Project Management Oversight

DEPARTMENT OF TRANSPORTATION <SUBAGY>Federal Transit Administration</SUBAGY> <CFR>49 CFR Part 633</CFR> <DEPDOC>[Docket No. FTA-2025-0010]</DEPDOC> <RIN>RIN 2132-AB59</RIN> <SUBJECT>Project Management Oversight</SUBJECT> <HD SOURCE="HED">AGENCY:</HD> Federal Transit Administration (FTA), Department of Transportation (DOT). <HD SOURCE="HED">ACTION:</HD> Notice of proposed rulemaking (NPRM). <SUM> <HD SOURCE="HED">SUMMARY:</HD> FTA is proposing to modify the applicability of project management oversight by raising the total cost and Federal investment thresholds to align with the statutory thresholds for Small Starts projects under FTA's Capital Investment Grant program. </SUM> <DATES> <HD SOURCE="HED">DATES:</HD> Comments should be filed by September 2, 2025. FTA will consider comments received after that date to the extent practicable. </DATES> <HD SOURCE="HED">ADDRESSES:</HD> You may send comments, identified by docket number FTA-2025-0010, by any of the following methods: • <E T="03">Federal Rulemaking Portal: https://www.regulations.gov.</E> Follow the instructions for sending comments. • <E T="03">Fax:</E> (202) 493-2251. • <E T="03">Mail:</E> Docket Management Facility, U.S. Department of Transportation, 1200 New Jersey Avenue SE, West Building Ground Floor, Room W12-140, Washington, DC, 20590-0001. • <E T="03">Hand Delivery/Courier:</E> West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue SE, Washington, DC, between 9 a.m. and 5 p.m. ET, Monday through Friday, except Federal holidays. <E T="03">Instructions:</E> All submissions received must include the agency name and docket number or Regulatory Information Number (RIN) for this rulemaking. All comments received will be posted without change to <E T="03">https://www.regulations.gov,</E> including any personal information provided. <E T="03">Docket:</E> For access to the docket to read background documents or comments received, go to <E T="03">https://www.regulations.gov.</E> Background documents and comments received may also be viewed at the U.S. Department of Transportation, 1200 New Jersey Ave. SE, Docket Operations, M-30, West Building Ground Floor, Room W12-140, Washington, DC 20590-0001, between 9 a.m. and 5 p.m. EST, Monday through Friday, except Federal holidays. <FURINF> <HD SOURCE="HED">FOR FURTHER INFORMATION CONTACT:</HD> For program matters, contact Corey Walker, Office of Program Management (TPM), (202) 366-0826 or <E T="03">corey.walker@dot.gov</E> . For legal matters, contact Mark Montgomery, Office of Chief Counsel, (202) 366-1017 or <E T="03">mark.montgomery@dot.gov</E> . Office hours are from 8:30 a.m. to 5 p.m., Monday through Friday, except Federal holidays. </FURINF> <SUPLINF> <HD SOURCE="HED">SUPPLEMENTARY INFORMATION:</HD> <HD SOURCE="HD1">Table of Contents</HD> <EXTRACT> <FP SOURCE="FP-2">I. Executive Summary</FP> <FP SOURCE="FP1-2">A. Statutory Authority</FP> <FP SOURCE="FP1-2">B. Background</FP> <FP SOURCE="FP1-2">C. Summary of Provisions</FP> <FP SOURCE="FP-2">II. Regulatory Analyses and Notices</FP> </EXTRACT> <HD SOURCE="HD1">I. Executive Summary</HD> This NPRM proposes to amend the PMO regulation at 49 CFR part 633. The proposed rule would modify the applicability of project management oversight by raising the total cost threshold from $300 million to $400 million and the Federal investment threshold from $100 to $150 million, to align with the statutory thresholds for Small Starts projects under FTA's Capital Investment Grant (CIG) program. This amendment would reduce the number of projects subject to project management oversight requirements and therefore reduce regulatory burden. <HD SOURCE="HD2">A. Statutory Authority</HD> This rulemaking is issued under the authority of 49 U.S.C. 5327, which requires the Secretary to conduct oversight of major capital projects and to promulgate a rule for that purpose that includes a definition of major capital project to delineate the types of projects governed by the rule. <HD SOURCE="HD2">B. Background</HD> Recognizing a compelling need to strengthen the management and oversight of major capital projects, in the Surface Transportation and Uniform Relocation Assistance Act of 1987 (STURAA) (Pub. L. 100-17) (April 2, 1987), Congress authorized FTA's predecessor agency, the Urban Mass Transportation Administration (UMTA), to conduct oversight of major capital projects and to promulgate a rule for that purpose. The statute, now codified at 49 U.S.C. 5327, authorizes FTA to obtain the services of project management oversight contractors (PMOCs) to assist FTA in overseeing the expenditure of Federal financial assistance for major capital projects. Further, the statute requires FTA to promulgate a regulation that includes a definition of “major capital project” to identify the types of projects governed by the rule. Accordingly, UMTA promulgated a rule for oversight of major capital projects