Major Capital Investment Projects, 43328-43377 [E7-14285]

Agencies

• Federal Transit Administration
• DEPARTMENT OF TRANSPORTATION

[Federal Register Volume 72, Number 149 (Friday, August 3, 2007)]
[Proposed Rules]
[Pages 43328-43377]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-14285]



[[Page 43327]]

-----------------------------------------------------------------------

Part II





Department of Transportation





-----------------------------------------------------------------------



Federal Transit Administration



-----------------------------------------------------------------------



49 CFR Part 611



 Major Capital Investment Projects; Proposed Rule



Notice of Availability of Proposed Policy Guidance on Evaluation 
Measures for New Starts/Small Starts; Notice

Federal Register / Vol. 72 , No. 149 / Friday, August 3, 2007 / 
Proposed Rules

[[Page 43328]]


-----------------------------------------------------------------------

DEPARTMENT OF TRANSPORTATION

Federal Transit Administration

49 CFR Part 611

[Docket No. FTA-2006-25737]
RIN 2132-AA81


Major Capital Investment Projects

AGENCY: Federal Transit Administration (FTA), DOT.

ACTION: Notice of proposed rulemaking.

-----------------------------------------------------------------------

SUMMARY: This Notice of Proposed Rulemaking (NPRM) provides interested 
parties with the opportunity to comment on proposed changes to the 
Federal Transit Administration's (FTA's) New Starts program and a new 
proposed Small Starts program category. The new Small Starts program 
category is a discretionary grant program category for public 
transportation capital projects that run along a dedicated corridor or 
a fixed guideway, have a total project cost of less than $250 million, 
and are seeking less than $75 million in Small Starts program funding. 
This NPRM addresses comments on the Advanced Notice of Proposed 
Rulemaking (ANPRM) on Small Starts issued on January 30, 2006 and the 
draft Guidance on New Starts Policy and Procedures issued on January 
19, 2006, and makes proposals for the New Starts and Small Starts 
programs which take into account these comments. FTA is concurrently 
issuing policy guidance for comment that describes the factors and 
measures used in its evaluation process, which are not described in the 
NPRM.

DATES: Comments must be received by November 1, 2007.

ADDRESSES: Written Comments: Submit written comments to the Docket 
Management System, U.S. Department of Transportation, Docket 
Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New 
Jersey Ave., SE., Washington, DC 20590.
    Comments. You may submit comments identified by the docket number 
(FTA-2006-25737) by any of the following methods:
     Federal eRulemaking Portal: https://www.regulations.gov. 
Follow the online instructions for submitting comments.
     Web Site: https://dms.dot.gov. Follow the instructions for 
submitting comments on the DOT electronic docket site.
     Fax: 1-202-493-2251.
     Mail: U.S. Department of Transportation, Docket 
Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New 
Jersey Ave., SE., Washington, DC 20590.
     Hand Delivery: To the Docket Management System; U.S. 
Department of Transportation, Docket Operations, M-30, West Building 
Ground Floor, Room W12-140, 1200 New Jersey Ave., SE., Washington, DC 
20590, between 9 a.m. and 5 p.m., Monday through Friday, except Federal 
Holidays.
    Instructions: All submissions must include the agency name and 
docket number or Regulatory Identification Number (RIN) for this 
notice. For detailed instructions on submitting comments and additional 
information on the rulemaking process, see the Public Participation 
heading of the Supplementary Information section of this document. Note 
that all comments received will be posted without change to https://
dms.dot.gov including any personal information provided. Please see the 
Privacy Act heading under Supplementary Information.
    Docket: For access to the docket to read background documents or 
comments received, go to https://dms.dot.gov at any time or to the 
Docket Management System (see ADDRESSES).

FOR FURTHER INFORMATION CONTACT: Ron Fisher, Office of Planning and 
Environment, telephone (202) 366-4033. FTA is located at 1200 New 
Jersey Ave., SE., East Building, Washington, DC 20590. Office hours are 
from 9 a.m. to 5:30 p.m., Monday through Friday, except Federal 
holidays.

SUPPLEMENTARY INFORMATION:

I. Background

    On August 10, 2005, President Bush signed the Safe, Accountable, 
Flexible, Efficient Transportation Equity Act--A Legacy for Users 
(SAFETEA-LU). Section 3011 of SAFETEA-LU made a number of changes to 49 
U.S.C. 5309, which authorizes the Federal Transit Administration's 
(FTA's) fixed guideway capital investment grant program known as ``New 
Starts.'' This Notice of Proposed Rulemaking (NPRM) implements those 
changes and proposes a number of other changes that FTA believes will 
improve the New Starts program.
    In addition to the changes made to the New Starts program, SAFETEA-
LU amended 49 U.S.C. 5309 to add a new capital investment program 
category for projects requesting less than $75 million in Section 5309 
Capital Investment funds and having a total project cost of less than 
$250 million. That new capital investment program, which will be 
referred to as the ``Small Starts'' program, is the other subject of 
this NPRM. Based on comments received on this NPRM, FTA plans to issue 
a final rule in the future that will finalize the proposed changes to 
the existing New Starts program, as well as proposed rules for the 
Small Starts program.
    This NPRM is the culmination of two public involvement initiatives 
for the New Starts and Small Starts programs--the Small Starts Advance 
Notice of Proposed Rulemaking (ANPRM) (71 FR 4864, Jan. 30, 2006) and 
the Guidance on New Starts Policies and Procedures (Notice of 
availability and request for comments, 71 FR 3149, Jan. 19, 2006). 
These separate pre-rule public involvement processes are being 
consolidated into this one rulemaking so that issues of overlap and 
coordination between these two aspects of FTA's discretionary capital 
investment program may be addressed. This NPRM closes the dockets for 
both of these pre-rule activities and creates a new docket for comments 
on the NPRM.
    FTA provided further opportunity for public involvement by holding 
a number of listening sessions throughout the country. Those listening 
sessions were held at the following dates and locations:

--San Francisco, CA--February 15-16, 2006, Hyatt Regency San Francisco.
--Ft. Worth, TX--March 1-2, 2006, Radisson Plaza Hotel Fort Worth.
--Washington, DC--March 9-10, 2006, Wardman Park Marriott Hotel.

