Background As the landlord for the federal government, GSA acquires space on behalf of federal agencies through new construction and leasing. In this capacity, GSA leases space in 8,681 buildings or other assets and maintains a total inventory of more than 370 million square feet of workspace for 1.1 million federal employees, plus support contractors. Furthermore, GSA is authorized by law to enter into lease agreements for up to 20 years and is permitted to obligate funds for its multiyear leases one year at a time. GSA can delegate its leasing authority to agencies if GSA determines it is in the government’s best interest. Agencies may request this delegation of authority when they believe they can obtain the lease more efficiently than GSA. GSA grants three types of delegations of leasing authority, depending on the intended use of the leased space: General purpose – types of space that might be needed by almost any agency, such as office or warehouse space; Categorical – specific types of space that might be needed by some agencies, such as for antennas, depots, or docks; and Special purpose – types of space designated for 13 specified agencies, such as laboratories for the Department of Health and Human Services or office space in or near stockyards for USDA. GSA’s FMR Bulletin C-2, issued in 2014, (the 2014 Bulletin) provides usage and reporting requirements for delegations of leasing authority. Many of these requirements restate or elaborate on various requirements in statute and regulation. All delegations of leasing authority, including general purpose, categorical, and special purpose space delegations, are covered by the 2014 Bulletin. Agencies are responsible for compliance with all applicable requirements when using delegated leasing authority. Agencies must also conform with the requirements of any delegation approval from GSA. The requirements can include limits on square footage or the length of the lease. Although GSA delegates its leasing authority to other agencies, it acts as a guarantor for the leases in the event of a default by an agency. GSA officials said that there have not been any defaults to date. The process to apply for delegated leasing authority and then obtain a delegated lease is outlined in figure 1 below. GSA Has Reformed its Delegated Leasing Program, but Data Issues Remain GSA Has Made Efforts to Reform its Delegated Leasing Program In 2007, GAO found that GSA’s delegated leasing program documentation was incomplete, inconsistent, unclear, and outdated. Specifically, we found that GSA’s lease delegation process lacked certain management controls, such as current written policies and procedures. In addition, the GSA OIG found that some delegated leases had excessive rental rates and inadequately documented lease files, primarily due to customer agencies’ lack of expertise. Further, 56 percent of the lease files reviewed by the OIG contained insufficient documentation to support that the federal government received a fair and reasonable price. In response to problems identified in GAO and GSA reviews, GSA reformed its lease delegation program by clarifying requirements, documenting policies and procedures, and centralizing data management. In 2007, GSA issued new requirements for the delegated leasing program in the FMR Bulletin 2008-B1 (2008 Bulletin). For example, the 2008 Bulletin instructed GSA and the agencies on the proper submission of documents to GSA; and required agencies to have an organizational structure in place to support the delegation of authority, and to ensure compliance with all applicable laws, regulations, and GSA directives governing the lease acquisition. In 2014, GSA began using a new electronic system—G-REX—to review and process applications for delegations of leasing authority. Requesting agencies began electronically submitting pre-authorization and post award documents to G-REX. In 2014, GSA re-emphasized and updated the requirements applicable to GSA leasing delegations in its 2014 Bulletin, which continued to be in effect when this report was issued. GSA Continues to Address Data Quality Issues GSA continues to address data quality issues that persist in spite of its reform efforts. These data quality issues affect GSA’s ability to monitor its delegated leasing program. First, we found that when information is compiled, the G-REX system overstates the total delegated lease contract values by 12 times higher than they actually were for every delegated lease in the G-REX system. This occurred because it multiplied annual rents by the number of months of the lease, instead of by the number of years. For example, for a lease with an annual rent of $2,300,000 and a lease term of 48 months, the calculated total contract value was $110,400,000 instead of the $9,200,000 total contract value it should have had for the 4 year lease. GSA officials confirmed this error and corrected it during the course of our review. Second, we also found data errors in G-REX resulting in approved delegated leasing projects with annual rental rates higher than they actually were. For example, we found a data entry within G-REX for an approved delegated lease with a total lease rental rate several times higher than the average annual rent rate. After reviewing the lease file, GSA officials confirmed that the rental rate was incorrectly entered by the user into G-REX. We also found two G-REX data entries for approved delegated leasing projects with 25 year lease terms. General purpose delegated leases can only be for terms of up to 20 years. GSA officials confirmed that both identified leases were within the authorized delegated leasing parameters but that the data entries were inaccurate due to a system