Active Commuter Rail Agency Service Contracts (10-JUL-06,	 
GAO-06-820R).							 
                                                                 
Commuter rail is an important part of the transportation system  
in many cities and regions in our country, providing more than	 
420 million passenger trips in 2005. Although several of the	 
largest commuter rail agencies hire their own employees, many	 
agencies contract with other companies, including Amtrak, freight
railroads, and private rail operators, to provide services that  
are critical to running the agencies' trains. These contracted	 
services include providing crews to operate trains (train	 
operations); maintenance of equipment (MOE), including		 
maintenance of train cars and locomotives; dispatching train	 
traffic; and maintenance of way (MOW), which involves maintaining
the track, signals, and other track infrastructure. Commuter rail
agencies can obtain these services by opening contracts to	 
competition or through noncompetitive negotiations with a service
provider. Congress asked us to provide information on the service
arrangements between commuter rail agencies and other companies. 
Accordingly, we addressed the following questions: (1) How many  
currently active commuter rail service contracts were obtained	 
through competitive and noncompetitive processes? (2) What	 
differences, if any, are there between competitively and	 
noncompetitively negotiated contracts?				 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-06-820R					        
    ACCNO:   A56624						        
  TITLE:     Active Commuter Rail Agency Service Contracts	      
     DATE:   07/10/2006 
  SUBJECT:   Comparative analysis				 
	     Railroad industry					 
	     Railroad transportation operations 		 
	     Service contracts					 
	     Competitive procurement				 

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GAO-06-820R

     

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July 10, 2006

The Honorable Richard C. Shelby

Chairman

Committee on Banking, Housing and Urban Affairs

United States Senate

Subject: Active Commuter Rail Agency Service Contracts

Dear Mr. Chairman:

Commuter rail is an important part of the transportation system in many
cities and regions in our country, providing more than 420 million
passenger trips in 2005. Although several of the largest commuter rail
agencies hire their own employees, many agencies contract with other
companies, including Amtrak, freight railroads, and private rail
operators, to provide services that are critical to running the agencies'
trains. These contracted services include providing crews to operate
trains (train operations); maintenance of equipment (MOE), including
maintenance of train cars and locomotives; dispatching train traffic; and
maintenance of way (MOW), which involves maintaining the track, signals,
and other track infrastructure. Commuter rail agencies can obtain these
services by opening contracts to competition or through noncompetitive
negotiations with a service provider.

You asked us to provide information on the service arrangements between
commuter rail agencies and other companies. Accordingly, we addressed the
following questions: (1) How many currently active commuter rail service
contracts were obtained through competitive and noncompetitive processes?
(2) What differences, if any, are there between competitively and
noncompetitively negotiated contracts? Through interviews and site visits
with commuter rail agencies, we identified all 50 active commuter rail
contracts that provided at least one of the four following services: train
operations, MOE, dispatching, and MOW. Of these 50 contracts, we found
that 22 only provided access to infrastructure and services directly
related to maintaining and operating the infrastructure (e.g., dispatching
and MOW). These contracts did not include other services, such as train
operations, that are not bound to the infrastructure and for which a
commuter rail agency could choose a provider other than the infrastructure
owner. We excluded these 22 contracts from our analysis because commuter
rail agencies must negotiate with the infrastructure owner for access, and
infrastructure owners generally conduct their own dispatching and maintain
their own rights-of-way. The other 28 contracts included at least one
service that was not bound to infrastructure used by the commuter rail
agency and, therefore, could be provided by an entity other than the
infrastructure owner. These contracts were included in our analysis and
are discussed in greater detail in our findings.

About Half of Commuter Rail Service Contracts Were Obtained through
Competitive Processes

Fifteen of the 28 active commuter rail service contracts were obtained
through competitive processes. As of July 1, 2006, Herzog, a private rail
operator headquartered in Missouri, held 7 of the competitively procured
contracts. Amtrak held 2 of the competitively procured contracts-including
a turnkey service for Caltrain, a commuter rail service linking San
Francisco and San Jose, under which Amtrak provides services critical to
running Caltrain's commuter service, as well as operations at several of
Caltrain's passenger stations. The remaining 6 contracts were spread among
six other private transportation companies.