FTA is planning to conduct similar outreach activities on both this 
NPRM and the policy guidance that FTA is issuing concurrently. Details 
on these activities will be announced in a Federal Register notice at a 
later date and on FTA's Web site.
    The Response to Comments section of this notice summarizes and 
responds to comments received on each of the questions raised in the 
Small Starts ANPRM and the Guidance on New Starts Policies and 
Procedures. It begins by restating each question, then summarizes the 
comments received on that question, as well as our response to the 
comments and concludes with FTA's proposal for addressing those 
comments in our proposed regulatory language. The Response to Comments 
portion of the Preamble is broken down by the following subjects: 
Eligibility, Evaluation and Ratings, and Procedures for Planning and 
Project Development, first with respect to the Guidance on New Starts 
Policies and Procedures and then with respect to the APRM on Small 
Starts and concludes with a section entitled ``Additional Discussion 
Items for Comment'' where FTA specifically seeks feedback on several 
new issues that it would like to address in the final rule. The 
Section-by-Section Analysis in this notice explains our rationale for 
the

[[Page 43329]]

language proposed for the regulation, as well as suggesting alternative 
proposals to some provisions.
    In order to make the regulation more understandable, FTA is 
proposing to divide it into four subparts that will cover General 
Provisions, ``New Starts,'' ``Small Starts,'' and ``Very Small 
Starts.'' Subpart A would include General Provisions that apply to all 
projects seeking Section 5309 Capital Investment funds. Subpart B would 
include those provisions that apply to New Starts (projects of $250 
million or more in total cost or requesting $75 million or more in New 
Starts funds). Subpart C would cover Small Starts projects (projects of 
less than $250 million in total cost and requesting less than $75 
million in Small Starts funds but not qualifying as a Very Small 
Start). Subpart D would cover Very Small Starts (a subset of Small 
Starts projects which are less than $50 million in total cost and $3 
million per mile (excluding vehicles) and which meet other specified 
characteristics). FTA has chosen this approach, even though there is a 
lot of similarity in the requirements of each subpart, in order to 
assist a project sponsor in finding all of the applicable procedures 
and evaluation criteria in a single subpart, depending on the size and 
nature of the proposed project.

II. Response to Comments

    The following is a summary of the comments received in response to 
our questions raised in Part 2 of the Guidance on New Starts Policies 
and Procedures and in the Small Starts ANPRM, our response to the 
comments received and our proposal for addressing the issue raised by 
the questions in the proposed NPRM.

Guidance on New Starts Policies and Procedures

Eligibility
    1. How might FTA determine whether a Bus Rapid Transit (BRT) 
project is a ``fixed guideway'' project?
    Comment: Nine comments were received in answer to this question. 
The range of BRT eligibility requirements suggested in the comments 
highlights the inherent difficulty in determining whether a BRT project 
is a ``fixed guideway'' project. Some commenters suggested that 
eligible BRT projects should operate in an exclusive right-of-way (ROW) 
or that certain percentages of project length should be in an exclusive 
ROW. Others stated that eligibility should be based on percentage of 
length subject to certain features or ``intensity'' of usage, such as 
ridership or vehicles per unit of time. Finally, some thought that 
eligibility should be determined on a case-by-case basis.
    Response: There is no statutory requirement that a fixed guideway 
project must operate in its entirety in a separate or exclusive ROW. 
The varied responses indicate the difficulty in strictly defining the 
parameters that should apply to BRT when it does not include a fixed 
guideway for its full length. FTA has previously made eligibility 
determinations on a case-by-case basis and has allowed eligibility for 
projects that include a significant fixed guideway portion, e.g., a 
dedicated busway, but also include some mixed-traffic sections.
    Proposal: FTA proposes to define a BRT project as a ``fixed 
guideway'' if the project operates on a fixed guideway that is 
dedicated to transit or high occupancy vehicle use for at least 50 
percent of its length during the peak period, or when congestion 
inhibits transit system performance. In making this determination it is 
not necessary that the 50 percent of its length be contiguous as long 
as the 50 percent that is dedicated is designed to provide significant 
travel times savings.
    In addition, for the purposes of funding design and construction of 
New Starts and Small Starts, FTA proposes to revise the definition of a 
``fixed guideway'' to include projects meeting certain other 
conditions. FTA is asking for specific comment, under a section 
entitled ``Additional Discussion Items for Comment'' on this revised 
definition that would include a transportation facility that, by means 
of pricing and other enhancements, replicates the benefits of ``free-
flow'' conditions for transit users historically achieved by a 
physically separated right-of-way available solely for transit and 
high-occupancy vehicles. To make such projects eligible for New Starts 
or Small Starts funding, FTA proposes to incorporate into the 
regulatory definition of ``fixed guideway system'' a provision that 
deems such a facility, subject to certain limitations, to be ``a 
separate right-of-way reserved for the exclusive use of public 
transportation.'' The operation of the new provision would be limited 
strictly to defining eligibility for discretionary funding under New 
Starts (49 U.S.C. 5309(d)) and Small Starts (49 U.S.C. 5309(e)), and 
would not alter the definition of ``fixed guideway mile'' for purposes 
of calculating the distribution of funds under formula programs 
administered by FTA.
    The practical effect of amending the definition of ``fixed 
guideway'' in this way is that it would allow FTA to fund a portion of 
the construction of high occupancy toll (HOT) lanes, on which transit 
vehicles would run, with money from the Section 5309 Capital Investment 
program. This has the advantage of providing more flexibility to 
project sponsors with creative ideas for potentially building cost 
effective transit projects.
    Specifically, FTA proposes to revise the definition of ``fixed 
guideway system'' to include the following clause at the end of the 
definition:

    ``Additionally, a transportation facility shall be deemed a 
fixed guideway system solely for the purposes of funding eligibility 
under New Starts (49 U.S.C. 5309(3) if the project is designed so 
that in any given month (i) transit vehicles utilize the 
transportation facility on a barrier-separated right-of-way; and 
(ii) by means of tolling or other enhancements, 95 percent of the 
transit vehicles using the facility will be able to maintain an 
average speed of not less than 5 miles per hour below the posted 
speed limit for the time they are on the facility.''

