EXECUTIVE SUMMARY
Cities, states, and metropolitan areas across the United States are looking to invest in a range of public transit projects in order to connect people to jobs and economic opportunity, reduce greenhouse gas emissions from vehicles, and shape development patterns.
According to one estimate, the United States invested about $50 billion in new transit projects in just the last decade.
These include underground subways in Los Angeles, commuter rail lines along the Front Range near Denver, a streetcar in downtown Atlanta, light rail lines in suburban Phoenix, and bus rapid transit in Richmond, Virginia, among many others.
While these projects are as diverse as the country itself, they all have one thing in common: increased scrutiny over their costs and timelines to build. A few very visible projects have reinforced the narrative that rail transit investments have systemic issues that are endemic to the United States.
This all begs the questions:
Is this true? If so, why? And what should we do about it?
These are precisely the questions Eno set out to answer through this research, policy, and communications project to analyze current and historical trends in public transit project delivery. We convened a set of advisors and conducted in-depth interviews with key stakeholders to understand the drivers behind mass transit construction, cost, and delivery in the United States. A comprehensive database of rail transit projects was created and curated to compare costs and timelines among U.S. cities and peer metropolitan areas in Western Europe and Canada. Through this quantitative and qualitative approach, we developed actionable recommendations for policy changes at all levels of government as well as best practices for the public and private sectors.
UNDERSTANDING COSTS AND TIMELINES
Eno’s Construction Cost Database of 180 domestic and international public transit projects completed since 2000 shows that the United States pays a premium of nearly 50 percent on a per-mile basis to build transit for both primarily at-grade and primarily tunneled projects. The tunneling premium in the United States rises to roughly 250 percent when New York City’s disproportionately expensive projects are included.
Tunneled projects are not only less expensive abroad, but also more common. Just under 12 percent of U.S. rail transit projects represented in our database were constructed primarily below ground, compared to 37 percent of non-U.S. projects. In fact, many international projects constructed below grade have similar costs to those that are at-grade in the United States. For example, Toulouse, France’s 9.3 mile Metro Line B was built entirely underground at a cost of about $176 million per mile while Houston Metro’s 3.2 mile Green Line is all at-grade and cost $223 million per mile.
Despite their lower construction costs, international projects are often more complex than similar lines in the United States. They tend to have more stations that are built closer together than U.S. projects, often run through crowded historic city centers, and usually share street space with cars and other vehicles. Rail projects in the United States tend to be routed along “paths of least resistance” such as freight rail or highway corridors, rather than dense areas where transit would make the most sense for riders or communities. Of course, this is not always the case. Seattle’s 1 Line corridor traverses well-developed urban areas and operates in a tunnel between the University of Washington and downtown. But many U.S. transit projects resemble Minneapolis’ Blue Line, whose mostly at-grade alignment along existing right-of-way was specifically intended to limit impacts on the local community and minimize the need to acquire private property.
Even with more straightforward alignments, U.S. projects with minimal tunneling still take about six months longer to construct than similar non-U.S. projects. U.S. projects that are almost all underground take nearly a year and a half longer to build than abroad. The time it takes to construct a transit project is also highly correlated with its cost, reinforcing the aphorism “time is money.”
RESEARCH METHODS
With an understanding that transit projects in the United States do suffer from high costs and take longer to complete than they do abroad, it is important to investigate the “why.” To do so, we conducted a thorough examination of existing literature and research and interviewed 117 professionals with both intimate knowledge of specific projects or regions and transit project delivery expertise generally. We also conducted detailed case studies of project delivery in four domestic regions (Los Angeles, Seattle, Denver, and Minneapolis) and four international regions (Copenhagen, Madrid, Paris, and Toronto) to help identify real-world examples of cost and timeline drivers for transit projects as well as best practices. We also compared a transit project to a highway project in Virginia to compare how regulatory processes, project delivery practices, institutional support, and governance differ across modes.
Through our literature review and case studies, one clear finding emerged: there is not one, easily identifiable reason for high costs or delivery delays. Rather, we identified a dozen drivers of transit construction costs and timelines that fall into three overlapping and interrelated categories: governance, processes, and standards. These findings form the basis of our resulting recommendations and best practices to deliver transit projects quicker and more cost-effectively.
There is not one, easily identifiable reason for high costs or delivery delays.
Rather, we identified a dozen drivers of transit construction costs and timelines that fall into three overlapping and interrelated categories:
Governance
Processes
Standards
POLICY AND PRACTICE RECOMMENDATIONS
The responsibility for cutting costs and timelines for transit projects does not rest solely on federal reforms, fixes at the agency level, or with private sector practice. Rather, the challenges are acute, complex, and multi-faceted. The solutions are, too. The recommendations below are based on that fundamental premise. Click each one to see further details.
Governance
First, we need to get the institutions, oversight, and decision-making right.
The public institutions charged with leading the delivery of transit projects need authority, staff, and good governance to move them forward.
Today in the United States, transit projects are delivered almost exclusively through existing entities. Public transit agencies are institutions that were designed as operating entities often to pick up the operation of struggling bus lines from private companies decades ago. Setting a clear structure for organizational decision-making responsibility, as well as coordination with other agencies and transportation modes, is critically important to the success of a transit project. The successful, low-cost expansion of Madrid’s metro system between 1995 and 2003 provides a clear example of how small, multi-disciplinary internal management teams can deliver projects effectively when they are empowered to address issues as they arise. In Denver, a delegated authority approach for the region’s FasTracks system expansion led to faster turnarounds on key decisions and fewer project delays.
Our research shows that independent, special purpose delivery vehicles (SPDV) are an attractive option to manage construction before handing the ownership and operation back to the public agency. States or regions need to create a temporary, independent SPDV, or modify an existing institution, with the necessary authorizations and abilities to manage and focus on the most complex of projects. Institutions responsible for project delivery need to be self-permitting, should be able to issue debt (if necessary), use eminent domain to acquire land, relocate utilities, as well as enter into contracts and agreements with public and private entities. Governing boards should be made up of funders and the relevant other stakeholders that are necessary to push the project forward. The organization should also have the ability to set salaries to attract and hire top project management talent and borrow staff from existing institutions. For its part, the FTA should encourage project sponsors to reform governance, authorizations, and other factors as part of receiving federal funds.
Project sponsors need to understand, manage, and commit to whatever project delivery method is most appropriate for the project.
Anecdotally, many experts have a preferred method for delivering projects. Some swear by traditional approaches, like design-bid-build while others prefer design-build or partnerships with private partners. Our work makes clear that no single delivery method on its own is a panacea for cost and timeline issues. Rather, agencies’ commitment to a delivery method and understanding of how to manage it is essential.
Project sponsors need to adopt a formal evaluation process to determine the appropriate procurement method on a project-by-project basis. Once a specific procurement method is selected, the project sponsor should commit to it and manage it accordingly.
Projects need to be developed smartly so contracts are not too large to be effectively managed, procurement goals are realistic, and the best value is returned for public dollars.
Anecdotally, many experts have a preferred method for delivering projects. Some swear by traditional approaches, like design-bid-build while others prefer design-build or partnerships with private partners. Our work makes clear that no single delivery method on its own is a panacea for cost and timeline issues. Rather, agencies’ commitment to a delivery method and understanding of how to manage it is essential.
Project sponsors need to adopt a formal evaluation process to determine the appropriate procurement method on a project-by-project basis. Once a specific procurement method is selected, the project sponsor should commit to it and manage it accordingly.
Agency staff need appropriate training in order to manage projects, construction staff, and consultants.
Overburdened and undertrained public agency staff have trouble coordinating environmental review and planning documents, creating discrete and clear procurement plans, writing smart and effective contracts, and ensuring adherence to contract terms during construction. These all lead to problems with litigation, change orders, and delays throughout a project. Project sponsors need to invest in better training and support for front office staff who are responsible for overseeing, monitoring, and managing projects from inclusion to operation. They should also establish small, multidisciplinary teams of high-quality, experienced executives with control over on-the-spot decisions, and enough junior staff to support them. FTA needs to work with project sponsors to more precisely determine their workforce needs for project delivery management and oversight
In addition, this research found that the unionized, frontline construction workforce is not a primary target for cost or timeline efficiencies on major projects domestically or abroad. Project sponsors should, however, establish equitable project labor agreements (PLAs) as a valuable way to avoid worker strife by providing clear arrangements for dispute resolution, pre-approved compensation, and work rules. Labor leaders should be at the table at the beginning of project development in order to address potential concerns early on, create flexibility in work rules and overtime, as well as establish a shared understanding about conflict resolution and scheduling to keep projects moving efficiently and safely.
Processes
Second, some of the processes, procedures, and practices that public and private actors must undertake in order to build transit projects—from conception to final completion— are often too slow, cumbersome, or outdated. We need to make it easier to build more and better transit projects.
The federal NEPA statute does not need to be reformed, but the processes by which federal agencies reach a record of decision does.
NEPA is an important part of making sure that projects are transparent about their potential impacts to the built and natural environment, the air, and the communities affected. It is one of the few mandated opportunities for historically underrepresented communities to provide input into projects. It is also, however, subject to an uncoordinated, duplicative, and convoluted process. Although environmental rules, regulations, and requirements in other countries are as just as elaborate, the environmental review processes are generally better streamlined, and approval is obtained faster than in the United States. Many of the challenges with NEPA are attributed to misunderstandings and conflicts between agencies. Early and consistent coordination between agencies during planning and environmental assessment would undoubtedly help foster agreement on issues and avoid delays. Sharing of best practices in environmental assessment between agencies and project sponsors would further help improve common challenges in reaching a record of decision.
The Council on Environmental Quality (CEQ), an entity within the Executive Office of the President, should require more regular face-to-face meetings of federal agency field staff involved with preparing environmental documents and require sharing of environmental documents between permitting agencies to cut down on duplicative tasks. The Biden Administration should issue an executive order focusing on better coordination and consolidation of the disparate timelines and processes among the various regulations that fall under the umbrella of NEPA. Once issued, the FTA should execute an agreement with relevant federal agencies such as the Army Corps of Engineers and commit to working together in a more frequent, collaborative manner. CEQ should also set up an annual environmental permitting conference to build expertise and allow for exchange of best practices among stakeholders.
To go a step further, the United States can look to Madrid and Ontario, whose respective governments have set up specialized environmental reviews for transit projects. Given the net-positive environmental benefits of transit, Congress should create a pilot program to allow the federal transportation secretary to exempt select public transportation projects from NEPA if sponsors are able to demonstrate that they conducted robust community engagement and evaluation of project alternatives through the planning process. FTA should monitor this pilot program to measure its effectiveness at saving time as well as ensuring environmental protection.
States and project sponsors also need to invest in the staff and processes for their own permitting and environmental review.
Highway projects interact with the environmental review process more regularly given how routinely the United States builds roadway projects. To lean on their deep expertise, transit project sponsors should borrow staff from state departments of transportation (DOTs) and the federal highway administration (FHWA) to assist with preparing environmental documents. Transit project sponsors should take advantage of revised federal regulations to no longer require the evaluation of “all reasonable alternatives” and instead examine only those alternatives deemed feasible. Congress should also dedicate more resources to the FTA to increase staffing in their regional offices and help assist transit agencies with preparing and coordinating environmental documents.
But since state laws and regulations are often as complicated and suffer from the same siloed nature as federal permits, states should set up their own entities similar to the Federal Permitting Improvement Steering Council. If structured correctly, they would help local agencies navigate state environmental regulations and coordinate between various state and federal staff.
The planning and community stakeholder engagement process needs greater investment and more attention.
Despite their efforts, project sponsors generally invest too little in early planning and public outreach, and still employ outdated tools. Project sponsors need to dedicate more staff and resources to working directly with communities and secure scope agreements as early as possible during the project planning stage to prevent disagreements and issues from causing delays and issues further into a project. In doing so, sponsors should employ non-traditional forms of public engagement including opportunities to provide virtual feedback, having smaller meetings in individual communities (rather than the traditionally large, informal public meetings held in an auditorium), and hosting meetings at non-traditional hours.
Project sponsors should work with the community to recognize trade-offs and push for greater short-term disruption to advance construction faster. Agency staff also need to be more empowered to make tough decisions on project scope and requests through a transparent process, with public sector planners documenting all comments to demonstrate how they inform an agency’s final decisions. Staff should take care to respond to every comment, document why certain options regarding project scope were advanced or taken off the table, and show how decisions were made with public input and social equity top of mind.
Policy and practice reforms are needed to address significant shortcomings related to utility relocation and land acquisition.
Utility relocation is among the most complex elements of a transit project and is frequently cited as a major cost and timeline driver. Old and inaccurate maps complicate efforts to identify utilities and lead to additional costs and delays to address unexpected site conditions. As a result, project sponsors need to dedicate enough staff with expertise in utility relocation. These staff should be brought on early in the planning phase and remain through the duration of construction. Project sponsors and utilities should sign agreements early in the project development process and relocate or identify as many utilities as practical prior to construction. Early utility identification and relocation yields significant cost and timeline savings throughout the course of a project’s construction. On the other hand, misidentification of utilities can lead to significant costs due to change orders and unexpected findings during construction.
Similar challenges exist with the land acquisition process, which can be lengthy and involve confrontations or disputes with communities along a project’s alignment. Early and prompt land acquisition can result in significant time and cost savings for projects. Since highway departments conduct land acquisition and utility relocation on a much more regular basis, transit project sponsors should work with staff at state DOTs to borrow staff experienced in utility relocation and land acquisition.
Standards
Third, building more and better transit demands a new framework for how we think about projects, the standards that are applied, and the policy environment in which they operate.
Customization should be deemphasized in favor of updated standardization to save on construction costs and speed up delivery.
Undeniably, transit investments—especially stations—help shape communities, neighborhoods, and define a community’s character. But this research found an overemphasis among U.S. decisionmakers to customize stations and vehicles when designs could be simplified and streamlined by standardizing components. The Copenhagen Metro, for example, used standardized station designs, equipment, materials, components, and off-the-shelf rail cars to minimize costs and allow for easy repairs. U.S. project sponsors, particularly those constructing new systems, should adopt vehicle and station designs from peer agencies to simplify design and trim costs.
Further, the longstanding U.S. approach to safety and other project standards should be revisited. Project sponsors, FTA, and transit constituency organizations should review existing construction standards to see if they can be more performance-based and useful in ways that can maintain safety but open avenues for more creative ways to meet them. To help inform such a review, the FTA and project sponsors should establish dedicated programs to exchange best practices on project delivery and station design, including but not limited to regular study tours. This involves looking at other countries beyond Western Europe, too, where great examples abound.
Transit projects in the United States need to maximize their public benefits.
When faced with escalating costs and community resistance, project sponsors in the United States often select routes that are significantly less expensive, do not interface with communities, nor require the intensive utility relocation often necessary for at-grade options along boulevards or other urban roadways. Project sponsors should weigh the tradeoffs between cost, complexity, and ridership when considering alignments. In doing so, project sponsors should enact a policy that clearly outlines when and how stakeholders can request project enhancement (“betterments”), include a process to evaluate whether to grant the request, and require the requesting entity to cover the cost in most circumstances. Community benefit agreements should be used to address community concerns and are useful when conducted early in the process.
Federal incentives are another powerful tool to enable project sponsors to increase the overall standards of their transit projects. For example, the federal Capital Investment Grants program needs to require minimum zoning densities or level of development around stations as a condition for federal funding. Similarly, federal evaluation needs to de-emphasize ridership as a key component of a project’s success and rely on accessibility metrics more often.
CONCLUSION
During this time of economic uncertainty, environmental concerns, and social anxiety, it is critically important we get the most out of our existing public investments. The dramatic changes foisted upon the nation as the result of the COVID-19 pandemic highlighted the importance of public transit for essential workers, low-income riders, and neighborhood connectivity. While the federal government literally came to the rescue with emergency funding to keep most of these systems afloat, there is appropriate scrutiny now to make sure the projects we do undertake are successful both during the planning, construction, and implementation phases.
Our national goals around economic growth and opportunity, climate change, and social equity all mean we are going to need more and better transit than we have today. But we are not going to get more or better transit if we cannot figure out how to deliver projects in a timely and cost-effective way. As we consider transit investments in a new post-pandemic light, it is critically important our investments are as efficient as possible.
INTRODUCTION
The desire to build infrastructure projects faster and cheaper has persisted since the earliest infrastructure projects were completed. Famous projects like the Hoover Dam, the Golden Gate Bridge, and the Empire State Building are celebrated for the speed in which they were completed, and the transcontinental railroad was literally a race to see which company could lay track the fastest.
Of course, those historic projects were all designed, built, financed, and governed under different circumstances and very different regulatory environments. The rules, procedures, and preferences that exist today at all levels of government are intended specifically to avoid the horrific way workers, the environment, and neighboring residents were impacted by infrastructure projects in the past, and to ensure that safety remains paramount for users. While those rules and regulations have certainly helped to achieve those goals, infrastructure projects have become so costly and take so long to build that few large projects are being built, especially for public transit. This is particularly disheartening when we examine other countries in Europe, Asia, and elsewhere that have similar standards but much lower costs.
But why? What can we learn from previous research and practice to understand how transit projects are delivered, the primary cost drivers, and impediments for their timely delivery?
This report answers these questions albeit with important caveats. For one, there is significant attention given to individual projects that take much longer than expected or experience cost overruns. We address those problems to a limited extent but are primarily interested in whether and why transit projects cost more and take long to deliver than international peers in the first place. As a result, this report focuses on overall project timelines and costs. Much of the existing work on cost and timeline drivers tends to be narrowly focused either on cost overruns, or on specific elements of project delivery. Recently completed subway projects in New York City, which are among the most expensive ever built, also receive a substantial amount of coverage given the outsized role public transit plays in that region. Other case studies often focus on a single transit line, region, or country, resulting in conclusions that are relevant to a particular area or specific project, but might not be broadly transferable. In addition, research conclusions on certain subjects—like delivery models— occasionally conflict.
This research and resulting policy recommendations aim to shift the current national conversation around transit project delivery from simply diagnosing problems to identifying and implementing opportunities to deliver better and more cost-effective projects. This report raises the level of discourse around project delivery by relying on comprehensive qualitative and quantitative findings, as opposed to idiosyncratic and isolated anecdotes. Lastly, the work directly informs federal decision-makers as they pursue reform-minded policies, as well as helps state and local actors more effectively invest in transit networks to grow local their economies, reduce greenhouse gas emissions, and connect people to opportunity.
METHODOLOGY
To fully explore how projects are delivered, understand where the challenges occur, and develop solutions to overcome those challenges, this research employed an approach that had four distinct components, illustrated in Figure 1 (click to see an expanded image of the process).
FIGURE 1: TRANSIT COST AND DELIVERY METHODOLOGY
The first step was to better understand the problem and where it was most acute. To do this, the Eno team created a construction cost database of 180 domestic and international rail transit projects completed over the past 20 years. The database is limited to examples in the United States, Canada, and Europe. The research team kept the geographical range to these countries and regions because of their comparable political culture, government structures, and infrastructure development and age.2 For each project, factors such as number of stations, grade alignment, station spacing, and mode, adjusted for purchasing power parity and inflation, allow for comparisons.
The database helps draw conclusions about the extent to which transit construction costs differ in the United States and peer countries, as well as sheds light on the differences between project characteristics and complexity across countries. The database informs the analysis in Section 3 and is also available for download to other researchers investigating similar topics.
A range of academic, media, industry, and government resources were used to obtain reported construction costs for all new lines entered into the database. It draws from official cost reports wherever possible, either from agencies or other entities directly responsible for construction. When using media reports, we aimed to confirm whether the same—or very similar—cost figure was used across other outlets. Additional project detail collected includes the year and month of groundbreaking and opening for service to the public, project length (kilometers and miles), number of stations, grade alignment (i.e. the share of total alignment that is below ground, at-grade, and above-ground), and station spacing (calculated as average miles between stations). The database also uses inputs from construction cost data collection from the Federal Transit Administration’s Capital Cost Database and by researchers Alon Levy and Eric Goldwyn at the NYU Marron Institute and Yonah Freemark via The Transport Politic.3
With the data showing a clear cost and timeline premium in the U.S., the next step was to better understand why. The research includes a thorough background assessment of existing documentation and previous research related to project delivery to understand key cost drivers and how they influence project outcomes. We evaluated reports, data, project-specific documents, and presentations from academic, research, and government sources. The documentation on project delivery we assessed spanned all phases from the preliminary idea and design phases through construction.
This report classifies cost and timeline drivers into three broad, interrelated categories with 11 specific topic areas, detailed in Section 4:
Governance
The public authorities that oversee transit project funding and construction in our federalist system. Includes how they function, the way they make decisions, and how they work with other public authorities and with the private sector.
Standards
The federal, state, and local rules and regulations that must be adhered to in order to achieve an overall policy goal directly or indirectly related to the project.
Processes
The procedures and practices that public and private staff undertake to build transit projects from conception to final completion. Includes the steps that must be followed, timelines, and tasks to be completed.
To fully understand how public transit projects are delivered, this report includes detailed case studies of nine regions in the United States, Canada, and Europe. These studies not only yield facts and details of the specific projects within those regions, but also uncover elements that may not otherwise be captured in the data, literature, or popular reporting. While each region is uniquely different, there are clear commonalities in project delivery across regions that determine cost and timeline drivers, and impact project outcomes. This report includes the following case study regions, detailed in Section 5:
- Domestic: Denver, Los Angeles, Minneapolis, Seattle
- International: Copenhagen, Paris, Madrid, Toronto
- Highway case: I-495 HOT Lanes in Virginia
The case studies also help determine whether projects in the United States are being built to higher technical and safety standards than elsewhere, and to what extent factors like governance, institutional experience and staff capacity, project management, and contracting practices influence project outcomes. By identifying specific drivers as well as best practices in project delivery, the case studies inform the policy and practice recommendations in Section 6.
For this research, a case study is defined as a project or several projects delivered by an agency or agencies in a region, opened to the public between 2000 and 2020.5 This timeframe ensures that a project has a clear final cost and is also recent enough in interviewees’ memories that they can recall important details. For each of these cases, the lead agency in each region has completed at least two projects in the past 20 years. This allowed the research team to learn from an agency’s experience delivering multiple projects in a single region. Since this work is intended to inform transit project delivery in the United States, the international cases are limited to regions with comparable development patterns, economies, and governmental and legal structures.