The other 13 contracts were negotiated noncompetitively. Amtrak held 5 of
these 13 contracts, and three freight railroads-Burlington Northern Santa
Fe (BNSF), CSX, and Union Pacific-held 6. The remaining 2 noncompetitive
contracts were negotiated between commuter rail agencies that share
continuous rights-of-way.1

Table 1 provides information on all 28 active commuter rail service
contracts.

Table 1: Active Commuter Rail Service Contracts

                                                                       Does the        
                                                        Was this       contracted      
                              Contracted                contract       provider own    
Commuter rail                 service       Contract    negotiated     the             
agency         Services       provider      period      competitively? infrastructure? 
Noncompetitively negotiated contracts                                  
Competitively negotiated                                               
contracts                                                              
Altamont       Train          Herzoga       June        Yes            No              
Commuter       operations and               1998-June                  
Express (ACE)  MOE                          2009, with                 
                                            the option                 
                                            to extend                  
                                            the                        
                                            contract                   
                                            for a                      
                                            period                     
                                            deemed                     
                                            appropriate                
                                            by ACE's                   
                                            board                      
Maryland       Contract for   Amtrak        Dec.        Yes            No              
Transit        MOE services                 2001-Dec.                  
Administration at MARC's                    2006                       
(MARC)         maintenance                                             
               facility in                                             
               Frederick,                                              
               Maryland                                                
Massachusetts  Train          Massachusetts July        Yes            No              
Bay            operations,    Bay Commuter  2003-July                  
Transportation MOE, MOW,      Railroad      2008, with                 
Authority      dispatching,   Company       the option                 
(MBTA)         and station    (MBCR)        to extend                  
               operation                    through                    
                                            2013                       
Nashville      Train          Transit       Begins from Yes            No              
Music City     operations and Solutions     the start                  
Starb          MOE            Group         of revenue                 
                                            service for                
                                            5 years,                   
                                            with the                   
                                            option to                  
                                            extend for                 
                                            5 years;                   
                                            notice to                  
                                            proceed was                
                                            issued in                  
                                            May 2006                   
New Jersey     MOE            Herzog        July        Yes            No              
Transit                                     2005-June                  
Corporation                                 2010, with                 
(NJT)c                                      the option                 
                                            to extend                  
                                            through                    
                                            June 2012                  
New Mexico     Train          Herzog        Fall        Yes            No              
Rail Runner    operations,                  2005-2010,                 
Expressb       MOE, and MOW                 with the                   
                                            option to                  
                                            extend                     
                                            until 2012                 
North County   Train          Herzog        July        Yes            No              
Transit        operations,                  2006-June                  
District       MOE, and MOW                 2011                       
(Coaster)                                                              
Peninsula      Train          Amtrak        July        Yes            No              
Corridor Joint operations,                  2001-June                  
Powers Board   MOE, MOW,                    2009, with                 
(Caltrain)     dispatching,                 the option                 
               and station                  to extend                  
               operation                    until June                 
                                            2011                       
Southern       MOE            Bombardier    July        Yes            No              
California                                  2003-June                  
Regional Rail                               2010, with                 
Authority                                   the option                 
(SCRRA),                                    to extend                  
operator of                                 until 2013                 
Metrolink                                                              
Commuter Rail                                                          
Service                                                                
SCRRA          Train          Connex        July        Yes            No              
               operations                   2005-June                  
                                            2010, with                 
                                            the option                 
                                            to extend                  
                                            until 2015                 
SCRRA          MOW (track and Herzog        March       Yes            No              
               structures)                  2001-June                  
                                            2007                       
SCRRA          MOW (signals   Mass Electric July        Yes            No              
               and            Construction  2001-June                  
               communication) Co.           2007                       
Tri-County     Train          Herzog        Nov.        Yes            No              
Commuter Rail  operations and               2002-June                  
Authority      MOE                          2007                       
(Tri-Rail)                                                             
Trinity        Train          Herzog        Oct.        Yes            No              
Railway        operations,                  2005-Oct.                  
Express (TRE)  MOE, MOW, and                2010, with                 
               dispatching                  the option                 
                                            to extend                  