In applying this definition FTA intends to limit the amount of New 
Starts and Small Starts funds that can be used for constructing the 
facility to that portion which benefits transit. FTA could calculate 
the ``total project cost'' of a fixed guideway made eligible under this 
proviso as follows: (i) The total project cost of the fixed guideway in 
its entirety, multiplied by (ii) a ratio, (a) the numerator of which 
would be the expected peak transit vehicle-miles traveled on the fixed 
guideway and (b) the denominator of which would be the expected total 
peak vehicle-miles traveled on the fixed guideway. The product of the 
calculation would be deemed the total project cost attributable to a 
transit project eligible for funding under New Starts or Small Starts. 
Eligible fixed guideway costs, in other words, would be proportionate 
to the transit use of the facility. Alternatively, FTA and the 
applicant may designate a mutually agreeable amount as the total 
project cost. In either case, the Federal share, if any, contributed 
toward such project costs would be made available subject to full 
compliance with the standard rating criteria for New Starts (or Small 
Starts) projects, as provided by applicable statutes, regulations, and 
FTA guidance.
    2. Should FTA fund HOV projects to the degree that they provide 
benefits to public transit riders?
    Comment: Sixteen comments were received in answer to this question. 
Responses to this issue were equally mixed, with similar numbers of 
commenters supporting and opposing the concept. Those who favored 
support for HOV projects cited minimum service

[[Page 43330]]

levels and ridership as necessary conditions. Those opposed were 
concerned that the already limited FTA funding for New Starts projects 
would be further reduced by those funds being diverted to projects 
traditionally funded by the FHWA.
    Response and Proposal: FTA has not participated in HOV projects 
through the New Starts program for the last decade and FTA does not 
propose to change that policy. However, as stated in the response 
above, FTA is considering revising the definition of a fixed guideway 
system, to allow for funding a portion of a new HOT facility that meets 
certain conditions.
Project Evaluation and Ratings
    3. How might the New Starts evaluation framework be changed to 
better support informed decision-making? Is there a preference for 
Option 1, Option 2, or something different?

    Note: Option 1 was described as an extension of the current 
framework with the two new criteria in SAFETEA-LU, economic 
development and reliability of the forecast of costs and ridership, 
added to the project justification criteria currently used. The 
project justification rating would result from weights applied to 
the ratings for each of the component criteria. The project 
justification rating described in Option 2 relied on ratings of the 
problem or opportunity that the New Start was intended to address, 
the effectiveness of the project as a response, and the project's 
cost effectiveness. The rating for effectiveness would be based on 
ratings for mobility for all users, mobility for transit dependents, 
environmental benefits, and economic development. The rating for 
reliability would be used to raise or lower ratings for project 
justification and local financial commitment.

    Comment: Seventeen comments were received in answer to this 
question. Of those commenters who chose between Options 1 and 2, the 
majority favored the Option 2 framework, stating that it allows FTA to 
more fully understand and appreciate the merits of a particular 
project. However, these commenters suggested some slight modifications 
to Option 2, specifically with regard to the treatment of land use. The 
commenters stated that the treatment of land use solely as a risk/
uncertainty measure rather than as a benefit measure under project 
effectiveness is inconsistent with the intent of SAFETEA-LU.
    Those commenters favoring Option 1 stated that it has the benefit 
of continuity and keeps the rating process stable for project sponsors. 
One of these commenters wrote that because Option 2 involves the 
simultaneous introduction of numerous complex factors and includes 
subjective appraisals by FTA or its contractors for some of the 
proposed measures, it is less desirable than Option 1. Several of the 
commenters favoring Option 1 stated that Option 2 overemphasized the 
role of reliability in the evaluation of projects relative to what was 
intended by SAFETEA-LU.
    A number of commenters suggested that neither Option 1 nor Option 2 
is preferred, but rather a new framework should be developed in 
consultation with the transit industry. However, few commenters 
provided specifics on how the framework could be structured. Most 
stated that analytical perfection should not be the goal, and that an 
overemphasis on quantification of measures misses the need for judgment 
about some factors that are important yet inherently subjective. One 
commenter suggested a point system be developed, similar to the one 
proposed in the Transit Cooperative Research Program Quick Response 
Project J-06 on the Small Starts program.
    Response: FTA has striven to make its evaluations understandable, 
consistent, and fair, and has emphasized that quantifiable measures 
best achieve these goals. Nevertheless, qualitative measures have been 
used when sufficient quantitative measures cannot be identified. Each 
option relies on a combination of quantitative and qualitative 
measures.
    Given the myriad of benefits associated with New Starts projects, 
it is difficult to create a New Starts evaluation process to 
effectively capture all of them. Further, it is not necessary to 
evaluate all the benefits in order to distinguish the merits of 
projects. Option 2 allows for a more complete organization of the key 
project evaluation factors that address different perspectives of a 
project's merits. These include the nature of the problem/opportunity 
in the area where the project has been proposed, the project's 
effectiveness as a response, the degree to which the project generates 
benefits commensurate with its costs (cost effectiveness), the strength 
of the local financial commitment, and the uncertainty in the 
evaluation measures. This organization facilitates a more coherent 
description of the worthiness of a project for New Starts funding in 
language that is more understandable to decision makers. In addition, 
SAFETEA-LU emphasizes the need for more reliable ridership and cost 
information, adding ``the reliability of forecasting methods'' as a new 
evaluation consideration, codifying the ``before and after'' study 
requirement, and requiring FTA to produce an annual report on 
contractor performance in the development of ridership forecasts and 
cost estimates. Option 2 responds to SAFETEA-LU by directly 
incorporating an evaluation of the reliability of the forecasts when 
FTA evaluates and rates proposed projects.
    Proposal: FTA proposes to advance the framework described in Option 
2 into the NPRM with one exception that is discussed more fully in the 
next set of questions. Instead of the nature of the problem or 
opportunity being evaluated as one of the primary factors of project 
justification, along with effectiveness and cost effectiveness, FTA 
proposes that it will be rated and evaluated under ``other factors''. 
The effect of this change is that the ``nature of the problem/
opportunity'' rather than being included as a separate factor, will be 
considered as an ``other'' factor that can either raise or lower the 
overall rating for project justification.
    4. In what ways could FTA improve the evaluation process to 
highlight the ``case'' for a proposed New Starts project rather than 
focus on numerical ratings?
    5. Are there any other measures that might indicate and 
characterize the nature and extent of the problem or opportunity 
addressed by a proposed New Starts project?
    6. How should FTA evaluate or rate projects that address 
significant transportation problems compared to projects that take 
advantage of opportunities to improve service?
    Comment: Question 4 received 4 comments, question 5 received 7 
comments, and question 6 received 6 comments. Questions 4, 5, and 6 
addressed FTA's proposal to include in the evaluation of project merit 
an examination of the nature or extent of the problem or opportunity in 
a corridor. FTA suggested some measures that might be used to quantify 
the problem or opportunity in the corridor, including current bus 
travel speeds, current highway speeds, vacancy rates, value of land, 
and others.
    The majority of commenters wrote that each project may have unique 
strengths or may be structured to meet specific local objectives. 
Rather than FTA dictating standard measures that might indicate and 
characterize the nature and extent of the problem or opportunity, these 
commenters felt that each sponsoring agency should be left to define 
the specific measures appropriate to their project. A few commenters 
provided specific suggestions for measures that might be included in 
defining the problem or opportunity such as congestion/crowding relief 
and maintenance of existing mode share.
    The majority of commenters were opposed to giving more weight to 
projects that seek to address