The final cases also highlight comparable transit modes to what is typically constructed in the United States, specifically light rail. In particular, Paris and Madrid invested heavily in their regional tram systems, which provides direct comparisons to U.S. light rail projects. Domestic cases avoid outliers such as extremely expensive projects (like in New York City) that are unlikely to provide comparable lessons for other regions in the United States.6
A key part of the case study research was conducting interviews with stakeholders and experts in regions. The not-for-attribution interviews were not limited to organizations building rail transit, but also included other groups that have direct and indirect input to the governance, planning, and execution of capital projects. Specifically, interviewees included senior level representatives from the following types of organizations:
- Transit operators
- Transit oversight agencies, where applicable
- Metropolitan planning organizations (MPOs)
- City governments, including planning departments and officials in select cities
- State government, including officials from state departments of transportation
- The Federal Transit Administration and regional offices
- Academics with specialized knowledge in transportation and an understanding of the region
- Advocacy organizations and think-tanks, including riders’ unions, business groups, chambers of commerce, and other nonprofits
- Labor unions
- Former transit and government officials with specialized knowledge in transportation and an understanding of the region
The findings included in this report are almost entirely based on consistent information from multiple sources and interviewees.
As part of this project, the Eno team interviewed 117 individuals at 72 organizations.
While this methodology generated a set of findings that is inherently subjective, it also provided a level of insight not often found in the existing literature. Much of the agency-specific detail in the background and case studies is publicly available on the agencies’ websites, unless otherwise indicated.
Woven throughout the data analysis, background research, and case studies is consistent engagement with a high level, 22-person project advisory panel, consisting of experts from academia, industry, transit agencies, as well as state, local, and federal government. Eno consulted with the advisory panel before and during each major stage of this project, including case study selection, creation and release of Eno’s construction cost database, and development of our policy recommendations. Eno also convened separate sub-panels of representatives from labor unions and major design and engineering consultancies to gain further insight into various phases of project delivery and receive input on preliminary findings.
Insights and consistent themes that emerged from the research formed the basis of the takeaways and recommendations in Section 6. The recommendations also incorporate best practices that emerged from the literature review, case studies, Advisory Panel meetings, and discussions and feedback from additional interviews with experts and practitioners in various elements of project delivery such as environmental review, permitting, engineering, and labor, among others.
ANALYSIS OF TRANSIT CONSTRUCTION COST DATA
The following analysis is designed to help set the baseline for the systemic problem in the United States with high costs and long timelines associated with delivering transit capital projects. The data shows three important findings:
When evaluating transit projects, grade alignment has a stronger impact on costs than mode.
The United States pays a premium for rail transit that gets worse as projects get more complex, particularly for tunneled lines.
The United States takes longer to complete construction of rail transit projects than international counterparts, which also drives-up costs.
Section 2 of this report details the methodology for Eno’s capital cost database, but several points are important to reiterate because they are relevant to this analysis.
First, this analysis includes projects that have been completed between 2000 and 2020. There are some exceptions made on a case-by-case basis to include projects outside this range to help provide additional context and comparisons. Similarly, the database generally does not include projects that have not yet opened for service, but the database does include a few projects in Boston, San Francisco, and others that are set to open in 2021 because of their complexity and importance in the national discussion around transit project delivery.7
To compare projects across geographies and over time, the database adjusts costs so all project costs are compared in 2019 U.S. dollars. This is done with a two-step process. First, international reported costs were adjusted using purchasing power parity (PPP) rates for projects reported in non-U.S. currency. Currency conversions were based on the OECD’s PPP table, which documents conversion rates for international currencies to U.S. dollars in a given year, taking differing price levels between countries into account (measured as foreign currency needed to purchase $1 worth of goods).8
Then, projects were adjusted to 2019 dollars for inflation using the project’s midpoint. Instead of using a standard inflation calculator based on the consumer price index (CPI), the research team decided to use the Engineering News-Record (ENR) Construction Cost Index (CCI). The CCI is a more accurate reflection of buying power for construction as opposed to the CPI, which is based primarily on consumer spending in categories like healthcare, housing, and utilities. Eno also evaluated other indices, including several producer-price indices published by the Bureau of Economic Analysis, and decided that the ENR CCI was most applicable and appropriate for transit projects.9
Comparing as-built construction costs can offer some clues as to whether other countries are building public transit systems more cost-effectively. However, there are several caveats and challenges when attempting to make a true “apples to apples” comparison between domestic and international construction costs. The final output of the database is a comparable “unit cost,” in inflation- and currency-adjusted dollars per mile of rail line.
But not all projects and agencies are transparent in their cost reporting, and when they are, the data tend to be reported inconsistently. For example, some projects include costs not associated with the actual unit cost of mile of rail line. Elements like maintenance facilities or rolling stock are included in some projects, but not others. Worse, detailed cost breakdowns are typically not reported for most projects, and if they are, there may be vast differences in the categories used. For federally funded projects in the United States, regulations require agencies report cost breakdowns using nine Standard Cost Categories (SCCs), shown in Table 1.10.
TABLE 1: FTA STANDARD COST CATEGORIES
However, as the Eno team discovered when reviewing select cost breakdowns received through Freedom of Information Act (FOIA) requests, some agencies in the United States also use their own internal methodology to track costs, especially for projects that are locally funded. Rather than reporting project costs for items like stations, sitework, and stations, costs in some cases are broken down by project phase (i.e. preliminary engineering or final design). Cost breakdown methodologies between countries can also vary. Of the 26 projects in the database that have full cost breakdowns (all U.S. projects), 22 reported vehicles as part of the total cost, and 14 reported a maintenance or support facility. Land acquisition costs were reported in all 26 of the projects, indicating that these are likely included in most U.S. projects. The database does exclude the cost of maintenance facilities and rolling stock when available.
When comparing construction costs, it is important to avoid drawing sweeping conclusions or over-interpreting trends, though such comparisons will become richer with more data. Keeping these caveats in mind, the following takeaways will inform our research and spark additional questions that in-depth case studies can answer with more accuracy.
3.1 Grade alignment is much more correlated with cost than the mode of transit.
Defining “modes” of transit is a perennial debate, with inconsistencies across and within countries around the world. For the most part, the Eno capital cost database focuses on heavy rail and light rail transit projects. Most new transit infrastructure in the United States is light rail, so the database includes many international examples of light rail projects. In most cases, European trams are similar to U.S. light rail in their grade alignment (surface, tunneled, or elevated), stations, and vehicles.
The database does not include intercity rail projects (like California High Speed Rail or comparable international examples). The database also avoids U.S. streetcar projects, which rarely travel in their own right-of-way (ROW) and are often loops instead of bidirectional track, making cost comparisons difficult. Some commuter and regional rail projects were included, particularly if they involved building new infrastructure (and are thus like heavy rail). But many U.S. commuter rail projects, which primarily run from outlying suburbs to city cores, were also excluded from the database, as most of these projects were conversions of existing freight rail infrastructure for commuter rail service and include little new construction.
Defining the mode of a transit project—whether it’s light rail or heavy rail—does not correlate well with its construction cost. Most of the construction and planning inputs for both modes are the same, despite shorter trains and stations for light rail projects. A transit line, whether heavy or light, includes laying track, installing electrical systems, and building accessible stations. Therefore, when making cost comparisons, light rail is not inherently cheaper than heavy rail—it is only that light rail tends to be at-grade, while heavy rail is usually not, making the latter more expensive.
FIGURE 2: GRADE ALIGNMENT COMPARISON—U.S. AND NON-U.S.
3.2 The U.S. pays a greater premium as projects get more complex, particularly with tunnels and stations.
Figure 3 below plots project grade alignments (percent of total alignment that is at-grade) against costs-per-mile and illustrates how most U.S. rail transit projects in the database are built primarily at-grade in contrast to non-U.S. projects.
FIGURE 3: GRADE ALIGNMENT (PERCENT AT-GRADE) VS. COST-PER-MILE
Source: Eno Capital Cost Database
Note: The trendlines are not intended to represent or be interpreted as a linear regression, but rather to illustrate the general direction of construct costs as they relate to a project’s grade alignment.
Despite some successes domestically and some costly projects abroad, the United States in general pays a significant premium to tunnel, a dynamic that has also caught the attention of some trade publications.11 The database shows New York City’s Second Avenue Subway and 7 line extension cost $3.5 billion per mile and $3 billion per mile, respectively. Transit projects elsewhere in the United States are much less expensive than these two outliers. Many international projects are built primarily below-grade but have similar costs as at-grade projects in the United States.
TABLE 2: AVERAGE CONSTRUCTION COSTS PER MILE (USD)
Source: Eno Capital Cost Database
Note: Only four U.S. projects are within the 20-80 percent bucket and conclusions for that part of the dataset are limited
As Table 2 illustrates, there is a U.S. premium for both mostly at-grade and mostly below-ground projects, though the premium is higher for tunneled projects (particularly when including New York City). The tunneling premium can be seen more clearly in Figure 4 below by plotting projects’ share of below-ground alignment with their cost-per-mile, and excluding the two outlier projects in New York City.12 Not only is the cost trendline for U.S. projects steeper than for non-U.S. projects, but there is a sizeable number of fully tunneled international projects that were built at a comparable cost to at-grade U.S. projects in the $100-$300 million per mile range.13
FIGURE 4: PERCENT TUNNELED VS. COST-PER-MILE
Tunneling increases the complexity of a transit project, resulting in much more variability in costs. Figure 5 illustrates the distribution of construction costs-per-mile by the share of project alignment below ground. There is noticeable, but not dramatic, variation in construction costs for mostly above-ground projects (<20 percent tunneled) in both the United States and abroad. However, costs can vary considerably for projects that are largely below ground (>80 percent tunneled).
FIGURE 5: COST VARIABILITY BY SHARE OF ALIGNMENT IN TUNNELS
Outside of the United States, where tunneled projects are more common, below-grade lines range from as low as $135-215 million per mile for fully underground tram and metro lines in Madrid and Toulouse, to as high as $500-900 million for subway projects in Barcelona and London (and some Parisian Metro lines). Tunneled projects in the United States range from $270 million to 1 billion per mile (and up to $3.5 billion for projects in New York City, which are excluded from the plot). There are significantly fewer U.S. tunneled lines in the database compared to international projects, and the presence of two large outlier projects in New York City further contributes to the dramatic variation in U.S. costs for tunneled projects. However, Current budgets and cost estimates for tunneled lines that are not in the database but are under construction or proposed are still significantly higher than most peer projects abroad, with a notable exception in Seattle.
- Seattle Light Rail Northgate Extension (4.3 miles, 3.5 miles in tunnels): $419 million per mile14
- Los Angeles Purple Line Extension Phase 1 (3.9 miles): $1.2 billion per mile (excl. vehicles)15
- Los Angeles Purple Line Extension Phase 2 (2.6 miles): $967 million per mile (excl. vehicles)16
- Los Angeles Purple Line Extension Phase 3 (2.6 miles): $1.4 billion per mile (excl. vehicles) 17
- Los Angeles Regional Connector (2 miles): $900 million per mile (excl. vehicles)18
- Downtown Austin Light Rail Tunnel (1.5 miles): $1.3 billion per mile19
If included in the database, these projects would still fall within the higher cost-range for U.S. projects. The U.S. tunneling premium, excluding New York City, would increase from 48 percent to 123 percent, reflecting an average construction cost of $771 million per mile, compared to $511 million per mile. These projects further reinforce the relatively high cost of building below-ground transit in the United States.
Some of the cost variation for tunneled projects can be attributed to factors like geological conditions (which vary considerably in each region and can significantly influence the cost and complexity of tunnel boring), technical specifications, tunnel depth, or station design (see Section 4.10). The detailed, regional case studies in Section 5 shed light on other governance or process-related elements that can affect construction costs, including project and contractor management, institutional expertise, permitting, and regulation.
Stations can also constitute a large portion of overall transit project costs and add more complexity to the projects. For tunneled projects in the United States, the database shows stations accounting for around 25 percent of total project costs. Research shows that station depth, size, and architecture is a significant project cost driver (see Section 4.10). But despite their generally lower cost per mile, international projects have more
and closer stations on average, which is usually more common and useful in denser areas. However, the database analysis shows station spacing does not seem to have a clear correlation with cost.
The database calculates the average distance, in miles, between stations.20 A high-level comparison of station spacing across U.S. and non-U.S. project suggests in Figure 6 that transit stations are spaced closer together abroad, especially for lines mostly at-grade, which have nearly a third of the distance between stations as at-grade U.S. lines. These at-grade lines—most of which are tram or light rail projects—often run through dense, historic city centers and are usually not grade-separated.
FIGURE 6: STATION SPACING VS. COST-PER-MILE
Comparing average station spacing of projects with their cost-per-mile does not indicate a relationship between station spacing and costs but suggests that European transit projects have higher station densities without a significant cost premium. This comparison, however, may not fully capture differences in technical complexity between U.S. and non-U.S. projects, particularly considering that some international tram lines might have more in common with mixed-traffic streetcars compared to fully grade-separated light rail in the United States.
3.3 Projects outside of the U.S. take longer to build, mostly because they are far more complex.
In addition to project costs, this database also includes information on project timelines—measured as groundbreaking and opening months and years. On average, non-U.S. projects in this database take slightly longer to build than U.S. projects (5 years abroad compared to 4.7 years in the United States).21 However, there are considerable differences in the time it takes to complete projects based on their grade alignment.
FIGURE 7: PERCENT TUNNELED VS. TIME TO COMPLETE (IN MONTHS), U.S VS NON-U.S. PROJECTS
Source: Eno Capital Cost Database
Note: This graphic excludes projects that took more than 150 months to construct. Additionally, the 20-80 percent tunneled bin in the U.S. has only four projects, which limits the takeaways of that portion of the data.
According to Figure 7, projects in the United States that are mostly at-grade take almost six months longer to complete, while projects that are mostly tunneled take more than 16 months longer to complete than comparable projects abroad. But the other countries represented in the database account for many more tunneled projects. In Figure 7, 41 of the 106 international projects are 80 percent or more tunneled, compared to only 8 of the 68 U.S. projects. (Section 5 explores why this is the case).
However, these project timelines only cover the construction period. While unexpected site conditions, scope changes, and other issues arising during construction can affect project timelines, many of the timeline drivers identified in this report, including preparatory sitework, utility relocation, the environmental review process, land acquisition, stakeholder engagement, and lengthy planning periods, are not captured in these timelines. Projects may be proposed in one form or another, but not formally become reality until years or decades later. It is thus difficult to pinpoint a precise and consistent “start” date for transit lines.
FIGURE 8: TIME TO COMPLETE VS. COST PER MILE
Though the metrics used do not capture the full timeline of a project, there is still a clear relationship between the time it takes to construct a transit line and its final construction cost across both U.S. and international projects. Some of the relationship between time and cost might be attributed to the complexity of a project and its alignments. However, within this database, there is little relationship between a project’s length or grade alignment and its timeline. There is also minimal variation in timelines for new lines compared to extensions of existing lines, though the most notable outlier, the North-South Line in Amsterdam, was a new build. Other complicating factors like the share of project in existing ROW, the density or level of development around the alignment, and geological conditions not captured by this database may further influence timelines. Nonetheless, these findings suggest project timelines themselves can be a significant driver of costs.
BACKGROUND: POTENTIAL COST AND TIMELINE DRIVERS
This section reviews 11 potential areas that have been identified as potential cost and timeline drivers for public transit projects. These cost drivers fall into roughly three categories: governance, processes, and standards. As illustrated in Figure 9 and throughout this section, there is clear overlap among these topic areas and the groupings are admittedly subjective. Nevertheless, they are helpful to understanding the complexities in delivering large transit projects and highlighting the differences between the United States and other countries.
FIGURE 9: CATEGORIES AND TOPICS OF MAJOR POTENTIAL TRANSIT COST AND TIMELINE DRIVERS
Also, there are terms that describe important actors in transit project delivery. While many terms, like transit agencies, state DOTs, and labor unions are self-explanatory, some terms are used in different ways by varying stakeholders. Figure 10 defines some of the entities frequently referred to in this section.
FIGURE 10: KEY ACTORS/TERMS IN TRANSIT PROJECT DELIVERY
4.1 Institutional Structure and Decision-making
Perhaps one of the most overlooked but most important issues in transit project delivery is institutional governance. Research shows that transit projects can suffer or fail due to lack of focus on establishing the institutional structures that will ultimately deliver and operate the project. The literature shows that setting a clear structure for organizational decision-making responsibility and coordination with other agencies and transportation modes is important to the success of a project.
In the federalist system of the United States, governance for transit is largely devolved to state and local governments which, in turn, develop their own unique way of organizing transit networks and the institutions that govern them. Transit capital projects are often carried out within the existing construction divisions of the same public authorities responsible for bus and rail operations. In some instances, independent special purpose delivery vehicles are used to deliver major projects. Most operating funds come from state and local sources, and federal grants cover a significant portion of capital projects, including rail transit expansions (see CIG summary above).
A special purpose delivery vehicle (SPDV), sometimes called a special-purpose public authority, or SPPA, is sometimes created to oversee the planning and delivery of the asset. The specific way in which these are organized can vary, but in general they are temporary, self-governed entities empowered to make coordinated decisions about project delivery. They are typically dissolved once the project is completed.23
SPDVs are common in Europe, where they can help deliver projects yet insulate them from traditional bureaucracy.24 For example, an SPDV is delivering the Crossrail project, a nearly $5 billion regional rail project in London, helping to streamline internal decision-making, bolster expertise in-house, and allow for a flexible approach to project management.25 SPDVs in the UK were also used to deliver the High Speed 2 lines and the 2012 Olympics. The Madrid Infraestructura del Transporte (MINTRA) SPDV was created to lead the successful construction of their subway expansion in the late 1990s and early 2000s.26 The use of a state-owned SPDV was also “essential” to the successful construction of a metro line in Athens.27 Independent SPDVs have been recommended for each future mega project in New York, citing the desire for equal representation between the MTA, city, and state to enhance coordination and budget control.28
SPDVs typically have independent boards that are composed of relevant regional stakeholders such as members of transit agencies and municipal governments, which can help to streamline jurisdictional coordination and ensure that all parties have a direct stake in achieving successful project delivery.29 City representation on an SPDV governing board allows the agency to use the city’s powers and relationships with utility providers to order and negotiate relocation, often at minimal or zero cost (see Section 4.5.)
Whether through an existing transit agency or through SPDVs, transit capital projects need a well-functioning board of directors to set high-level policy, choose the executive team, and empower that team to make decisions without getting involved with the day-to-day management of the project. Some boards explicitly state these principles in their bylaws.
Projects can get bogged down when processes become overly reliant on board action. Los Angeles Metro previously had issues concerning excessive involvement of board members in routine capital project activities, calling it “distracting” and out of alignment with the fundamental best practices of good project management, and linked procedures that require excess board involvement to project delays and cost increases.30 In response, Metro staff proposed, and the board approved, that change orders would only require formal board approval if they exceeded the project budget. This greatly expedited project management decision making. Regular reporting on change order status was still required, providing a high level of transparency while also enabling an efficient process.
Research shows that project management teams with rigid or overinvolved boards do not have the capacity to adapt when confronted with a problem.31 Since large transit projects in urban areas are very complex and routinely face unanticipated challenges, transit boards should establish a “small” and “multidisciplinary” team of executives with control over on-the-spot decisions. Management and the board should anticipate many changes during design and construction and should have a clear plan that proactively integrates change into the decision-making processes.
Manuel Melis Maynar, who oversaw the recent expansion of Madrid’s Metro, recommends “a very small group of experienced engineers driving the works, more like close friends and colleagues, than people under a rigid hierarchical organization.”32 The tunneling projects in Madrid from 1995 to 2003, which constructed a remarkable 80 miles of subway for an average of US$85 million per mile, utilized three chief engineers and six additional engineers, all directly employed by the public sector. No consultants were hired for general project management positions.
However, in many cases, consultants can be helpful to project management by bringing in targeted expertise or advice and by assuming specialized tasks, that might need help from internationally experienced professionals, especially in large, complex projects. But external consultants have limitations: they are often more expensive than in-house staff and require quality oversight by the agency so as to avoid conflicts of interest.33 Some research suggests “upskilling,” in which consultants will train agency staff as part of their contract, thereby requiring consultants to pass on key knowledge to the personnel that will continue to work on the project after the contract expires.34
The institutional structure and decision-making processes of the implementing entity have significant impact on project outcomes. SPDVs commonly used in Europe have been successful at delivering major subway expansions and megaprojects, largely because of their flexibility in contracting, independence, and board structure. Representation of all relevant stakeholders and jurisdictions on the governing board of the entity responsible for project delivery can help ensure all jurisdictions have a stake in successful project delivery and utilize their ability to order relocation. However, overreliance on board actions for routine decision-making can slow down projects and lead to cost increases. Additionally, strong public sector management staff that are adaptable and empowered to make major decisions have been cited as critical to moving projects along. Conversely, research suggests an overreliance on external consultants can be more expensive and result in suboptimal outcomes compared to in-house management.
Balancing power asymmetries is an important consideration when designing the governance of project delivery. Transit construction projects are often politically charged processes and successful efforts require the full commitment not only from the sponsoring agency, but also from other local, state, and regional entities.35 A clear hierarchy of decision-making authority has the potential to compress project timelines, while more balanced power within and between agencies can enable the development of more creative solutions for overcoming deadlocks.36
4.2 Project Delivery and Risk Assignment
Transit projects require the coordinated involvement of public and private actors with varying tasks, risks, and costs. For example, public transit agencies rarely own concrete plants or tunnel boring machines (TBM) and therefore rely on the private sector for design and construction. The scale and scope of the contractual relationship and delivery method between the public agency and private contractors can vary widely and directly affects project success. While there is extensive research on different models, there is no single method that is preferable in all cases, each with advantages and disadvantages.37
The literature describes myriad forms of project delivery but in the United States there are three fundamental methods: design-bid-build, design-build, and construction manager-at-risk.38 These are summarized below and in Figure 11.