                                            through                    
                                            2015                       
Virginia       MOE            STV Group     May         Yes            No              
Railway                       Inc.          2006-May                   
Express (VRE)                               2007, with                 
                                            1-year                     
                                            options to                 
                                            extend up                  
                                            to 2010                    
Coaster        Dispatching    SCRRA         In          No             No              
                                            perpetuity                 
                                            until the                  
                                            parties                    
                                            agree to                   
                                            terminate                  
                                            the                        
                                            agreement                  
Connecticut    Train          Amtrak        March       Nod            Yes, owns       
Department of  operations,                  2006-June                  rights-of-way   
Transportation MOE, MOW,                    2007                       
Shore Line     dispatching,                                            
East (SLE)     and station                                             
               operation                                               
MARC           Train          Amtrak        Dec.        No             Yes, owns       
               operations,                  2004-Dec.                  portions of the 
               MOE, MOW,                    2006                       rights-of-way,  
               dispatching,                                            Washington      
               and station                                             Union Terminal, 
               operation                                               and Ivy City    
                                                                       Maintenance     
                                                                       Yard            
MARC           Train          CSX           July        Noe            Yes, owns       
               operations,                  2005-July                  portions of the 
               MOE, MOW, and                2010                       rights-of-way   
               dispatching                                             
MTA            Train          NJT           In          No             Yes, owns       
Metro-North    operations,                  perpetuity                 portions of the 
Railroad       MOE, MOW, and                until the                  rights-of-way   
               dispatchingf                 parties                    in New Jersey   
                                            agree to                   
                                            terminate                  
                                            the                        
                                            agreement                  
New Mexico     Dispatching    BNSF          March       Nog            No              
Rail Runner                                 2006-March                 
Expressb                                    2009                       
NJT            MOE            Amtrak        July        No             Yes, owns       
                                            2005-June                  Sunnyside       
                                            2006                       Maintenance and 
                                                                       Storage Yard,   
                                                                       in which NJT    
                                                                       has an easement 
                                                                       interest        
Northeastern   Train          BNSF          Jan.        No             Yes, owns       
Illinois       operations,                  2001-Dec.                  portions of the 
Regional       MOE, MOW, and                2007                       rights-of-way   
Commuter       dispatching                                             
Railroad                                                               
Corporation                                                            
(Metra)                                                                
Metra          Train          Union Pacific Jan.        No             Yes, owns       
               operations,                  2004-Dec.                  portions of the 
               MOE, MOW, and                2008                       rights-of-way   
               dispatching                                             
Sound Transit, MOE            Amtrak        Sept.       No             Yes, Amtrak     
Central Puget                               2000-Dec.                  owns facilities 
Sound Regional                              2009                       and leases      
Transportation                                                         property at     
Authority                                                              Holgate         
(Sounder)                                                              Maintenance and 
                                                                       Storage Yard    
Sounder        Train          BNSF          South Route No             Yes, owns       
               operations,                  2000-2040;                 rights-of-way   
               MOW, and                     North Route                
               dispatching                  2000-2012,                 
                                            with the                   
                                            option to                  
                                            extend                     
                                            until 2017                 
Tri-Rail       MOW and        CSX           To continue Noh            No              
               dispatching                  until                      
                                            either                     
                                            party                      
                                            provides 9                 
                                            months                     
                                            notice to                  
                                            end or                     
                                            change the                 
                                            contract                   
VRE            Train          Amtrak        July        Noi            Yes, owns about 
               operations,                  2005-June                  1.5 miles of    
               MOE, MOW,                    2010                       rights-of-way   
               dispatching,                                            from L'Enfant   
               and station                                             Station into    
               operation                                               Washington      
                                                                       Union Terminal  
                                                                       and Ivy City    
                                                                       Maintenance     
                                                                       Yard, which are 
                                                                       also owned by   
                                                                       Amtrak          