on September 1, 1989, at 49 CFR part 633 (54 FR 36708). At that time, the average total cost of CIG projects was $266 million (not adjusted for inflation). The UMTA regulation defined “major capital project” as any project for the construction of a new fixed guideway or extension of an existing fixed guideway or a project involving the rehabilitation or modernization of an existing fixed guideway with a total project cost of $100 million or more. The rule limited covered projects to those receiving funds made available under sections 3, 9, or 18 of the Urban Mass Transportation Act of 1964, as amended; 23 U.S.C. 103(e)(4); or section 14(b) of the National Capital Transportation Amendments of 1979. By 2011, the annual dollar value of the Federal transit capital programs was nearly five times the level authorized under STURAA in 1987, and the number of active PMOC task orders was more than double the number in 1987. Furthermore, FTA funded a larger number of projects with a total cost of more than one billion dollars that presented significant oversight challenges. On September 13, 2011, FTA published a Notice of Proposed Rulemaking (NPRM) (76 FR 56378) that proposed to: (1) enable FTA to identify the necessary management capacity and capability of a sponsor of a major capital project more clearly; (2) spell out the many facets of project management that must be addressed in a project management plan; (3) tailor the level of FTA oversight to the costs, complexities, and risks of a major capital project; (4) set forth the means and objectives of risk assessments for major capital projects and; (5) articulate the roles and responsibilities of FTA's PMOCs. After the NPRM was published, however, the Moving Ahead for Progress in the 21st Century Act (MAP-21) (Pub. L. 112-141) (July 6, 2012) expanded the scope of the project management oversight requirements to cover major capital projects for public transportation under any provision of Federal law. Moreover, MAP-21 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. Given the fundamental changes to the project management oversight requirements and scope, FTA withdrew the NPRM (78 FR 16460) to reexamine its proposed definition of major capital project and its policy and procedures for risk assessment. Subsequently, the Fixing America's Surface Transportation (FAST) Act (Pub. L. 114-94) (December 4, 2015) further amended 49 U.S.C. 5327 to limit project management oversight to quarterly reviews, absent a finding that more frequent oversight was necessary, and mandated that the Secretary prescribe regulations outlining a process for at-risk recipients to return to quarterly reviews. FTA has become much more knowledgeable about the risks common to major capital projects, having conducted its own risk assessments since 2005, witnessed some project sponsors' lack of management capacity and capability and appropriate project controls for some projects, and studied the reasons for cost and schedule changes on many major capital projects. Consequently, on September 23, 2020, following a notice of proposed rulemaking (84 FR 44590) and an opportunity for comment, FTA published a final rule (85 FR 59672) that changed the applicability of the regulation by shifting the definition of a “major capital project” from one based on the type of project or total project cost to one based on both the amount of Federal financial assistance and the total project cost, which FTA views as a more appropriate benchmark than the type of project or total capital cost of a project alone. The rule applied a project cost threshold to all fixed guideway capital projects. As a default, the rule raised the total project cost threshold to $300 million or more and required that the project receive $100 million or more in Federal investment to be subject to project management oversight. A key consideration for selecting these thresholds was that they reflect the thresholds Congress chose to distinguish Small Starts projects from New Starts projects in the CIG program. New Starts projects have more steps to complete in the CIG process and tend to be more complex, potentially requiring more oversight. Reducing the number of lower-risk Small Starts projects undergoing project management oversight will allow FTA to focus on higher-risk New Starts projects while yielding annual cost savings to FTA and its recipients. Subsequently, the Infrastructure Investment and Jobs Act (Pub. L. 117-58; November 15, 2021) amended 49 U.S.C. 5309 to raise the thresholds for Small Starts projects in the CIG program to $400 million or more in total costs and $150 million or more in Federal investment. Accordingly, FTA proposes to amend the definition of “major capital project” und ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 25k characters. Full document text is stored and available for version comparison. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━