[[Page 43331]]

demonstrated transportation problems than those projects that take 
advantage of opportunities.
    Response: At the heart of any planning, environmental, or 
transportation study is an adequate description of the nature and 
magnitude of the needs that are driving consideration of projects that 
could require significant funding and/or have significant impacts on 
the communities in which they are built. Because of the diversity of 
regional conditions in which New Starts projects are implemented, local 
areas are in the best position to describe the nature of the needs that 
a project is intended to address. It is undeniable that projects that 
address problems that are already severe have more benefits over the 
long term than those that address problems that are less severe now, 
but which are forecast to be worse over time. However, the New Starts 
process, which measures project benefits for forecast periods that are 
20 to 25 years into the future, based on annualized costs and benefits, 
does not account for the year in which the benefits occur. The 
conventional approach that properly accounts for costs and benefits 
over time would be to determine them for each year into the future and 
perform a net present worth computation to today. However, to account 
for each year of project costs and benefits would pose a significant 
burden on project sponsors due to the considerable effort required for 
interim year forecasts of travel and transit system capital and 
operating and maintenance costs. Therefore, projects designed to take 
advantage of an opportunity to improve transportation and economic 
development, while serving areas that have less severe transportation 
problems compared to what is predicted in the future, are currently 
advantaged in the New Starts evaluation process compared to areas with 
current severe problems. Consideration of higher ratings for projects 
with severe problems currently can reduce this unfair advantage.
    Proposal: FTA proposes to use the current ``make the case'' 
document under ``other factors'' as the basis for evaluating the 
severity of the transportation or economic development problem that the 
New Starts project is to address. This document is currently part of 
the evaluative information that FTA requests of sponsors of New Starts 
projects. While FTA will not dictate specific measures to describe the 
nature and extent of the problem or opportunity addressed by the 
proposed New Start project, it will consider the nature of the problem 
and opportunity in the overall project justification rating. While 
actual rating measures will be described in policy guidance, one way to 
do this is to use a three-tiered rating with the highest rating given 
to projects with severe transportation or economic problems; the next 
highest rating to projects with less severe transportation or economic 
problems; and the lowest rating for projects which are opportunities to 
improve transportation or economic development. Projects in areas with 
demonstrable existing problems will be rated more highly than projects 
in areas where problems are only predicted to develop over the next 20 
to 25 years, all else being equal. As congestion is one of the Nation's 
most daunting transportation challenges, one measure that FTA intends 
to consider under ``other factors'' is the degree to which a project is 
a part of an effective congestion reduction strategy. FTA will evaluate 
projects that are a principal element of an effective congestion 
reduction strategy, in general and a pricing strategy, in particular, 
more highly. FTA seeks comment on how it might better measure 
congestion in the future.
    FTA will also consider as an ``other factor'' any benefit of the 
project not covered under the project justification criteria or other 
factors that the Secretary determines to be appropriate to carry out 
the evaluation. The rating for ``other factors'' will be compared to 
the combined rating for effectiveness and cost effectiveness and can be 
used to raise or lower the overall project justification rating.
    7. Is there a preference for analyzing regional economic benefits 
or station area economic development benefits? Could FTA utilize both 
perspectives in evaluating expected economic development impacts?
    8. How might FTA evaluate economic development and land use as 
distinct and separate measures?
    9. Are there any additional methods available to predict economic 
development impacts? If so, how might these other measures be used to 
evaluate proposed New Starts projects?
    Comment: Question 7 received 7 comments, question 8 received 11 
comments, and question 9 received 16 comments. Four commenters 
expressed a preference for analyzing station area economic development 
benefits rather than regional economic development benefits. Reasons 
given for the preference included agreement with FTA's stated opinion 
that projections of regional benefits would be time-consuming and 
expensive and that a project's influence on a regional basis would be 
greatly diluted by other regional economic factors.
    Three commenters supported an evaluation of both regional and 
station area economic impacts. One of these commenters stated that 
regional forecast models tend to be more reliable than those for 
smaller station areas.
    Commenters generally supported the evaluation of both land use and 
economic development as distinct and separate measures, though few 
comments articulated a clear difference between these two measures. 
Many comments characterized economic development and land use factors 
interchangeably or stated that land use factors were a component or 
indicator of economic development potential. One industry association 
supported characterizing land use impacts as ``buildings and density'' 
while economic development would be characterized as ``jobs and 
sales.''
    As a means of predicting economic development impacts, several 
commenters suggested that FTA focus on existing developer agreements 
and partnerships and the existence of local development incentives.
    Response: FTA agrees that both station area economic development 
and regional economic impacts are useful and valid measures of project 
benefits. At the current time, however, the analytical tools used to 
develop regional economic analyses appear to be overly costly and 
burdensome to impose on every project sponsor. FTA intends to continue 
research efforts and case studies of both the station area impacts and 
regional economic impacts to develop tools that can be applied to 
measure the economic development impacts of New Starts projects. The 
regulation is structured to allow new measures to be added through 
policy guidance, following public review and comment.
    Whether for land use or economic development, a common theme of the 
majority of respondent suggestions was to use indicators of the 
likelihood of increased development in areas near projects. Past 
research confirms that this increased development is not added to the 
region but that the effect of transit investments is to attract 
development around stations that would locate elsewhere if not for the 
project, in effect redistributing development within a region. Existing 
land use conditions, existing and planned transit-oriented plans and 
policies, and projections of increases in employment and revenues are 
all factors that help to determine whether or not a transit project is 
likely to have an impact on development. Indeed, it is not possible to 
ascertain the