FIGURE 11: PRIMARY TYPES OF PROJECT DELIVERY IN THE UNITED STATES
Note: While DBB and CMR have very similar structures, in CMR the Construction Manager is hired early in the process during design, unlike the General Contractor in DBB which is hired after the design is complete.
Design-bid-build (DBB) is the traditional and still most common project delivery method for transit infrastructure. The sponsoring agency first hires an engineering and planning firm to create complete designs for the project. The agency is then responsible for awarding and managing separate contracts to trade-based construction companies based on the designer’s completed plans. The sponsoring agency owns the design details and is usually financially responsible for design errors or omissions encountered by the contractor.39 The majority of the project design control and risk are retained by the public sector.
Design-build (DB) is a model in which the sponsoring agency procures the design and construction elements together in a single contract with a design-builder. The DB entity is often a consortium of several firms and is typically liable for delivering designs and construction costs according to a fixed price identified in the project proposal. Sponsoring agencies often use requests for qualifications (RFQs) then requests for proposals (RFPs) rather than going straight to bid in DB. The risk of cost and timeline overruns are shifted to the design-builder. A proper DB procurement involves the agency giving up control over much of the design specifics. DB projects are generally quicker to construct because construction can begin during design, but they are often much longer to procure than DBB. DB is often referred to as “alternative” project delivery because it is different from traditional DBB.40 DB-based delivery models such as design-build-finance (DBF, sometimes called a public-private partnership, or P3), design-build-operate-maintain (DBOM), and others expand the responsibility of the design-builder and assign more risk to the private sector partners.
Construction Manager-At-Risk, also commonly referred to as “Construction Manager/General Contractor,” or CM/GC, shifts control and risk to the private sector (though to a lesser extent than in DB). In CMR, as in DBB, the sponsoring agency controls and owns the project design. However, a key difference between DBB and CMR is that in CMR, the Construction Manager is selected prior to the completion of design via a pre-construction agreement, enabling them to participate in the design process. The Construction Manager and General Contractor work closely together and, unlike in DBB, contract directly with construction firms to complete the project. This direct contracting arrangement often makes it possible for the project contract to include a maximum guaranteed price.41
While federal law is not a barrier to DB or CMR, there is a patchwork of state laws governing alternative procurement methods. Twelve states do not allow for the use of public-private partnerships for public transportation projects, including both New York and New Jersey, though all but two states (Iowa and North Dakota) allow for the use of design-build.42 Some states restrict the use of alternative delivery methods in part as an attempt to avoid corruption and also because traditional DBB procurements retain most of the risk and control with the public sector, which some states are reluctant to give up. Other states legislate specific exceptions for projects, but the lack of local enabling legislation remains a substantial barrier to broader use of these methods.43 Similarly, some local laws and agency policies limit the use of reimbursable price contracts, restricting pricing contracts to some form of fixed price agreement.44
Due to both inertia and limiting regulations, DBB remains the most prevalent delivery mechanism worldwide. But there is an increasing trend toward alternative methods for shortening timelines and cutting costs persists, with mixed results.45
Pricing Models
Contract structure is a crucial factor in determining the benefits and drawbacks of the DBB, DB, and CMR delivery methods. Agencies often desire to know the total cost of the project up front and set the contract so that the contractor is tied to the projected price. In theory, this arrangement provides significant incentives to private contractors to keep costs down and meet deadlines. In practice, circumstances outside of the contractor’s control often lead to “change orders,” which drive up project cost beyond what was anticipated in the original contract (see Section 4.4). This pattern of discrepancy has led to the development of several different methods for pricing construction projects, each with its own advantages and disadvantages. Ultimately, the pricing mechanism decision revolves around balancing the allocation of financial risk and costs among all parties involved.46
Fixed Price contracts can be structured either as unit price or lump sum. In unit price contracts, the contractor fee is based on a measurable deliverable. For example, a contractor would receive a specified amount for each length of subway track completed (typical agreements contain many unit costs). The unit price includes labor, materials, overhead, and profit. Unit price contracts can be helpful when specific delivery quantities are unknown or expected to change during the design and construction process and can also help with contractor cash flow during long-term projects. Fixed unit pricing is common for urban rail projects and DBB delivery methods, and some research suggests it is preferred by contractors.47
Lump sum contracts are inclusive of all materials, labor, overhead, and profit. This contract structure transfers significant risk to the private sector and provides a strong incentive to complete the work efficiently.48 Lump sum contracts are common for smaller, discrete tasks. For large, complex projects, lump sum contracts can force contractors to include significant cost buffers, driving up overall costs.
Many agency policies require that a contract include an upfront, fixed price, in part because sponsoring agencies have a strong desire for budget control and certainty. But using a CMR-type procurement often requires some kind of reimbursable or guaranteed maximum pricing scheme given the uncertainties in the design and subcontracting process.49
Reimbursable Price contracts provide compensation to the contractor for the project costs, including labor, materials, overhead, and profit. It is structured either as a “cost-plus” contract in which the contractor is reimbursed for labor, materials, and overhead and then given a percentage-based profit, or as a “fixed fee” contract in which the contractor is similarly reimbursed but the profit and overhead are fixed rather than percentage-based. Reimbursable price contracts are most commonly used for complex projects involving high-risk estimating.50 Agencies must exercise additional oversight of reimbursable price contracts in order to limit the potential for wasteful spending given the lack of incentive for cost containment.
A Guaranteed Maximum Price contract is a combination of fixed- and reimbursable-price models in which the contractor is reimbursed and paid a fee, up to a previously-agreed-upon limit. If the cost of the project exceeds the limit, the contractor is responsible for covering the overrun. If the costs are less than the maximum, the sponsoring agency and the contractor split the remaining budget, creating an incentive to keep costs low. But guaranteed maximum price contracts can provide a false sense of security if set too low, and they have the potential to precipitate adversarial relationships similar to those created when lump sum contracts are underbid.51
Industry trends indicate that guaranteed maximum and reimbursable cost pricing might become more common in the future. Some project managers say that lump sum fixed price contracts are simply not compatible with the complexities of tunneling.52 With cost overruns on fixed cost projects becoming more prevalent, major firms are declaring a desire to not bid on fixed cost projects.53
There is no single consistently preferred delivery method for large transit projects.54 In fact, a review of several projects at Los Angeles Metro found different results for DB and DBB projects, with no single method consistently performing better than another.55 Research suggests sponsoring agencies tailor the project delivery model to align with staff capacity at the agency, project characteristics, and the state of the market and they should do so early in the project—during project scoping, if feasible.56 However, most agencies, even those with robust capital programs, do not have formal processes for selecting a project delivery method. Such a process can be formalized and conducted on a project-by-project basis, weighing several interrelated factors:
Cost
When it comes to project delivery methods, the literature mostly agrees that delivery method has a small effect on the overall cost of the project. A study of nine U.S. transit projects found that the use of DB and CMR did result in some cost savings over DBB projects.57 Some of these savings may be attributed to the avoidance of cost overruns related to design and scope changes that the sponsoring agency typically bears under DBB.58 Another study showed that no single delivery system performed best in terms of unit costs.59 Other research indicates that DB and CMR project delivery methods appear to have a positive effect on cost certainty even if they do not deliver lower cost projects.60
Experience in Los Angeles shows that DB projects can run into problems when designers do not account for utility relocation (a major cost driver, see Section 4.5) and when the DB entity does not have the relationships and experience needed to coordinate utility relocation with other entities. This shortcoming significantly increased costs for DB projects in Los Angeles.61
Timeline
By combining the design and construction firms into a single entity using DB or CMR methods, construction can begin very early in the process while the design is still unfinished.62 In this way, DB is specifically noted as a way to meet aggressive delivery schedules or to approach projects that need to be fast tracked.63 Of course, DB is not a panacea for paring back timelines. Citing the DB examples in Los Angeles, accelerated construction timelines led to problems being discovered much later in a project, making them more expensive to resolve and subsequently increasing costs.64 Regardless, if length of construction time is more important than cost, it appears that using DB or CMR might be helpful for accelerating timelines.
Size and complexity
Some experts say that large, complex projects are good candidates for DB given the need for greater experience from the private sector while DBB may be appropriate for smaller, more manageable projects. Based on his experience in Madrid, Maynar recommends that the large tunneling projects use DBB in order to separate design from construction, allowing for more flexibility and control by the agency.65 It is important to note that neither project size nor complexity alone typically affects the choice of delivery method.66
Innovation
Alternative delivery methods allow for more innovation (loosely defined in the literature) in design and construction because the construction team can communicate more closely with the design team to make design adjustments that enhance constructability.67 Rather than providing 100 percent completed design documents as the basis for construction contracts, agencies can instead specify a set of performance criteria for DB projects. This approach was cited as a major cost-saving measure in the Denver Eagle P3 project, which utilized a design-build-finance-operate-maintain (DBFOM) delivery model.68 Instead of providing detailed design specifications as traditionally done under DB projects, the agency provided 30 percent design documents and high-level performance standards as reference materials to maximize bidders’ design flexibility and creative freedom. The P3 team credited the use of performance-based procurement in lowering project costs, with the winning bid coming in $300 million below the agency’s original cost estimate.69 Maryland’s Purple Line project, also a DBOM, proposed a higher-voltage system that required fewer substations, reducing overall costs.70 Although not all demonstrate significant cost savings during construction, small changes that improve constructability can effectively improve overall project design.
Staff capacity and experience
It is the responsibility of the sponsoring agency to retain sufficient, high-quality staff to manage a project. The delivery method selected determines the kinds of skills staff needs to have to successfully execute the project. For DBB, the public sector is in control of the project at all times, and thus staff need to be skilled in project management. Many failings of DBB projects often result from inadequate management of the various contractors, which affects the overall progress of the project.71 This problem seems to be particularly acute within smaller agencies.
DB projects need personnel with project oversight skills. With hundreds of millions of dollars at stake, agency staff must be vigilant in providing strong and active oversight.72
For example, a DB firm might produce a design that is cheaper to construct but that does not have a long life cycle before significant maintenance is needed. Because they have no direct long term stake in the project (aside from reputation), a DB firm might choose a poor outcome for the agency without such oversight.73 Quality assessment and quality control procedures are vital to ensure a lasting product, but many agencies do not invest enough planning and resources into creating such a system.74 Providing a contract to operate and maintain the asset for several decades builds in an incentive for life cycle cost planning, but few examples of DBOM transit projects exist.
Competition
Under traditional DBB procurements, a project sponsor may choose to bring on a single prime contractor to oversee project development and construction, or instead award individual project components under separate contracts to multiple prime contractors.75 Combining contracts into a larger package may be more attractive to bidders and allow the project to benefit from economies of scale and the consistency of a single entity to deliver the entire, integrated project. However, it may also limit competition to a handful of larger firms due to project size and complexity, either pricing out smaller contractors or relegating their involvement to the role of subcontractor.76 Dividing a project into several smaller contracts may increase competition, potentially lower costs, and provide more opportunities for small contractors to serve as primes, but it can also introduce more complexity by requiring project sponsors to coordinate several prime procurements and manage a larger group of contractors.77
4.3 Procurement Specifications
How agencies legally obtain goods and services—from vehicles and parts to engineering and construction services—is a major element of any transit project. The FTA requires agencies to ensure full and open competition when procuring goods and services, as well as adopt written codes of conduct to prevent any emplo yee or board member with a conflict of interest from participating in the “selection, award, or administration of contracts.”78
For procurements over $100,000, which encompass rolling stock, design, engineering, and construction contracts, agencies are required to adopt formal procurement methods. The two broad types are sealed bids and RFPs. Under a sealed bid procurement, agencies provide firm, rigid, and detailed specifications for potential bidders and award contracts to the “lowest responsive and responsible bidder.”79 Sealed, low-cost bids are not recommended for complex procurements in which significant variation among bidders is expected beyond price (i.e. qualifications, management approach, schedule).80 Through an RFP process, agencies provide a scope of work or general requirements rather than detailed specifications and then solicit feedback from potential bidders on the proposed scope of work.81
When procuring architectural and engineering services, agencies must award contracts based on contractor qualifications, rather than price. This requirement is borne out of the Brooks Act of 1972, which established a Qualifications Based Selection (QBS) process for all federal design contracts.82 Under a QBS procurement, price is not a consideration, and pricing data is often not collected.
Agencies are not federally obligated to award contracts solely based on price. They can also use “best value” procurement that considers other factors, including contractor qualifications, approach, local hire provisions, and project schedule (though state and local laws may require otherwise).83 While RFP processes can allow for consideration of factors beyond price, existing literature suggests agencies often end up choosing the lowest-priced proposal because of existing agency policy, out of reluctance to seek board approval for more expensive purchases, or fear of negative public reaction to choosing a pricier bid.84
Examples from Madrid and elsewhere demonstrate that best value procurement keeps construction costs low and projects on schedule by prioritizing technical expertise and preventing under-qualified contractors from receiving contracts.85 When scoring construction bids for the 1999-2003 metro extensions in Madrid, 30 percent of the final score was based on bid price, 20 percent on schedule considerations, and 50 percent on the technical qualifications of the bidder and their proposal.86 Most other European countries have similar bid evaluation criteria. Several states, including Minnesota and Delaware, allow best value procurement for major public works projects.87 Best value statute in Delaware requires selection criteria to be provided to bidders in the bid invitation, and agencies must first determine that the bidder is “responsive and responsible” before awarding them a contract.88 The weight attached to bid price must fall within a range of 70 percent to 90 percent of the total score and schedule considerations within 10 percent to 30 percent.89 While this statute allows for the consideration of factors beyond price, the outsize role of price in the final score can still lead to the lowest-price bid prevailing.
Another major consideration for project sponsors during the procurement stage is the participation of disadvantaged business enterprises (DBE). DBEs are small businesses that are owned and controlled by socially or economically disadvantaged individuals, including women and people of color.
The federal government has employed minority preference policies since the 1960s in order to provide opportunities specifically through federal spending and counter the effects of past discrimination. In 1983, Congress passed a statutory provision requiring 10 percent of all federal financial assistance for highways and transit to be expended by DBEs.90 The program has been re-authorized regularly since 1987. State and local transportation agencies are required to develop overall, statewide DBE goals every three years, which are supplemented by specific subcontracting goals for any federally-assisted contracts. These goals must be “narrowly tailored” to each contract based on the availability of DBE firms in a project’s market area(s). Bidders must demonstrate how they will meet the stated DBE goals (often with a list of funding commitments to specific DBE firms) or demonstrate a good faith effort to meet the targets. If they are unable to accomplish either, their bid must be rejected.
While the literature does not show that DBE goals are a major cost driver, transit agencies have found it increasingly difficult to incorporate DBE participation into contracts through alternative delivery methods such as DB or CMR.91 Considerations for DBE participation can inform an agency’s choice of delivery method or how it packages design and construction contracts. Challenges in meeting DBE goals at the outset of a project can also lead to project delays and complications, which may indirectly affect final costs.92 Agencies need to consider the tradeoffs between larger, consolidated contracts that may streamline project delivery but limit the pool of bidders, and a handful of larger firms and smaller contracts that introduce more competition and opportunity for DBE firms but require strong contractor and project management capacity.
Given the large size and complexity of many DB contracts, most DBE firms often participate as subcontractors.93 However, the lack of a completed design when awarding DB contracts can also make it difficult to set specific DBE subcontracting goals for bidders when exact quantities of work and needs are not known.94 Additionally, there is often a lengthy gap between the signing of a DB contract and the actual utilization of subcontractors (sometimes up to two years), which can cause some subcontractors to withdraw from the project if they are unable to carry out the work or maintain their original prices.95
In response to these challenges, several state DOTs have modified their DBE processes to allow for more flexibility in meeting DBE goals for DB projects. DOTs including South Carolina, Delaware, California, Colorado, and New York allow DBE commitments to be made as a project progresses, rather than at its inception.96 This approach relieves DBE firms of the risk inherent in bidding on incomplete plans. These approaches provide agencies with more flexibility and ease in meeting DBE requirements and reduce the risk of delays or complications if a project fails to meet its DBE goals.
Varying federal, state, and local regulations govern the method by which project sponsors procure the different elements of a transit project. In many states, project sponsors are legally required to award contracts to the lowest bidder while in other cases, sponsors may opt for a low-bid procurement even if not necessary out of concern for board or public backlash. Evidence from Madrid and other regions suggests best value procurements, which weigh bids according to a combination of price, technical expertise, and schedule, can result in better outcomes and avoid potential cost increases resulting from underqualified contractors. Additionally, DBE and local hire regulations can provide traditionally under-represented firms an opportunity to build up experience in the local market, but may be difficult to meet if set too high. Other factors, including the choice of delivery method and contract bundling, can further impact the ease or difficulty of achieving DBE goals.
4.4 Soft Costs and Change Orders
Transit project construction cost estimates inform a range of project aspects, including design, alignment, financing strategies, and community reaction. While there has been significant attention to the measurement of hard costs—physical elements of a project like vehicles, tracks, stations, and steel—soft costs are overlooked and understudied.
Soft costs typically encompass activities and services needed to plan, build, and start up a transit project aside from physical construction. Examples include design and engineering services, legal work, security and safety analyses, environmental review, risk assessment, cost estimation, administration, and project management.97 While few studies have directly analyzed the magnitude and scope of soft costs, research shows they have increased over time. There is no consensus on a specific source of increases but some research points to poor project management practices that lead to excessive change-orders, high contractor profit margins, long planning phases, unusual political influence, and project complexity.98
Among a 2010 sample of federally-funded projects, soft costs comprise an average of 30 percent of the total cost, ranging from 11 to 54 percent.99 Soft costs have also increased over time, from an average of 21 percent of the overall project cost in the 1970s to nearly 35 percent in the 2000s.100 The limited quantitative analyses on soft costs show percentages for heavy rail projects were six percent higher than those for light rail projects, while soft cost percentages for new, stand-alone lines that did not interface with an existing line were 3.8 percent lower.101 Additionally, soft cost percentages for projects with lengthy planning periods (beyond 5-7 years) were 7.1 percent higher than others while projects that experienced unusual political influence – like contentious design, need for approval by multiple boards and commissions, or intensive public involvement – had 6.6 percent higher soft cost percentages.102
A 2012 study explored the effect of a range of variables on proj ect soft cost variation, including: delivery method, project mid-point (year), project type (new or extension), length, number of stations, grade alignment (percent at-grade, below grade, and not at-grade), and length of project development phase.103 It found that one of the most consistently significant variables was time, as project soft costs increased by 4-5 percent as a share of total project costs each decade for both light and heavy rail projects.104 This could potentially be attributed to increasing design and management service costs over time or changing regulations (i.e. new environmental review standards that require more professional services to meet). Additional research is needed to investigate whether this trend holds true for projects built since 2010.
Activities associated with soft costs can be performed either by agency staff or by outside consultants. The decision to bring on outside consultants is informed by a range of factors including the project complexity as well as an agency’s technical knowledge and staffing capacity. Agencies may utilize in-house staff to deliver a project if feasible; hire another transit or state/local government agency as a third-party contractor; use a general consultant or series of consultants overseen by an in-house project management team to plan, design, and build a system; or outsource oversight of consultants to an external project manager.105 While many of the decisions involving contracting are dependent on an agency’s procurement practices (see Section 4.4), agency capacity to manage contractors and resulting consequences of procurement decisions can affect soft costs.
As explained in Section 4.3, project sponsors are able to control the size and structure of major contracts. While dividing major design and construction work into smaller packages can increase competition and agency control over the project, the increased number of contractors on a project can also increase complexity. The New York MTA employs separate consultants for environmental assessment, design and engineering, and constructability assessments, resulting in a complex project organization structure. This approach has been cited as a potential cost driver by causing the agency to incur project management costs, contract defaults, and delays that might have been avoided with use of a single contractor.106
While agency expenditures on external consultants for design, engineering, and other professional services are likely to be counted towards a project’s formal soft costs, other indirect costs associated with construction contractors may not be. Agency payments to construction contractors may be classified as a hard cost, though these costs may include indirect expenditures like overhead, administration, and other activities on behalf of the contractor that are not captured in the formal soft cost total.107 Frequent change orders and poor management practices can lead to contractors incorporating higher overhead and profit margins into their bid prices, further driving up both soft and hard costs.
Change orders typically occur when the project sponsor makes an addition or modification to a project’s original scope of work during construction.108 Much like soft cost estimates, a project’s scope can evolve as it moves from the conceptual and design phases to construction. Some of these modifications occur due to errors or omissions in the initial design, while others are prompted by unexpected events, budget constraints, changing needs and standards, or poor project management.109
While change orders can affect hard costs by modifying physical components of a project, they can also drive up soft costs due to increased administrative capacity necessary to process the change orders, manage changes in construction, and oversee contractors.110 Additionally, change orders can cause delays in a project’s timeline, further introducing new costs and complications. Analyses of past projects indicate that, on average, change orders contribute to a nearly 24 percent increase in project costs.111 These cost overruns often exceed the fixed percentage of project costs reserved for contingencies.
In New York City, change orders have been a major cost driver, particularly on the Second Avenue Subway and East Side Access projects, by introducing significant project delays and driving up budgets. Though an outlier due to its unusually high cost, the Second Avenue Subway project underwent over 270 change orders for a single station (96th Street), modifying nearly 70 percent of its original scope.112 Several factors contribute to the magnitude of change-orders for New York projects, including a lack of agency capacity to quickly process change orders (often requiring months to be approved), inaccurate designs and budget estimates, and increasingly customized specifications to maintain compatibility with older systems as required by the MTA’s operating agencies.113
These challenges not only introduce delays but also inflate soft costs by increasing overhead and profit margins on the part of contractors. When bidding for projects, contractors often account for profit, change orders, and other overhead expenses by adding 10 percent to their final cost estimate.114 In New York City, contractors’ overhead margins often exceed 20-25 percent to account for risk associated with MTA’s notoriously numerous change orders, custom specifications, and bureaucratic challenges.115 Though New York may be an outlier, persistent change orders could also impact the ways in which contractors price risk and overhead into their bids for other agencies, leading to further inflated soft costs.
