As required by statute, the administration uses  the FTA evaluation and rating process, along with the development phases  of New Starts projects, to decide which projects to recommend to  Congress for funding. Previous GAO Work Has Identified Key Challenges in Managing New Starts Program

		Frequent Changes to the New Starts Program Have Sometimes Led to Confusion and Delays

Numerous changes have been made to the New Starts program over the  last decade. These changes include statutory, regulatory, and  administrative changes to the program. New evaluation criteria introduced: Given past concerns that the  evaluation process did not account for a project’s impact on economic  development, SAFETEA-LU added economic development to the list of  project justification criteria that FTA must use to evaluate and rate New  Starts projects. Although the impetus for each change varied, FTA officials stated that, in  general, all of the changes the agency has initiated were intended to make  the process more rigorous, systematic, and transparent. FTA officials have acknowledged these limitations, but noted that  improvements in local travel models are needed to resolve some of these  issues. In  2008, we made a series of recommendations designed to address the  limitations of FTA’s current evaluation process, including recommending  that (1) the Secretary of Transportation seek additional resources to  improve local travel models in the next authorizing legislation to improve  the New Starts evaluation process and the measures of project benefits;  (2) FTA establish a timeline for issuing, awarding, and implementing the  result of its request for proposals on short- and long-term approaches to  measuring highway user benefits from transit improvements; (3) the  Administrators of FTA and Federal Highway Administration collaborate in  efforts to improve the consistency and reliability of local travel models;  and (4) the Administrator of FTA establish a timeline for initiating and  completing its longer-term effort to develop more robust measures of  transit projects’ environmental benefits. Striking Appropriate Balance between Maintaining a Robust Evaluation Process and Minimizing Complexity Is Challenging

We reported in 2008 that experts and some project sponsors we spoke  with generally support FTA’s quantitatively rigorous process for evaluating  proposed transit projects but are concerned that the process has become  too burdensome and complex, and as noted earlier, may underestimate  certain project benefits. In response to such concerns, FTA has tried to simplify the evaluation  process in several ways. FTA also commissioned a study by Deloitte in June 2006 to review the  project development process and identify opportunities for streamlining or  simplifying the process. Potential Options to Expedite Project Development in the New Starts Program

As part of our ongoing work, we are reviewing existing research, including  past GAO reports, analyzing data on the length of time it takes for projects  to complete the New Starts process, and interviewing project sponsors,  industry stakeholders and consultants, and transportation experts to  identify options to expedite project development in the New Starts  program. While each option could help expedite project  development, each option has advantages and disadvantages to consider  and some options could require legislative changes. Tailor the New Starts evaluation process to risks posed by the  projects: Project sponsors, consultants, and experts we interviewed  suggested that FTA adopt a more risk-based evaluation process for New  Starts projects based on the project’s costs or complexity, the federal  share of the project’s costs, or the project sponsor’s New Starts  experience. Consider greater use of letters of intent and early systems work  agreements: The linear, phased evaluation process of the New Starts  program hampers project sponsors’ ability to utilize alternative project  delivery methods, such as design-build, according to project sponsors. However, this  policy change does not apply to projects approved for entry into  preliminary engineering, which is the New Starts project development  phase that has the most requirements for project sponsors and the phase  where project sponsors told us that frequent changes to the project by  sponsors and to the New Starts process by FTA result in additional costs  and delays.
Why GAO Did This Study

The New Starts program is an important source of new capital investment in mass transportation. As required by the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users, the Federal Transit Administration (FTA) must prioritize transit projects for funding by evaluating, rating, and recommending projects on the basis of specific financial commitment and project justification criteria, such as cost-effectiveness, economic development effects, land use, and environmental benefits. To be eligible for federal funding, a project must advance through the different project development phases of the New Starts program, including alternatives analysis, preliminary engineering, and final design. Using the statutorily identified criteria, FTA evaluates projects as a condition for advancement into each project development phase of the program. This testimony discusses the (1) key challenges associated with the New Starts program and (2) options that could help expedite project development in the New Starts program. This testimony is based on GAO's extensive body of work on the New Starts program and ongoing work--as directed by Congress. For this work, GAO reviewed FTA documents and interviewed FTA officials, sponsors of New Starts projects, and representatives from industry associations. The FTA reviewed the information in this testimony and provided technical comments.

What GAO Found

Previous GAO work has identified three key challenges associated with the New Starts program. First, frequent changes to the New Starts program have sometimes led to confusion and delays. Numerous changes have been made to the New Starts Program over the last decade, such as revising and adding new evaluation criteria and requiring project sponsors to collect new data and complete new analyses. Although FTA officials told GAO that changes were generally intended to make the process more rigorous, systematic, and transparent, project sponsors said the frequent changes sometimes caused confusion and rework, resulting in delays in advancing projects. Second, the current New Starts evaluation process measures do not capture all project benefits. For example, FTA's cost-effectiveness measure does not account for highway travel time savings and may not capture all economic development benefits. FTA officials have acknowledged these limitations, but noted that improvements in local travel models are needed to resolve some of these issues. FTA is also conducting research on ways to improve certain evaluation measures. Third, striking the appropriate balance between maintaining a robust evaluation and minimizing a complex process is challenging. Experts and some project sponsors GAO spoke with generally support FTA's quantitatively rigorous process for evaluating proposed transit projects but are concerned that the process has become too burdensome and complex. In response to such concerns, FTA has tried to simplify the evaluation process in several ways, including hiring a consulting firm to identify opportunities to streamline or simplify the process. As part of ongoing work, GAO has preliminarily identified options to help expedite project development within the New Starts program. These options include tailoring the New Starts evaluation process to risks posed by the projects, using letters of intent more frequently, and applying regulatory and administrative changes only to future projects. While each option could help expedite project development in the New Starts process, each option has advantages and disadvantages to consider. For example, by signaling early federal support of projects, letters of intent and early systems work agreements could help project sponsors use potentially less costly and time-consuming alternative project delivery methods, such as design-build. However, such early support poses some risk, as projects may stumble in later project development phases. Furthermore, some options, like combining one or more statutorily required project development phases, would require legislative action.