[[Page 43332]]

likelihood of a project's effect on surrounding development unless a 
number of factors relating to both land use and economic development 
are considered in combination. Land use considerations provide 
information about the potential for development or redevelopment and 
whether that development can occur in a transit-oriented way. Although 
these are necessary conditions, they are not in themselves sufficient 
to ensure that the proposed project spurs development, as the local 
development climate must be robust enough to provide the engine needed 
for development; the project must be perceived as permanent to entice 
developer interest; and the project must increase accessibility to the 
area. Because all these factors must be viewed in combination, it is 
critical that land use and economic evaluation criteria be combined 
into a single criterion.
    Proposal: Until additional research is completed, FTA proposes to 
implement an evaluation measure for land use and economic development 
impacts that focuses on the potential for station-area development 
impacts of the proposed projects. The best available measures of likely 
land use and economic development benefits can be derived from the 
circumstances in which the projects would be implemented rather than 
from actual forecasts of development. This approach is necessary 
because forecasts of additional development due to New Starts projects 
require considerable resources and contain considerable uncertainty.
    FTA proposes to use a single criterion to ascertain the likelihood 
of increased transit-oriented development resulting from a New Starts 
project. Given the important role that land use plays in increasing 
development, in developing specific measures for this criterion, FTA 
will draw upon many of the same factors used in its current evaluation 
of land use. These will be augmented with indicators that provide 
further incentives to development. A survey of available research on 
the development impacts of transit suggests two primary transit-related 
drivers of development (1) increased accessibility and (2) permanence 
of the transit investment. While the actual FTA proposes to evaluate 
whether or not the conditions necessary to support economic development 
exist in the project corridor by using the following specific measures: 
(1) Current land-use conditions, (2) development and land-use plans and 
policies, (3) the economic development climate in the corridor and 
region, (4) the project-related change in transit accessibility for 
developable areas in the corridor; and (5) the economic lifespan of new 
transit facilities proximate to those developable areas. FTA seeks 
comment on how it might better measure land use/economic development in 
the future.
    10. Are there any other measures of mobility benefits that could be 
used to evaluate New Starts projects?
    Comment: Ten comments were received in answer to this question. 
Commenters suggested that FTA should examine ways to better capture the 
following in the mobility benefits measure: benefits to highway users; 
benefits resulting from special events trips; benefits resulting from 
non-home-based trips; and benefits generated by automobile trips not 
taken due to enhanced pedestrian activity in the corridor.
    Response: FTA is committed to incorporating highway benefits into 
its mobility and cost effectiveness rating in every way feasible. In 
fact, the ``SUMMIT'' software used by FTA to calculate user benefits 
already has the ability to capture benefits to all transportation 
system users (including highway users). Further, the definition of user 
benefits included in the current regulation includes benefits to 
highway users. However, this function of the SUMMIT software cannot 
currently be used because FTA has found that most travel models around 
the country do not accurately predict changes in highway speeds 
resulting from transit improvements. This is a problem with travel 
models nationally. FTA does not have the resources on its own to 
correct the deficiencies but is working with the Federal Highway 
Administration to address this issue. The rule is structured in a way 
that once reliable forecasts of such benefits can be produced, they can 
easily be incorporated into the measures of mobility and cost 
effectiveness through the policy guidance. In addition, FTA proposes to 
adopt other measures on a temporary basis that would provide an 
indication of the congestion relief benefits to highway users. Such 
measures would be based on measures of current congestion in the 
project corridor. FTA seeks comment on how it might better measure 
congestion in the future.
    Likewise, the SUMMIT software used by FTA already captures the 
benefits resulting from non-home based trips to the extent they are 
accurately estimated in the local travel model. Typically, few areas of 
the country have good data on the non-home-based trip market, which 
affects the ability of the local model to develop accurate forecasts. 
If a local area is willing to put resources into a data collection 
effort to improve the forecasts for this market, the Summit software 
used by FTA to calculate user benefits will automatically capture any 
additional benefits that may accrue.
    FTA has always worked individually with various project sponsors to 
better capture the benefits resulting from special events markets. 
Local travel models are not generally structured to capture ridership/
benefits for this market. Consequently, FTA has helped project sponsors 
in the past to include ``off-model'' calculations to capture these 
benefits and will continue to do so in the future.
    FTA acknowledges the value of the trip not taken in terms of 
reducing congestion but has not yet been able to develop methodologies 
capable of making reliable estimates of this benefit.
    Proposal: FTA is proposing to adopt a definition of user benefits 
that explicitly includes congestion relief benefits to highway users 
and pedestrians. FTA is supporting the Office of the Secretary of 
Transportation and the Federal Highway Administration to improve travel 
forecasts so that the transportation system user benefits to highway 
users can be calculated reliably and be included in the cost 
effectiveness calculation. The Department of Transportation expects to 
release a Request for Proposals/Work Statement for model improvements 
in Fall 2007. In the interim, as discussed below under item 4 of 
``Additional Discussion Items for Comment,'' FTA will explore the use 
of surrogate measures which can assess the degree to which a proposed 
New Start results in congestion relief. These measures could include 
the current level of service, delay compared to free flow speed, or the 
average daily VMT on any highway facility in the project corridor.
    Absent any specific suggestions for other measures of mobility 
benefits, FTA will use its policy guidance to set specific measures for 
mobility. Two measures that FTA considers to have merit are user 
benefits per passenger mile for those using the New Starts project, and 
the absolute number of passengers using the project. The first would 
measure the magnitude of the user benefits for each traveler and 
whether the savings are significant, while the second would measure the 
number of travelers affected.
    11. Does the proposed (low-income mobility) measure entail 
implementation difficulties for measurement, reporting, or comparison 
between projects?
    12. Are there any other measures that FTA should consider when 
evaluating

[[Page 43333]]