error within G-REX that incorrectly calculated the renewal options. GSA officials said that they are aware of some data quality issues with the G-REX system and are working to address them in an updated version, which they plan to launch later in 2019. Officials said that the new version of G-REX will include more business rules to prevent missing data and identify anomalies. Further, uploading required post award documents is not currently a mandatory action in G-REX. Instead, G-REX sends automatic reminder emails to agencies if these documents have not been uploaded. To address this issue, GSA officials said that the new version of G-REX would improve the post award document upload process. As we discuss later in this report, we found that selected agencies did not always submit all required post award documents. GSA Has Not Annually Reconciled G-REX and FRPP Data While GSA is taking steps to improve the G-REX system, it does not reconcile FRPP and G-REX data. Specifically, the 2014 Bulletin states that GSA will perform an annual reconciliation of data between FRPP and G-REX. GSA officials described the annual reconciliation as an oversight procedure that would help ensure that GSA has an accurate listing of delegated leases by comparing FRPP data with the centralized records on delegated leases (currently stored in G-REX). According to GSA officials, they tried to fully reconcile the two databases in 2014 but were unable to do so. GSA officials stated that while they could identify certain specific discrepancies between FRPP and G-REX, conducting a full reconciliation of the two databases has many degrees of complexity. Specifically, G-REX does not include all delegated leases, in part, because not all existing delegated leases migrated into G-REX from the prior GSA leasing system. In addition, GSA officials said FRPP and G-REX do not directly match because each database serves different purposes. Specifically, FRPP is a single comprehensive database that contains information on federal real property worldwide, updated annually. In contrast, G-REX is considered a business process management software application and is primarily used by GSA to process and capture lease delegation applications, according to GSA officials. GSA officials now report that, even though the 2014 Bulletin still calls for the annual reconciliation of data in G-REX and FRPP, they believe fully reconciling the two datasets would have little, if any, value, and currently have no intentions to do so. The Standards for Internal Control in the Federal Government state that improving the reliability of data could help agencies better manage programs. For example, in this case, agencies could utilize real property data to measure performance and inform decision-making to ultimately improve the cost effectiveness and efficiency of their real property portfolio. Moreover, although FRPP data quality could be improved, FRPP can still provide reliable background information on GSA’s federal real property portfolio. Since agencies are required to report data to FRPP on all leased assets acquired under a delegation from GSA, FRPP may provide GSA with useful information on an agency’s delegated leases, in addition to what is included in G-REX. We recognize the challenges posed by attempting to fully reconcile G- REX and FRPP. However, the 2014 Bulletin does not explicitly state GSA will perform a full reconciliation. GSA could partially reconcile G-REX and FRPP by doing some cross-data comparison. For example, had GSA cross-verified G-REX and FRPP data, even on a case-by-case basis, it could have potentially caught and addressed the data quality issues we found in G-REX earlier. Some comparison of G-REX with the relevant data in FRPP could improve the reliability, and thereby the usefulness, of both data sets. For example, GSA officials said that GSA could, in theory, begin comparing leases reported in FRPP as being awarded with delegated authority against G-REX’s record of delegated leases. A partial reconciliation like this could identify leases possibly acquired without delegated leasing authority or other data quality issues and GSA could then take steps to increase the reliability of the G-REX data. Until GSA clarifies its position on what efforts it will take to reconcile G-REX and FRPP, GSA is potentially losing opportunities to enhance its oversight and is operating at odds with its own procedures. GSA Does Not Know if Agencies Have the Policies and Procedures to Appropriately Manage Their Delegated Leasing Activities GSA Does Not Regularly Assess Whether Agencies Have Policies and Procedures to Effectively Manage Delegated Leasing Activities We found that GSA has not designed control activities that would allow it to regularly determine the adequacy of requesting agencies’ policies and procedures to manage their delegated leasing activities. Instead, GSA officials said that they expect agencies to have the capacity to manage their delegated leases until evidence suggests otherwise and said GSA assesses agencies’ activities on an ad hoc basis. For example, GSA officials said that GSA audited USDA and Bureau of Indian Affairs (BIA) because of tips from outside sources. Agencies requesting a delegation of leasing authority must submit, among other things, an organizational structure and staffing plan to support the delegation that identifies trained and experienced staff to support delegated leasing activities. In our review, we found that not all selected agencies had sufficient policies and procedures to manage their own delegated leases. For example, GSA’s ad hoc review of USDA’s delegated leases found significant oversight issues. Specifically, GSA found that USDA had awarded