The delays associated with change orders are compounded by a lack of agency capacity to manage contractors, limited ability to respond to construction issues as they arise, inaccurate cost estimates, and flawed or poorly managed project design.116 Proposed solutions have included the integration of contractors into the design process to better anticipate and prevent changes that materialize during construction; improvements in project management and oversight capacity; and more transparent contracting.117
As discussed in section 4.2, agency staff in Madrid employ several measures to minimize costs, change-orders, and delays, including the use of unit cost contracts in lieu of lump-sum contracts and reliance on a small team of in-house engineers for project management.118 These contracting measures allow Madrid Metro to increase transparency by enabling change orders to be more easily priced and quickly agreed upon with contractors. Relying on in-house project management also enabled Madrid Metro to expedite decision-making (major decisions among leadership can be made within 24 hours), reduce bureaucratic complexity, minimize disputes between the agency and contractor, and resolve disputes before they become unmanageable, which helped keep project costs low.119
Notably, overhead rates for public works in Spain are limited by law to 13 percent, and profit margins to 6 percent.120 These unique legal factors, combined with differences in engineering methods (cut-and-c-cover vs. tunnel boring), governance structures, and public ownership of utilities, partially explain the unusually low cost of transit projects in Madrid. However, Madrid’s approach to transit projects also highlight the impact that project management and contractor oversight capacity can have on the prevalence of change orders and the resulting magnitude of a project’s soft costs.
Soft costs on a transit project encompass most non-construction activities, including environmental reviews, planning, legal fees, administrative costs, and expenditures on design or engineering consultants. Research has found soft costs as a share of project costs have increased over time. A project sponsor’s approach to contracting and management can play a significant role in shaping the extent of soft costs within a project. In cases where agencies rely heavily on outside consultants, lack of proper oversight and management can lead to change orders and delays that result in additional fees and cost increases, which factor into a project’s soft costs. Poor oversight over the design, engineering, and management process can also lead contractors to incorporate more risk into their bids, further inflating soft costs. By using in-house management, unit-cost contracts, and caps on contractor profit margins, these best practices can keep soft costs in check by minimizing scope modifications, change orders, and delays.
4.5 Utility Relocation
A major element of transit construction, particularly for rail projects, is the relocation of utilities along the proposed alignment. These may include power, water, gas, phone, internet, and sewer lines often owned by private sector enterprises with completely different goals and motives. Transit projects can cross utilities both above and below ground, requiring them to be moved vertically, horizontally, or both. It is among the most complex elements of transit projects, and one of the most common reasons cited for issues and project delays.12
Utility relocation needs are typically identified during the initial project design phase. When a preferred alignment is chosen, agencies begin to assess affected utilities, notify utility owners, and coordinate relocation plans as design progresses. One frequently cited issue in relocation, particularly in the case of older utilities, is unavailable or inaccurate information on the location of existing utilities often due to missing historical records or abandoned utilities that were left undocumented.122 An inability to accurately locate existing utilities can greatly complicate the relocation process and require additional work and delays that increase costs down the line.
Early identification and mapping of existing utilities is a major cost-saving measure. One commonly cited statistic claims that every $1.00 invested in early utility identification saves $4.62 in future delays, scope changes, and re-excavation.123 Poor constructability assessments and limited site access during the initial stages of project development can jeopardize the ability of project sponsors to fully identify utility relocation needs.124 Limited site access may be a result of poorly managed design processes, or a reluctance to disrupt existing service (particularly for extensions of existing lines). A report by LA Metro cites poor relocation drawings submitted by consultants and compressed timelines as a driver of utility-related delays.125 While compression of project timelines is often a desirable goal, agencies often do not dedicate sufficient time to carrying out field work and the actual relocation and utility companies are not incentivized to prioritize the timeline of a transit project.126
In addition to timing, utility relocation often requires significant coordination among various public and private entities, and demands a high level of staff capacity. According to law in the United States, private utilities (like the private streetcars in the past) must bear the full cost of relocation.127 But given the immense cost associated with relocation and the propensity for utility companies to sue, legal proceedings are frequent, and companies have found ways through the legal process to argue around or against this rule, and courts have sometimes sided with the utilities.128 Most utility relocation is governed by state or local station, and utilities operating within public rights of way often have franchise agreements with cities, providing the city—but not necessarily the transit agency—with significant leverage to order the relocation of utilities at the owner’s expense or at a negotiated cost.129
Ownership, governance, and staff capacity play major roles in the outcome of utility relocation. Cities, rather than transit agencies, often have the legal authority to order relocation, and strong working relationships between agencies, municipalities, and the utility owners can lessen the time and expense of utility relocation. Both the city and county of Los Angeles have franchise agreements and working relationships with utility providers, as well as representatives on the Board of LA Metro. This relationship allows the city and county to negotiate better rates for relocation work, while in New York, the politically isolated nature of the MTA (and minimal involvement of the city on the agency’s megaprojects) often requires the agency to accept the relocation rates provided by the utility owners.130 Site work and utility relocation costs for the Second Avenue Subway were two and a half times higher than the Purple Line extension in Los Angeles, a similar underground project ($214 million vs. $94 million).131 The Charlotte Area Transit System (CATS), on the other hand, is owned by the city, which allows for a straightforward relocation of city-owned utilities for capital projects.132 The city also has a good working relationship and cost sharing agreements for relocations with the local electricity provider, which has facilitated smooth relocations.
Another coordination issue involves staff capacity to manage utility relocations both at the agency as well as the utility. Staffing requires specialized knowledge of utility technical requirements, processes and people. This is cited as a major issue for LA Metro, where understaffing makes it difficult to keep up with the increasing relocation needs.133 Best practice shows utility relocation managed by a dedicated team of staff with expertise in relocation for the duration of the project and with the same effort that is dedicated to design and construction oversight.134 Experienced staffing and proper oversight is associated with fewer delays and issues than outsourcing the work.135
Projects utilizing alternative delivery methods may also experience complications in implementing utility relocation. This is primarily a result of compressed project schedules and staff capacity. The tightened timelines for DB projects often do not leave enough time for utility relocation, and the lack of completed design documents can make it difficult to identify and relocate utilities early in the project. Delegating utility relocation to the design-builder without sufficient assistance or oversight can pose its own set of challenges, particularly when there is not a strong relationship between the contractor and utility companies.136
Utility relocation is among the most complex elements of a transit project and is frequently cited as a major cost and timeline driver. Project sponsors typically begin identifying utilities during the project design phase and begin notifying and coordinating with utility owners once an alignment has been chosen. Old and inaccurate utility maps, however, can complicate efforts to identify utilities, and lead to additional costs and delays to address unexpected site conditions when conducting relocation. Additionally, insufficient time dedicated to relocation, limited site access, lack of staff capacity, existing agreements between public entities and utility companies, and the need to coordinate with various third party entities can lead to further delays and cost increases during the utility relocation process. Research indicates that investment in early utility identification and relocation planning can result in significant cost savings further down the line by reducing delays, scope changes, and re-excavation.
4.6 Land Acquisition
The acquisition of land and ROW is necessary for any transit project and its route, grade alignment, stations, and maintenance facilities impact specific land needs and costs. Federal and state regulations, including eminent domain laws, environmental statutes, and other statutes governing the purchase of property for infrastructure projects, also influence the land acquisition process and costs.137
Land and ROW acquisition can constitute anywhere from 5.8 percent to 15 percent of project costs.138 When deviating from public right of way or public land, below -grade projects involve the purchase of underground easements from property owners, often with minimal impact to the surface.139 The valuation of these easements depends on depth and anticipated disruption to the surface property like noise or vibrations, which may be considered as part of the environmental review process (see Section 4.7). Easements are sometimes necessary for the placement of aerial guideways for above-ground rail systems.140
Anecdotal evidence from a 2019 GAO report suggests that the costs of ROW acquisition are closely correlated with local land values, and that many project sponsors use existing ROW—such as a highway median—to avoid costly and time-consuming acquisitions.141 However, construction costs are not necessarily higher in more expensive cities. Construction costs-per-mile are much lower in cities like Madrid, Paris, and Copenhagen than in similarly expensive cities like New York and San Francisco, though further detail on actual land acquisition costs would allow for a more accurate comparison.142
Acquisition of real estate for federally-funded projects must abide by the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (URA), as well as 49 CFR part 24, which establishes protections for owners and lessees of property acquired as part of an FTA-funded project. These laws outline procedures and requirements for land appraisal, price negotiation, and just compensation for displaced property owners. As part of the environmental review process, project sponsors are required to document land acquisition needs for alternative alignment scenarios. If relocation is deemed necessary, a social impact analysis is conducted that analyzes the people and businesses displaced, the availability and type of replacement dwellings, potential relocation issues, and efforts to mitigate adverse impacts.143
In addition to these documentation requirements, the National Environmental Policy Act (NEPA) prevents project sponsors from acquiring real estate or ROW prior to the completion of the NEPA process and final determination by FTA. This prohibition on early acquisition is intended to avoid bias towards or against any particular alignment scenario, including a No Build scenario. Limited exceptions are granted for circumstances involving: 1) hardship acquisitions, 2) protective acquisitions, or 3) acquisition of railroad ROW.
For cases in which a transportation project is unable to avoid negative impacts to natural resources or wildlife habitats, agencies are required to employ compensatory mitigation to offset environmental impacts.144 Mitigation efforts are typically conducted on a per-project basis during the later stages of project development. On average, natural resource mitigation constitutes 7.5 percent of project costs (excluding the costs of ROW acquisition) and can range from two to 12 percent of project costs.145
Pursuant to federal and state requirements for just compensation of property owners, project sponsors must obtain a property appraisal and make an offer to the owner accordingly. In some states, like Colorado, property owners retain the right to choose the appraiser, and the agency covers the cost of the appraisal process.146 The agency and property owner then come to a negotiated agreement for purchase and sale. However, if an agreement cannot be reached, an agency may exercise its powers of eminent domain and acquire the property through condemnation as a last resort.
Various elements of the acquisition process act as a cost driver mostly by making the process time consuming. These elements include the timing of property acquisition, whether land is obtained through negotiation or condemnation, and the extent to which relocation assistance or litigation is necessary. Several studies have found that early acquisition can lead to significant cost savings.147 This is largely attributed to reduced delays and likelihood of litigation, as well as the impact of inflation and rising property values on land acquisition costs.
Currently, FTA allows project sponsors to purchase corridor property (ROW) prior to conclusion of the NEPA process at their own risk, so long as it does not preclude the consideration of any alternatives, including alternatives that do not utilize the corridor.148 ROW acquired under this provision must be for a new transit line or core capacity improvement to an existing line. Property not associated with a new or improved transit line or for facilities for a new or improved transit project that are not directly adjacent to the ROW (i.e. maintenance or storage facilities) cannot be acquired under this provision.149 FHWA allows project sponsors slightly broader authority to purchase real property, not just ROW, at their own risk for highway projects prior to the completion of the environmental review.150
An expedited and prompt acquisition process can reduce costs by preventing prolonged negotiations, costly and time-consuming legal battles, and compressed project schedules. Review of best practices in the U.S. and Europe have identified early involvement of the public as a way to compress acquisition timelines and prevent litigation.151 By incorporating public input early in the acquisition process, agencies can determine whether particular alignments are likely to be contentious when acquiring ROW and avoid litigation by planning accordingly.152 During the acquisition process, poor communication between negotiators and property owners, slow pay-outs, and unresponsive acquisition staff can lengthen the negotiation processes, reduce trust between property owners and staff, and lessen the likelihood of a successful negotiation.153
Condemnation is reserved as a final resort, and federal regulation requires agencies to exhaust all possible attempts at negotiation before using their powers of eminent domain.154 Data from 1996 to 2002 reveal that the rate of condemnation varies significantly by state (as low as 0.5 percent in Colorado to nearly 50 percent in Rhode Island) and that more urbanized states are associated with higher rates, likely due to the increased complexity of urban projects.155
Condemnation is not only contentious but can also be far more c ostly given the likelihood of litigation and associated delays. In Texas, acquisition costs were 78 percent higher for condemned properties, and added up to eight months to the process.156 The Utah Transit Authority’ s ability to acquire more than 1,000 parcels without resorting to condemnation was similarly found to be a m ajor cost saver.157 While condemnation can enable the rapid acquisition of property for transit projects, it is inadvisable given the associated cost increases, project delays, and general loss of trust between the public and gov ernment.
While the full extent of land acquisition costs as a share of transit projects can vary significantly, the process can serve as a cost and timeline driver, particularly in the event of lengthy negotiations or if condemnation is required. Beginning the land acquisition process as early as possible with ample community input can allow project sponsors to anticipate and plan for potentially contentious acquisitions and foster trust with property owners. Advanced land acquisition has also been cited as a potential cost saver, and the FTA currently allows project sponsors to acquire ROW before completion of the environmental review process at their own risk.
4.7 Environmental Review
A variety of federal laws, rules, and regulations govern environmental review of federally funded transit projects in the United States. Compliance with these standards falls under the process established in 1970’s National Environmental Policy Act (NEPA), but also involve more than two dozen other federal statutes that span several federal agencies. NEPA acts both as a holistic method of determining the environmental impact of a federal undertaking and as a collection point for the many permits and consultations required under federal environmental law.158
While a few transportation projects are exempted from complete environmental review, a full environmental impact statement (EIS) is typically required of projects built in new ROW. Completing an EIS is often a long process (a median of 3.6 years for EIS completion time) that can contribute to project delivery time and costs. There is general bipartisan support for streamlining the environmental review process, but the approach to do so is either unspecific or divisive.
The emphasis on sources of delay due to environmental protections tends to be on the process of implementing those protections rather than on the standards or stringency of the protections themselves. Some suggest that conforming to environmental mandates may even prevent project delivery delays due to litigation or redesigns later in the process.159
While NEPA is often cited as a source of delay, the law has als o enabled projects to be more responsive to local needs and reduced adverse environmental impacts.160 NEPA has become the primary method for engaging with and informing the public of project details, and thus serves an important role in community engagement. Disagreements about how to proceed given different project alternatives are associated with delays in the overall NEPA process. Finally, many of the preliminary engineering decisions made about a project occur during the NEPA process and would have to occur irrespective of NEPA.
NEPA requires federal agencies to assess potential environmental effects and evaluate any significant impacts in advance of proposed major federal actions prior to making final decisions about how to implement those actions. These may include decision-making about permit applications, adopting federal land management actions, and constructing publicly-owned facilities like federal highways. “Effects” can be the result of direct or indirect actions and include ecological (i.e. effects on natural resources), aesthetic, historic, cultural, economic, social, and health outcomes.161 In this sense, the definition of environmental effects constitutes not only natural resources (e.g. air, water, and ecological resources), but also historic, social, and cultural resources (e.g. historic properties, districts, and archaeological sites).
NEPA applies to highway or transit projects with any federal nexus, including direct federal projects, federally permitted or approved projects, or any project receiving federal funding assistance. Projects that do not use federal funds or require federal permits or authorizations, like preparation of a regional transportation plan, typically do not require NEPA review but may be subject to similar state- level environmental review processes.162 While NEPA is largely procedural (i.e. primarily encompassing assessment and disclosure of environmental impacts), parallels at the state level are in some cases more stringent in that they are both procedural and substantive, in some cases requiring mandatory mitigation efforts.163
The Council on Environmental Quality (CEQ), an entity within the Executive Office of the President, is tasked with oversight of NEPA implementation and the development of national environmental quality recommendations and policies. The regulations established by CEQ are binding on all federal agencies. Federal agencies also supplement CEQ regulations by establishing their own NEPA procedures that reflect their agency’s mission. A federal agency’s NEPA procedures reflect their internal statutory requirements, regulations, and guidance. Typically, a single federal agency is designated the “lead agency” responsible for NEPA review for the proposed action based on expertise and relationship. If more than one agency has expertise on resources impacted by the proposed project, those agencies will also conduct assessments, though the lead agency typically has the biggest review responsibility.
To comply with NEPA and receive federal funding, transit project sponsors must consult with FTA. The project sponsor prepares statements that assess a project or action’s environmental impacts as well as the potential effects of alternative projects or actions.164 Alternatives can be determined through local planning processes or based on prior transportation project planning studies. Through an approach called planning and environment linkages (PEL), transportation planners and NEPA practitioners can coordinate their analysis efforts to potentially accelerate project delivery. However, the application of this approach to transit projects has been limited. Through the NEPA process, FTA and the project sponsor work together to devise a list of economically and technically feasible “reasonable alternatives”.165 FTA is responsible for ensuring that NEPA documentation is complete.
The assessment statements prepared by FTA or the responsible federal agency falls into one of the following categories:
- Categorical Exclusions (CATEX or CE): Certain types of federal actions are categorically excluded from a full environmental analysis because they are considered to not individually or cumulatively have a significant effect on the environment. The federal code lists these types of actions, which require only administrative approval because past experience has demonstrated that these project types or categories do not involve significant environmental impacts. Examples include utility poles, power substations, energy retrofits, training, landscaping, and technology upgrades.166
- Environmental Assessments (EA): If an agency determines that a CE does not apply to a proposed action, it prepares an EA. An EA includes: discussion of the need for the proposal; alternatives; environmental impacts; and a listing of agencies and individuals consulted. The EA process determines whether a project will have significant environmental impact. Once the EA is completed, the agency either issues a Finding of No Significant Impact (FONSI), which describes why the agency believes there are no significant environmental impacts, or it prepares an Environmental Impact Statement.
- Environmental Impact Statements (EIS): If a proposed action may significantly affect the human environment as defined by NEPA, a federal agency will issue a Notice of Intent and begin preparation of an EIS in conjunction with the sponsoring agency. An EIS includes information about the agency and the action it intends to take; the purpose and need of the action; alternatives; a description of the affected environment; and direct and indirect environmental consequences, among other details. An EIS is required for the construction of transit facilities not located within an existing ROW.
Since 2010, FTA has prepared over 50 EA/FONSIs, and over 30 RODs.167 The ROD is the document that identifies the preferred alternative as determined by the EIS process.
Because NEPA serves as “umbrella” legislation over other federal environmental laws, project sponsors typically need to obtain supplemental federal permits or perform certain project-specific analyses to satisfy various federal environmental statutes (see Table 3).
TABLE 3: FEDERAL ENVIRONMENTAL STATUTES MOST LIKELY TO AFFECT MASS TRANSIT PROJECTS
Historically, costs and timelines for processing NEPA reviews have not been tracked in detail for transit or highway projects. Transit agencies and FTA representatives interviewed in a GAO report have indicated that costs associated with NEPA review are not tracked because it can be difficult to discern whether costs are to be attributed to the NEPA process or to the planning and preliminary design phases of project delivery.168 However, one analysis of environmental costs incurred by State DOTs indicated that while environmental costs may range from two to 12 percent of total project costs, the majority of those costs were likely to be for mitigation actions like stormwater facility construction and erosion control, though the same study listed a number of barriers to tracking environmental costs.169
The time and expense needed to conduct environmental review is oft-cited as a challenge in complying with federal requirements.170 State and local transportation officials have identified limited funding and staffing, responsibilities beyond transportation projects, and difficulty coordinating between multiple government agencies as contributors to increased costs and delays associated with the NEPA process.171 NEPA review is included in the project budget, and can come from a mix of federal, state, and local funding sources such as FTA New Starts funds, funds from toll road revenues, grant funding, and state transportation fund accounts.172 Transit agencies frequently rely on contractors to conduct specific elements of NEPA review, such as noise, air quality, and traffic analyses. However, this requires the agency to allocate funds from the project budget toward procuring external assistance. These costs are typically reported among the project management costs.173 Costs associated with environmental reviews are considered a soft cost (see Section 4.4), though there is not a separate line item in FTA’s Standard Cost Categories to exclusively track NEPA costs. Instead, environmental review is bundled with other design, engineering, and legal activities.
While more complex projects typically require more time to complete NEPA documentation, the length of time from the NOI to the ROD may or may not be directly related to NEPA. For example, there may be starts and stops in the process of documentation due to challenges coordinating with other agencies, changes in agency priorities, lack of staff availability, insufficient funding, community opposition, or engineering requirements.174
CEQ studied all 1,161 final EISs across all federal agencies published from 2010 through 2019 and determined that the average EIS completion time from NOI to ROD was 4.5 years, with a median of 3.6 years.175 On average, the period from the original NOI until the publication of the draft EIS took between two and three years, the period from draft EIS to final EIS took over one year, and the period from final EIS to ROD only took a few months, as shown in Figure 12.
FIGURE 12: AVERAGE EIS PROCESS COMPLETION TIME (NOI TO ROD), ALL EISS AT ALL FEDERAL AGENCIES COMPLETED 2010 – 2019
Source: CEQ 2020
However, the average duration of the EIS process is highly dependent on the type of project being built, and transportation projects are significantly longer than other types of actions. The 319 EIS documents issued by the Department of Agriculture averaged just over three years from start to finish. But the 185 EISs prepared by the Department of Transportation took longer than any other agency—almost seven years, on average, as Figure 13 shows. Thirty-nine DOT projects took longer than 10 years from NOI to ROD (33 of which were FHWA EISs).176
FIGURE 13: AVERAGE COMPLETION TIME (NOI TO ROD) FOR FEDERAL AGENCY EISS COMPLETED BETWEEN 2010 AND 2019
The CEQ analysis shows that the FTA was the lead agency for 31 of the projects that completed the NEPA process between 2010 and 2019. For those 31 projects, average and median NEPA processing times vary because of two outliers (the Charlotte Lynx light rail and the Maryland Purple Line). The median overall time, start to finish, is 50.2 months, or just over four years, as shown in Table 4.
TABLE 4: NEPA PROCESSING TIME FOR DECISIONS WHERE THE FTA WAS LEAD AGENCY, 2010-2019 (MONTHS)
The CEQ analysis shows that the FTA was the lead agency for 31 of the projects that completed the NEPA process between 2010 and 2019. For those 31 projects, average and median NEPA processing times vary because of two outliers (the Charlotte Lynx light rail and the Maryland Purple Line). The median overall time, start to finish, is 50.2 months, or just over four years, as shown in Table 4.
