[Federal Register Volume 85, Number 185 (Wednesday, September 23, 2020)]
[Rules and Regulations]
[Pages 59672-59681]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-18819]


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DEPARTMENT OF TRANSPORTATION

Federal Transit Administration

49 CFR Part 633

[Docket No. FTA-2019-0016]
RIN 2132-AB35


Project Management Oversight

AGENCY: Federal Transit Administration (FTA), DOT.

ACTION: Final rule.

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SUMMARY: This final rule amends FTA regulations implementing project 
management oversight. FTA is modifying the regulation to make it 
consistent with statutory changes and to modify the scope and 
applicability of project management oversight.

DATES: Effective on October 23, 2020.

FOR FURTHER INFORMATION CONTACT: For program matters, Corey Walker, 
Office of Program Management, (202) 366-0826 or [email protected]. 
For legal matters, Mark Montgomery, Office of Chief Counsel, (202) 366-
4011 or [email protected]. FTA is located at 1200 New Jersey Ave. 
SE, Washington, DC 20590-0001. Office hours are from 8:00 a.m. to 4:30 
p.m. E.T., Monday through Friday, except Federal holidays.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Rulemaking Background
II. Summary of NPRM Comments and FTA's Responses
III. Regulatory Analyses and Notifications

I. Rulemaking Background

    Recognizing a compelling need to strengthen the management and 
oversight of major capital projects, in the Surface Transportation and 
Uniform Relocation Assistance Act of 1987 (STURAA) (Pub. L. 100-17) 
(April 2, 1987), Congress authorized FTA's predecessor agency, the 
Urban Mass Transportation Administration (UMTA), to conduct oversight 
of major capital projects and to promulgate a rule for that purpose. 
The statute, now codified at 49 U.S.C. 5327, authorizes FTA to obtain 
the services of project management oversight contractors (PMOCs) to 
assist FTA in overseeing the expenditure of Federal financial 
assistance for major capital projects. Further, the statute requires 
FTA to promulgate a regulation that includes a definition of ``major 
capital project'' to identify the types of projects governed by the 
rule.
    Accordingly, UMTA promulgated a rule for oversight of major capital 
projects on September 1, 1989, at 49 CFR part 633 (54 FR 36708). At 
that time, UMTA's capital programs were comparatively small, relative 
to today, totaling a little more than $2 billion annually. UMTA 
promulgated a regulation that defined ``major capital project'' as any 
project for the construction of a new fixed guideway or extension of an 
existing fixed guideway or a project involving the rehabilitation or 
modernization of an existing fixed guideway with a total project cost 
of $100 million or more. The rule limited covered projects to those 
receiving funds made available under sections 3, 9, or 18 of the Urban 
Mass Transportation Act of 1964, as amended; 23 U.S.C. 103(e)(4); or 
section 14(b) of the National Capital Transportation Amendments of 
1979. That rule is still in effect today.
    By 2011, the annual dollar value of the Federal transit capital 
programs was nearly five times the level authorized under STURAA in 
1987, and the number of active PMOC task orders was more than double 
the number in 1987. Furthermore, FTA funded a larger number of projects 
with a total cost of more than one billion dollars that presented 
significant oversight challenges. On September 13, 2011, FTA published 
a Notice of Proposed Rulemaking (NPRM) (76 FR 56378) that proposed to: 
(1) Enable FTA to identify the necessary management capacity and 
capability of a sponsor of a major capital project more clearly; (2) 
spell out the many facets of project management that must be addressed 
in a project management plan; (3) tailor the level of FTA oversight to 
the costs, complexities, and risks of a major capital project; (4) set 
forth the means and objectives of risk assessments for major capital 
projects and; (5) articulate the roles and responsibilities of FTA's 
PMOCs.
    After the NPRM was published, however, the Moving Ahead for 
Progress in the 21st Century Act (MAP-21) (Pub. L. 112-141) (July 6, 
2012) repealed the Fixed Guideway Modernization program, created the 
State of Good Repair program, and amended the Capital Investment Grants 
Program to add Core Capacity Improvement projects and streamline the 
New and Small Starts project development process. Moreover, MAP-21 
shifted the initiation of project management

[[Page 59673]]

oversight to the project development phase and removed the statutory 
requirement that recipients of financial assistance for projects with a 
total cost of $1 billion submit an annual financial plan. Given the 
fundamental changes to these competitive and formula capital programs, 
FTA withdrew the NPRM (78 FR 16460) to reexamine its proposed 
definition of major capital project and its policy and procedures for 
risk assessment. Subsequently, the Fixing America's Surface 
Transportation (FAST) Act (Pub. L. 114-94) (December 4, 2015) further 
amended 49 U.S.C. 5327 to limit project management oversight to 
quarterly reviews, absent a finding that more frequent oversight was 
necessary, and mandated that the Secretary prescribe regulations 
outlining a process for at-risk recipients to return to quarterly 
reviews.
    FTA has become much more knowledgeable about the risks common to 
major capital projects, having conducted its own risk assessments since 
2005, witnessed some project sponsors' lack of management capacity and 
capability and appropriate project controls for some projects, and 
studied the reasons for cost and schedule changes on many major capital 
projects. Consequently, on August 26, 2019, FTA published an NPRM (84 
FR 44590) proposing to amend its project management oversight rule.
    First, the NPRM proposed to change the applicability of the 
regulation by shifting the definition of a ``major capital project'' 
from one based on the type of project or total project cost to one 
based on both the amount of Federal financial assistance and the total 
project cost, which FTA views as a more appropriate benchmark than the 
type of project or total capital cost of a project alone. The current 
definition of a ``major capital project'' under 49 CFR 633.5 applies to 
all construction projects for new fixed guideways or extensions of 
existing fixed guideways, regardless of project cost, and to fixed 
guideway rehabilitation and modernization projects with total project 
costs over $100 million. The NPRM applied a project cost threshold to 
all fixed guideway capital projects. As a default, the rule proposed 
raising the total project cost threshold to $300 million or more and 
requiring that the project receive $100 million or more in Federal 
investment to be subject to project management oversight.
    Second, the NPRM proposed to amend the regulation to bring it into 
compliance with statutory changes. The rule proposed limiting project 
management oversight to quarterly reviews, absent a finding by FTA that 
a recipient requires more frequent oversight, and providing a process 
for such a recipient to return to quarterly reviews. In addition, the 
rule proposed applying project management oversight to major capital 
projects receiving Federal financial assistance under any provision of 
Federal law.
    After reviewing public comments and making some corresponding 
changes, FTA now amends and finalizes its project management oversight 
rule.

II. Summary of NPRM Comments and FTA's Responses

    FTA received 69 discrete comments from 17 commenters, including one 
comment from a mayoral office expressing general support for the 
proposed rule. Two comments were outside the scope of the proposed rule 
and are not addressed in this document. One of the comments was a 
question about the criteria for applying for an FTA grant. Another 
comment regarded PMOC procurement, which is not addressed in the 
regulation.

