Mass Transit

The Federal Transit Administration's (FTA) oversight of federally funded major capital projects has evolved over the past several years to include more comprehensive and ongoing reviews of a proposed grantee's financial capacity to construct a major transit system. Changes in project management, oversight, and grant-making activities have come about because of project costs and schedule problems identified through FTA's oversight program and increased congressional scrutiny. Changes should help the grantees avoid major cost, schedule, or quality problems and help protect the federal government's investments. However, FTA is concerned that funds may be insufficient to monitor large projects in the future.

GAO noted that: (1) the project management oversight program is designed primarily to help ensure that grantees constructing major capital projects have the qualified staff and procedures to successfully build the projects according to accepted engineering principles; (2) to implement this program, FTA enters into contracts with competitively selected engineering firms, which serve as an extension of its limited technical staff; (3) while a project is being designed, the oversight contractor reviews the grantee's plan for managing and constructing the project; (4) this plan is the key document that the oversight contractor and FTA use to determine whether the grantee has the technical capability to complete the project; (5) once FTA approves the plan, the oversight contractor monitors the project to determine whether it is progressing on time, within budget, and according to approved plans and specifications; (6) as a result of FTA's experiences with the Los Angeles subway project in the mid-1990s, in 1998, FTA expanded its oversight efforts to include a formal and rigorous assessment of a grantee's financial capacity to build and operate a new project and of the financial impact to that project on the existing transit system; (7) FTA's project management oversight program has resulted in benefits for both grantees and FTA; (8) transit agencies have commended the program and cited numerous examples of how the FTA contractors have improved project management, especially quality controls; (9) FTA's oversight activities are supported by a statutorily limited set-aside of the funds made available annually for certain transit programs; (10) in the past, this set-aside has been more than sufficient to cover the costs of FTA's oversight contractors; (11) FTA officials now believe that this amount will not be sufficient to allow them to continue their current level of oversight activity, mainly because the number of projects in one of FTA's capital investment programs--new starts--has increased by almost 90 percent since 1996 and will continue to grow; (12) FTA believes that starting in fiscal year 2002, it will have to cut back its level of oversight activities on some projects; (13) this cutback could occur at a time when many of the proposed new transit projects are sponsored by transit agencies that have little or no experience in planning, designing, and constructing major transit projects; and (14) FTA officials could not tell GAO what level of shortfall would occur after fiscal year 2002 or exactly how it would address any shortfalls.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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