the benefits that accrue to transit dependent populations?
    Comment: Question 11 received 3 comments and question 12 received 6 
comments. In the Guidance on New Starts Policies and Procedures, FTA 
proposed using a new measure for determining mobility for transit 
dependents--the share of user benefits accruing to passengers in the 
lowest income stratum or to the lowest auto ownership stratum 
(depending on which is used in the local travel model) compared to the 
regional share of the lowest income stratum or lowest auto ownership 
stratum. All commenters to Question 11 noted that the proposed measure 
may result in some inconsistencies among projects because of this 
difference in how local models stratify trip takers. An additional 
comment noted that in densely developed urban areas, transit dependency 
does not correlate with either income or car ownership.
    The comments included the following suggested alternative 
populations to include when calculating the benefits to transit 
dependent populations, but did not identify a specific way to measure 
the benefits to these populations: Elderly persons, persons with 
disabilities, and university students. One commenter suggested that FTA 
should include in the measure how well the overall transit system 
serves job centers, but there was no specific discussion of how this 
might be measured.
    Response: FTA acknowledges that examining the benefits that accrue 
to the lowest income stratum or the lowest auto ownership stratum from 
the local travel forecasting models is only a surrogate for determining 
the benefits to transit dependents. But this information is already 
available from all local travel models and does not require development 
of additional data by project sponsors. Furthermore, since the 
measurement relies on the change in service for that stratum in a given 
city, it is not necessary for every city to use the same stratum in 
order for the measure to allow for comparisons between cities.
    FTA believes that whatever measure is used, it should have a way of 
identifying how the project serves transit dependents rather than 
simply characterizing the project corridor demographics. Unfortunately, 
local travel models do not usually stratify trips by some of the 
suggested categories--elderly persons, persons with disabilities, and 
university students. Consequently, the benefits accruing to these 
populations cannot be calculated.
    Proposal: The regulation simply states that FTA will measure 
Mobility Benefits. The actual measures will be listed in policy 
guidance. One approach that FTA is considering is to utilize the share 
of user benefits accruing to passengers in the lowest income stratum or 
to the lowest auto ownership stratum (depending on which is used in the 
local travel model) compared to the regional share of the lowest income 
stratum or lowest auto ownership stratum for the region for evaluating 
mobility for transit dependents.
    13. How could FTA improve the current method of evaluating 
environmental benefits to produce a more useful measure?
    Comment: Three comments were received in answer to this question. 
FTA currently measures environmental benefits from proposed New Starts 
projects by examining the projected change in regional vehicle miles 
traveled (VMT), various types of vehicle emissions, and energy 
consumption. All comments received indicated support for continuing the 
current measures given that other replacement measures are not readily 
available. One commenter expressed concern that the current measures 
are biased in favor of projects that help reduce highway congestion and 
against those projects that help relieve transit congestion. Since a 
project that is meant to reduce existing congestion on a transit system 
does not reduce VMT, no environmental benefits would be shown under the 
current method. The commenter stated that the rating process should 
make accommodations for this situation, but acknowledged that no other 
measures of environmental benefits are readily available to address 
this problem.
    Response: The current measure is limited to capturing reduced 
emissions, projecting the change in VMT and energy consumption as a 
result of automobiles being taken off the road when travelers use 
transit instead of driving. However, even in that case, the change is 
usually very small compared to emissions region wide, limiting the 
usefulness of the measure.
    Proposal: FTA proposes to continue to evaluate environmental 
impacts, with the actual measures identified in policy guidance. FTA is 
currently conducting research to try to develop other measures that 
better distinguish the environmental merits of projects.
    14. Should FTA rely on the cost effectiveness evaluation to address 
the operating efficiency criterion?
    15. If not, in what way could agency operating cost information be 
used to compare New Starts projects to each other?
    Comment: Question 14 received 6 comments and question 15 received 
11 comments. Four comments received were in favor of eliminating the 
operating efficiency criterion because of the inability of the measure 
to distinguish in a meaningful way between projects. However, two 
commenters disagreed with the proposal, stating that operating 
efficiency can be a significant factor in comparing a single new rail 
line with the transit system as a whole.
    Response: In the past, FTA has used the projected system-wide 
change in operating cost per passenger mile to measure the impact of 
proposed New Starts projects on operating efficiency. However, this 
measure has not proven to be a meaningful way of distinguishing among 
proposed projects. On the other hand, FTA's evaluation of cost 
effectiveness has always included the annual system-wide operating and 
maintenance expense as a component of annualized cost. Therefore, the 
impact of the project on operating and maintenance costs is already 
captured in the calculation of cost effectiveness.
    Proposal: FTA proposes to remove the operating efficiency factor as 
a separate evaluation criterion, relying instead on the evaluation of 
cost effectiveness to address this statutory criterion. Project 
sponsors may still calculate operating efficiency if they find it 
useful for their own comparisons.
    16. Is it desirable for FTA to attempt to incorporate other 
measures of effectiveness besides mobility when evaluating cost 
effectiveness?
    17. If so, what measures might be incorporated and how?
    18. How could FTA combine transportation system user benefits 
measures with economic development measures into a valid measure of 
cost effectiveness?
    Comment: Question 16 received 2 comments, question 17 received 1 
comment, and question 18 received 8 comments. For all three of the 
questions, comments received were opposed to incorporating other 
measures of effectiveness in the evaluation of cost effectiveness. 
Reasons for the opposition included the potential for ``double-
counting'' benefits and the increased complexity that would result from 
adding other measures.
    Response: FTA sees value in acknowledging additional benefits of 
transit projects when comparing benefits to costs. There are two major 
components of these additional benefits that are distinct from those 
currently calculated: Travel time saved by users of the highway system 
who experience less

[[Page 43334]]