Cost Threshold--Application

    One transit agency sought clarification as to when FTA would 
determine a project had met the cost threshold, thus triggering 
application of the project management oversight (PMO) regulation to the 
project. The commenter suggested that the independent cost estimate, 
receipt of project bids, or the final funding decision should initiate 
the threshold determination.
    In response, FTA has determined that for Capital Investment Grants 
(CIG) projects, FTA will use the cost estimate provided by the project 
sponsor when the project enters the CIG Project Development phase and, 
for non-CIG projects, FTA will use the cost estimate provided by the 
project sponsor after a National Environmental Policy Act (NEPA) 
decision is made by FTA. If bid numbers are available, then they will 
be considered in estimating the baseline cost. Two commenters suggested 
that subsequent to FTA's acceptance of a project's funding plan, if a 
project's Federal investment increases to above $100 million or the 
total project cost increases during project delivery to more than $300 
million, project management oversight should be implemented based on 
project risk and not funding actions. An industry consultant commented 
that the threshold should remain based on the total cost of the project 
being $100 million or more because public transportation infrastructure 
is a public resource, and the source of funding is irrelevant when 
determining oversight.
    Since higher-cost projects generally tend to involve higher risk, 
FTA will utilize the cost threshold as a base criterion. If a project's 
proposed Federal investment and total cost increase during project 
delivery to meet the $100 million and $300 million thresholds, the 
project will be subject to project management oversight. However, FTA 
may determine, pursuant to revised 49 CFR 633.5(e) and 633.19, to 
exclude a project from oversight that exceeds the thresholds or to 
require oversight for a project that does not meet the thresholds on a 
case-by-case basis. FTA will utilize its risk evaluation tool in making 
this determination. Regarding which projects would be eligible for 
project management oversight services under Sec.  633.11, a transit 
agency asked FTA to clarify whether covered projects would include 
those utilizing Federal loans, such as Transportation Infrastructure 
Finance and Innovation Act (TIFIA).
    Major capital projects will include those utilizing Federal loans, 
such as TIFIA and Railroad Rehabilitation and Improvement Financing 
(RRIF), because 49 U.S.C. 5327(a) applies the project management 
oversight requirements to major capital projects for public 
transportation funded under any provision of Federal law.
    A metropolitan transportation agency suggested that the $100 
million Federal investment threshold language in revised Sec.  633.5(e) 
should clearly state that it is limited to CIG dollars to eliminate 
confusion that could result from use of funds from other Federal 
resources. Pursuant to 49 U.S.C. 5327(a), this regulation is not 
limited to CIG projects but covers all Federally-funded major capital 
projects for public transportation, so the Federal share threshold is 
based on all Federal funds in a project. For a CIG project, the Federal 
share will include all Federal money in the project, regardless of 
source, not just the CIG share of funds.

Cost Threshold--Amount

    Four commenters, including two transit agencies and two trade 
associations, suggested that FTA raise the total project cost threshold 
in revised Sec.  633.5(e) to $500 million for parity with Federal 
Highway Administration (FHWA).
    FTA considered cost thresholds of $1 billion, $500 million, $300 
million, and $100 million. A key consideration for selecting $300 
million as the cost threshold was that it reflects the threshold 
Congress chose to distinguish Small Starts projects from New Starts 
projects in the CIG program. New Starts projects have more steps to 
complete in

[[Page 59674]]

the CIG process and tend to be more complex, potentially requiring more 
oversight. Because of the number of higher-risk projects in the $300 
million to $500 million range, FTA is not adopting the $500 million 
threshold.
    A State DOT expressed concern that the proposed cost threshold was 
too high and would accordingly leave a void between the existing PMO 
responsibilities and the FTA-supported State Safety Oversight Agency 
(SSOA) and degrade safety.
    FTA notes that project management oversight is not the same as 
State safety oversight. FTA conducts project management oversight of 
major capital projects via its PMOCs pursuant to 49 U.S.C. 5327, 
whereas SSOAs oversee rail fixed guideway public transportation safety 
pursuant to 49 U.S.C. 5329(e). Although FTA's oversight of major 
capital projects includes oversight of safety and security management 
plans and the project sponsors' readiness to enter revenue service, 
this is separate and distinct from the responsibilities of SSOAs and 
their rail transit agencies' capital projects.

Project Sponsor Input

    A trade association and two transit agencies noted that FTA should 
involve the project sponsor in decision-making throughout the PMO 
process, including initiation of PMO services, exclusion from the PMO 
program, basic requirements, and implementation of a project management 
plan (PMP). A trade association and an individual suggested that there 
should be an element of scalability to project management oversight, 
depending on the experience level of the project sponsor.
    FTA will have conversations with project sponsors on a case-by-case 
basis to discuss the project risks and determine when to begin project 
management oversight or whether a project should be included or 
excluded from project management oversight under revised 49 CFR 
633.5(e) and 633.19.

Initiating Project Management Oversight

    Four commenters requested clarification on the initiation of 
project management oversight under Sec.  633.13. One commenter noted 
that a model for the analytical process to be used by the Administrator 
to ``maximize transportation benefits and cost savings'' would be 
difficult to develop and that ``transportation benefits'' is an 
ambiguous term. A transit agency commented that oversight at the 
project development phase may be premature and questioned how in 
practice this rule would apply for projects that utilize the design-
build or progressive design-build methodology. Another agency 
recommended that project management oversight begin after the locally 
preferred alternative (LPA) has been adopted and the FTA Administrator 
and the project sponsor determine that design and engineering work is 
sufficiently mature for the development of a reasonably reliable 
project cost, schedule, and PMP.
    Section 5327 of title 49, United States Code, stipulates that 
project management oversight should start at the project development 
phase unless the Administrator determines that initiating services at 
another stage would maximize the transportation benefits and cost 
savings. The oversight work generally will begin after the selection of 
the LPA, and the level of oversight will be risk-based. As is currently 
the case, there will be no oversight reviews prior to the beginning of 
project development. FTA will have conversations with project sponsors 
early in project development regarding the level and scope of oversight 
reviews that will be conducted on the project, and oversight will only 
be initiated if the sponsors have enough data available for meaningful 
reviews.
    Four commenters, including transit agencies and a trade 
association, proposed changes to the definition of project development. 
A coalition of transit agencies noted that project sponsors often 
undertake significant design and engineering and adopt the LPA well 
before submitting a formal request to enter the Project Development 
phase of the CIG program. The commenters suggested that the definition 
of project development be aligned with 49 U.S.C. 5309(d)(1)(B) and 
FTA's 2016 Final Interim Policy Guidance on the CIG Program.
    Section 5327 of title 49, United States Code, uses the term 
``project development'' more generically, and not in the specific way 
it is used under 49 U.S.C. 5309(d)(1)(B). Section 5309(d)(1)(A) only 
requires the initiation of NEPA, but not completion of NEPA, prior to 
entry into project development, so the LPA may not have been chosen 
before the project enters the Project Development phase of the CIG 
process. Since project management oversight applies to both CIG and 
non-CIG projects, FTA will remove the reference to the LPA in the 
project development definition under Sec.  633.5 and add a reference to 
the LPA under Sec.  633.13 as an example of when PMO generally will be 
initiated.
    One commenter noted that guidelines and tools must be developed to 
evaluate progress in project development, since many of the services 
are out-sourced by recipients.
    FTA notes it has developed tools, such as its oversight procedures, 
to track the progress of the major capital projects. FTA has also 
published guidelines and handbooks, available on its Guidance 
Center,\1\ and worked with the National Transit Institute to develop a 
number of courses to help support the industry.
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    \1\ https://www.transit.dot.gov/guidance.
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Designating a Major Capital Project