As of 2018 there have been about 30 provisions enacted into law to streamline the NEPA process, with the first provisions enacted in 2005’s SAFETEA-LU law. The GAO groups these provisions into four categories:
- Accelerated NEPA review: excluding certain actions from more detailed NEPA review;
- Administrative and coordination changes: changing processes to avoid duplication, establish time frames, and create planning documents;
- Assigning NEPA review to states: except for air quality review, allowing states to review EIS, environmental assessments, and some categorical exclusions;
- Advance planning: provisions such as land acquisition that occur prior to NEPA approval.177
The provisions largely encompass expansions of categorical exclusions to different types of projects and situations. In part because transit agencies do not track the costs and delays associated with the NEPA process, and because not all provisions have been used by all agencies, it is difficult to ascertain exactly how these provisions have affected project delivery for transit. The provision that was reported to be used most and to be most successful in speeding project delivery for both highway and transit projects was “Minor Impacts to Protected Public Land”, which allows project sponsors to bypass environmental assessment if a project will have minimal effects on historic sites and parklands.178 For the Chicago Transit Authority, this provision was expected to speed project delivery by several months.179
While legislative reforms have led to some gains in streamlining project delivery, they have not been entirely successful. A recent report from the DOT Office of the Inspector General found that of the 42 planned actions listed in MAP-21 to streamline project delivery, only 27 had been completed. Full implementation was delayed because DOT had to revise several actions to comply with the subsequent FAST Act.180
Since NEPA was first signed into law, a number of Executive Orders (EOs) have been issued by presidents that have altered the scope of information agencies are to obtain when conducting their environmental reviews (see Table 5). EOs outline the responsibilities of federal agencies when administering environmental permits, thereby altering the information that agencies are required to submit.
TABLE 5: RECENT EXECUTIVE ORDERS ISSUED RELATED TO ENVIRONMENTAL REVIEWS
In 2007, the National Surface Transportation Policy and Revenue Study Commission recommended a number of reforms to reduce project development delays, including eliminating the need to revisit alternatives that were previously rejected in the planning process, revising CEQ regulations to narrow the number of alternatives considered “reasonable”, and requiring better coordination between federal agencies.181 The alternatives analysis required by NEPA often duplicates a similar analysis required by FTA’s New Starts program. The Surface Transportation Assistance Act marked up by the House Transportation and Infrastructure Committee in 2009 suggested eliminating the alternatives analysis required in the New Starts program, but this was ultimately not adopted into law.182
California has its own environmental review law that is famously more stringent than NEPA. In response, federal law was changed in 2005 to allow U.S. DOT to assign some of its responsibilities under NEPA to states, a provision that is available to both highway and transit projects but to date, has primarily been used for highway construction. Under this law, state DOTs can conduct NEPA reviews and approvals on FHWA’s behalf, though FHWA still retains liability for decisions.183 The NEPA Assignment provision was originally enacted as a pilot in SAFETEA-LU with the goal of speeding up the environmental review process and has since been enacted in seven states through the Surface Transportation Project Delivery Program created in MAP-21.184 Delegation of NEPA responsibility can also allow states to use their own resources, thus decreasing the likelihood of delays caused by state DOTs needing to obtain project-specific approvals from FHWA.185
States must first assume FHWA’s responsibility for NEPA compliance for at least one highway project within the state before they can do the same for a railroad, public transportation, or multimodal project. This process for assuming authority can pose challenges, as it may lead to a situation in which a state presides over NEPA review for a highway project while the appropriate federal agency maintains authority over other project elements. Further, states—but not transit agencies—can assume responsibility for determining whether an activity qualifies for a CE. Given both of these challenges, the potential effects of NEPA Assignment on multimodal projects are unknown.186
The few states that have pursued NEPA Assignment have reported cost and time savings. For example, Ohio DOT estimates a 20 percent time savings and $45 million savings in overall program delivery. Texas DOT estimated a reduction in the average time to conduct an EA from three years before state assignment to two years. However, these examples are limited to highway programs and a comprehensive study of nationwide NEPA Assignment cost and time savings has not yet been conducted.187 Of the states whose NEPA programs have been evaluated, the available information pertains to a limited number of projects and fails to consider how other factors like funding can affect project timelines.188
When an EIS is required for a project, the lead agency must coordinate with resource agencies that have purview over the resources potentially affected by a project, such as the Fish and Wildlife Service or the Federal Aviation Administration (FAA). In addition, the requirement that projects comply with all federal, state, and local environmental laws means that the NEPA process necessitates close coordination among a number of agencies at all levels of government.189
It is unclear whether recent attempts at better federal coordination have been successful.190 There is little indication that the “Administrative and Coordination” provisions in recent transportation legislation have led to improvements in project delivery. Rather, most of these provisions have either had no effect or the effects cannot yet be measured, as indicated by state DOTs.191 Still, efforts specifically aimed at early coordination—between permitting agencies and between planning and environmental staff—might help to mitigate a number of risks that, if unaddressed, may result in time-consuming litigation associated with the NEPA process.192
A 2005 report for a working group focused solely on improving analysis of indirect and cumulative impacts, for the agencies that conduct such analyses, indicated that early coordination between agencies would help to foster agreement on issues about the resources most likely to be affected as well as the temporal and spatial boundaries of analysis. The provision of guidance and information resources to support better coordination could help to “avoid misunderstandings and conflicts that can lead to delays in project development”.193
In 2011, FHWA launched the “Every Day Counts” (EDC) to help find best practices. Through EDC, the FHWA and its regional offices work with state and local agencies as well as private sector firms to collaboratively identify innovative delivery practices and rapidly scale their utilization through regional summits, webinars, and written materials focusing on best practice sharing. EDC innovations include design and construction practices, procurement and delivery models, public outreach, and innovative finance. Since its inception, 52 discrete and specific innovations have been identified and each state has employed at least one.194
Legal issues are often cited as a major source of NEPA-related project delays, though the issues that spur litigation are complex. Of the many types of events identified as potentially inciting litigation, two in particular receive the most attention: use of NEPA to delay or stop a project by interests such as community coalitions or environmental organizations who oppose the project, and lack of agency compliance with NEPA procedures.195 Across all federal NEPA actions, only 0.22 percent result in litigation.196 This is because the vast majority (95 percent) of federal actions are evaluated as a CE, with less than one percent of federal actions requiring an EIS. While NEPA litigation has declined since the 1970s, there is concern that the potential for litigation still affects the NEPA process through the extra time and effort expended by project sponsors to prepare legally-sound documentation.197
The primary reasons for filing NEPA lawsuits are inadequate NEPA documentation (e.g. the EIS or EA did not include sufficient analysis of all alternatives, did not consider all “reasonable” project alternatives, or did not adequately analyze cumulative or indirect effects) and failure to prepare an EIS rather than an EA (e.g. inappropriate selection of assessment process).198
As shown in Table 6, 39 cases were brought against FTA between 2001 and 2013, compared with 96 against FHWA, 46 against the FAA, and 7 against other agencies within DOT.199 Cases brought against FTA represent just over 2 percent of all NEPA litigation.
TABLE 6: NEPA CASES BROUGHT AGAINST TRANSPORTATION AGENCIES FROM 2001 TO 2013
Source: Ruple and Race 2020
Public involvement efforts, a fundamental piece of the environmental review process, often provide the forum in which project opposition is addressed. Levels of public involvement vary depending on the type of NEPA review (i.e. EA vs EIS) and the specific agency conducting the review. In general, agencies are required to offer 45 days for the public to comment once a draft EIS is prepared. Two Supreme Court cases have held that issues must be raised at an early enough point in the process to be “meaningfully considered” unless there is a flaw in the agency’s analysis.200
The CEQ notes that, “the success of a NEPA process heavily depends on whether an agency has systematically reached out to those who will be most affected by a proposal, gathered information and ideas from them, and responded to the input by modifying or adding alternatives, throughout the entire course of a planning process.”201
For reviews that warrant an EIS, the project sponsor is required to conduct a “legal sufficiency” review to ensure that the proposal is legally sound and accounts for all available information. Some have expressed that this review is overly risk-averse and may slow down the process.
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Commonly cited reasons EISs for transportation projects have been found inadequate in court cases. 202 |
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Twenty jurisdictions (states, territories, regions, and local jurisdictions) in the United States have their own environmental review processes, and other states have laws in place to address specific environmental issues, like wetlands protection.203 In some cases, as with the California Environmental Quality Act (CEQA), these reviews are considered more stringent and has more substantive requirements and mitigation mandates than federal environmental review.204
In these cases, the lead federal agency can authorize states to use their own requirements to meet the federal standard per Section 1309 of the FAST Act. In California, a single combined EIS/EIR (environmental impact report) that bundles the federal and state reviews together is prepared. Some states have indicated that administrative responsibilities associated with NEPA add time to project delivery that would otherwise be prevented if only the state review was required.205 States can also choose to forego the use of federal funds to save time and costs – thus avoiding the federal NEPA review process – though time and cost savings may be negated in states with environmental requirements like those at the federal level. However, using nonfederal funds can create problems if the project later uses federal funding and must meet federal requirements.206
Individual transit agencies usually have their own environmental review criteria that must be done in conjunction with NEPA review for any project. Typically, this is met by complying with NEPA, though there is some administrative work to put the analysis into agency-specific terms. For example, a transit agency may set its own noise criteria standards in addition to those established by FTA.
Many transit agencies have adopted several other environmental standards for their construction efforts. For example, among the first efforts LA Metro undertook to improve environmental standards in their building practices was the adoption of a Green Construction Policy to reduce emissions from construction equipment in 2011.207 Since then, the agency has established a Sustainability Plan, Rail Design Criteria, and the Metro Environmental Construction Awareness (MECA) program. Through MECA, contractors and sub-contractors can access video, text, and internet resources specific to environmental regulations and best practices for composing a proposal.208
Environmental review is a major element of transit projects and their schedules, though the precise cost of environmental assessments and the extent to which delays are solely attributed to environmental review versus other project development stages can be difficult to pin down. Delays associated with environmental review on projects are primarily a result of the process, rather than the standards themselves. The environmental review process takes an average of seven years to complete for transportation projects, and the potential for litigation can contribute to additional delays. Litigation may result from project sponsors failing to meet NEPA requirements, or from opponents seeking to delay or stop a project. These lawsuits primarily allege inadequate documentation, or failure to consider all reasonable alternatives. Early, proactive coordination among agencies responsible for elements of the environmental review, as well as setting firm geographic and temporal boundaries on the extent of environmental impact analyses have been cited as tools to avoid disagreement and delays during the NEPA process.
4.8 Buy America
Mass transit procurements over $150,000 using FTA grant funds are subject to a “Buy America” requirement first adopted by Congress in 1978. Under 49 U.S.C. §5323(j), all “steel, iron, and manufactured goods used in the project” must be produced i n the United States. For rolling stock (including train control, communication, traction power equipment, and rolling stock prototypes), the standard is not quite as high— the cost of all components and subcomponents made in the United States must be at least 70 percent of the total cost for all rolling stock compon ents, and final assembly must have occurred domestically.209 The intent of Buy America is to leverage public infrastructure dollars to support and grow domestic manufacturing, but it has some potential cost and timeline consequences for transit projects.
The law gives the U.S. Secretary of Transportation the authority to waive the requirement for transit projects if U.S.-made goods are deemed to be insufficiently available or of insufficient quality, if the domestic content requirement would cause the cost of the overall project to rise by more than 25 percent, or if a waiver is in the public interest. But the issuance of such waivers is always at the discretion of the Secretary, and no waivers have been issued since 2016.
All forms of economic protectionism (whether high tariffs or Buy America requirements) are a statement of principles: that preserving certain kinds of domestic jobs, or certain kinds of industrial or agricultural capacity, are so important to the nation that it’s worth requiring U.S. consumers of those products to pay more. The degree to which the costs of mass transit projects are increased by the Buy America requirements are not well documented. However, the few available studies suggest Buy America requirements can lead to costlier procurements for rolling stock given the relatively small size of this domestic market, which cannot achieve lower unit costs from economies of scale. Further, the limited availability of domestically produced versions of specialized products necessary for processes like utility relocation can increase costs through cumbersome compliance processes and the need to request waivers.210
Additionally, the higher cost of domestically produced materials can inflate construction costs. For example, the price of hot-rolled band steel milled in the Eastern U.S. is $650 per metric ton as of February 2020, versus $445 per metric ton for equivalent steel milled in China or $491 per metric ton for steel milled in Western Europe. The average world export price is $495 per metric ton at the point of export.211 The cost of transoceanic shipping may mitigate this differential by as much as $70 per ton, but there is still a sizable difference in the cost of steel used in U.S. transit projects because it cannot be purchased on the world market. A study analyzing the effects of using U.S.- produced steel in highway projects found that Buy America requirements increased construction costs by $2 billion from 2009 and 2011 ($652 million annually).212
But perhaps more important than increased costs is the time spent complying. Commonly cited issues with Buy America include lengthy project timelines due to limited domestic availability of specific materials or administrative complications in determining compliance or requesting waivers. These costs include required agency documentation of the national origin of various materials and products; contractor preparation of two separate bids incorporating either domestic or foreign materials for a single project; and preparation of waiver requests.213
In New York City, the Second Avenue Subway project was delayed over disagreements about whether a fire suppression system largely manufactured in Finland needed to be Buy America-compliant.214 The MTA argued that the system was a subcomponent of the subway station and not itself the “end product.” However, in 2013 another firm challenged the MTA’s interpretation and two years later, the FTA determined that the suppression system itself was an end product, and thus had to comply with Buy America’s 100 percent domestic content requirement.215 This ruling required the MTA to remove the Finnish system and begin the procurement process over again.216
The number of U.S. buyers for rail rolling stock is limited and there is little data about the effect of Buy America on contracts. However, a 2015 study estimated that U.S. transit buses cost twice as much as those in South Korea and Japan, and that allowing importation of buses would likely lead to expanded choice, lower prices, and better bus service as a result.217
Given their unique supply chain, the application of Buy America requirements for utility relocation is a source of additional complication. Difficulties finding specialized parts, documenting compliance, or requesting waivers have led to delayed relocation and increased project costs for several agencies. An FTA request to review Buy America compliance for a $2.3 million reimbursement agreement for gas relocation in Sacramento delayed the relocation by one year. It was eventually completed at an increased cost of $4.3 million.218 Another instance there involved the replacement of a lot valve, in which a small number of valves were found to be non-compliant with Buy America. While it would have only cost $100,000 to produce a replacement in the United States, the agency learned that the manufacturing process and safety certification would take at least 62 weeks, likely resulting in a project cost increase more than 10 times the value of the actual part.219
Existing research on the effect of Buy America on construction costs primarily identifies costlier procurements of select items, particularly rolling stock, electrical systems, and steel components. Though there is not a comprehensive analysis of Buy America’s effect on transit costs, several examples and research suggest that the process by which agencies must determine that a product is compliant or applying for waivers can be cumbersome and result in additional delays and costs. The limited availability of Buy America-compliant specialized parts, particularly for utility relocation, can also lead to delays and cost increases during the procurement process as agency’s attempt to find compliant parts or apply for a waiver.
4.9 Planning and Community Engagement
Planning helps decision-makers, elected officials, and the public translate goals and visions into a specific, prioritized projects for a region’s transit network. Planners at public agencies work with communities and other agencies to pursue projects that meet their criteria. This involves a multi-step process with frequent interaction with the public and demand models to predict future impacts.
Nearly all models of transportation planning include an element of community vision or engagement. Benefits include gaining knowledge and expertise from local constituents; communicating plans, designs, timelines, and costs early on to avoid later conflict; and in many countries for many types of projects, community engagement is a legal requirement. Requirements often include holding meetings and allowing time for public comment on documents, particularly with the expectation of those comments being addressed in subsequent drafts of plans and policies.
However, this element of the planning process is not always included in an effective, equitable, or transparent manner.220 Community engagement can take many forms to fully constitute participation, not merely communication or placation.221 Strategies and practices have changed over time, but the aim of engaging the public in the planning process continues to provide both opportunities and challenges. While planning and community engagement can add time and cost to project delivery, early project planning has been found to decrease construction timelines.222 Insufficient early planning results in costly additional engineering, consideration of more alternatives during the NEPA process, and inaccurate cost estimation.
Following the expansion of the Executive Branch through the New Deal, Congress passed the Administrative Procedures Act (APA) of 1946 to provide greater accountability through new requirements on announcement and recording of proposed government actions. The APA was further amended with the passage of the Freedom of Information Act (FOIA) in 1966 that requires all agencies and departments in the Executive Branch to announce meetings in advance and state whether or not they are public. It also requires open meetings for most government proceedings, stating that with exceptions for security, privacy, and trade secret, among other reasons, “every portion of every meeting of an agency shall be open to public observation” and mandated the opening of records and ability of the public to request records.223
While the APA and FOIA brought about more transparency and accountability to the actions and decision-making of executive agencies, they did not actually engage the public or focus on specific stakeholders. Formal processes and expectations to engage the public changed significantly in the 1960s and 1970s, and some attribute increased project costs to increased engagement.224 As outlined in Section 4.8, projects that include an EA or EIS as required by NEPA also must provide opportunity for public comment. There are other specific requirements to involve the public in the context of transportation planning as well, such as the requirement that metropolitan planning organizations (MPOs) provide in-person and online comment and participation from the public on their required long- and short-range plans for the region.225
In the United States, engagement strategies have changed over time as well. Jane Jacobs painted the picture of citizens making their way to city hall and facing imposing city officials “like rulers” in an overly formal setting prior to 1960, and lamented how out of touch the city planners were with their communities.226 Since then, public involvement has become much more local, taking on the form of meetings in the affected neighborhoods, collaboration with local stakeholders, and other means of more direct communication.
Recently, virtual public engagement techniques through websites have become widespread. While shifting to solely virtual public engagement has social equity implications since not everyone has easy online access, making online engagement mobile-friendly has helped bridge gaps. By 2019, about 20 percent of adults in the United States accessed the internet through smartphones only, and 81 percent owned a smartphone. However, there is lower smartphone ownership among vulnerable populations such as older adults, people with lower education levels, people with lower income levels, and people in rural areas.227 Other new engagement strategies include bringing communities together at projects sites through art, storytelling, or other engaging activities.228 In 2020, in response to the COVID-19 pandemic, modifications to community engagement ranged from shifting online to canceling meeting or postponing projects.229 Many agencies have found that online public engagement during the pandemic has drawn significantly higher levels of engagement.230 While there are still inequities in any singular form of engagement, virtual engagement can reach across platforms, reduce travel time to and from a public meeting, reduce childcare needs, and allow participants to tune in for only the part of a meeting that is directly relevant or of interest to them.231
Community engagement can affect project costs and timelines not necessarily through the engagement itself, but rather the process and its outcomes. If community engagement lengthens a project’s timeline, costs may be drawn out, and input can produce changes in project specifications, such as community requests to add more infrastructure.232 One recent study found higher increases in costs for highway projects in high income areas, possibly due to the fact that people with higher incomes may provide more input given they are more likely to have flexible schedules, able to afford childcare, and more inclined to value spending public money to further enhance transportation projects beyond basic or standard designs. Furthermore, people with higher incomes have a higher willingness to pay for environmental attributes such as air quality and noise.233 The desires of the community are only communicated and incorporated into plans when the public is involved and listened to. Therefore, involving as much of the public as possible and acknowledging the biases in the community feedback or engagement received will also have an impact on resulting project outcomes and costs.
Public engagement is not often studied and evaluated, especially on a project level.234 It is therefore difficult to assess its precise impacts.235 However, research suggests that early, transparent, and effective public participation can help mitigate the costs and delays associated with problems or difficult issues springing up in later project stages. While increasing community participation likely also increases costs, these are likely not high as the costs of large changes partway through a project or litigation, and engagement can be conducted parallel to other project tasks, limiting potential stoppage due to litigation.
4.10 Architecture and Design
Design specifications are a core element of any transportation project, and agencies often spend a significant amount of money on preliminary design. Design decisions determine whether a project is constructed at-grade, above-ground, or below-ground, along with the depth and size of stations. Other elements of station design include platform size and layout, vertical access (escalators and elevators), construction materials, and aesthetics.236 These specifications are informed by a range of factors including expected passenger capacity, environmental considerations, physical site characteristics, agency preference, and compatibility with existing systems, among many others.
There is significant debate over the impact of architectural and design elements on project costs. Some research cites large, grandiose, and overly-customized stations as a major cost driver, while examples from Toronto have pointed to station depth— rather than design—as a primary determinant of cost (building deeper can be a result of geological constraints, but also a desire to minimize disruption at surface level).237 Other research and examples from New York City points to management of the design process and design quality as a potential driver.238 Projects typically undergo a series of design and constructability reviews to resolve errors and ensure that the project can be built as designed. Poor project design or incomplete design evaluations may require change orders or other modifications if major errors or issues arise during construction, leading to further delays and cost increases. An over-designed project—one whose initial capacity far exceeds its short-term expected capacity—may also incur unusually high construction and operating costs while an under-designed one may result in significant costs down the road in the form of expensive modifications.
Assessment of project design quality is dependent on a variety of factors, including an agency’s technical expertise and the contracting method used. Design assessment can be conducted in-house by agency staff, by outside consultants, or by a hybrid team.239 In a DBB process, projects typically undergo a series of three design reviews during the Final Design phase—sometimes referred to as 30-percent, 60-percent, and 90-percent reviews. The FTA establishes a set of recommended protocols for design quality assessment during each phase.
Some projects undergo a less formal peer review, in which peer agencies or other independent external entities evaluate and offer feedback on a range of possible topics including a project’s design, budget, or timeline. While peer review is required for Small Starts projects and for midsize projects funded by the FTA’s CIG program, it is not a requirement for larger projects. Such reviews tend to enhance the project development process and ensure compliance with common standards rather than improving specific project elements.
Flawed project design processes have been cited as a major cost driver in New York City, particularly for the East Side Access and Second Avenue Subway projects. Project design and constructability reviews in New York are often performed by contractors overseen by the agency. During constructability reviews, limited access to construction sites led to incomplete assessment of site conditions, while poor evaluation of initial design documents resulted in alterations and change orders during construction.240 Analysis by the MTA’s Office of the Inspector General found that design errors or omissions were some of the most common causes of frequent change orders.241 The prevalence of change orders and design-related delays underscores the effect that design review quality and management can have on overall project cost and schedule.