seven leases without a delegation of authority. In addition, USDA was unable to locate the executed lease for one of the delegated leases we reviewed. USDA officials said the agency has learned from experiences like this one and is currently developing better policies and procedures to prevent this from happening again. For example, USDA has centralized leasing oversight between two bureaus and plans to annually review selected delegated leases. Moreover, GSA’s ad hoc review of BIA’s delegated leases found that BIA had also leased property without delegated authority. Further, GSA’s 2012 audit of post award documents found that BIA had some delegated leases that had expired, and some exceeded the space threshold of 19,999 square feet. As a result of its review, GSA did not grant BIA any new delegated leasing authority until its OIG completed its findings and BIA responded with a corrections plan that corrected these deficiencies, according to GSA. GSA’s 2014 Bulletin states that GSA will review the adequacy of the requesting agency’s organizational structure and staffing proposed for the delegation; and whether the requesting agency has complied with all applicable laws, executive orders, regulations, OMB Circulars, and reporting requirements under previously authorized delegated leases. Further, according to federal standards for internal control, management should design control activities to achieve objectives and respond to risks. Control activities are the actions management establishes through policies and procedures to achieve objectives and respond to risks in the internal control system. Accordingly, agencies with delegated leasing authority should have an appropriate organizational structure and effective policies and procedures to support the delegation and to ensure compliance with applicable laws and other requirements, both of which help agencies manage their delegated leasing activities. If GSA had designed control activities to regularly review each agency’s policies and procedures for managing its delegated leases, GSA officials could have known earlier that an agency lacked the ability to manage its delegated leases and possibly delayed granting additional delegations of leasing authority until the agency had demonstrated their ability to manage its delegated leasing activities. GSA officials said assessing an agency’s policies and procedures to manage delegated leasing activities when reviewing the agency’s individual application for a delegation of leasing authority is not practical. GSA officials noted that it would become a repetitive and unproductive process to review an agency’s policies and procedures each time they applied for delegated leasing authority as the same agencies are requesting delegated leasing authority for many leases and an agency’s policies and procedures would not change with each new application. However, GSA could assess agencies’ policies and procedures for managing delegated leasing activities at regular intervals, such as annually or biennially. Because GSA is not following its own procedures set out in the 2014 Bulletin, or designing control activities that would allow it to assess, at regular intervals, agencies’ ability to manage their own delegated leasing activities, GSA cannot ensure that it is providing this authority to agencies that can manage it effectively. GSA Does Not Track Agencies’ Performance in Meeting GSA Management Goals GSA does not track agencies’ performance toward meeting GSA’s management goals, which is inconsistent with the 2014 Bulletin and GSA policy. GSA has three key management goals for tracking the success of the delegated leasing program: 1. Delegated leases should have lease rates that are at or below private sector rates over half the time, according to GSA’s annual performance plan. The 2014 Bulletin states that, prior to granting the agency’s request for a leasing delegation, GSA will consider the demonstrated ability of the requesting agency to meet or exceed this published performance measure for the cost of leased space, among other things. 2. Delegated leases should not extend into holdover status. The 2014 Bulletin states that a lease in holdover status, or an agency occupying a building or space with no lease because it has expired, is in violation of the lease delegation authority. 3. Delegated leases should not be extended unless necessary to avoid a holdover. GSA’s leasing desk guide states that short-term lease extensions should only be used as a last resort because they typically cost more, among other reasons. The post award documents that agencies submit into G-REX do not allow GSA to track agencies’ performance in meeting these management goals. For example, G-REX does not calculate when lease rates are at or below private sector rates. GSA officials said that GSA does not track the performance of agencies with delegated leasing authority against these three management goals because it is primarily the agencies’ responsibility to ensure they meet them. However, the four agencies with delegated leases that we reviewed did not always meet GSA’s three goals. Officials from two of the agencies we interviewed said that they were unaware of GSA’s performance cost metric for negotiating lease rates at or below private sector rates or that it applied to delegated leases. Consequently, the agency officials did not know if they met it. Since neither G-REX nor the agencies with delegated authority track lease rates in this way, GSA does not know if agencies are meeting GSA’s performance cost metric or, more simply stated, if agencies are negotiating cost-effective lease rates. Regarding holdovers, we found all four agencies in our review were experiencing