1In the first case, Metro-North Railroad, a commuter rail service in the
New York City area, has a contract with New Jersey Transit (NJT), another
commuter rail agency in the same region. Two of Metro-North's lines are
extensions of New Jersey Transit lines that operate out of Hoboken
Terminal in New Jersey, and both agencies have found it to be efficient to
have a single operator (NJT) for this system. In the second case, Coaster
has a contract for dispatching services provided by Southern California
Regional Rail Authority (SCRRA), the operator of Metrolink Commuter Rail
Service. Coaster officials noted that this contract is between two
California public agencies, and, while Coaster's service does not use
parts of the rights-of-way owned by SCRRA, Metrolink commuter rail service
does access Coaster rights-of-way.

Source: GAO analysis of commuter rail contract information.

Notes: Each row of this table represents a single contract. Because
commuter rail agencies may have multiple contracts to obtain the services
critical to their operations, a commuter rail agency may be listed more
than once. For example, Metrolink, a commuter rail service in Los Angeles,
has four contracts-one for train operations, one for maintenance of
equipment, and two for maintenance of way-each of which is summarized on a
separate row; Metrolink, therefore, is listed four times in the table.

aHerzog has several subsidiaries, but we did not distinguish between them
for the purposes of the report.

bThe Nashville Music City Star and the New Mexico Rail Runner Express are
both proposed commuter rail agencies that plan to initiate revenue service
later in 2006.

cThis contract covers about 2 percent of NJT's total maintenance of
equipment service needs.

dSLE has had a noncompetitive agreement with Amtrak, in part because of
labor issues, according to agency officials. However, SLE is investigating
the possibility of contracting with a different train operator and having
a separate noncompetitive agreement with Amtrak for rights-of-way access.

eMARC's contract with CSX requires MARC to issue a request for proposals
for new train operation crews and maintenance of equipment workers because
CSX does not wish to provide these services to MARC in the future. MARC
officials are working to develop the request for proposals and plan to
issue it late in 2006.

fThis contract covers about 7.5 percent of Metro-North's total service and
applies only to Metro-North services west of the Hudson River.

gIn March 2006, New Mexico purchased rights-of-way from BNSF and
established a Joint Use Agreement. In accordance with the terms of the
agreement, BNSF will provide dispatching services over this rights-of-way
for 3 years (until March 2009). After this initial period, New Mexico may
assume dispatching responsibilities or select another provider.

hThis contract is between the state of Florida and CSX. According to
Tri-Rail officials, dispatching and MOW services were negotiated as a part
of the sale of CSX's rights-of-way to the state when the service was
initiated. The state of Florida now owns the rights-of-way and may choose
to competitively procure this service contract provided the state gives
CSX 9 months' notice of its intention to do so.

iIn its July 2005 renegotiations with Amtrak, VRE had Amtrak separate its
costs for access and midday storage at Washington Union Terminal (WUT)
from other expenses. This information would allow VRE to competitively
procure train operations in 2010, when its current service contract with
Amtrak expires. VRE's long-term plans also include the construction of
maintenance facilities so that equipment maintenance would not need to be
performed at WUT. The WUT contract would remain noncompetitive, but VRE
would be able to competitively procure maintenance of equipment services.

Infrastructure Ownership Appears to Be an Important Determinant in Whether
Contracts Are Competitively Negotiated

According to our analysis, the most notable difference between contracts
that were competitively and noncompetitively negotiated was whether the
service provider owned the infrastructure that the commuter rail agency
was using. Specifically, for all 15 contracts that were negotiated
competitively, the service provider did not own the infrastructure used by
the commuter rail agency. Rather, in most cases the commuter rail agency
or its sister transit agency owned the majority of the infrastructure. In
contrast, for 10 of the 13 contracts that were negotiated
noncompetitively, the service provider owned the infrastructure used by
the commuter rail agency. In two other cases, the service provider was the
former owner of the rights-of-way, and the service agreement was
established concurrently with the sale of the track. Thus, the service
provider currently or previously owned the infrastructure used by the
commuter rail agencies for 12 of the 13 noncompetitively negotiated
contracts.