    Two transit agencies, a coalition of transit agencies, and a trade 
association expressed concern that the amended definition of ``major 
capital project'' would exclude all Small Starts projects and suggested 
that FTA allow project sponsors to ``opt-in'' to project management 
oversight for projects that would otherwise not meet the definition of 
major capital project. Per revised Sec.  633.5(e), the Administrator 
may designate a project a major capital project if he or she determines 
a project would benefit from project management oversight. FTA will 
take into consideration requests by project sponsors to opt-in to the 
PMO process. A transit agency sought clarification of this opt-in 
provision and questioned whether there would be a process to appeal the 
Administrator's designation of a project as a major capital project 
that would otherwise not meet the regulatory definition. Another 
transit agency commented that FTA should apply the provision sparingly.
    FTA utilizes a risk-based approach to its oversight and will 
consider risks when designating a project as a major capital project. 
Section 5327 of title 49, United States Code, grants the Secretary the 
authority to define a major capital project through this regulation, 
which includes the discretion to deem projects that do not meet the 
thresholds to be major capital projects based on risk. FTA will 
consider inputs from project sponsors in making a final decision.

Excluding a Major Capital Project

    A coalition of transit agencies, a transit agency, and an industry 
professional sought clarification on the process outlined in Sec.  
633.19 for excluding projects meeting the definition of major capital 
project from project management oversight.
    FTA will make this determination case-by-case based on an analysis 
of the risks associated with each project.

[[Page 59675]]

Project Management Plan--Basic Requirement

    A PMOC commented that FTA should require all projects accepted into 
the CIG program to prepare and submit for FTA's approval a PMP, prior 
to receiving a grant. The commenter suggested that any decision to 
exclude a project from project management oversight should not be made 
at the outset, when a project enters project development. Instead, the 
commenter stated that decision should be made after the sponsor has 
demonstrated to FTA, through its PMP and other preparations, that it 
has the management capacity and capability and other resources in place 
to complete the project successfully. The commenter suggested that a 
PMOC should be assigned to the project during project development as 
stated in revised Sec.  633.13, which addresses the initiation of PMO 
services. Similarly, a regional transportation agency commented that 
PMOCs should continue to review the readiness of both Small and New 
Start projects to ensure agencies are ready to be successful with these 
CIG projects.
    In response, FTA notes that pursuant to the 49 U.S.C. 5309(g)(5) 
policy guidance, all CIG projects are required to have an approved PMP 
before FTA will enter into a construction grant agreement. In addition, 
all CIG projects will receive oversight regardless of cost or Federal 
share until they receive a construction grant agreement.
    A transit agency commented that while the definition of major 
capital project includes rehabilitation and modernization projects that 
meet the cost and Federal funding thresholds, it is unclear how these 
thresholds for oversight would apply to annual capital asset renewal 
programs at transit agencies. The commenter noted that Sec.  633.21, 
which outlines the basic requirement for a PMP, implies that this 
regulation applies to specific, discrete projects for which Federal 
funding is specifically solicited. The commenter requested that FTA 
confirm this rule would not apply to ongoing capital asset renewal 
programs or clarify how the definitions would be applied, e.g., whether 
the thresholds would be applied on an annual basis or by specific 
contract.
    Capital asset renewal programs at transit agencies generally are 
made up of a list of projects with cost, scope, and schedule at the 
outset and then incrementally funded. Once a project is defined with a 
specific cost and scope, that cost estimate and the Federal funding 
assumed for the project becomes the basis for determining if it meets 
the thresholds and if the oversight regulation will apply.

Project Management Plan--Applicability and Contents

    Three transit agencies, a coalition of transit agencies, a PMOC, 
and a trade association provided comments regarding the contents of the 
PMP under Sec.  633.25. One transit agency commented that the content 
requirements of Sec.  633.25 are oriented towards a project in 
construction and suggested either limiting those to reflect the project 
development phase or changing the phase in which the PMP must be 
developed to a later phase. Another transit agency commented that the 
statement beginning in Sec.  633.25, which outlines the PMP contents, 
should be amended to include the term ``phase'' to acknowledge that the 
PMP is iterative and reflects the information available at the time it 
is developed.
    FTA notes that while some PMP elements such as a detailed 
construction schedule, construction staff, and others will not be 
available at the early stages of the project, most of the PMP items 
listed are important and should be developed early (at least in some 
form) at the project development phase, with additional details 
provided as the project progresses. FTA will add the term ``phase'' to 
the statement in Sec.  633.25 to provide more clarity.
    A coalition of transit agencies commented that proposed Sec.  
633.25(k) through (n), proposed to expand the contents of the PMP 
greatly, noting that this information has not been previously required 
by FTA, is not required by statute, and adds a substantial cost to 
projects. Another transit agency requested that FTA detail the 
anticipated content for compliance with subsection (n) (management of 
risks, contingencies, and insurance) and perform an assessment of the 
potential burden on project sponsors and publish it for public review 
and comment before determining whether the additions should be in the 
final PMO rule. One commenter asked whether the Risk and Contingency 
Management Plan (RCMP) would still be a required subplan of the PMP, 
noting the NPRM appears to fold the subplan into the PMP.
    In response, FTA notes that, other than subsection (n), all the 
project management elements listed in the NPRM are expressly required 
by 49 U.S.C. 5327. Section 633.25(n), addressing risk and contingency 
management, is a standard industry practice and was added based on past 
experiences and its criticality for project success. This includes a 
process of identifying, evaluating, and responding to risks, including 
the management of cost and schedule contingencies and the 
identification of insurance necessary to minimize risk to the project. 
The RCMP is a means to address the requirements in Sec.  633.25(n).
    One transit agency commented that it is unclear from the NPRM if 
recipients and project sponsors need to update their existing PMPs to 
comply with the requirements that FTA proposed to add.
    In response, all recipients must comply with the new requirements 
if their project meets the definition of major capital project, but the 
plans do not need to be in one single large PMP document. The 
additional materials may be submitted as individual subplans, so there 
will be no requirement to go back and consolidate.
    A PMOC commented that Sec.  633.25 should include a requirement for 
a design management plan that defines the roles and responsibilities of 
the recipient and its consultants, third parties, and the contractor.
    The regulation addresses this requirement through Sec.  633.25(a) 
and (f), which cover organizational structures, functional 
responsibilities, reporting relationships, and staffing.
    A trade association and a transit agency commented that the 
proposed changes to information requested as part of project management 
oversight may create redundant information requests as part of other 
CIG reporting requirements.
    There are likely to be overlaps in the reporting requirements for 
CIG projects under 49 U.S.C. 5309 and the PMP under 49 U.S.C. 5327 if a 
project sponsor is building more than one project at the same time. FTA 
does not believe regulatory changes are needed to address potential 
overlaps in reporting requirements. FTA will work with project sponsors 
to combine requirements, such as combined quarterly meetings and minor 
modifications to existing PMPs to reduce redundancies.