congestion as a result of fewer vehicles on the highway; and 
transportation benefits from more compact development patterns. For the 
first, FTA has discovered that current highway assignment models do not 
reliably predict the reductions in travel time for highway users. 
Research and development of improved travel models are needed to ensure 
that highway travel time benefits are reliable. For the second, 
additional development would have to be forecast with and without the 
New Starts project and travel models employed to ascertain the user 
benefits that result. The analytical analysis required to accomplish 
this is beyond the capabilities of the current demand forecasting 
models in virtually every urban area in the nation. As a result, at 
this time there is no analytical approach that can be implemented to 
determine the additional economic development benefits that should be 
added to those currently predicted for travel time savings. However, 
FTA has identified a surrogate for including economic benefits to the 
travel time savings calculation. The breakpoint for cost effectiveness 
already includes an assumption that the non-transportation benefits, 
including economic development, are approximately equal to the value of 
the travel time savings for a project. Therefore every city is given 
the same credit for other benefits.
    Proposal: Because of the difficulty of incorporating additional 
measures into its evaluation of project cost effectiveness, FTA is 
proposing to maintain its current cost effectiveness measure of 
annualized cost per hour of user benefits at this time.
    19. Are there any ways that FTA could improve the evaluation of 
financial capability?
    Comment: Five comments were received in response to this question. 
Two comments were received with specific suggestions for improvements 
or changes to the financial evaluation process. The first comment 
stated FTA should consider the degree to which private sector resources 
are leveraged to assist with project financing (public-private 
initiatives) as well as the degree to which synergies between Federal 
funding sources are leveraged to build and operate the project. The 
second comment stated that FTA should consider a broader set of 
indicators to rate the current capital condition of an agency rather 
than just the average age of the fleet and the agency's bond ratings. 
The commenter stated that capital condition should be evaluated in the 
context of the project sponsor's full fleet management plan, including 
replacement cycles, miles between breakdowns, and budgeted purchases.
    Three additional comments concerned with the current evaluation 
methodology were received, but the commenters did not suggest ways to 
improve the evaluation methodology. Other points noted in the five 
comments indicated the policy guidance was not clear with regards to 
who will assess financial capability. One commenter stated that the 
current process examines the reliability of capital, operating, and 
maintenance cost estimates under both the project justification 
evaluation and the financial capability evaluation and requested more 
detail from FTA on exactly how financial capability is currently 
evaluated. Lastly, one commenter stated that the requirements for 
operating and maintenance plans are more detailed than necessary for 
systems with a long history of consistent performance.
    Response: Although not specifically accounted for in the financial 
capability evaluation process, FTA does consider the degree to which 
private sector resources are utilized to assist with project financing 
when making funding recommendations. In addition, FTA has recently 
initiated the Public Private Partnership Pilot Program outlined in 
SAFETEA-LU as a means to distinguish projects that are supported by 
private sector resources.
    Section 3011(c) of SAFETEA-LU authorizes the Secretary of 
Transportation to establish and implement the Pilot Program to 
demonstrate the advantages and disadvantages of public-private 
partnerships (PPPs) for certain new fixed guideway capital projects. In 
particular, the Pilot Program is intended to study whether, in 
comparison to conventional procurements, innovative contracting 
arrangements, known as PPPs, better reduce and allocate risks 
associated with new construction of such projects, accelerate their 
delivery, enhance their operating performance once they are constructed 
and improve the reliability of projections of project costs and 
benefits. This Pilot Program will evaluate this view as applied to the 
procurement and operation of eligible projects, which may include 
projects funded under the Section 5309 Capital Investment program.
    On March 22, 2006, FTA issued a notice in the Federal Register (71 
FR 14568), soliciting comments and requesting preliminary expressions 
of interest in sponsoring a project under the Pilot Program. Five 
potential project sponsors submitted expressions of interest. On 
January 19, 2007, FTA issued a notice in the Federal Register (72 FR 
2583) establishing the Pilot Program's operating criteria and 
soliciting formal applications.
    FTA believes that the process of establishing Public-Private 
Partnerships, which include innovative arrangements for operating New 
Starts projects, can result in contractual arrangements that can reduce 
and/or improve the reliability of forecasts of operating costs on New 
Starts systems. Arrangements under which private sector interests take 
responsibility for the design, construction, operations, finance, and 
maintenance of projects can result in transferring much of the long 
term risk of project capital and operating costs to the private 
partner. Alternatively, the process of procuring such arrangements can 
identify changes that can produce significant improvements in the 
efficiency of publicly provided services through innovative contractual 
arrangements. As a result, projects which utilize such approaches are 
likely to be rated better, because operating costs will be lower 
(producing better ratings of cost effectiveness), and the reliability 
of the estimates of such costs will be higher (producing higher ratings 
of reliability). FTA asks for specific comments on this approach under 
question 5 under the section ``Additional Discussion Items for 
Comment.''
    FTA has tried whenever possible to base the financial ratings on 
readily available information that all project sponsors consistently 
calculate and report. Of the additional items mentioned by one 
commenter for inclusion in the capital condition subfactor rating, FTA 
believes that two--replacement cycles and budgeted purchases--are 
already captured in the average fleet age calculation. Clearly the 
average fleet age will change from year to year as replacement vehicles 
are purchased and older vehicles retired. This is true for all 
grantees. The other item mentioned by the commenter--miles between 
breakdowns--is not always routinely prepared by all transit agencies or 
prepared with a consistent methodology. For example, different 
operators may classify breakdowns in a different way. Therefore, FTA 
feels this would not be a good measure to use. FTA believes the 
existing measures for capital condition are fair, easily reported, and 
consistently applied to all grantees.
    In response to the comment that more detail is needed from FTA on 
exactly how financial capability is evaluated, FTA would like to point 
out that each year as part of the New Starts Reporting Instructions and 
again as an appendix to the Annual Report on New Starts, FTA

[[Page 43335]]