Additionally, extended project planning phases can lead to over-customized specifications that require expensive procurement, complicate construction, and inflate costs. The Second Avenue Subway and East Side Access projects both underwent several rounds of design. When planning phases are extended over several years, there is an increased risk of technology or standards in the initial design becoming outdated before construction starts, leading to change orders, delays, and cost increases.242 Extended planning phases may also prompt contractors to overdesign projects as a way to manage the potential risk of inadequate design, further inflating construction costs.
DB projects tend to involve unique design evaluation methods viewed through the lens of three variables: cost, schedule, and quality.243 Under DBB, agencies and project sponsors provide a completed design and desired completion date, leaving bidders to compete over the price needed to complete the project. Under DB, agencies will provide specific performance criteria and project schedule, leaving design and cost as the variables in bidder competition.244 Agencies who pursue DB often need to define and evaluate design quality in a more detailed and precise manner than they would for a DBB project.
The degree to which project owners utilized these potential design assessment approaches varied greatly. One study’s review of DB RFPs indicates that project owners may be insufficiently evaluating design bids. Nearly 30 percent failed to ask for the design/builder’s past qualifications, and 43 percent failed to evaluate the bidder’s approach to delivering project quality.245 While a majority of projects required post-award submission of a quality management plan for construction, less than a third required a similar plan for project design. These patterns suggest that project sponsors may be relying solely on review of design submissions to evaluate project quality and missing opportunities to establish quality management plans. While most of the highway and rail projects reviewed included both design and construction quality management plans, transportation projects made up a small portion of the RFPs reviewed in the study. These findings nonetheless demonstrate the role of design evaluation in the project development process and suggests the need for rigorous design quality assessment practices for DB projects.
Among the design elements frequently cited as a major cost driver are stations, particularly for subway projects. Various elements of transit stations, including size, construction materials, depth (if underground), and tunneling method can contribute to project costs. Larger, deeper, and more complex stations may incur significantly more construction costs than smaller and simpler stations.
Station Depth
Data from projects in the United States, Canada and Europe suggest that station depth may play a significant role in driving construction costs. When compared to projects in Los Angeles, Paris, and London, both the share of total costs borne by stations and per-station costs were unusually high in New York’s newer stations. Recent stations in New York are notable for their large, deep, and highly customized features in contrast to older MTA stations. Stations accounted for 60 percent of construction costs for the Second Avenue Subway, 32 percent for East Side Access, and 62 percent for the 7 Line Extension.246 Stations accounted for only 36 percent of total construction costs for Paris’ Line 14 extension despite large intermodal connections required to connect with the existing system, and 27 percent for Los Angeles’ Purple Line extension. Per-station costs for the Second Avenue Subway were $507 million compared to $161 million for the Purple Line in Los Angeles and $200 million for the extension of Paris’ Metro Line 14.247
TABLE 7: STATION COST COMPARISON AMONG NEW YORK, LONDON, LOS ANGELES, TORONTO, AND MADRID248
Stations for the recent New York projects are significantly deeper than those on other subway lines. The Hudson Yards station for the 7 Line Extension is 125 feet below ground while the SAS and ESA stations are nearly 100 feet below ground, compared to roughly 50 feet for LA’s Purple Line and Paris Metro’s Line 14 extension. In the case of the SAS, the decision to build deep stations was intended to avoid the expense of relocating utility lines, though any savings were likely negated by the significant cost of these stations. In the case of the 7 Line extension, the 100 foot station depth was necessary due to the line’s tail-end tracks, which extend beyond the terminal below the existing rail yard, and other deep infrastructure. For the ESA project, the new 100 foot-deep terminal below Grand Central Station was chosen over proposals to bring rail service to the station’s existing lower level in part due to concerns associated with excavating the tunnels connecting the station to buildings along Park Avenue.249
A similar relationship between station depth and cost was identified in Toronto, though overall construction costs in Toronto are on par with similar projects in Paris and Los Angeles referenced above. The most recent subway project in Toronto—the 5.3 mile Toronto-York-Spadina Subway Extension (TYSSE)—was among the most expensive in recent history at $579 million per mile ($3.1 billion). TYSSE stations are among Toronto’s deepest, ranging from 65 to 82 feet below ground, and feature long-escalators, expansive column-less interiors when possible, and high ceilings. The TYSSE project’s six stations are estimated to have cost between $957 million to $1.1 billion (roughly $160-183 million per station), nearly 39 percent of the total project cost.250
The second most recent subway project in Toronto was the Sheppard Subway (Line 4), a five-station line spanning four miles. Completed in 2002, the project cost $400 million per mile ($1.5 billion total). Stations on Line 4 are 50 to 59 feet below ground, which makes them shallower than the TYSSE stations yet up to twice as deep as older stations on the Toronto subway. The Line 4 stations are simpler and less grandiose than the TYSSE stations and cost $143 million each ($714 million total). While the Line 4 stations were less expensive than those on the TYSSE, they were still two to three times more expensive than older, shallower stations. When compared to the shallower stations (no deeper than 46 feet) on older projects (mostly built using cut-and-cover methods), the TYSSE stations ranged from 4.2 to more than 18 times more expensive. These trends suggest a linear relationship between greater station depth and construction costs in Toronto. Examples from Madrid and Toronto suggest that cut-and-cover methods may be less costly than tunnel boring, though they may also generate other externalized costs and are far more disruptive at the street-level and can require costly relocation of existing utilities along the trench.251
Station Customization
While some level of customization is necessary for all projects, the extent to which stations rely on standardized designs and simple construction materials can affect project costs. The New York MTA opted for granite archway entrances for the SAS project, which required custom-produced granite cut at the right size and shape. Buy America regulations limited the MTA to a handful of American granite suppliers capable of producing the custom pieces, though the need for custom granite would have likely still resulted in a similarly complicated and expensive procurement. Stations on the East Side Access project were intended to feature pre-cast walls as finishes for portions of the blasted tunnels. The pre-cast pieces, which were sometimes damaged during transport from the project staging site in Long Island, ultimately did not fit together due to the tunnel’s slope and led to workers casting the walls by hand. Researchers noted that leaving the exposed bedrock (like in Stockholm and other European cities) rather than adding finishes likely could have curtailed costs without necessarily sacrificing visual appeal.252
Officials in Madrid and Copenhagen cite standardization and simplification of station design as a cost containment strategy for their respective projects. In Madrid, where subway construction costs are among the lowest in the world (ranging from $134-168 million per mile), stations were kept shallow (55 feet) and primarily built using cut-and-cover methods.253 The most recent extension of the Madrid Metro—Line 9—featured two new stations that cost an average of $14 million each (21 percent of total project costs), far less expensive than other European and American projects.254 In addition to cut-and-cover construction and shallow depth, officials stressed the use of standard, uniform designs, wide platforms, and simple materials as key elements to keeping station costs low.255
Similar efforts to streamline and simplify station design have been implemented in Copenhagen and Los Angeles. Using a modular “kit-of-parts” approach, officials in Copenhagen and Los Angeles standardized sizes, materials, and components for their stations to minimize costs and streamline construction (see Copenhagen Case Study). In 2018, LA Metro adopted a formal Systemwide Station Design Standards policy that established common materials and parts for all future bus rapid transit (BRT) and rail stations. The policy was initially developed in 2012 in response to risi ng construction and maintenance costs associated with unique station designs, including challenges in maintaining or replacing custom station features that negatively affect station appearance over time.256 The standards were produced as a kit-of-parts and specify both the materials and individual components to be used across all stations. These components are primarily made of glass, stainless steel, and concrete, with factory-finished surfaces used in limited cases. Components include glass panels for canopies and entryways; a standardized concrete paving pattern for all station plazas; stainless steel finishes for entrances, gates, railings, and other equipment; and LED lighting. This standardization is intended to allow for customization and variation in station layout—including the integration of public art into glass panels for entryways—while maintaining durability, consistent appearance, and cost-effective construction and repairs across the system.
While station customization can play a role in construction costs, it is difficult to assess the magnitude of its impact compared to station depth. In Toronto, there was minimal difference in stations as a share of total cost between the TYSSE project (with large, ornate stations) and Line 4 (built using a no-frills, minimal design).257 While the former chief of the Toronto Transit Commission suggested station depth, rather than materials, was the primary determinant of station costs for the Line 4 project, more data is needed to evaluate station cost drivers more precisely. The lack of comprehensive data or studies on station costs makes it difficult to fully isolate the impact of station depth or materials on costs for individual projects. However, cost figures and anecdotal evidence from New York City, when compared to design streamlining efforts in Los Angeles, Copenhagen, and Madrid suggest that station customization, architecture, and depth can all play key roles in driving construction costs.
Technological advances have improved the ability to monitor, control and manage operational and safety performance of transit systems. However, they have significantly added to the complexity of projects, particularly tunneling projects. For example, a transit line project can have thousands of unique communications points that are transmitted and report in some manner to a remote location, such as a control center. These include train tracking, signaling, emergency communications devices, intrusion alarms, gas monitors, failure monitors on myriad types of equipment, ventilation control and monitoring, fire alarms, and CCTV.
While not expensive as stand-alone elements, their installation, integration, and testing can add significant time to rail projects. Many of these subsystems, like fire alarms, must be connected in order to work. Activation of a fire alarm in a station affects operational functions of elevators, escalators, messaging systems, station ventilation and alarm reporting. Each interface must be tested for each alarm, of which an underground station can dozens.
Further, given the long time to complete rail projects, specifications for advanced communication systems are often obsolete by the time they are ready to be installed toward the end of a project. This can result in change orders with schedule impacts if upgrading to a more modern standard. Many of these technological requirements are driven by fire and safety codes that are unique to rail projects, discussed in detail below.
Fire Safety Standards
Rail transit stations, particularly below ground, are also subject to safety regulations. The U.S.-based National Fire Protection Association (NFPA), an independent global trade group, publishes safety and fire codes for a range of facilities, including rail transit systems under NFPA 130 Standard for Fixed Guideway Transit and Passenger Rail Systems.258 NFPA 130 is not federal law, but it has been formally adopted by many jurisdictions and agencies as part of their fire safety codes for rail transit construction. While some countries like Spain, France, Japan, Italy, Germany and Austria have their own fire safety standards for transit, most agencies around the world follow NFPA 130.259
NFPA 130 largely consists of performance-based criteria for ventilation, fire endurance and spread, and evacuation, but also include specific provisions for materials, distances between exits, spacing of stations and cross-passageways, and doors, among others. For example, one part of the code that has direct implications for the scope of subway stations, and thus costs, is riders standing on a platform must be able to evacuate the station within four minutes and reach a safe location within six minutes.260
The code also sets parameters for modeling evacuation scenarios. These evacuation times are based on peak service, with trains one headway behind schedule, resulting in twice the normal passenger load on vehicles and twice as many passengers on a platform.261 Additionally, evacuation scenarios assume that one escalator on each station level is out of service, and that the escalator chosen must be the one that would most negatively impact passenger exit capacity.262 Escalators generally cannot make up more than half of a station’s egress capacity on each level.263 This is intended to ensure that evacuation can be completed even in a worst case scenario.
One of the more significant determinants of station platform size are NFPA 130 requirements on the number and width of stairs, as well as the maximum permissible distance from the most remote points of the platform to the nearest exit.264 As a result, station and platform sizes often comfortably exceed the levels that would be necessary to handle normal passenger flow rates. While intended to ensure space for evacuation, meeting these strict standards can lead to a more comfortable passenger experience.265
Other standards that may impact station costs or elements include provisions for the inclusions of cross-passages to allow for passengers to move between tunnels in case of emergency and, for example, if one tunnel has smoke. According to NFPA 130, if the distance between two stations is greater than 2500 feet, cross passages must be built between the tunnels at 800-foot intervals if there are no intermediate shafts to the surface.266 According to one analysis, cross passages are rare in Europe as well as in Japan.267 This is likely in part due to the relatively close spacing an d travel time between stations that may allow passenger to walk a short distance to evacuate, and reducing the likelihood that a train would get caught in the middle of a tunnel and unable to drive to the next station.268 Constructing cross-passages can require additional excavation and complexity that may affect construction costs.
Ventilation systems that can bring fresh air to underground passengers during a safety incident is also a major element of underground metro systems. NFPA 130 requires mechanical and passive ventilation systems to become fully operational within 180 seconds, and maintain airflow rates for at least one hour to allow for evacuation of vehicles.269 Design of ventilation systems also accommodate the maximum number of trains possible between ventilation shafts during an emergency.270
Seismic Standards
Transit systems in earthquake prone areas also must comply with seismic safety guidelines. At and above ground systems are particularly vulnerable to ground movement from earthquakes while underground transit systems largely move with soil in the event of an earthquake and are generally safer.271
Seismic codes for transit are largely handled at the local or a gency level, though there are certain statewide and federal guidelines that agencies may incorporate into their design standards.272 For example, Seattle’s Sound Transit adopted agency-wide seismic standards that take a hazard-based approach to earthquake resilience. These approaches include planning for an Operating Design Earthquake (ODE) this strength over a facility’s 100 year design life. The other is a Maximum Design Earthquake (MDE), which would be expected to occur once every 2500 ye ars, with a 4 percent chance of an earthquake exceeding this level during a facility’s design life. Sound Transit’s guidelines require light rail facilities to withstand ODE’s and resume operations in a “reasonable amount of time,” and withstand a MDE without collapsing or risking lives.273
Meeting such standards can vary depending on the seismic profile of varying regions. For example, San Francisco’s Bay Area Rapid Transit (BART) strengthened its standards over the past decades and are undertaking vulnerability analyses and retrofitting key facilities to enhance their earthquake resilience. These measures include enlarging tunnels that cross through faults to account for potential displacement and incorporating concrete-encased steel ribs.274 Aerial structures are reinforced with stronger foundations or columns to withstand collapse or poor soil is replaced with non-liquifiable soil to prevent collapse or damage.275
Accessibility Standards
Transit stations are also subject to accessibility requirements under the Americans with Disabilities Act of 1990 (ADA). Design specifications for accessibility are outlined under Title II and III of the ADA, also known as ADA Accessibility Guidelines. Enforced by both the federal departments of Justice and Transportation, these guidelines cover vehicles, buildings, transportation facilities, and many other types of facilities. The U.S. Access Board, a federal government agency, writes all code/guidance and has issued supplements to cover different facilities. The ADA guidelines were last updated in 2004 to address usability and format issues, as well as cover new types of facilities. The U.S. DOT formally adopted these new standards in 2006.
Among the DOT-specific guidelines for transit include locating accessible routes in the same area as general circulation paths, including detectable warnings on curb ramps and along platforms that do not have screen doors or platform guards, minimum platform heights, and maximum rail platform slopes.276 DOT has added to these standards over time. For example, in September 2011, DOT added a provision mandating that individuals with disabilities, including wheelchair users, “must have access to all accessible cars available to passengers without disabilities in each train using the station”, to prevent segregating disabled riders in separate vehicles.277 These standards apply to all new construction, as well as alterations to existing facilities.
The ADA requires that any alterations to existing facilities make them fully ADA compliant, or to the maximum extent feasible in cases where full accessibility is not possible. If making a facility fully accessible would exceed 20 percent of the alteration cost, agencies are only required to incorporate accessibility elements that would not result in a disproportionate cost (under 20 percent).278
A U.S. DOT 2016 ruling clarified that any alterations to existing transportation facilities that can impact their usability must incorporate accessibility, including for wheelchair users.279 The ruling also clarifies that the ADA requirement to incorporate accessibility to the maximum extent possible is primarily intended for rare cases where it is impossible to make an existing facility fully ADA compliant. In these cases, agencies cannot cite disproportionate cost as a limiting factor preventing incorporation of accessibility. The disproportional cost provision applies only in instances where a primary function area of a station (such as a platform) is being renovated.
Coverage of the impact of ADA compliance on construction costs has largely revolved around elevator retrofits on older subway systems. The cost of retrofitting elevators has gained particular attention in New York City. Only 23 percent of New York MTA’s subway stations are accessible, and the agency has retrofitted several stations without installing elevators or ramps.280 A 2019 lawsuit ruled that the agency violated the ADA by not installing elevators as part of a 2013 subway station renovation in the Bronx, and must make stations accessible when renovating future stations.281 The agency announced a $5.5 billion capital program in 2019 to install elevators in 70 stations in five years.282 The plan received increased scrutiny for its cost—nearly $78 million per elevator, in contrast to examples from European cities, where station upgrade costs per elevator are as low as $22 million.283 These costs are also lower in other North American cities like Boston, where the MBTA installed three new elevators and two escalators at a Red Line station for $36 million, and Chicago, where a new station with four elevators cost $75 million ($19 million per elevator).284
Accessibility regulations abroad are largely handled at the country level, but generally all stations built in recent decades are designed to be accessible. Transportation systems in Canada are governed by the newly enacted Accessible Transportation for Persons with Disabilities Regulations (ATPDR), as well as the 2018 Accessible Canada Act, which is the first nationwide accessibility act.285 Provinces also have their own accessibility regulations that apply to public entities, like the Accessibility for Ontarians with Disabilities Act.286 Public transportation in Australia is similarly governed by the national Disability Discrimination Act of 1992, which includes design and service standards for public transport similar to the ADA.287
There are no European Union-wide accessibility standards comparable to the ADA, but rather individual member state regulations. The European Accessibility Act, passed by the European Parliament in 2019, largely focuses on fare payment systems and does not explicitly address system design.288 Accessibility on European transit systems can vary significantly. In Barcelona, 143 out of 158 metro stations (81 percent) are accessible, while just under 20 percent of stations on the London Underground are accessible.289 Just three percent of stations on the Paris Metro, for example, are accessible to passengers with disabilities, while the much newer tram system is fully accessible.290 While France passed a law in 2005 to improve accessibility in public spaces, Paris’ Metro was exempt, and its operator has argued that the system’s age would make retrofitting stations extremely costly.
Design and architecture can be significant cost drivers for transit projects in three ways: poor management of the design processes, project design itself, and design standards. Lack of oversight of the design process can result in accepting inadequate or faulty designs that result in issues during construction and require change orders. The design of transit projects themselves, particularly on underground stations, can also raise construction costs. Deep, extravagant stations and the use of bespoke materials have been cited as major cost drivers in cities like New York and Toronto. Lastly, select safety standards can require more complex system design to make a project resistant to natural disasters like earthquakes. Stringent evacuation standards in fire safety codes like NFPA 130 can also result in large subway s tations, while the need to install cross-passages and ventilation systems can be an additional source of costs. Accessibility standards, on the other hand, do not appear to be a particularly significant cost driver for new construction, though accessibility retrofits of older station in New York City have received scrutiny for th e high costs of elevator installations compared to other cities.
4.11 Labor
Frontline labor is a major cost of any capital project. Workers are needed to prepare and install the materials to ensure a safe and long-lasting infrastructure system. But while labor is a major part of overall construction costs, outside of New York City there is little research comparing transit construction labor costs in the United States to places abroad or whether labor is a major cost driver that can be addressed through responsible changes in public policy. The wages, benefits, and work rules that are negotiated for unionized labor, which makes up the majority of the transit capital workforce, are typically embedded in construction contracts protected by nondisclosure agreements and are notoriously difficult to obtain.291
The economic desperation of the Great Depression resulted in widespread labor mobility, with unemployed men willing to relocate almost anywhere to get work and prepared to accept almost any wage offered. In response, Congress enacted a law in 1931, called the “Davis-Bacon Act” after its sponsors, to prevent an influx of cheap outside labor from lowering the wage standards in any given area.292 The law originally mandated that any contract to construct or improve a federal building had to require that all contractors and subcontractors pay laborers and mechanics a wage “not less than the prevailing rate of wages for work of a similar nature in the city, town, village, or other civil division in the State in which the public buildings are located.”293 Davis- Bacon was expanded in 1935 to cover almost all federal work and in 1956 to federal-aid “highway projects on the Interstate System.”294
Later, the Federal-Aid Highway Act of 1968 expanded Davis-Bacon applicability to non- Interstate federal-aid highway projects and prevented any mass transit loan or grant from being approved without assurances that all construction workers would be paid prevailing wages.295
The Department of Labor maintains a minutely detailed database of the prevailing wage determinations for a wide variety of job types in every U.S. municipality. The database contains wage information for four types of construction projects: building, heavy, highway, and residential.296 The categorization of a project within the database is often based on the primary structure type rather than on the overall project type. For example, per the DOL guidance document, construction of aboveground “Subway stations” is generally classified under “Building Construction” while “Railroad construction,” “Subways (other than buildings),” “Tunnels,” and “Viaducts (other than highway)” are categorized under “Heavy Construction.”297
Obviously, the prevailing wage requirement causes an increase in construction labor costs for some federally-aided mass transit projects.298 However, the financial effects of Davis-Bacon are difficult to evaluate, because the prevailing wage laws in a majority of states would still apply in the absence of a federal prevailing wage law.299 According to a 2017 report from the Council of State Governments, 29 states have some kind of prevailing wage law that would still govern federally-funded mass transit construction contracts in the absence of federal Davis-Bacon requirements.300
The factors affecting compensation relate to the U.S. healthcare and pension system, which rely heavily on employers to provide those benefits. Such benefits, negotiated by unions, can cost 36 to 62 percent of the prevailing wage rate.301 Comparable developed economies typically have government-provided healthcare and retirement plans, alleviating huge potential cost burdens on agencies and contractors.302 Abroad, those costs are paid through general taxation so they do not add to the direct cost of capital projects. Pension contributions at Transport for London are less than half those at New York MTA.303 Without significant reform in U.S. healthcare and retirement policy, those discrepancies are likely to persist.
