PRIIA mandated new responsibilities for FRA to  plan, award, and oversee the use of federal funds for intercity passenger  rail. FRA’s Grants Management Approach Has Evolved to Administer the Section 305 Equipment Procurement Projects

FRA’s management of the grants funding the section 305 equipment  procurement projects has evolved from a general grants management  approach to include additional project-level oversight. For example, FRA provides  grantees with administrative, programmatic, and technical assistance as  needed. As the Bi-level Project Encountered Challenges, FRA’s Approach for the Section 305 Equipment Procurement Projects Evolved to Include Additional Project-Level Oversight

As the section 305 procurement projects have progressed, the bi-level car  project has encountered challenges that jeopardize project completion by  the expenditure deadline. In August 2015, the bi-level car schedule encountered an additional  setback after the bi-level car shell suffered a structural failure during  testing and production stopped for car shell redesign. As  of April 2016, the bi-level production schedule is on hold and the final  project equipment delivery date is unknown. FRA Does Not Have Performance Measures Directly Linked to Project Goals and Does Not Fully Evaluate Results of Monitoring Activities

An effective grants management framework includes establishing a  process that ensures project goals are identified, tracked, and fulfilled and  deliverables received. FRA partially follows the performance monitoring  leading practice area because while FRA developed a strategic vision for  the HSIPR program and outlined a monitoring process in its Grants  Manual, it does not have project goals or performance measures linked to  the grants funding the section 305 equipment procurement projects and it  does not fully evaluate the results of monitoring activities. Without explicit project goals and associated performance measures, it  may be challenging for decision-makers to track and assess a project’s  progress, make decisions about future efforts, and keep grantees  accountable for outcomes. According to FRA officials, they use  internal reports—separate from the routine and scheduled monitoring—to  inform agency management about any issues related to a project’s scope,  schedule, and budget. FRA Developed Internal Documentation for Grants Management Policies and Procedures, but Has Not Developed Written Guidance For Grantees

An effective grants management framework includes developing and  maintaining written documentation as a means to obtain and retain  organizational knowledge and to ensure accountability for achieving  agreed-upon results. A lack of guidance  could result in FRA’s not receiving sufficient and necessary information  from its grantees to carry out its grant oversight activities. Enhance the process outlined in the Grants Manual to monitor project  performance for future grants to include: (1) performance measures  directly linked to project goals, and (2) fully incorporating timely and  actionable information on grantee performance into FRA’s review  process to help determine whether current efforts are in line with the  overall project goals. 2)  To what extent has FRA’s approach to grants management for the  PRIIA section 305 equipment procurements met leading practices and  whether FRA’s grants management practices could be improved? To determine how FRA has carried out its grants management roles and  responsibilities for the grants funding the section 305 equipment  procurement projects, we reviewed FRA policies and other guidance  established to outline the agency’s responsibilities, such as the August  2015 Grants Management Manual and the 2013 Program Management  Plan. Appendix II: Grants Management Leading Practices with GAO Assessments

We assessed the extent to which the Federal Railroad Administration’s  (FRA) approach to grants management for the grants funding the section  305 equipment procurement projects met leading practices and  supporting characteristics for grants management that we identified in the  areas of performance monitoring, written documentation, training, and  communication.
Why GAO Did This Study

The Passenger Rail Investment and Improvement Act of 2008 (PRIIA) expanded FRA's role by, among other things, authorizing grant programs for intercity passenger rail. Section 305 of PRIIA established a Next Generation Equipment Committee to design, develop specifications, and procure standardized rail equipment. FRA awarded approximately $800 million in grant funding for two locomotive and bi-level passenger car procurement projects.
GAO was asked to review issues related to FRA's oversight of the grants funding the PRIIA section 305 equipment procurements. This report examines: (1) how FRA has carried out its grants management roles and responsibilities for the PRIIA section 305 equipment procurement projects, and (2) the extent to which FRA's approach has met leading practices and whether FRA's grants management practices could be improved. GAO reviewed grants management policies and practices and identified relevant and applicable leading practices to be used as criteria in assessing FRA's grants management.

What GAO Found

The Federal Railroad Administration (FRA) initially used a regional oversight and monitoring approach outlined in its Grants Management Manual (Grants Manual) to manage the grants funding the section 305 equipment procurement projects, but in the face of challenges that approach evolved to include additional project-level oversight. When FRA began awarding the grants for the section 305 equipment procurement projects in 2010, its grants management approach was defined by the Grants Manual —including routine and scheduled monitoring—and by the terms of the grant agreements funding the locomotive and bi-level passenger car projects (see figure). As the bi-level car project encountered significant challenges—including major schedule delays—FRA moved to a project structure including increased contractor support to better oversee the locomotive and bi-level car projects in response to problems identified in the bi-level car project's schedule. In August 2015, the bi-level car suffered a structural testing failure, and as of April 2016, production of the bi-level car was on hold, and the final equipment delivery date was unknown.
FRA's grants management approach partially follows GAO-identified leading practices for performance monitoring, communication, training, and written documentation, but FRA's approach could be improved by better alignment with those practices. For example, while FRA stated that project progress is measured by tracking scope, schedule, and budget, it has not documented a process to identify project-specific goals and associated performance measures. Establishing a process that ensures project goals are identified, tracked, and fulfilled is a leading practice of effective grants management. Without explicit project goals and associated performance measures, it may be challenging for decision makers to track and assess a project's progress, make decisions about future efforts, and keep grantees accountable for outcomes. In addition, FRA has not provided documentation outlining grantees' expectations or developed written guidance specific to the section 305 equipment procurement projects. An effective grants management framework includes developing and maintaining written documentation as a means to obtain and retain organizational knowledge and to ensure accountability. According to FRA officials, the agency informs grantees of expectations through routine monitoring and technical assistance. However, the lack of written guidance, goals, and performance measures could result in FRA's not receiving sufficient and necessary information from its grantees to carry out its grant oversight activities.

What GAO Recommends

GAO recommends, among other things, that the Secretary of Transportation direct FRA to enhance its process for monitoring project performance to include project goals and performance measures that directly link to those goals, and develop and provide written guidance to grantees outlining agency expectations and deliverables. The department concurred with the recommendations.