includes a detailed description of the entire rating process, including 
a discussion of the financial capability evaluation and rating process. 
Included in this appendix are two matrices that outline specifically 
what is required in the financial plan to receive each level of rating 
(from low to high) for each and every financial subfactor used in the 
evaluation. In addition, FTA has posted on its Web site the guidance 
that it provides to its financial contractors who help develop the 
financial capability ratings. This provides the industry with 
additional insight into exactly how the ratings are determined for 
those areas of the evaluation that are more subjective than 
quantitative. FTA feels the process is very well described, 
standardized, and completely transparent.
    Proposal: FTA proposes to keep the current financial capability 
evaluation and rating process since the requirements were not changed 
by SAFETEA-LU, the current process has proven to be useful for 
distinguishing among projects, and the process is thoroughly documented 
and transparent. However, FTA will continue to issue the specific 
measures for each factor for review and comment in its policy guidance. 
In addition, the proposed regulation would provide for an assessment of 
the degree to which project proposals include innovative contractual 
arrangements which produce significant reductions in operating 
expenses, or which improve the reliability of forecasts of operating 
costs.
    20. Should the existing weighting factors used to develop the 
financial ratings be changed?
    Comment: Seven comments were received in answer to this question. 
Of the comments received, approximately half were in favor of 
maintaining the existing weights used to develop the financial ratings, 
and half were opposed, stating that the current weights are awkward, 
provide little insight, and should be changed. Of those opposed to the 
existing weighting scheme, one commenter proposed a simple pass/fail 
approach for evaluating the capital financial plan as well as a much 
less rigorous review of the operating financial plan. Other comments 
received concerned retaining the credit given on the New Starts share 
rating when higher local shares are proposed.
    Response: Not only does SAFETEA-LU require FTA to rate projects on 
both project justification and local financial commitment on a five 
tier scale from low to high, but also FTA sees merit in showing 
gradations in financial plan ratings versus employing a simple pass/
fail approach, particularly with regard to making tough funding 
recommendation decisions. A less rigorous evaluation of the operating 
and maintenance financial plan, as suggested by one commenter, is 
inconsistent with the requirement added by SAFETEA-LU that FTA must 
ensure local funding is available to operate, maintain, and re-
capitalize the proposed project as well as the rest of the transit 
system without a reduction in existing services or levels of service. 
The change in SAFETEA-LU to this criterion was clearly intended to 
strengthen, not weaken, FTA's review of the operating and maintenance 
financial plan. FTA believes the current financial capability 
evaluation methodology meets the requirements of the law.
    FTA agrees that project sponsors should be given credit when higher 
local shares are proposed. FTA proposes to maintain the non-New Starts 
funding share as one of the financial capability evaluation criterion. 
FTA proposes to continue the practice of giving project sponsors a 
higher rating based on a higher non-New Starts share and will set the 
measures for this in its policy guidance. In addition, FTA may consider 
the non-New Starts share during the decision to recommend a project for 
a Full Funding Grant Agreement (FFGA). However, consistent with 
SAFETEA-LU, FTA will also consider the project sponsor ability to 
provide only a 20 percent match and will not rate the project's local 
financial commitment at less than Medium, solely on the basis of a 20 
percent match, so long as the project sponsor can demonstrate that the 
20 percent match is based on the limited fiscal capacity of State and 
local governments. In this way, FTA can address the SAFETEA-LU 
requirement that FTA consider State and local fiscal capacity at the 
same time that it addresses the SAFETEA-LU requirement that it gives 
priority to financing projects with a higher-than-required non-New 
Starts/Small Starts share.
    Proposal: The NPRM proposes that the local financial commitment 
rating consist of equally weighting the ratings of the capital and the 
operating financial plan.
    21. How might the FTA incorporate measures of reliability into 
project evaluation?
    Comment: Four comments were received in answer to this question. 
All comments received were opposed to incorporating measures of 
reliability into project evaluation, stating that the New Starts 
process already includes a number of mechanisms to evaluate the 
reliability of forecasts so that additional reviews are unnecessary. In 
addition, one commenter stated that peer projects are difficult, if not 
impossible, to identify.
    Response: Although the New Starts process certainly includes 
mechanisms intended to improve the quality of forecasts, reliability 
can vary considerably for a variety of reasons that relate to (1) 
transit-orientation of existing and future land uses and land-use plans 
and policies, based on the degree to which project effectiveness 
depends upon projected changes in future land use patterns and the 
likelihood of those changes occurring;
    (2) Project sponsor experience with implementing previous projects; 
(3) Industry experience with the proposed project type; (4) The 
reliability of forecasting methods used to prepare those estimates, as 
well as the reliability of the information provided to FTA for its 
evaluation of the project; (5) How the opening year project ridership 
compares to that estimated for the 20 to 25 year planning horizon; (6) 
Enhanced reliability of operating cost forecasts due to use of 
innovative contractual arrangements; and (7) Mitigation actions the 
project sponsor takes to help improve the reliability of the 
information submitted in support of a proposed project. For example, 
travel forecasts made for downtown circulator projects are by their 
very nature less reliable than those for projects intended to attract a 
predominately commuter-oriented travel market. This is because travel 
models have traditionally been better able to predict the travel 
behavior of commuters, and historically have been poor predictors of 
travel involving the type of discretionary trips that a downtown 
circulator is intended to attract. Other travel markets that can be 
problematic to predict include suburban-to-suburban travel and park-
and-ride travel in areas with few existing park-and-ride lots. In 
addition, capital cost estimates historically have been problematic for 
tunnels and elevated structures. Moreover, recent construction 
experience has shown that commodity prices can be volatile and that the 
bidding environment plays a much larger role in cost estimates compared 
to the past.
    Project sponsors of new transit projects commonly ask for peer 
reviews to help them assess the quality of their cost and ridership 
forecasts. While FTA acknowledges that no two projects are identical, 
drawing on past experience from a similar type of project has proven 
invaluable to improving the cost and ridership forecasts of the newer 
project because these projects often have enough features in common to 
gain

[[Page 43336]]

insights that result in improved forecasts.
    Proposal: SAFETEA-LU specifically requires FTA to evaluate projects 
based on the reliability of their forecasts. Furthermore, FTA's 
experience over the past three decades indicates that there is a 
considerable range of reliability in forecasts based on the factors 
discussed above. FTA proposes to consider reliability of the costs and 
ridership forecasts in its evaluation and to adjust, either upward or 
downward, the ratings of the individual criteria that rely on these 
forecasts. The measures for reliability will be identified in policy 
guidance but are likely to be designed to address the issues addressed 
above, such as transit-orientation of existing and future land use 
plans and policies; project sponsor experience with implementing 
previous projects; industry experience with the proposed project type; 
the reliability of the forecasting methods; a comparison of the opening 
year ridership to that estimated for the planning horizon covering no 
less than 20 years; use of innovative contractual arrangements which 
improve the reliability of cost estimates; and mitigation actions taken 
by the project sponsor.
    22. How should information on the reliability of forecasts be 
modified or updated as a proposed project advances through project 
development?
    Comment: Six comments were received in answer to this question. One 
comment was received stating that FTA and the project sponsor should 
work to improve reliability of forecasts as projects advance through 
project development. The remaining respondents addressed the unrelated 
topic of how and when to solidify funding sources.
    Response: FTA agrees that with more detailed information generated 
as the project progresses through project development the reliability 
of forecasts should improve over time. However, FTA's experience also 
shows that even with this updated information, forecasts are by their 
very nature predictive and that it is only through actual completion of 
the project that true costs and ridership are known.
    Proposal: FTA acknowledges that it is impossible to totally remove 
uncertainty from any stage of the process. However, the measures 
prescribed by FTA are written broadly enough to allow FTA to tailor its 
assessment of reliability to reflect the stage that the project is in. 
Therefore, FTA will use these measures to assess the reliability of 
forecasts as a proposed project advances through project development 
and use the most recent information available in making its assessment 
of reliability.
    23. How should FTA help to ensure that contingencies adequately 
reflect the uncertainties in project design, prices, and quantities at 
each stage of project development?
    Comment: Three comments were received in response to this question. 
Four themes or suggestions emerged from the comments that relate to the 
treatment of uncertainties, project costs, and project contingencies. 
In the first theme, dealing with project uncertainties, many commenters 
stated that FTA's project management oversight (PMO) program and risk 
assessment processes constitute a worthwhile and sufficient approach. 
In addition, one commenter stressed the value of peer review for cost 
estimates. Many commenters suggested that uncertainties could be 
reduced through simplification of FTA's process, specifically through 
implementation of policies to screen out unworthy projects earlier 
(i.e., at entry to preliminary engineering (PE)) and to execute FFGAs 
within six months of final design entry.