Project Management Plan--Due Date and Updates

    Two transit agencies and one industry consultant provided comments 
regarding the implementation of a project management plan under Sec.  
633.27. One transit agency noted that FTA should limit the number of 
revisions required and that there should be some guidance on the 
reasonableness of FTA comments on the PMP. Specifically, the agency is 
concerned that there is ambiguity in requiring revisions ``at a new 
phase'' and where there is a ``significant change'' under Sec.  
633.27(b). The industry consultant

[[Page 59676]]

added that the term ``periodic,'' regarding the updates required under 
Sec.  633.25, is vague.
    FTA notes that a PMP is a living document that must be updated at 
many phases of the project (for example as new resources are added or 
as the project transitions from design into construction). Project 
sponsors will be given 90 days to submit the PMP upon formal 
notification from FTA, and FTA generally will approve or disapprove the 
PMP within 60 days, pursuant to 49 U.S.C. 5327(b). Project sponsors 
need not wait until they receive notification from FTA to begin working 
on the PMP. FTA will work with project sponsors to minimize the number 
of revisions needed, and will provide reasonable comments to streamline 
the process. Periodic updates to the PMP are required by 49 U.S.C. 
5327(a)(11), and FTA intends to require updates or reviews every two 
years or upon significant changes to the project. A review of the PMP 
might show that there is no need for an update because nothing 
significant has changed to the project. FTA will assess significance on 
a case-by-case basis (e.g., when key staff leave a project or a project 
is trending towards delays and cost overruns).
    One transit agency questioned why Sec.  633.27(c) requires project 
budget, schedule, financing, ridership estimates, and the status of 
local efforts to enhance ridership to be updated on a ``periodic 
basis'' as opposed to when there are changes to those items. Another 
transit agency commented that the NPRM adds requirements to provide 
updates for project capital and operating financing, as well as for the 
operating plan based on the ridership estimates. The commenter also 
noted that the NPRM requires recipients to submit current data on a 
major capital project's budget and schedule on a quarterly basis and 
that such reporting requirements may result in additional costs to 
recipients or project sponsors.
    This provision reflects a statutory requirement under 49 U.S.C. 
5327(a)(11). FTA recognizes that there may be limited information on 
these topics that will need to be updated regularly.
    One transit agency requested that project sponsors be given 180 
days to submit the PMP.
    CIG projects must progress through project development in two 
years. The 90-day period to prepare the PMP will help move projects 
through the process in that timeframe. Non-CIG projects should have a 
PMP in place as early as possible. Stakeholders should be aware that 
project sponsors do not have to wait for FTA to request a PMP to begin 
preparing their PMP.

Project Management Plan--Reporting

    An industry consultant commented that monthly reporting is the 
responsible minimum standard. Section 5327 of title 49, United States 
Code, limits project management oversight to quarterly reviews, but the 
Administrator maintains discretion to require more frequent oversight 
if a project is at risk of going over budget or becoming behind 
schedule.
    A transit agency commented that FTA should add a clause clarifying 
that the Sec.  633.25(l) requirement to submit a quarterly project 
budget and schedule is met through the project budget and schedule 
updates submitted with quarterly milestone progress reports. FTA does 
not intend to duplicate submittals, so one submittal with the quarterly 
progress report is sufficient.
    The agency also commented that under Sec.  633.27(d), FTA proposes 
to require more frequent compliance reviews of any project that is ``at 
risk of materially exceeding its budget or falling behind schedule.'' 
Accordingly, the commenter requested that FTA define ``materially.'' 
Section 5327(d)(2)(B) of title 49, United States Code, provides FTA the 
discretion to require more frequent oversight if the recipient has 
failed to meet the requirements of the PMP and the project may be at 
risk of going over budget or becoming behind schedule. In response to 
the comment, FTA has added to Sec.  633.27(d) that ``Budget and 
schedule changes will be analyzed on a case-by-case basis, but FTA 
generally will consider any cost increase or schedule delay exceeding 5 
percent as a material change.''

Regulatory Cost Savings

    One anonymous commenter noted that FTA's cost savings analysis was 
too low. The commenter suggested that $32 million was a more 
appropriate estimate, because of the 1 percent drawdown for oversight, 
and questioned how the remaining $23.9 million in savings would be 
applied, noting that FTA provided no economic analysis of that amount.
    The drawdown for oversight from this program is combined with the 
drawdown from other FTA programs and then budgeted for several 
oversight activities. The $3.2 billion amount is the total cost of the 
projects and not the annual budgets for the projects. The $8.1 million 
amount, on the other hand, is the estimated savings in oversight cost 
per year and reflects the money that would have been spent on external 
contractors. FTA will continue to manage its oversight resources 
judiciously to ensure that all its projects and programs receive 
sufficient oversight.
    Another commenter noted that the oversight cost savings estimate of 
$11 million is flawed, because simply multiplying hours does not 
account for the potential for severe project overruns, delays, and 
quality problems.
    FTA's analysis is an approximation, but Sec.  633.5(e)(2) allows 
the Administrator to determine on a case-by-case basis that certain 
projects should be subject to project management oversight based on an 
assessment of risk, which would include an analysis of the likelihood 
of budget and schedule overruns.

Financing the PMO Program

    A PMOC commented that 49 U.S.C. 5338(f)(1) and (2) does not specify 
that the oversight funds will be used to contract for project 
management oversight services in connection with a major capital 
project as set forth in the current version of Sec.  633.19. The 
commenter noted that the funds may be used for other activities as 
described in the statute and would not be available to fund the project 
management oversight program as intended. The commenter recommended 
that the current text of Sec.  633.19 be retained to ensure that the 
oversight takedown be used as originally intended.
    FTA notes that project management oversight is an eligible expense 
of funds authorized for oversight, and other activities are authorized 
to be funded from that source as well. However, project management 
oversight is a statutory requirement for all projects meeting the 
definition of major capital project, per 49 U.S.C. 5327(a) and (d)(2), 
and FTA will utilize oversight funds as authorized for that purpose.

