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FTA Announces Final Rule for PMO

Tuesday, October 6, 2020

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At the end of September, the U.S. Department of Transportation’s Federal Transit Administration announced a final rule amending FTA regulations for Project Management Oversight of transit capital investments.

“The number of transit capital projects and the infrastructure costs associated with them has increased significantly since the PMO program was first authorized in 1987,” said FTA Deputy Administrator K. Jane Williams. “This rule tailors the level of FTA oversight to the real costs, complexities, and risks of major capital projects and right-sizes the role of Federal oversight while eliminating unnecessary red tape for state and local leaders.”

The final rule has since been published in the Federal Register.

PMO Background

According to the Federal Register, Congress had authorized the Urban Mass Transportation Administration—a predecessor agency of the FTA—to conduct oversight of major capital projects and to promulgate a rule in recognizing that the management and oversight of major capital projects, specifically in the Surface Transportation and Uniform Relocation Assistance Act of 1987, needed strengthening.

Wenjie Dong / Getty Images

At the end of September, the U.S. Department of Transportation’s Federal Transit Administration announced a final rule amending FTA regulations for Project Management Oversight of transit capital investments.

The statute (49 U.S.C. 5327) authorizes FTA to obtain the services of project management oversight contractors to assist FTA in overseeing the expenditure of federal financial assistance for major capital projects, in addition to requiring a definition of “major capital project” to identify the types of projects governed by the rule.

In 2011, it was recognized that the annual dollar value of federal transit capital programs was nearly five times the level authorized under STURAA in 1987, whereas FTA published a Notice of Proposed Rulemaking (NPRM) that proposed to:

  • Enable FTA to identify the necessary management capacity and capability of a sponsor of a major capital project more clearly;
  • Spell out the many facets of project management that must be addressed in a project management plan;
  • Tailor the level of FTA oversight to the costs, complexities, and risks of a major capital project;
  • Set forth the means and objectives of risk assessments for major capital projects; and
  • Articulate the roles and responsibilities of FTA's project management oversight contractors.

Following the publication of the NPRM, however, Moving Ahead for Progress in the 21st Century Act—published in 2016—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. The document also shifted the initiation of project management 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, causing FTA to withdraw the NPRM.

By 2019, the FTA published another NPRM in August, proposing to amend its project management oversight rule.

The Final Rule

As reported by the FTA, the rule “redefines a “major capital project” as a new fixed guideway project — or an expansion, rehabilitation or modernization of an existing fixed guideway system — with a total project cost of $300 million or more and with a Federal investment of $100 million or more.”

Previously, major capital projects were defined as a project costing $100 million or more but didn’t include federal support as a factor.

In the new ruling, the USDOT has saved $4.37 billion in regulatory costs to the economy and consumers, in addition to exceeding President Donald J. Trump’s 2-for-1 plan, issuing at its peak 23 regulatory reform actions for every new single regulatory action. At the time of this publication, the USDOT has issued 65 regulatory reform actions and six significant regulatory actions.

The rule goes into effect on Oct. 23.


Tagged categories: Department of Transportation (DOT); Government; Mass transit; NA; North America; Program/Project Management; Project Management; Public Transit; Transportation

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