Another difference between the competitively and noncompetitively
negotiated contracts was the types of services included in the contract.
Although competitive and noncompetitive contracts were almost equally
likely to cover train operations, maintenance of equipment, and
maintenance of way, the noncompetitive contracts were much more likely to
include dispatching-an important infrastructure-related service that
allows the provider to control train traffic on the rights-of-way. (See
table 2.)

Table 2: Services Included in Contracts Reviewed

Service                  Competitive contracts Noncompetitive contracts 
Train operations                       9 of 15                  8 of 13 
Maintenance of equipment              12 of 15                  9 of 13 
Maintenance of way                     7 of 15                  9 of 13 
Dispatching                            3 of 15                 11 of 13 

Source: GAO analysis of commuter rail agency contract information.

Note: Most contracts included terms for more than one service. For
example, a single contract may include train operations, maintenance of
equipment, and maintenance of way services. As a result, the number of
services exceeds the number of contracts in each column.

Although infrastructure ownership appears to have played a critical role
in determining whether the current contracts were negotiated
competitively, commuter rail agencies indicated that, in the future, they
may have greater latitude in choosing a provider other than the
infrastructure owner. For example, several commuter rail agencies have
taken steps to competitively procure services that are currently being
provided by the infrastructure owner, and two agencies noted that the
Massachusetts Bay Transportation Authority's (MBTA) experience with
changing service providers served as an example for other agencies.
Specifically, in 2003, MBTA replaced Amtrak with a new service provider,
even though Amtrak had provided these services since 1987 and the two
agencies are dependent on each other's infrastructure. In addition,
commuter rail agency officials noted that the number of private rail
companies has grown in the last 5 to 10 years, potentially making
competitive negotiations financially more worthwhile. For example,
officials from the Virginia Railway Express (VRE) took steps to
restructure their current service contract with Amtrak and are developing
long-term plans to build their own equipment maintenance yard so that the
agency is positioned to competitively negotiate train operations and
maintenance of equipment services when their contract with Amtrak expires
in 2010.

Agency Comments

We provided the Department of Transportation and Amtrak officials with a
draft of this report for review and comment. Both agencies provided
technical clarifications that we incorporated, as appropriate.

Scope and Methodology

To address our objectives, we contacted officials from all existing
commuter rail agencies, as reported by the American Public Transportation
Association, as well as two proposed commuter rail agencies that plan to
initiate service in 2006. We conducted a semistructured interview with
each agency to identify its service needs, the companies it has contracted
with, and the scope of the services covered by its contracts. We also
determined through these interviews whether the contracts included rights
for the commuter rail agency to access infrastructure owned by the service
provider (e.g., rights-of-way, passenger stations, and train maintenance
yards). Through site visits with seven existing and one proposed commuter
rail agency and through follow-up correspondence with all existing
commuter agencies and the two proposed commuter agencies, we identified
the length of the service contracts and determined whether each contract
had been competitively or noncompetitively negotiated. We also examined
some current commuter rail service contracts and documents related to
milestones in agencies' competitive procurement processes.2 To ensure the
accuracy of information summarized in the report, we verified the
information we collected with the commuter rail agencies.3

2Our audit work also contributed to a comprehensive report on commuter
rail agencies' reliance on Amtrak for services and access to
infrastructure. See GAO, Commuter Rail: Commuter Rail Issues Should Be
Considered in Debate over Amtrak, GAO-06-470 (Washington, D.C.: Apr. 21,
2006).

3Two commuter rail agencies did not respond to our request to verify
information.