Access to Information

    An industry consultant suggested that Sec.  633.27 should include 
the requirement of affidavits attesting to full compliance with Federal 
and State Disadvantaged Business Enterprise (DBE) and Minority Business 
Enterprise (MBE) programs, a detailed report of employment of 
relatives, in-laws, and neighbors on the project, and waiver of 
confidentiality for the purposes of immediate and unannounced 
government inspection of invoices, receipts, payroll, and payments 
related to project. Similarly, another commenter requested that Sec.  
633.15 include coverage of procurement and civil rights, and the tie to 
contract administration based on 2 CFR part 200 and FTA Circular 
4220.1F.

[[Page 59677]]

The commenter noted that there is no mention of the requirements for 
Americans with Disabilities Act (ADA), DBE, and Title VI requirements 
in the regulation. The regulation addresses the technical oversight of 
the projects. Reviews such as DBE and ADA compliance are critical but 
are not addressed primarily through project management oversight. 
Instead, these requirements are covered through other areas of FTA 
oversight, such as triennial reviews.

Definitions

    Two parties provided comments on the definition of ``recipient.'' A 
trade association noted that within the definition of ``recipient'' the 
term ``sponsor'' is not defined. A transit agency proposed defining 
``sponsor'' within the definition in Sec.  633.5(i). Both commenters 
suggested defining ``sponsor'' as the ``entity designated to deliver 
the project per the terms set forth in the construction grant 
agreement.''
    In response, FTA has defined ``sponsor'' under Sec.  633.5(j) as 
``the entity designated to deliver the project per the terms set forth 
in the grant agreement.''
    A transit agency and a trade association provided input on the 
definition of ``full funding agreement.'' Both commenters suggested 
keeping a definition of grant agreement in the regulation and utilizing 
the term ``construction grant agreement,'' which would encompass grant 
agreements for various Federal funding programs including New Starts, 
Small Starts, Core Capacity, BUILD, and INFRA under which major capital 
transit projects may receive Federal funds.
    Because neither term is used in the regulation, a definition is 
unnecessary. Further, the purpose of a full funding grant agreement is 
addressed under 49 U.S.C. 5309.
    A transit agency requested clarification on adding ferries to the 
definition of ``fixed guideway'' under Sec.  633.5(c). Specifically, 
the commenter sought an explanation of what the fixed guideway of a 
ferry system includes and the anticipated impact of this change in the 
fixed guideway definition with respect to project management oversight.
    Ferries are included in the definition of a fixed guideway set 
forth at 49 U.S.C. 5302, which is a ``public transportation facility 
using and occupying a separate right-of-way for the exclusive use of 
public transportation, using rail, using a fixed catenary system; for a 
passenger ferry system; or for a bus rapid transit system.'' For a 
passenger ferry system, this would include all infrastructure necessary 
for the operation of the system, e.g., terminals, ferry boats, and 
related equipment.
    A transit agency requested a definition of ``risk-informed 
monitoring'' which is referenced in the definition for project 
management oversight in Sec.  633.5(g).
    FTA will not define this term in the regulation, because 49 U.S.C. 
5327(d)(2)(B) makes clear that FTA must assess whether projects are at 
risk of going over budget or becoming behind schedule. ``Risk-informed 
monitoring'' in this context means that the oversight will be scaled 
based on the level of risk of the project.
    A transit agency noted that FTA previously solicited comments on 
alternate definitions of a Federal project and suggested that FTA 
continue with efforts to refine the Federal project definition and 
consider opportunities to incorporate similar lines-of-thinking in the 
proposed rule.
    The definition of ``Federal project'' is unrelated to this rule. 
Per 49 U.S.C. 5327(a), the project management plan requirements, and 
this regulation implementing the statute, apply to all major capital 
projects for public transportation under any provision of Federal law.

Oversight Procedures

    A transit agency commented that FTA should update its project 
management oversight procedures (OPs) concurrent with finalizing the 
PMO rule to help ensure that the actual guidelines followed by FTA's 
contractors align with the final rule. The commenter further suggested 
that the draft OPs be subject to formal public review and comment 
before issuance. FTA notes that its OPs are contractual documentation 
for FTA's contractors and not guidance for recipients. Thus, a public 
review and comment process is not required.

Incorporating Another PMP

    FTA received two comments pertaining to the implementation of a PMP 
under Sec.  633.29. An industry consultant commented that the 
incorporation of ``applicable elements from a previously approved 
project management plan or to incorporate procedures that a recipient 
uses to manage other capital projects'' is not sufficient planning and 
increases risk. A transit agency suggested maintaining the section or 
adding a similar provision to Sec.  633.25.
    In response, the intent of the referenced clause in Sec.  633.29 
was to avoid unnecessary duplication. For example, some PMP elements 
such as document control procedures, quality control procedures, and 
material testing policies generally will not change much from project 
to project, especially when the project sponsor is building multiple 
projects at the same time. In the final rule, FTA is rescinding Sec.  
633.29, because the statute mandates that the PMP for each major 
capital project include the elements in Sec.  633.25(k) through (m), 
and FTA does not have the discretion to waive these elements of the 
plan.

III. Regulatory Analyses and Notifications

Executive Order 13771 (Reducing Regulation and Controlling Regulatory 
Costs)

    This final rule is an Executive Order 13771 deregulatory action. 
Details on the estimated cost savings of this rule can be found in the 
rule's economic analysis.

Executive Order 12866 (Regulatory Planning and Review), Executive Order 
13563 (Improving Regulation and Regulatory Review) and Department of 
Transportation (DOT) Regulatory Policies and Procedures

    Executive Orders 12866 and 13563 direct Federal agencies to assess 
all costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits--including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity. The rule 
amends the definition of a ``major capital project'' under 49 CFR part 
633 by raising the total project cost threshold and adding a minimum 
Federal share, thereby reducing the number of public transportation 
projects subject to project management oversight. This action complies 
with Executive Orders 12866 and 13563 to improve regulation, as well as 
DOT's regulatory requirements at 49 CFR part 5.
    FTA has determined that this rulemaking is not a significant 
regulatory action within the meaning of Executive Order 12866 and 
within the meaning of DOT regulatory policies and procedures. FTA has 
examined the potential economic impacts of this rulemaking and has 
determined that this rulemaking is not economically significant because 
it will not result in an effect on the economy of $100 million or more. 
In addition, this rule does not have an impact on another agency and 
does not materially alter the budgetary impacts of entitlements,