The stipulations written into labor contracts that establish the parameters for baseline and additional compensation, are also a potential cost driver. To address safety and health concerns, abuses of excessive time worked, and quality standards, labor unions created a system of rules which prevented management from taking advantage of workers. The inability of work rules to keep up with technology and productivity improvements are cited as one key factor in driving labor costs.304 Private sector labor are often 20-30 percent below union labor, and according to contractors this is due to differences in work rules not compensation.305
Discrepancies in work rules exist between U.S. unionized labor and similar organized workforce abroad. For example, tunnel boring machines (TBMs) and necessary support systems in the United States generally require 20-25 operators, compared to 10 in Poland and Spain 14 in Australia, and up to 20 in the UK.306 It is unclear whether there are any tangible safety implications related to a smaller worker-to-machine ratio. Higher labor counts are not restricted to TBMs: one detailed investigation found staffing levels on subway projects in New York to be up to four times higher than in other countries.307
Laborers sometimes receive high premiums for working nights and weekends, which is when many capital construction projects take place so as to not disrupt existing operations. Complicated accounting for overtime can also create scheduling problems. Modifying rules to add more flexibility to scheduling might appease both labor and agency management, but the General Contractors Association of New York, a labor group, has resisted a more flexible overtime policy.308
Some cities have used Project Labor Agreements (PLAs) to establish work rule guidelines prior to construction and final negotiation of the contract. PLAs are collective bargaining agreements designed to avoid worker strife by providing clear arrangements for dispute resolution, per-approved compensation rates and benefits, specific work rules, and—importantly—dispute resolution procedures.309 They apply to all contractors and subcontractors on a construction project, usually prohibit work stoppages, and include union or non-union workers.
A comprehensive study in Massachusetts found PLAs beneficial for keeping large-scale transportation construction projects on time and on budget due to their ability to avoid labor disputes.310 A study in New York came to similar conclusions.311 LA Metro recently renewed its PLA policy based on its previous ability to attract workers in advance of major anticipated construction activity was approved by voters.312 Nevertheless, they remain contentious. A study of PLAs throughout California suggests the agreements reduce the ability for “flexibility” on the job site.313 President George Bush issued two Executive Orders restricting the use of PLAs for federal construction projects, which was overturned by President Barack Obama whose Executive Order encouraged their use.314
Workforce supply is another potential labor-related cost driver. In Los Angeles, the concurrency of several large-scale public and private construction projects has resulted in a scarcity of skilled workers, increasing costs for the Purple Line Extension.315 The workforce shortage is expected to become more acute as workers retire and fewer are available and willing to take their place. Workforce development programs and active succession planning can help to retain a productive workforce.316
While cost increases associated with the frontline workforce have been documented in New York City, the extent of labor costs on U.S. transit projects have not been fully quantified, nor has there been a comprehensive comparison of labor costs between U.S. and international projects. The full impact of the Davis Bacon Act is also difficult to assess, as most states have their own prevailing wage requirements that would apply in the absence of federal regulations. However, costs associated with paying workers extra for evening or weekend shifts may be minimized by the use of more flexible working hours. The use of PLAs has also been found to minimize worker strife and avoid delays and costs associated with labor disputes. Other sources of increased labor costs in the U.S. may be attributed to healthcare and pensions being incorporated into the direct capital cost of a project compared to abroad, where nationalized healthcare and pension schemes are paid for through general taxation as opposed to employers.
REGIONAL CASE STUDIES
The case studies in this report examine the facts and background of a project or several projects conducted in a region and examined their approach to governance, processes, and project standards. The research relies on discussions with public and private experts and stakeholders in each region to help identify best practices and problems in delivering projects. The case studies were selected in consultation with the project’s advisory panel, and included considerations of project complexity, geographic diversity, modal comparability, and other factors that can help identify cost and timeline drivers along with solutions to improve them.
The following cases are included in this section:
- Los Angeles
- Seattle
- Denver
- Minneapolis-St. Paul
- Copenhagen
- Madrid
- Paris
- Toronto
- Virginia’s I-495 HOT Lanes and the Silver Line
THE ROLE OF THE FEDERAL TRANSIT ADMINISTRATION IN PROJECT DELIVERY
The Federal Transit Administration (FTA) is a modal agency under the U.S. Department of Transportation (USDOT) and administers roughly $12 billion annually through its various grant programs. Fixed guideway (rail and bus rapid transit) projects receive approximately $2.3 billion through the agency’s Capital Improvement Grants (CIG).
The agency employs 550 full time staff across its Washington, DC headquarters and 10 regional offices. Each regional office includes an Office of Planning and Program Development, as well as an Office of Program Management and Oversight. Some of the larger regional offices with more transit activity like Philadelphia (Region 3) and San Francisco (Region 9) have an Office of Financial Management and Program Oversight that provides additional oversight and assistance. Staff sizes at the regional offices ranges from 15 to 40 employees.
Nearly all large transit infrastructure projects use federal resources as part of their funding package, necessitating interaction with FTA staff and complying with federal regulations. This is done primarily through FTA’s regional offices in the early stages of project development. FTA’s in-house staff is supported by project management oversight contractors (PMOCs) that are drawn from a nationwide network of private firms, selected by the FTA through a rigorous review, to provide oversight of major capital projects from conception to operation. These contractors focus specifically on project costs, schedules, expenditures, scope, risk, and safety.317 Transit agencies work closely with FTA staff to secure CIG funding and reach a record of decision on the federal environmental review. The FTA also conducts triennial reviews of grantee agencies, including their procurement practices, capital programs, financials, and compliance with Buy America, civil rights, and other requirements that come with Federal funding. Once funding and NEPA approval are secured, the FTA’s role in construction and operations diminishes.
Local agency staff mostly recall positive experiences working with FTA and benefit from their technical expertise. In particular, oversight and reviews by the FTA before the preliminary engineering phase help agencies better identify and resolve staff capacity constraints, third party and intergovernmental approvals and coordination, or other complications like utility relocations in advance, preventing potential delays. Some cited a lack of staff capacity at the FTA regional offices and distances between agencies offices and FTA offices resulting in slower decisions and inability to provide greater technical assistance.
AMERICAN CASE STUDIES
THE ROLE OF THE EUROPEAN UNION IN PROJECT DELIVERY
Public transportation projects in Europe are largely planned, funded, and delivered at the national and local levels. However, the European Union plays a limited role in funding and overseeing select projects, as well as setting guidelines for environmental assessments. This funding and oversight role is handled by the European Commission, the EU’s executive branch. The Commission is organized into multiple departments and executive agencies according to policy area.407 The Directorate General for Regional and Urban Policy oversees the segment of the EU budget that funds urban transportation projects, and consults with other DGs, including the DG of Mobility and Transport.408
The EU sets some high-level transportation policies aimed at meeting specific goals like decarbonization, adoption of new technology, and reducing disparities in economic development between member states.409 Among the more specific goals of the EU is the completion of the Trans-European Transport Network (TEN-T).410 The EU provides funding and financing assistance to member states for TEN-T projects which are primarily cross-border rail and road projects. There are, however, some public transit projects that receive funding under this program. For example, Metro line 8 in Madrid, which provides a connection from the city center to the Madrid Airport, which is deemed an international connecting point for the TEN-T network. As a result, the European Union covered 76 percent of the project cost through its Cohesion Fund.411
The EU also sets general standards for formatting, processes, and environmental impacts to be considered through its Environmental Impact Analysis (EIA) directive (Directive 2014/52/EU).412 The EIA directive details the selection criteria that should be used to determine whether or not to prepare an environmental impact statement, including project characteristics, location, and the anticipated extent of potential impacts. The directive also requires public notices and consultation opportunities during various stages of the project development and environmental assessment phase.
While this directive specifies the general structure, form, and content of environmental impact statements, each member state is responsible for adopting its own law and process. The most recent amendment of this directive in 2014 instructed member states to streamline environmental reviews, enact time limits on the environmental assessment process, and simplify language to make EIA reports more accessible to the public.413
INTERNATIONAL CASE STUDIES
THE ROLE OF THE FEDERAL HIGHWAY ADMINISTRATION IN PROJECT DELIVERY
The Federal Highway Administration (FHWA) provides assistance and funding for states to design, build, operate, and maintain the national highway system (Federal-aid Highway Program).577 The agency is headquartered in Washington, D.C. and has a division office in every state, the District of Columbia, and Puerto Rico, employing roughly 2700 staff in total.578 Division offices are often located in state capitals, where most state DOTs are also headquartered.
The total federal-aid highway budget is $41 billion per year and is largely distributed to state DOTs under existing formulas in federal law. Unlike transit CIG grants, most FHWA grants for large projects are not discretionary and state DOTs are responsible for selecting and evaluating projects that will receive federal funding.579 To be eligible, projects must be included in a state’s Statewide Transportation Improvement Program (STIP) and the MPO’s Transportation Improvement Program (TIP or RTIP), which lists the major transportation projects across all modes that are expected to need federal funding or approval.580
FHWA uses a risk-based methodology to determine which projects to dedicate additional oversight and technical assistance, including size, cost, schedule, and complexity.581 For these major projects, division offices develop a project-specific plan that documents the justification for and scope of the division office’s involvement. The division office will often embed its own staff into a project to provide technical assistance across multiple project phases. FHWA division offices are able to lend in-house expertise on ROW acquisition, environmental reviews, engineering, operations, freight, and finance. The co-location of state DOTs and FHWA division offices in the same city allows for regular meetings, knowledge-sharing, and cooperation between state and federal teams.
Under federal law, the Surface Transportation Project Delivery Program also allows states to assume NEPA review and approval authority (known as NEPA assignment).582 This eliminates the need for FHWA review and approval on specific projects, and help streamline the environmental review process. States may apply for NEPA assignment and, if approved, are bound by a memorandum of understanding with FHWA that must be renewed every five years. Seven states currently have NEPA assignment agreements with FHWA: Alaska, Arizona, California, Florida, Ohio, Texas, and Utah.
MULTIMODAL CASE STUDY
TAKEAWAYS AND RECOMMENDATIONS
The preceding data, analysis, and case studies reveal major challenges with public transit cost and project delivery in the United States, outlined below. Especially at a time of economic and fiscal uncertainty as well as environmental and social anxiety, it is critically important we get the most out of our existing public investments and that those projects we do undertake are successful both during the planning, design, construction, and implementation phases.
However, this work also makes it clear that there is no silver bullet to cutting the costs and timelines of critical transit projects. It also finds that the responsibility for doing so does not rest solely on federal reforms, fixes at the agency level, or with private sector practice. Rather, the challenges are acute, complex, and multi-faceted and therefore the solutions are too. The recommendations below are based on that fundamental premise. They are organized around the governance/process/standards themes discussed in Section 2 and, similarly, there is overlap among the recommendations as well as their intended targets.
6.1 We need to get the institutions, oversight, and decision-making right. Governance does not usually garner the most attention, but it is paramount to the success of a project both at public agencies as well as with the private sector.
Today, in the United States, transit projects are delivered almost exclusively through existing entities. Public transit agencies are institutions that were designed as operating entities often to pick up the operation of struggling bus lines from private companies decades ago. As such, they rarely have the structure, authority, or experience to deliver a major transit construction project, which requires unfettered support from local jurisdictions, the ability to acquire land as necessary, secure local permits to close streets and relocate utilities, and flexibility to hire top talent to lead the project.
Given this complexity and the limited reach of most agencies, project sponsors both domestically and abroad have turned to SPDVs to deliver projects, whether using DBB, DB, P3 or other procurement method. The build-out of the subway system in Madrid relied on MINTRA, an independent SPDV, to manage construction before handing the ownership and operation back to Madrid Metro. Denmark and the Municipality of Copenhagen created the Ørestad Development Corporation to build their subway system and has since transitioned it to an operating agency. European SPDVs are often structured as publicly-owned corporations and their single-mission purpose of building a transit system with flexibility in contracting and setting salaries fosters a businesslike approach and culture. Some of the lowest cost lines in the United States, including the Gold Line in Los Angeles, were similarly constructed using an independent construction authority.
While the success of a project cannot be explicitly tied to a governance model, states or regions need to create a temporary, independent SPDV with the necessary authorities (outlined below), or modify an existing institution in the same way, to deliver a project. In either case, this can require the transit agency and local jurisdictions to cede some of their control over project delivery. But careful organization through board representation and sharing of staff can help to ameliorate those concerns.
Project sponsors should have authorization to be self-permitting. For example, if a street needs to be closed for construction activities for a transit project, a project-specific permit allows work to begin without the need to request another permit from a locality to proceed. This requires localities ceding some control but will facilitate speedier projects and help the project sponsor manage betterment requests. Project sponsors should also be able to issue debt (if necessary), use eminent domain to acquire land, relocate utilities, as well as enter into contracts and agreements with public and private entities.
Project sponsors should have a governing board that is made up of funders and the relevant other stakeholders that are necessary to push the project forward. Inclusive board representation not only allows the project sponsor to secure buy-in from relevant parties but can also help manage delays and scope additions. Project delays or major change orders will reflect poorly on the board, and if a delay is associated with a particular jurisdiction, they will be naturally incentivized to resolve the issue quickly. Having local officials on the governing board will also help alleviate concerns associated with ceding control over permitting and other decisions.
Since one of the most significant problems associated with project delivery is the ability of public-sector staff to directly manage projects, the project sponsor should have the ability to set its own salaries to attract and hire top project management talent and borrow staff from existing institutions. Compensation that is reflective of market rates will help the public sector compete with private sector consultants for top level staff. Instead of building the entire team from scratch, the entity should bring in staff from other agencies with project oversight and management experience, like state departments of transportation (DOTs). They can temporarily join the project sponsor payroll or relocate to the project sponsor’s office, adding expertise to help navigate regional project complexities.
While these authorities, abilities, and governance structures could be achieved by reforming and existing public transit agency or other existing institution in most cases, a temporary SPDV will be necessary to achieve those authorities given the complexities associated with reforming an existing institution for the purpose of delivering a project.
For its part, the FTA should encourage project sponsors to reform governance, authorizations, and other factors as part of receiving federal funds. The federal government should help support project sponsors set up SPDVs or reform governance of existing institutions through preferential treatment for competitive grants by adding a governance review and score as part of the CIG application process. The FTA can also develop more detailed information, best practices, lessons learned and other guidance about how to organize and create effective SPDVs.
Anecdotally, many project delivery experts have a preferred method for delivering projects. Some swear by the traditional DBB approach, which was used to successfully deliver the huge buildout of subways in Madrid. Others cite time savings and innovation realized through DB, which is increasingly used in regions like Paris and Copenhagen. The P3 arrangements in Denver created tangible project savings on some parts of the project, and project managers in Seattle use a combination of DB, DBB, and CMR.
Our work makes clear that no single delivery method on its own is a panacea for cost and timeline issues. But agencies’ commitment to the method and understanding of how to manage it is essential. Each delivery method has its own benefits and tradeoffs depending on the project. In DBB, most of the risk for cost overruns lie on the public sector side. While DB can transfer risk to the private sector and often yields a faster (but not necessarily cheaper) project, a poorly written DB contract, deferred planning decisions, or delays in obtaining public permits can result in change orders and lawsuits, with the public sector still responsible for cost increases. DB contracts require a different type of oversight than traditional contracts and require a much longer and more intensive procurement process.
In order to sort out these differences, project sponsors need to adopt a formal evaluation process to determine the appropriate procurement method on a project-by-project basis. As part of this process, risks must be identified their probabilities and impacts assessed, and mitigation measures must be identified and implemented.
Similarly project sponsors need to consider the level of involvement and control they would like to have over the project design, among other factors, before deciding on a procurement method. On a DBB project, the public sector is heavily involved in overseeing the project design process and conducts multiple design reviews. Under DB, the public sector provides the contractor with high-level specifications and performance criteria and allows the design-builder to develop the specifics as it simultaneously designs and constructs the project. This requires the project sponsor to cede control over the design process but allows it to benefit from potential innovations and efficiencies from having the builder design the project. Agencies that are too heavily involved in the design process of a DB can eliminate its benefits. In Seattle, a tendency to manage DB contracts as DBB on certain projects by requiring the design-builder to submit to the traditional 30, 60, and 90 percent design reviews was cited as a significant reason for delays and inability to realize the benefits of the delivery method.
Additionally, project sponsors must avoid developing design or procurement criteria that are either too prescriptive or too vague. Overly prescriptive specifications can restrict the design-builder’s creativ e freedom over the design process, which is one of the notable elements of the DB method. An overly vague spec sheet that fails to specify desired finishes or comp atibility requirements, for example, can result in agencies receiving an unsatisfactory or flawed f inal product. To remedy this requires expensive change orders, which were common in all the domestic case studies reviewed in this research.
Once a project sponsor chooses a specific procurement method, they should commit to it and manage it accordingly. For example, the first light rail project in the Twin Cities region was delivered primarily using a DB approach. This yielded a project that came in under budget and ahead of schedule. But when building their second line, the project sponsor opted to go with a DBB procurement given its desire retain more control over the project design. Officials in Copenhagen similarly wanted to retain control over the architecture of stations on the City Ring Line (which was delivered using DB) and thus opted to procure the stations separately.
After selecting the procurement method for a particular aspect or section of a transit line, project sponsors in the United States tend to make several mistakes that contribute to delays and increased costs.
For one, project sponsors often attempt to simplify projects by bundling its discrete elements into one mega contract that can exceed $1 billion in value. Bundling can have benefits: a single procurement and single contract helps a single contractor coordinate activity and, in theory, cut costs and timelines. But examples from abroad shows that single contracts are rare, and agencies often disaggregate segments, so contract values do not exceed about $300 million. While this is in part attributed to the limits of the private bidders to secure insurance and bonding capacity, this approach yields several benefits to the project. Notably, smaller contracts invite more competition and reduce the chance that a contract or contractor will jeopardize progress on other segments of a project. U.S. agencies should similarly break up construction projects into manageable sections and cap contracts at $300 million to $500 million.603 The project sponsor must execute these smaller contracts strategically and clearly to ensure seamless interfacing and coordination.
Project sponsors also regularly include rules in the procurement specifications that help achieve other public goals, such as requirements that a certain minimum percentage include disadvantaged businesses. The percentage is usually set locally and can be problematic for a project both in meeting the target and the process for compliance. Project sponsors should consult with construction firms prior to procurement to ensure that the DBE goal is both aspirational yet achievable, and to increase it on future procurements as the local market develops.
Similar approaches apply to other procurement specifications like local hiring requirements or Buy America. While it is unclear whether these add significant costs in themselves, the arduous process of complying with the requirements is the key cost and timeline driver rather than the requirement itself. Existing research focuses on how the Buy American law applies to several federal agencies, but not Buy America which applies to highway or transit projects conducted by state and local project sponsors. GAO needs to evaluate how Buy America specifically increases costs and timelines for transit projects, both in terms of materials and compliance. More research on Buy America and its effect on transit projects would help identify potential reforms to improve the processes for compliance.
Another problem is that most state or agency policies dictate that public procurements must go to the lowest bidder. The intention for prioritizing low bids is to save public dollars but in practice they often result in cost overruns or change orders because of problems both on the public and private sector side. Nevertheless, the practice continues in the United States despite international best practices of using a blended scoring process that place greater weight on the quality and past performance of the contractor, rather than cost as the primary driver. For example, when scoring construction bids for the 1999-2003 metro extensions in Madrid, 30 percent of the final score was based on bid price, 20 percent on schedule considerations, and 50 percent on the technical qualifications of the bidder and their proposal. Other evaluation factors might include design, delivery schedules and timelines, quality of proposed personnel, past performance, and management plan.
Examples from Europe demonstrate how best value procurement keeps construction costs low and projects on schedule by prioritizing technical expertise and preventing under-qualified contractors from receiving contracts. State and local procurement regulations should be reformed to allow transit agencies to apply best value selection rather than lowest bid. The federal government does not mandate any specific evaluation factors, but for best value procurement, it does require the criteria to be disclosed in its solicitation. But since most agencies do not have significant expertise in conducting best value procurement, the FTA should develop guidance and technical assistance to share best practices on standards and models, including formulas that agencies can use to evaluate proposals. A best practices manual with standards and implementation guidelines would provide agency staff with confidence of conformance with federal and state laws.
Overburdened and undertrained public agency staff have trouble coordinating environmental review and planning documents, creating discrete and clear procurement plans, writing smart and effective contracts, and ensuring adherence to contract terms during construction. These all lead to problems with litigation, change orders, and delays throughout a project. Project sponsors need to invest in better training and support for front office staff who are responsible for overseeing, monitoring, and managing projects from inclusion to operation. They should be well-versed in the type of delivery mechanism employed (e.g., DB, DBB, P3). Experienced staff with strong oversight is associated with fewer project delays.
Project sponsors should also invest in a small, multidisciplinary team of high-quality, experienced executives with control over on-the-spot decisions, and enough junior staff to support them. The team needs to consist of employees from the public sector to ensure no conflicts of interest and proper oversight of outsourced staff. Project sponsors can and should use consultants to bolster in-house staff for specific expertise and discrete tasks, but those consultants need to be overseen by strong public sector management.
The FTA needs to work with project sponsors to more precisely determine their workforce needs for project delivery management and oversight. The FTA should invest in and develop training institutes and provide other resources to help agencies address these needs.
In addition, this research found that the unionized, frontline construction workforce is not a primary target for cost or timeline efficiencies on major projects domestically or abroad.604 Due to competition with other industries for construction labor, the workforce is typically paid above the prevailing wage, and given that nearly all workers are employees of private construction firms, they do not have public sector pensions or other benefits associated with public sector agencies. Labor is a significant portion of project costs, but outside certain markets like New York, reforms to work rules and regulations will not have much effect.
Project sponsors should, however, establish equitable project labor agreements (PLAs) as a valuable way to avoid worker strife by providing clear arrangements for dispute resolution, pre-approved compensation, and work rules. Labor leaders should be at the table at the beginning of the project development in order to address potential concerns early, create flexibility in work rules, overtime, shared understanding about conflict resolution, and scheduling to keep projects moving efficiently and safely.
6.2 Some of the processes, procedures, and practices that public and private actors must undertake in order to build transit projects—from conception to final completion—are often too slow, cumbersome, or outdated. We need to make it easier to build more and better transit projects.
Large, linear transit construction projects almost always require a comprehensive EIS. This is the most detailed type of analysis required by federal environmental review process, and one that can take several years to complete. The federal NEPA process is required of projects that use federal funds, but components of it often apply even if no federal funding is used.
NEPA is an important part of making sure that projects are transparent about their potential impacts to the built and natural environment, air quality, and the communities affected. They are intended to be clear and transparent in order for stakeholders to understand what will happen and mitigate unintended consequences. These federal regulations also help protect communities from negative effects to their health, resiliency, and vitality, especially communities of color, which often bear a disproportionate burden of negative impacts. It can give others impacted by the project—including labor—a voice in the decision-making process. Along with the federal metropolitan transportation planning requirements, it is one of the few mandated opportunities for the historically underrepresented to provide input.