Our review identified 50 active commuter rail contracts that provided at
least one of four services critical to running an agency's service-that
is, these services are all related to the movement of trains (i.e., train
operations, MOE, dispatching, or MOW).4 Many of these contracts covered
more than one critical service. Of the 50 contracts, we found that 22
provided access only to infrastructure and services directly related to
maintaining and operating the infrastructure (e.g., dispatching and MOW).
These contracts did not include other services, such as train operations,
that are not bound to the infrastructure and for which a commuter rail
agency could choose a provider other than the infrastructure owner. We
excluded these 22 contracts from our analysis because commuter rail
agencies must negotiate with the infrastructure owner for access, and
infrastructure owners generally conduct their own dispatching and maintain
their own rights-of-way. A limitation of our analysis is that we did not
collect information on the willingness of infrastructure owners to provide
infrastructure access without also providing other services to commuter
rail agencies. Table 3 describes all 50 contracts and indicates whether
they are included in our analysis.

Table 3: Commuter Rail Service Contracts, by Agency

Commuter rail    Provider       Contract description        Included   
agency Commuter  Provider       Contract description        or         
rail agency      Provider       Contract description        excluded   
Commuter rail    Provider       Contract description        in our     
agency Commuter                                             analysis   
rail agency                                                 Included   
                                                               or         
                                                               excluded   
                                                               in our     
                                                               analysis   
                                                               Included   
                                                               or         
                                                               excluded   
                                                               in our     
                                                               analysis   
                                                               Included   
                                                               or         
                                                               excluded   
                                                               in our     
                                                               analysis   
Existing commuter rail agencies                             
Altamont         Herzog         Contract for train          Included   
Commuter Express                operations and MOE                     
(ACE)            Union Pacific  Contract for       Excluded 
                                   access to Union             
                                   Pacific                     
                                   rights-of-way               
                                   (ROW) and                   
                                   associated                  
                                   dispatching and             
                                   MOW                         
                    Caltrain       Contract for       Excluded 
                                   dispatching and             
                                   train storage at            
                                   Caltrain's San              
                                   Jose Station                
Connecticut      Amtrak         Contract for train          Included   
Department of                   operations, MOE,            
Transportation                  dispatching, MOW, and       
Shore Line East                 station operation; also     
(SLE)                           includes access to Amtrak   
                                   ROW                         
Maryland Transit Amtrak         Contract for train          Included   
Administration                  operations, MOE,            
(MARC)                          dispatching, MOW, and       
                                   station operation; also     
                                   includes access to Amtrak   
                                   ROW and Washington Union    
                                   Station                     
                    Amtrak         Contract for MOE   Included 
                                   services at MARC's          
                                   maintenance                 
                                   facility in                 
                                   Frederick,                  
                                   Maryland                    
                    CSX            Contract for train Included 
                                   operations, MOE,            
                                   dispatching, and            
                                   MOW                         
Massachusetts    MBCR           Contract for train          Included   
Bay                             operations, MOE,            
Transportation                  dispatching, MOW, and       
Authority (MBTA)                station operation           
                    Amtrak         Contract for       Excluded 
                                   access to                   
                                   Amtrak-owned ROW            
                                   and associated              
                                   dispatching and             
                                   MOW                         
                    Amtrak         Contract for MOW   Excluded 
                                   at the Route 128            
                                   Station, which is           
                                   owned by Amtrak             
                                   but sits on land            
                                   owned by MBTA               
                    CSX            Contract for       Excluded 
                                   access to CSX ROW           
                                   and associated              
                                   dispatching and             
                                   MOW                         
                    Guilford       Contract for       Excluded 
                                   access to Guilford          
                                   ROW and associated          
                                   dispatching                 
MTA Long Island  Amtrak         Contracts for MOW and       Excluded   
Rail Road (LIRR)                special maintenance         
                                   projects, as well as access 
                                   to ROW approaching Penn     
                                   Station and Penn Station    
                                   itself, all of which are    
                                   owned by Amtraka            
MTA Metro-North  New Jersey     Contract for train          Included   
Railroad         Transit        operations, MOE,            
                                   dispatching, and MOW, as    
                                   well as access to NJT ROW   
New Jersey       Herzog         Contract for MOE services   Included   
Transit                         on a small portion of the   
Corporation                     NJT train fleet             
(NJT)            Amtrak         Contract for MOE   Included 
                                   services at                 
                                   Amtrak's Sunnyside          
                                   Yard                        
                    Amtrak         Contract for       Excluded 
                                   access to Amtrak            
                                   ROW and Penn                
                                   Station, as well            
                                   as dispatching,             
                                   MOW, and services           
                                   related to use of           
                                   Amtrak ROW and              
                                   Penn Station                
                    Conrail        Contract for       Excluded 
                                   access to Conrail           
                                   ROW and associated          
                                   dispatching and             
                                   MOW                         
North County     Herzog         Contract for train          Included   
Transit District                operations, MOE, and MOW               
(Coaster)        SCRRA          Contract for       Included 
                                   dispatching                 
                                   services                    
Northeastern     Union Pacific  Contract for train          Included   
Illinois                        operations, MOE,                       
Commuter                        dispatching, and MOW; also             