[[Page 59678]]

grants, user fees, or loan programs. This rule does not raise novel 
legal issues.
    To calculate the benefits and annual cost savings from this 
proposed rule, FTA evaluated its project management oversight contracts 
for major capital projects from 2013 through 2018. This period was 
chosen to reflect changes to FTA's program management oversight 
procedures after MAP-21 was enacted in 2012. This period included 
several emergency relief program projects under 49 U.S.C. 5324 to 
repair significant damages to public transportation infrastructure 
resulting from Hurricane Sandy, which FTA also analyzed.
    Using FTA's risk evaluation tool, FTA evaluated projects in 
construction during that period based on ten key risk factors to 
produce a risk score from 0-100. Projects were then assigned a risk 
range based on the calculated score, with low-risk projects in the 
range of 0-39, medium-risk projects from 40-55, and high-risk projects 
from 56-100. This evaluation indicated that most high-risk projects, 
including 18 of the 22 projects in the high-risk range, involved total 
project costs of over $300 million. While removing project management 
oversight from projects with total costs between $100 and $300 million 
may increase the risk of materially exceeding budget or falling behind 
schedule for some projects, there are currently only four high-risk 
projects in this range, and under the rule, FTA may deem certain 
projects that do not meet the dollar-amount thresholds a ``major 
capital project'' to mitigate unacceptable risk. In addition, reducing 
the number of lower-risk projects undergoing project management 
oversight will allow FTA to focus on higher-risk projects while 
yielding annual cost savings to FTA and its recipients.
    FTA calculated the average total cost of oversight for projects in 
construction during that period that would not have qualified as major 
capital projects under the default threshold of this proposed rule. FTA 
estimates that an average of 38.3 projects annually, including 
emergency relief program projects, would no longer require additional 
oversight under the default threshold.
    This rule would reduce recipients' labor hours for oversight 
procedures, which include attending meetings, preparing quarterly 
reports and other requested documents, and accompanying contractors 
onto project construction sites. To estimate the potential cost savings 
for project sponsors, FTA staff examined the current projects in 
construction that would no longer qualify as major capital projects 
under the rule and estimated the level of effort required for oversight 
procedures. For two projects, FTA received input from recipients. 
Assuming variations in the level of effort based on the complexity of 
the project, FTA estimated that the labor hours required for recipients 
ranges from 1.7 to 2.3 times FTA's level of effort of approximately 
39,477 hours per year for project management oversight procedures. 
Accordingly, FTA used an average factor of two and determined that the 
default threshold to qualify as a major capital project under the 
proposed rule would reduce the level of effort required for project 
sponsors by an average of 78,955 hours annually at a wage rate of 
$139.67 based on an average of the Bureau of Labor Statistics rate for 
Construction Managers and the PMOC loaded rate for contractors. This 
burden reduction would result in an annual cost savings to project 
sponsors of approximately $11 million.
    In addition, the rule reduces the level of effort required under 
FTA's project management oversight contracts and yields corresponding 
cost savings to FTA. Removing oversight from an average of 38.3 
projects annually, at an average wage rate of $206, would yield annual 
cost savings to FTA of approximately $8.1 million.

Regulatory Flexibility Act

    In compliance with the Regulatory Flexibility Act (Pub. L. 96-354; 
5 U.S.C. 601-612), FTA has evaluated the likely effects of this rule on 
small entities, and certifies that the rule will not have a significant 
economic impact on a substantial number of small entities.

Unfunded Mandates Reform Act of 1995

    FTA has determined that this rule does not impose unfunded 
mandates, as defined by the Unfunded Mandates Reform Act of 1995 (Pub. 
L. 104-4, March 22, 1995, 109 Stat. 48). This rule does not include a 
Federal mandate that may result in expenditures of $155.1 million or 
more in any 1 year (when adjusted for inflation) in 2012 dollars for 
either State, local, and tribal governments in the aggregate, or by the 
private sector. In addition, the definition of ``Federal mandate'' in 
the Unfunded Mandates Reform Act excludes financial assistance of the 
type in which State, local, or tribal governments have authority to 
adjust their participation in the program in accordance with changes 
made in the program by the Federal Government. Federal public 
transportation law permits this type of flexibility.

Executive Order 13132 (Federalism)

    Executive Order 13132 requires agencies to assure meaningful and 
timely input by State and local officials in the development of 
regulatory policies that may have a substantial direct effect on the 
States, on the relationship between the national government and the 
States, or on the distribution of power and responsibilities among the 
various levels of government. FTA has analyzed this action in 
accordance with the principles and criteria contained in Executive 
Order 13132, and FTA determined that this action will not have a 
substantial direct effect or Federalism implications on the States. FTA 
also determined that this action will not preempt any State law or 
regulation or affect the States' ability to discharge traditional State 
governmental functions.

Executive Order 12372 (Intergovernmental Review)

    The regulations effectuating Executive Order 12372 regarding 
intergovernmental consultation on Federal programs and activities apply 
to this rulemaking.

Paperwork Reduction Act

    Federal agencies must obtain approval from the Office of Management 
and Budget (OMB) for each collection of information they conduct, 
sponsor, or require through regulations. FTA has analyzed this rule 
under the Paperwork Reduction Act and determined that it does not 
impose additional information collection requirements for the purposes 
of the Act above and beyond existing information collection clearances 
from OMB.

National Environmental Policy Act

    NEPA requires Federal agencies to analyze the potential 
environmental effects of their proposed actions in the form of a 
categorical exclusion, environmental assessment, or environmental 
impact statement. This rulemaking is categorically excluded under FTA's 
environmental impact procedure at 23 CFR 771.118(c)(4), which pertains 
to planning and administrative activities that do not involve or lead 
directly to construction, such as the promulgation of rules, 
regulations, and directives. FTA has determined that no unusual 
circumstances exist in this instance, and that a categorical exclusion 
is appropriate for this rulemaking.

Executive Order 12630 (Taking of Private Property)

    FTA has analyzed this rule under Executive Order 12630, 
Governmental Actions and Interference with Constitutionally Protected 
Property

[[Page 59679]]

Rights. FTA does not believe this rule effects a taking of private 
property or otherwise has taking implications under Executive Order 
12630.

Executive Order 12898 (Federal Actions To Address Environmental Justice 
in Minority Populations and Low-Income Populations)

    Executive Order 12898, Federal Actions to Address Environmental 
Justice in Minority Populations and Low-Income Populations, and DOT 
Order 5610.2(a) (77 FR 27534) require DOT agencies to achieve 
environmental justice (EJ) as part of their mission by identifying and 
addressing, as appropriate, disproportionately high and adverse human 
health or environmental effects, including interrelated social and 
economic effects, of their programs, policies, and activities on 
minority and/or low-income populations. The DOT Order requires DOT 
agencies to address compliance with the Executive Order and the DOT 
Order in all rulemaking activities. In addition, on July 17, 2014, FTA 
issued a circular to update its EJ Policy Guidance for Federal Transit 
Recipients (www.fta.dot.gov/legislation_law/12349_14740.html), which 
addresses administration of the Executive Order and DOT Order.
    FTA has evaluated this rule under the Executive Order, the DOT 
Order, and the FTA Circular and has determined that this rulemaking 
will not cause disproportionately high and adverse human health and 
environmental effects on minority or low-income populations.