The NEPA review process also extends beyond the statutory confines of the law itself. Environmental review for a project can involve more than 30 different federal authorizations, including NEPA, the Clean Air Act, the National Historic Preservation Act, and others. Layered on top of that are myriad state and local authorizations necessary for a project to move forward. The result is an uncoordinated, duplicative, and convoluted process that takes a long time given the different pace and experience among the agencies. Project sponsors usually do not know which of these authorizations will apply before they enter the environmental review phase. For each, a separate agency must prepare and review the authorization, under the loose guise of a lead agency that is tasked with overseeing the process. For example, the FTA is typically the lead agency for transit projects, but if a project crosses through an endangered species habitat, the Department of Interior must also review compliance with the Endangered Species Act.
In this way, the U.S. approach is fairly consistent with how other countries approach their environmental reviews. But although the rules, regulations, and requirements in some European countries are as just as elaborate, the environmental review processes are generally better streamlined, and approval is obtained faster than in the United States. They offer several potential reform ideas that will help to make demonstrable improvements in environmental review efficiency without affecting environmental and community protections.
Other countries limit what is required for certain types of projects, including alternatives and types of impacts. In Madrid, transit projects in urban areas are brownfields, and thus are exempt from many of the environmental laws that, for example, an intercity high-speed rail or highway project in a greenfield site would require. Subway projects in Madrid primarily focus on construction impacts such as noise, NOx, and vibrations along with historical preservation. Ontario’s Transit Project Assessment Process (TPAP) has allowed transit projects to be exempt from the provincial environmental assessment and to use their own condensed environmental review process that takes less than two years. Recent legislative changes have further exempted transit projects from select requirements and allowed certain early works like utility relocation to be evaluated through their own environmental assessment and carried out before completion of the larger environmental review.
Following the lead of places like Toronto, Congress should create a pilot program to allow the federal transportation secretary to exempt select public transportation projects from NEPA if they are able to meet certain criteria. To qualify for a place in the pilot program, a public transit project sponsor must demonstrate that it conducted robust community engagement and evaluated alternatives through the planning process. Projects in the pilot program will still need to work through other state and federal environmental authorizations outside of NEPA, such as historic preservation requirements and the Clean Air Act. The secretary should not allow more than three projects per year to be accepted into the pilot program. After five years, the FTA should evaluate the pilot to determine whether it had demonstrable benefits to costs and timelines or unintended consequences on the community or environmental resources.
For projects outside of the pilot, improved coordination, collaboration, and understanding of the federal permitting process among agency staff is critical to improving timelines. The better federal coordination promulgated through the One Federal Decision (OFD) Executive Order, was a good first step. Although there is general agreement that OFD will likely not make a significant impact on the actual timelines, better coordination between agencies on the status and timeline of the varying federal authorizations is sensible. However, the mandatory time limits on EAs and EISs imposed by OFD failed to take into account the separate timelines and review processes mandated by other laws, like the Endangered Species Act, Clean Air Act, or National Historic Preservation Act. Likewise, mandatory page limits did little to restrict the scope of the document as a whole, because those pages ended up being displaced to appendices.
The Biden Administration revoked the OFD EO, but it should be reissued and focus on better coordination and consolidation of the disparate timelines and processes among the various regulations that fall under the umbrella of NEPA. Some aspects of OFD, such as page or time limits should not be included in the new EO. Once issued, the FTA should execute an agreement with relevant federal agencies such as the Army Corps of Engineers, EPA, United States Coast Guard, and others as appropriate and commit to working together to achieve the goals of the reissued EO and collaboratively work to coordinate each agency’s processes.
Misunderstandings and conflicts between agencies lead to significant delays in the development of documents associated with environmental review. Early and consistent coordination between agencies during planning and environmental assessment helps foster agreement on issues. The Council on Environmental Quality (CEQ) should require more regular face-to-face meetings of federal agency field staff involved with preparing environmental documents. The goals of these in-person meetings are to discuss the project, the respective processes, potential barriers and to form relationships between staff that are concurrently working on environmental review. The deliberate creation of professional relationships can lead to a greater understanding among permitting staff on how other agencies conduct their respective analyses, enable better problem-solving, and ultimately result in faster decision-making.
Congress needs to level the playing field between highways and transit when it comes to NEPA review. Federal law allows states to assume NEPA review and approval authority for highway projects. This eliminates the need for the federal government to directly review and sign off on NEPA documents for specific projects, which could save time. U.S. DOT should closely evaluate NEPA Assignment outcomes in the states that have adopted the program to determine whether it makes sense for Congress to expand the program’s statutory applicability to transit projects.
But large transit projects are much less common than highway projects in the United States, and the agencies tasked with environmental review often take a risk averse and inefficient approach. The local project sponsor typically does not have longstanding experience in project delivery or NEPA. In addition, the FTA has fewer staff since field offices cover multiple states—in contrast to FHWA, where each state has a field office—and the uniqueness of transit projects often results in more complex analyses. Congress should dedicate more resources to the FTA to increase staffing in their regional offices and help assist transit agencies with preparing and coordinating environmental documents. As part of an overall coordination effort, requiring agencies to share environmental documents will help cut down on duplicative tasks and ensure greater communications between agencies. Federal agencies and CEQ should explicitly require sharing of environmental documents between permitting agencies to cut down on duplicative tasks.
Since the federalist reforms at streamlining are new and ongoing, CEQ should set up an annual environmental permitting conference. The event should cover federal, state, and local elements and bring public and private, federal and local environmental permitting staff together to learn and share best practices on transit project delivery. Training materials (e.g., print, video, and/or presentation materials) should be made available online or provided in person each year. Such an initiative could be modelled on parts of “Every Day Counts” (EDC) from the FHWA.
Through the course of this work, it was striking how mundane and straightforward highway projects navigate the environmental review process. With an engineering approach and methodical culture, highway projects interact with the environmental review process regularly since the United States routinely builds roadway projects. The public sector has experienced staff at state DOTs, and the FWHA has similarly experienced staff in nearby field offices in each state to guide projects through the environmental review process and other project phases. While officials seek to avoid NEPA-related litigation, it occurs regularly enough that agencies recognize it as part of the process, have the documents and staff ready to face these lawsuits, and regularly win such challenges. Along with continuing to leverage expertise from FTA, transit project sponsors should borrow staff from state DOTs, MPOs and FHWA to assist with preparing environmental documents. Transit project sponsors can lean on the deep experience and understanding that already exists within the highway environmental review industry by bringing on temporary staff, or working directly with staff at a state DOT or FHWA.
Since state laws and regulations are often as complicated and suffer from the same siloed nature as federal permits, states should set up their own permitting councils similar to the Federal Permitting Improvement Steering Council. If structured correctly, they would help local agencies navigate state environmental regulations and coordinate between various state and federal staff.
Lastly, transit projects are often subject to the study of several, if not dozens, of potential alternatives to determine the locally preferred option. In 2020, CEQ revised the federal regulations to no longer require the evaluation of “all reasonable alternatives” and instead now allows applicants to only examine those alternatives deemed feasible. Transit project sponsors should take advantage of this provision and exercise constraint in their alternatives and only examine those within their purpose and need. While exploring alternatives is undoubtedly important, project sponsors and federal agencies should only explore viable alternatives so as to limit the scope and size of the EIS.
During the environmental and planning process, project sponsors spend many hours communicating with the public and municipal governments about plans, soliciting input, and changing design in response to feedback. Plans and disruptions are similarly communicated to residents and business to help them handle the construction phase. In addition to being a required component of NEPA review and the federal planning process, community engagement is also an important part of major infrastructure projects around the globe.
But despite their efforts, agencies generally invest too little in public outreach and employ outdated tools. The resulting community anxiety and uncertainty can wind up slowing down project delivery. While some agencies like the Metropolitan Council in the Twin Cities stand out by having multiple, dedicated, full-time staff assigned to various portions of their projects’ alignments, most agencies use a standard public meeting approach to communicate plans and listen to feedback. A lack of early planning and dedicated staff that can meet the community members where they are, listen to their concerns, and find ways to address them is a common shortcoming. Project sponsors need to dedicate more staff and resources to working directly with communities during the early planning process. They should also employ non-traditional forms of public engagement, such as opportunities to provide virtual feedback, smaller meetings in communities (rather than the standard, large auditorium public meeting), and hosting meetings at non-traditional hours to accommodate shift workers, can play a major role in creating a more equitable and effective outreach program.
At the same time, project sponsors often defer too much to community input and place high value on the path of least resistance. While it is important to listen and absorb input, it can result in scope creep, runaway betterment requests from localities, and escalating costs. Public agencies and the officials on their boards are intended to represent the public, and agency staff need to be more empowered to make tough decisions on project scope and requests during planning and construction. In doing so, project sponsors need to transparently document their community engagement to ensure that those decisions are socially equitable. A transparent process, where public sector planners can document all comments and demonstrate how they feed into the final decisions, is critical. Staff should take care to ensure that outreach is representative, respond to every comment, track major decisions and why options were taken off the table, and show how decisions were made with the public input in mind.
Community engagement in international peer regions often emphasizes transparency early in the process. For the Grand Paris Express, project designs were open to public comment for several months and once construction started, numerous events were held where the public could interact with construction employees at the worksites. A similar approach was used in Copenhagen, where there is extended public outreach about the proposed designs an d an opportunity for the public to provide input into the scope of the environmental review. Project sponsors should invest time and resources into securing scope agreement as early as possible during the project planning stage to prevent disagreements and issues from causing further delays an d issues further into the project.
Without a doubt, most transit construction projects are disruptive to local businesses, residents, and roadway traffic. To minimize the impact, project sponsors amend their work schedule to avoid generating noise during the evening and night hours. Projects also have to enable traffic to flow around or through construction sites. Accommodating these interests is a major driver of project timelines in the United States while international examples suggest other countries much more tolerant of disruption.
COVID-19 created a natural experiment in Los Angeles to demonstrate these tradeoffs. When tunneling for the Purple Line’s Beverly Hills station, LA Metro’s original plan was to excavate Wilshire Boulevard over a months-long series of weekends, and deck over the excavation so traffic could resume during the work week. With stay-at-home orders in effect, the community agreed to close the road and let construction continue throughout the week. The result was that the station excavation was completed seven months sooner than anticipated. Project sponsors should work with the community to recognize these trade-offs and push for greater short-term disruption to advance construction faster.
The need to relocate utilities and acquire land are major cost and timeline drivers for both domestic and international projects. Utility relocation involves not only identifying which are affected by construction work, but also coordinating the actual relocation with utility companies, which may be publicly or privately owned. Issues with utility identification can become particularly complicated when relocating subsurface utilities. Old and inaccurate maps have led to project sponsors finding utilities below ground that were never documented, are in unexpected locations, or are in worse condition than documents had indicated. These result in additional relocation work and change orders that further adds costs and delays.
While utility companies are technically responsible for the relocation, it is the subject of frequent litigation, and courts do not always force utilities to cover the full cost. In some cases, existing agreements between utility companies and public agencies govern any relocations, giving project sponsors little to no ability to bring an outside contractor in to complete the relocation or push for a specific relocation timeline. Some of these agreements may give a municipality (but not necessarily a transit project sponsor) the power to order relocation. Additionally, the need to conduct third party reviews, acquire permits, and physically relocate the utilities can take significant time to complete.
It is critically important to begin the utility relocation process as early as possible. After a series of delays and claims associated with relocation work on Phase I of the Expo Line, LA Metro dedicated more staff to handling third party interfaces on major projects, and initiated earlier contacts with utility owners and municipalities. On the Purple Line Extension, the agency awarded a separate contract for utility identification and relocation prior to awarding the full design-build contract to prevent relocation issues from impacting the larger, multi-billion project contract. In Ontario, Canada, major legislative changes to the approval and environmental assessment process for transit projects have given project sponsors the legal authority to order utility relocation, and if utility companies refuse to comply, they are legally required to re-imburse the project sponsor for any relocation costs.605
Project sponsors need to dedicate staff with expertise in utility relocation since quick, and responsible processes lead to substantial cost savings. These staff should be brought on early, in the planning phase, and remain through the duration of construction. Project sponsors and utilities should sign agreements early in the process and relocate or identify as many utilities as practical prior to construction. Early identification and relocation yield significant benefits later in a project’s construction. On the other hand, misidentification of utilities can lead to significant costs due to change orders.
Similar challenges exist with the land acquisition process. Rising real estate costs in major U.S. cities along with hesitancy on the part of property owners hav e led to lengthy, expensive property acquisition negotiations. In Seattle the process can take nearly two years, and Sound Transit often spends a significant amount of time and money to compensate owners for their property to avoid condemnation. To address this, the agency began launching early discussions with property owners and brought in experienced ROW acquisition staff from the Washington State DOT. The DOT conducts land acquisition on a much more regular basis and can provide additional expertise and assistance in both acquiring land and making the most of the state’s existing ROW. This is a good model and transit project sponsors should work with staff at state DOTs to bring on experience in utility relocation and land acquisition.
6.3 Building more and better transit demands a new framework for how we think about projects, the standards that are applied, and the policy environment in which they operate.
Undeniably, transit investments—especially stations—help shape communities, neighborhoods, and define a place’s character. Given how infrequent these projects take place, there is a natural and understandable tendency to tailor designs and materials to a locally preferred aesthetic. In other cases, agencies have highly specific and unique standards for equipment and systems which are not visible to the public. By relaxing these kinds of standards and imparting lessons and practices from international and domestic cases, projects can achieve better economies of scale.
The Copenhagen example is illustrative. When that city built its first tunneled metro system, it opted for an off-the-shelf automated train from an Italian manufacturer, which provided significant cost savings. The Copenhagen Metro also uses small, 3 car trains, that dramatically reduce the size and excavation footprint of their stations. The automated nature of the system allows for trains to run once every 100 seconds, effectively increasing capacity and boosting service without significant operational costs. Along with reducing the footprint of their stations, architects of the Copenhagen Metro standardized as many parts on their stations as possible to reduce costs and allow for easy, inexpensive maintenance. U.S. project sponsors, particularly those constructing new systems, should adopt vehicle and station designs from peer agencies to simplify design and trim costs.
In addition to the overly customized nature of U.S. rolling stock and station design, the lack of incorporation of international examples and best practices is problematic. There could be significant benefits to standardization and adoption of other systems’ designs and approaches. The terms and conditions of transit construction contracts in Europe use the International Federation of Consulting Engineers (FIDIC) standards and are mostly uniform. The framework for tunneling provides guidance for how to address risk sharing between project sponsors and contractors and has resulted in fewer legal disputes.606 The United States should establish standardized terms and conditions for transit construction contracts, perhaps using existing resources like the FIDIC Emerald Book.
Further, the longstanding U.S. approach to safety standards should be revisited. Other countries have been able to meet or exceed American safety using a different approach than the NFPA 130 standards. For example, skylights in stations on the Copenhagen Metro not only allowed for natural light to reach the platform, but also doubled as NFPA-compliant ventilation devices, reducing the need for escape shafts and expensive ventilation equipment. The United States’ approach to safety standards would benefit from an update, along with additional study of other international standards. Project sponsors, the FTA, UITP, and APTA should review existing construction standards to see if they can be more performance-based and useful in ways that can maintain safety but open avenues for more creative ways to meet them.
The FTA and project sponsors should establish dedicated programs to exchange best practices on project delivery and station design, including but not limited to regular study tours. Through its International Public Transportation Program, the FTA currently engages in trade missions, capacity building, and technology transfer initiatives with agencies abroad. The FTA should expand its international collaboration by establishing a program dedicated to the exchange of best practices and capacity building for project delivery. Regular study trips and formal information exchanges would help U.S. planners, leaders, and designers to better understand the best practices and innovations in governance, planning, standards, and processes of transit project delivery around the world. Such exploration should expand beyond Western Europe and Canada to include other low cost countries in Asia and elsewhere.
When faced with escalating costs and community resistance, project sponsors in the United States often select routes along freeways or industrial freight rail rights of way because they are significantly less expensive, do not interface with communities, nor require the intensive utility relocation often necessary for at-grade options along boulevards or other urban roadways. However, the international examples explored in this research include trams constructed at-grade in the median of existing arterials (if not buried), taking existing lanes from cars and putting routes through the denser parts of the region. These projects are delivered at a similar cost to U.S. projects that choose a path of less resistance but provide far more utility and benefit to the communities they serve.
The U.S. approach leads some stations to be located in sub-optimal locations and less likely to meet ridership or accessibility goals or serve the most useful routes, ultimately undermining the project’s success. While ensuring proper stewardship of public dollars for construction is laudable, project sponsors should weigh the tradeoffs between cost, complexity, and ridership when considering alignments. While running transit through existing rights-of-way can minimize interfaces with existing communities, reduce complexity, and lower costs, it may also come at the expense of system ridership and utility if the line does not serve population centers.
Project sponsors are often responsible for covering the costs of betterments and other scope changes requested by local jurisdictions. Betterments can enhance a project and its surrounding community but can become problematic when requested after a project is already underway, leading to costly change orders, or require the project sponsor to increase project budgets to cover the cost of betterments. As has been done in Los Angeles and Minneapolis, project sponsors should enact a policy that clearly outlines when and how stakeholders can request betterments, include a process to evaluate whether or not to grant the request, and require the requesting entity to cover the cost in most circumstances. Sponsors can define instances in which a requester must pay for the betterment, and outline any exemptions (i.e. for equity or safety reasons, or for any betterments necessary to comply with the law, standards, or other policies) but project sponsors should be primarily responsible for funding just the transit elements of the overall project. Community benefit agreements (CBA) or other formal agreements, should be used to address community concerns and are useful when made early in the process.
Federal incentives are another powerful tool to enable project sponsors to increase the overall standards of their transit projects. The federal Capital Investment Grants program needs to require minimum zoning densities or level of development around stations as a condition for federal funding. Similarly, federal evaluation needs to de-emphasize ridership as a key component of a project’s success and rely on accessibility metrics more often. The FTA should investigate new metrics that better leverage federal dollars.
CONCLUSIONS
Our thorough review of project delivery reveals that inadequate governance, cumbersome processes, and outdated standards cost U.S. transit project dearly. While there is no single cause for high costs and long timelines, the compounding effects of these underlying issues creates an environment of inefficiency that results in fewer projects being built, shorter transit lines, and sub-optimal routing decisions that leave many systems underutilized. Implementing the changes necessary to tackle this problem will require a concerted effort at the federal, state, and local levels.
A common thread across the recommendations in this report is the lack of underlying political will to implement best practices. The United States suffers from a political climate that does not uniformly see investment in transit infrastructure as net positive. Instead, transit project sponsors spend much of their public outreach effort simply justifying their existence and the value of transit, rather than engaging on the details of a project. Public skepticism of transit investments results in broad community pushback, increased willingness to sue to delay or block projects, and more judges that are sympathetic to those lawsuits. The lack of broad public acceptance for transit also results in communities demanding mitigation for negative construction impacts rather than demanding faster timelines.
This stands in stark contrast to peer countries, where support for transit is much greater and often cuts across partisan lines. The successful subway expansion in Madrid was a product of socialist and conservative parties out promising each other on how much transit could be built in the region. The conversative party won regional elections on their promise to build more subway lines and were reelected due to their ability to meet their goals. While there are always detractors, broad support for transit allows communities to clamor and compete for projects, rather than trying to block them.
Changing the national mindset on transit investment is a monumental task and one that will take significant effort. Luckily, there are several important opportunities to help change the narrative on transit investments. Increasing environmental consciousness and a global need to cut greenhouse gas emissions are already expanding political support for transit investments, as is the growing focus on combatting racial and socioeconomic inequality. But most importantly, as more localities use their own funds to expand and invest in their transit networks, there will be a strong financial incentive for regions to change their approach to project delivery. By implementing best practices and making the changes necessary to effectively deliver major projects, project sponsors will be able to deliver more and better transit projects to the communities that need them.
ACKNOWLEDGMENTS
Eno would like to express gratitude to Alice Grossman, Jeff Davis, and Katherine Idziorek for their research assistance, as well as Katie Donahue and Caroline Marete for their help reviewing and editing this report. Karen Price and Madeline Gorman also provided invaluable assistance preparing this report and accompanying digital materials for publication.
The Eno Center for Transportation would like to thank the following individuals for contributing their expertise, constructive feedback, and support as members of the advisory panel convened for this research initiative:
Adjo Amekudzi-Kennedy
Professor and Associate Chair, Global Engineering Leadership and Entrepreneurship, School of Civil & Environmental Engineering, Georgia Institute of Technology
Rabinder Bains
Chief Economist, Federal Transit Administration
Andrew Bata
Regional Manager, North America UITP
Allison Black
Senior Vice President & Chief Economist, American Road & Transportation Builders Association
David Carol
Chief Operating Officer, American Public Transportation Association
Aileen Carrigan
Principal & Founder, Bespoke Transit Solutions
Richard Clarke
Former Chief Program Management Officer,
Los Angeles County Metropolitan Transportation
Nuria Fernandez
Administrator, Federal Transit Administration
Eric Goldwyn
Research Scholar, New York University’s Marron Institute on Cities and the Urban Environment
Tracy Gordon
Senior Fellow, Urban-Brookings Tax Policy Center
Hani Mahmassani
Director, Northwestern University Transportation Center
Beth Osborne
Director, Transportation for America
Stephanie Pollack
former Secretary and CEO, Massachusetts Department of Transportation
Thomas Prendergast
Americas Transit Leader, AECOM
Edwina Smallwood
Economist, Federal Transit Administration
Christof Spieler
Senior Lecturer, Rice University
Raj Srinath
Former Deputy General Manager/Chief Financial Officer, Santa Clara Valley Transportation Authority
Ali Touran
Professor of Civil and Environmental Engineering, Northeastern University College of Engineering
Mia Veltri
Program Analyst, Federal Transit Administration
Carole Voulgaris
Assistant Professor of Urban Planning, Harvard Graduate School of Design
Charlie Zelle
Chairman, Metropolitan Council
The Eno Center for Transportation also wishes to thank the Merck Family Fund, TransitCenter, the Barr Foundation, the Rockefeller Brothers Fund, and the John
Merck Fund for their generous support of this initiative. The Federal Transit Administration also provided financial support for this and future related work on transit costs and project delivery.