Railroad                        includes access to Union               
Corporation                     Pacific ROW                            
(Metra)          BNSF           Contract for train Included 
                                   operations, MOE,            
                                   dispatching, and            
                                   MOW; also includes          
                                   access to BNSF ROW          
                    Amtrak         Contract for MOW   Excluded 
                                   and dispatching in          
                                   the area                    
                                   immediately                 
                                   surrounding                 
                                   Chicago Union               
                                   Station, which is           
                                   owned by Amtrak;            
                                   contract also               
                                   includes access to          
                                   Chicago Union               
                                   Station                     
                    Canadian       Contract for       Excluded 
                    National       access to Canadian          
                                   National ROW, and           
                                   associated                  
                                   dispatching and             
                                   MOW                         
                    Norfolk        Contract for       Excluded 
                    Southern       access to Norfolk           
                                   Southern ROW, and           
                                   associated                  
                                   dispatching and             
                                   MOW                         
                    CSX            Contract for       Excluded 
                                   access to CSX ROW,          
                                   and associated              
                                   dispatching and             
                                   MOW                         
                    Illinois       Contract for       Excluded 
                    Central        access to Illinois          
                                   Central ROW, and            
                                   associated                  
                                   dispatching and             
                                   MOW                         
Northern Indiana Metra          Contract for access to      Excluded   
Commuter                        Metra ROW, stations, and               
Transportation                  associated dispatching and             
District (NICTD)                MOW                                    
Peninsula        Amtrak         Contract for train          Included   
Corridor Joint                  operations, MOE,                       
Powers Board                    dispatching, MOW, and                  
(Caltrain)                      station operation                      
                    Union Pacific  Contract for       Excluded 
                                   access to Union             
                                   Pacific ROW and             
                                   the right for               
                                   Caltrain to                 
                                   maintain and                
                                   operate this                
                                   portion of the              
                                   track                       
Sound Transit,   Amtrak         Contract for MOE and access Included   
Central Puget                   to Holgate Maintenance Yard            
Sound Regional   BNSF           Contract for train Included 
Transportation                  operations,                 
Authority                       dispatching, and            
(Sounder)                       MOW, as well as             
                                   access to BNSF ROW          
Southeastern     Amtrak         Contract for access to      Excluded   
Pennsylvania                    Amtrak-owned ROW, as well              
Transportation                  as associated MOW,                     
Authority                       dispatching, and propulsion            
(SEPTA)                         power on Amtrak's Northeast            
                                   Corridor and Harrisburg                
                                   Line                                   
Southern         Connex         Contract for train          Included   
California                      operations                             
Regional Rail    Bombardier     Contract for MOE   Included 
Authority        Herzog         Contract for MOW   Included 
(SCRRA),                        (track and                  
operator of                     structures)                 
Metrolink        Mass Electric  Contract for MOW   Included 
Commuter Rail    Construction   (signals and                
Service          Co.            communications)             
                    Union Pacific  Shared-use         Excluded 
                                   agreements for              
                                   access to Union             
                                   Pacific ROW, and            
                                   associated MOW and          
                                   dispatching                 
                    BNSF           Shared use         Excluded 
                                   agreements for              
                                   access to BNSF              
                                   ROW, and                    
                                   associated MOW and          
                                   dispatching                 
Trinity Railway  Herzog         Contract for train          Included   
Express (TRE)                   operations, MOE,                       
                                   dispatching, and MOW                   
Tri-County       Herzog         Contract for train          Included   
Commuter Rail                   operations and MOE                     
Authority        CSX            Contract for       Included 
(Tri-Rail)                      dispatching and             
                                   MOW                         
Virginia Railway Amtrak         Contract for train          Included   
Express (VRE)                   operations, MOE,                       
                                   dispatching, MOW, and                  
                                   station operation; also                
                                   includes access to Amtrak              
                                   ROW and Washington Union               
                                   Station                                
                    STV Group Inc. Contract for MOE   Included 
                    CSX            Contract for       Excluded 
                                   access to CSX ROW,          
                                   and associated              
                                   dispatching and             
                                   MOW                         
                    Norfolk        Contract for       Excluded 
                    Southern       access to Norfolk           
                                   Southern ROW, and           
                                   associated                  
                                   dispatching and             
                                   MOW                         
Proposed commuter rail agencies                             
New Mexico Rail  Herzog         Contract for train          Included   
Runner Express                  operations, MOE, and MOW    
                    BNSF           Joint Use          Included 
                                   Agreement for               
                                   dispatching                 
                                   services                    
Nashville Music  Transit        Contract for train          Included   
City Star        Solutions      operations and MOE; notice  
                    Group          to proceed was issued in    
                                   May 2006                    
                    Nashville and  Contract for       Excluded 
                    Eastern Rail   access to NERA              
                    Authority      ROW, and                    
                    (NERA)         dispatching and             
                                   MOW services                
                                   through NERA's              
                                   contractor, the             
                                   Nashville and               
                                   Eastern Railroad            
                                   Corporation;                
                                   notice to proceed           
                                   was issued in May           
                                   2006                        