Executive Order 12988 (Civil Justice Reform)

    This action meets the applicable standards in sections 3(a) and 
3(b)(2) of Executive Order 12988 (February 5, 1996), Civil Justice 
Reform, to minimize litigation, eliminate ambiguity, and reduce burden.

Executive Order 13045 (Protection of Children)

    FTA has analyzed this rulemaking under Executive Order 13045 (April 
21, 1997), Protection of Children from Environmental Health Risks and 
Safety Risks. FTA certifies that this rule will not cause an 
environmental risk to health or safety that might disproportionately 
affect children.

Executive Order 13175 (Tribal Consultation)

    FTA has analyzed this action under Executive Order 13175 (November 
6, 2000), and determined that it will not have substantial direct 
effects on one or more Indian tribes; will not impose substantial 
direct compliance costs on Indian tribal governments; and will not 
preempt tribal laws. Therefore, a tribal summary impact statement is 
not required.

Executive Order 13211 (Energy Effects)

    FTA has analyzed this rulemaking under Executive Order 13211, 
Actions Concerning Regulations That Significantly Affect Energy Supply, 
Distribution, or Use (May 18, 2001). FTA has determined that this 
action is not a significant energy action under the Executive Order, 
given that the action is not likely to have a significant adverse 
effect on the supply, distribution, or use of energy. Therefore, a 
Statement of Energy Effects is not required.

Privacy Act

    Anyone may search the electronic form of all comments received into 
any of FTA's dockets by the name of the individual submitting the 
comment, or signing the comment if submitted on behalf of an 
association, business, labor union, or any other entity. You may review 
USDOT's complete Privacy Act Statement published in the Federal 
Register on April 11, 2000, at 65 FR 19477-8.

Statutory/Legal Authority for This Rulemaking

    This rulemaking is issued under the authority of 49 U.S.C. 5327, 
which requires the Secretary to conduct oversight of major capital 
projects and to promulgate a rule for that purpose that includes a 
definition of major capital project to delineate the types of projects 
governed by the rule.

Regulation Identifier Number

    A Regulation Identifier Number (RIN) is assigned to each regulatory 
action listed in the Unified Agenda of Federal Regulations. The 
Regulatory Information Service Center publishes the Unified Agenda in 
April and October of each year. The RIN set forth in the heading of 
this document can be used to cross-reference this action with the 
Unified Agenda.

List of Subjects in 49 CFR Part 633

    Grant programs-transportation, Mass transportation.

K. Jane Williams,
Deputy Administrator.

0
In consideration of the foregoing, and under the authority of 49 U.S.C. 
5327, revise 49 CFR part 633 to read as follows:

PART 633--PROJECT MANAGEMENT OVERSIGHT

Subpart A--General Provisions
Sec.
633.1 Purpose.
633.3 Scope.
633.5 Definitions.
Subpart B--Project Management Oversight Services
633.11 Covered projects.
633.13 Initiation of project management oversight services.
633.15 Access to information.
633.17 Project management oversight contractor eligibility.
633.19 Exclusion from the project management oversight program.
Subpart C--Project Management Plans
633.21 Basic requirement.
633.23 FTA review of a project management plan.
633.25 Contents of a project management plan.
633.27 Implementation of a project management plan.
633.29 [Reserved]

    Authority:  49 U.S.C. 5327; 49 U.S.C. 5334; 49 CFR 1.90.

Subpart A--General Provisions


Sec.  633.1  Purpose.

    This part implements 49 U.S.C. 5327 regarding oversight of major 
capital projects. The part provides for a two-part program for major 
capital projects receiving Federal financial assistance. First, subpart 
B discusses project management oversight, designed primarily to aid FTA 
in its role of ensuring successful implementation of Federally-funded 
projects. Second, subpart C discusses the requirement that, to receive 
Federal financial assistance for a major capital project for public 
transportation under Chapter 53 of Title 49, United States Code, or any 
other provision of Federal law, a recipient must prepare a project 
management plan approved by the Administrator and carry out the project 
in accordance with the project management plan.


Sec.  633.3   Scope.

    This rule applies to a recipient of Federal financial assistance 
undertaking a major capital project for public transportation under 
Chapter 53 of Title 49, United States Code, or any other provision of 
Federal Law.


Sec.  633.5   Definitions.

    As used in this part:
    Administrator means the Administrator of the Federal Transit 
Administration or the Administrator's designee.
    Days means calendar days.

[[Page 59680]]

    Fixed guideway means any public transportation facility: Using and 
occupying a separate right-of-way for the exclusive use of public 
transportation; using rail; using a fixed catenary system; for a 
passenger ferry system; or for a bus rapid transit system.
    FTA means the Federal Transit Administration.
    Except as provided in Sec.  633.19, Major capital project means a 
project that:
    (1) Involves the construction, expansion, rehabilitation, or 
modernization of a fixed guideway that:
    (i) Has a total project cost of $300 million or more and receives 
Federal funds of $100 million or more; and
    (ii) Is not exclusively for the acquisition, maintenance, or 
rehabilitation of vehicles or other rolling stock; or
    (2) The Administrator determines to be a major capital project 
because project management oversight under this part will benefit the 
Federal government or the recipient, and the project is not exclusively 
for the acquisition, maintenance, or rehabilitation of rolling stock or 
other vehicles. Typically, this means a project that:
    (i) Involves new technology;
    (ii) Is of a unique nature for the recipient; or
    (iii) Involves a recipient whose past record indicates the 
appropriateness of extending project management oversight under this 
part.
    Project development means the phase in which planning, design and 
engineering work is undertaken to advance the project from concept to a 
sufficiently mature scope to allow for the development of a reasonably 
reliable project cost, schedule, and project management plan.
    Project management oversight means the risk-informed monitoring of 
the recipient's management of a major capital project's progress to 
determine whether the project is on time, within budget, in conformance 
with design and quality criteria, in compliance with all applicable 
Federal requirements, constructed to approved plans and specifications, 
delivering the identified benefits, and safely, efficiently, and 
effectively implemented.
    Project management plan means a written document prepared by a 
recipient that explicitly defines all tasks necessary to implement a 
major capital project. A project management plan may be a single 
document or a series of documents or sub plans integrated with one 
another into the project management plan either directly or by 
reference for the purpose of defining how the recipient will 
effectively manage, monitor, and control all phases of the project.
    Recipient means a direct recipient of Federal financial assistance 
or the sponsor of a major capital project.
    Sponsor means the entity designated to deliver the project per the 
terms set forth in the grant agreement.

