of both car ends and side posts. FRA also prohibited the operation of high-speed trains (up to 150 miles per hour) in a push-pull manner. FRA officials acknowledged that the crash energy system increased the weight of the Acela trainsets but said such a system resulted in safer trains. Amtrak told us that prohibiting push-pull operation caused them to obtain 20 additional power cars for Acela at a cost of about $100 million. Manufacturing and production delays. The Acela program experienced a significant share of manufacturing and production delays. Under FRA’s 1994 master plan for NHRIP, developed in response to the Amtrak Authorization and Development Act, delivery of enough high-speed trains to initiate limited 3-hour service between Boston and New York City was expected by 1999. However, due to design and manufacturing delays, the first Acela trainsets were delivered about a year late, and revenue service using the trainsets did not begin until December 2000. Manufacturing and production delays began early in the procurement process. For example, our review of Consortium progress reports indicated that as early as October 1996, only months after the original contract was signed, change orders and design changes (mainly related to car interiors) were being made that were causing delays in production. In addition, train weight was increasing, a condition that continued to plague the trainsets throughout production. Amtrak attempted to require the Consortium to prepare recovery plans to keep the program on schedule, but we found little evidence of such plans in documents we reviewed. Regardless, these plans did not prevent the trainsets from being delivered about a year late. Abbreviated testing prior to placement in revenue service. Amtrak’s Acela trainsets also appeared to have had abbreviated testing prior to being deployed into revenue service. A fuller testing of the trainsets may have better identified the range of potential problems and defects that could be experienced prior to placing the trainsets in service. The maximum testing any one Acela trainset received was about 35,000 miles of testing —20,000 miles at the Transportation Test Center (Center) in Pueblo, Colorado, and 15,000 miles on the Northeast Corridor between 1999 and 2000. However, an FRA official believed testing of the trainsets was rushed and that additional testing at the Center should have been conducted. This official cited testing of Amtrak’s AEM-7 electric locomotive as an example of the testing that is normally done on new equipment. This locomotive, which was a new locomotive that entered service in the early 1980’s, was tested for 165,000 miles at the Center prior to placement in service. An FRA official also acknowledged that there were no minimum federal testing requirements for new high-speed trainsets, like Acela, only that such equipment comply with existing safety regulations. However, this official believed Amtrak was under both financial and time pressures to place the trainsets in service, in part because of delays in trainset production. Since placement into revenue service in 2000, the Acela has experienced a number of unexpected problems. One occurrence was in August 2002 when Amtrak was forced to withdraw the trains from service to address unexpected equipment problems (yaw damper brackets). The trainsets were not returned to complete service until October 2002. According to Amtrak, this withdrawal cost the corporation a net $17 million in lost revenue. In April 2005, Amtrak once again experienced unexpected problems with the trainsets due to equipment problems (cracks in brake assemblies). Again, the trainsets have been withdrawn from service and Amtrak has stated that it may be months before the trains are returned to service. Although Amtrak is placing substitute equipment into service, it can be expected that there will be revenue loss as well as damage to Amtrak’s image. As the procurement proceeded, tensions grew between Amtrak and the Consortium.