4Commuter rail agencies such as MTA Long Island Rail Road, MTA Metro-North
Railroad, New Jersey Transit, the Northeastern Illinois Regional Commuter
Railroad Corporation (Metra), the Northern Indiana Commuter Transportation
District, and the Southeastern Pennsylvania Transportation Authority use
their own employees for most of their service needs, including train
operations, dispatching, MOE, and MOW. Although the Southern California
Regional Rail Authority (SCRRA), which operates the Metrolink Commuter
Rail Service, contracts out almost all other services, it has its own
staff to provide dispatching services. We did not include these in-house
arrangements in our analysis.

Source: GAO analysis of commuter rail contract information.

aDispatching at Penn Station is a joint responsibility between Amtrak and
LIRR, with each company providing half of the dispatching employees.

Our review did not examine commuter rail agencies' compliance with the
Federal Transit Administration's requirements for the use of competitive
procurement for railroad service contracts. We conducted our review from
July 2005 to July 2006 in accordance with generally accepted government
auditing standards.

                                   - - - - -

As agreed with your office, unless you publicly announce the contents of
this report earlier, we plan no further distribution until 30 days from
the report date. At that time, we will send copies to congressional
committees with responsibilities for commuter rail issues, the Secretary
of Transportation, the Acting President of Amtrak, and the Administrators
of the Federal Railroad Administration and the Federal Transit
Administration. We will also make copies available to others upon request.
In addition, this report will be available at no charge on GAO's Web site
at http://www.gao.gov .

If you or your staff have any questions about this report, please contact
me at (202) 512-2834 or [email protected]. Contact points for our Offices of
Congressional Relations and Public Affairs may be found on the last page
of this report. Key contributors to this report were Nikki Clowers
(Assistant Director), Gregory Hanna, Nancy Lueke, and Joah Iannotta.

Sincerely yours,

JayEtta Z. Hecker

Director, Physical Infrastructure Issues

(544122)

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