Subpart B--Project Management Oversight Services


Sec.  633.11   Covered projects.

    (a) The recipient is using funds made available under Chapter 53 of 
Title 49, United States Code, or any other provision of Federal law; 
and
    (b) The project is a major capital project.


Sec.  633.13   Initiation of project management oversight services.

    Project management oversight services will be initiated as soon as 
practicable, once the Administrator determines that this part applies. 
In most cases, this means that project management oversight will begin 
during the project development phase of the project, generally after 
the locally preferred alternative has been chosen (if applicable), 
unless the Administrator determines it more appropriate to begin 
oversight during another phase of the project, to maximize the 
transportation benefits and cost savings associated with project 
management oversight.


Sec.  633.15   Access to information.

    A recipient for a major capital project shall provide the 
Administrator and the project management oversight contractor chosen 
under this part access to its records and construction sites, as 
reasonably may be required.


Sec.  633.17   Project management oversight contractor eligibility.

    (a) Any person or entity may provide project management oversight 
services in connection with a major capital project, with the following 
exceptions:
    (1) An entity may not provide project management oversight services 
for its own project; and
    (2) An entity may not provide project management oversight services 
for a project if there exists a conflict of interest.
    (b) In choosing private sector persons or entities to provide 
project management oversight services, the Administrator uses the 
procurement requirements in the government-wide procurement 
regulations, found at Chapter 1 of title 48, Code of Federal 
Regulations.


Sec.  633.19   Exclusion from the project management oversight program.

    The Administrator may, in compelling circumstances, determine that 
a project meeting the criteria of Sec.  633.5(e)(1) is not a major 
capital project because project management oversight under this part 
will not benefit the Federal government or the recipient. Typically, 
this means a project that:
    (a) Involves a recipient whose past record indicates the 
appropriateness of excluding the project from project management 
oversight under this part; and
    (b) Involves such a greater level of financial risk to the 
recipient than to the Federal government that project management 
oversight under this part is made less necessary to secure the 
recipient's diligence.

Subpart C--Project Management Plans


Sec.  633.21   Basic requirement.

    (a) If a project meets the definition of major capital project, the 
recipient shall submit a project management plan prepared in accordance 
with Sec.  633.25, as a condition of Federal financial assistance.
    (b)(1) The Administrator will notify the recipient when the 
recipient must submit the project management plan. Normally, the 
Administrator will notify the recipient sometime during the project 
development phase. If the Administrator determines the project is a 
major capital project after the project development phase, the 
Administrator will inform the recipient of the determination as soon as 
possible.
    (2) Once the Administrator has notified the recipient that it must 
submit a project management plan, the recipient will have a minimum of 
90 days to submit the plan.


Sec.  633.23   FTA review of a project management plan.

    Within 60 days of receipt of a project management plan, the 
Administrator will notify the recipient that:
    (a) The plan is approved;
    (b) The plan is disapproved, including the reasons for the 
disapproval;
    (c) The plan will require modification, as specified, before 
approval; or
    (d) The Administrator has not yet completed review of the plan, and 
state when it will be reviewed.


Sec.  633.25   Contents of a project management plan.

    A project management plan must be tailored to the type, costs, 
complexity, and phase of the major capital project, and to the 
recipient's management capacity and capability. A project management 
plan must be written to a

[[Page 59681]]

level of detail sufficient to enable the recipient to determine whether 
the necessary staff and processes are in place to control the scope, 
budget, schedule, and quality of the project, while managing the safety 
and security of all persons. A project management plan must be 
developed with a sufficient level of detail to enable the Administrator 
to assess the adequacy of the recipient's plan. At a minimum, a 
recipient's project management plan must include:
    (a) Adequate recipient staff organization with well-defined 
reporting relationships, statements of functional responsibilities, job 
descriptions, and job qualifications;
    (b) A budget covering the project management organization, 
appropriate contractors and consultants, property acquisition, utility 
relocation, systems demonstration staff, audits, contingencies, and 
miscellaneous payments as the recipient may be prepared to justify;
    (c) A construction schedule for the project;
    (d) A document control procedure and recordkeeping system;
    (e) A change order procedure that includes a documented, systematic 
approach to the handling of construction change orders;
    (f) A description of organizational structures, management skills, 
and staffing levels required throughout the construction phase;
    (g) Quality control and quality assurance functions, procedures, 
and responsibilities for project design, procurement, construction, 
system installation, and integration of system components;
    (h) Material testing policies and procedures;
    (i) Internal plan implementation and reporting requirements 
including cost and schedule control procedures;
    (j) Criteria and procedures to be used for testing the operational 
system or its major components;
    (k) Periodic updates of the project management plan, especially 
related to project budget and schedule, financing, ridership estimates, 
and the status of local efforts to enhance ridership where ridership 
estimates partly depend on the success of those efforts;
    (l) The recipient's commitment to submit a project budget and 
project schedule to the Administrator quarterly;
    (m) Safety and security management; and
    (n) Management of risks, contingencies, and insurance.


Sec.  633.27   Implementation of a project management plan.

    (a) Upon approval of a project management plan by the Administrator 
the recipient shall begin implementing the plan.
    (b) Generally, a project management plan must be modified if the 
project is at a new phase or if there have been significant changes 
identified. If a recipient must modify an approved project management 
plan, the recipient shall submit the proposed changes to the 
Administrator along with an explanation of the need for the changes.
    (c) A recipient shall submit periodic updates of the project 
management plan to the Administrator. Such updates shall include, but 
not be limited to:
    (1) Project budget;
    (2) Project schedule;
    (3) Financing, both capital and operating;
    (4) Ridership estimates, including operating plan; and
    (5) Where applicable, the status of local efforts to enhance 
ridership when estimates are contingent, in part, upon the success of 
such efforts.
    (d) A recipient shall submit current data on a major capital 
project's budget and schedule to the Administrator on a quarterly basis 
for the purpose of reviewing compliance with the project management 
plan, except that the Administrator may require submission more 
frequently than on a quarterly basis if the recipient fails to meet the 
requirements of the project management plan and the project is at risk 
of materially exceeding its budget or falling behind schedule. Budget 
and schedule changes will be analyzed on a case-by-case basis, but FTA 
generally will consider any cost increase or schedule delay exceeding 
five percent as a material change. Oversight of projects monitored more 
frequently than quarterly will revert to quarterly oversight once the 
recipient has demonstrated compliance with the project management plan 
and the project is no longer at risk of materially exceeding its budget 
or falling behind schedule.


Sec.  633.29   [Reserved]

[FR Doc. 2020-18819 Filed 9-22-20; 8:45 am]
BILLING CODE P