holdovers, which raises questions about how effective their policies are to prevent them. For example, USDA does not use its lease expiration data in an effective manner to track expiring leases to submit lease delegation applications, according to GSA’s audit of USDA delegated leases. Consequently, USDA had one quarter (1,100 of 4,000) of its delegated leases in holdover status in the past 24 months, according to the GSA report. Furthermore, according to our analysis of agency data, all four selected agencies have expired delegated leases where the agency either has a standstill agreement with the landlord, or is simply in holdover status. For example, VA had approximately 10 percent of its delegated leases in holdover status in fiscal year 2018. Regarding extensions, according to G-REX data, almost half of all approved delegated lease authority requests from fiscal year 2016 to fiscal year 2018 were for lease extensions, which goes against GSA’s goals. Officials from three of the four agencies in our review said that they use extensions because they need more time to develop the agency’s space need requirements for a new delegated lease, and they might not have the time to do so before the current delegated lease’s expiration date. GSA staff stated that if an agency has a large number of extensions or holdovers, it denotes that the agency may not be monitoring its leases and as a result is not fully aware of expiring delegated leases. Tenant agencies agree that lease extensions are often not in the best financial interest of the federal government because they are not open to competition, according to this previous work. For example, the USDA’s delegated lease site in Coquille, Oregon was extended without competition for 45 years. USDA officials agreed this was not in the best financial interest of the federal government and that delegated leases should be opened for competition after 20 years. Lease extensions and expired leases in holdover or standstill status are inefficient and costly for the federal government for two reasons. First, without competition among landlords, an agency may be unable to meet the goal of negotiating a lease rate at or below the private sector rate. Second, we have previously reported that the short-term nature of holdovers and standstill agreements creates uncertainties, which can make it challenging for agencies to plan and budget for space needs and difficult for lessors to secure financing. Moreover, we have reported that holdovers can create an adversarial relationship with building owners, prompt concerns about an agency’s portfolio management, and create unnecessary uncertainty for relevant stakeholders. We also noted that holdovers and standstills occur for a variety of reasons, including challenges finalizing space requirements, tenant agency labor shortages, and the sometimes lengthy duration of the leasing process. Absent procedures to regularly track the performance of agencies with delegated leasing authority to ensure cost effectiveness and limit the use of extensions, holdovers, and standstill agreements, GSA cannot ensure that these agencies are meeting the management goals of the delegated leasing program. When previously reviewing GSA’s management of its own portfolio, we found that tracking and monitoring several measures over the life cycle of the lease acquisition process may help reduce the overall number of holdovers and extensions. For example, using a tracking tool to alert management of delegated leases approaching their expiration date could help to reduce the reliance on extensions and to prevent holdovers and standstill agreements. Regularly tracking agencies’ ability to meet key management goals would alert GSA to holdovers and heavy use of extensions that are not cost effective and may warrant additional oversight. GSA Cannot Ensure That Individual Delegated Leases Met Requirements GSA requires that agencies submit an acquisition plan for their lease when requesting delegated leasing authority, but GSA does not systematically ensure that the subsequently executed leases follow those plans and meet program requirements. Agencies submit an acquisition plan along with other documents in order to request delegated leasing authority. GSA officials told us that they review requests for delegated leasing authority by verifying that all required information and documents are uploaded into G-REX and that a lease consistent with the acquisition plan would meet program requirements. GSA officials noted, however, that the acquisition plan is strictly a planning tool and that the terms and conditions are subject to change when finalizing the lease. When approving a request for delegated leasing authority, GSA issues an executive summary and approval letter to the agency identifying the parameters of the leasing authority delegated, such as space limits. Once the agency with delegated leasing authority awards the lease, the agency is required to upload to G-REX certain post award documentation, including the executed lease, within 30 days. These documents provide insight on final lease terms such as square footage, lease expiration date and cost, which may differ from the acquisition plans agencies submitted when applying for delegated leasing authority. We have previously identified risk-based assessment and mitigation as leading practices for providing assurances to managers that they are complying with existing legislation, regulations, and standards and effectively preventing, detecting, and responding to potential fraud, waste, and abuse. Assessing a selection of delegated leases’ post award documents could serve as an early warning system for managers to help mitigate or promptly resolve issues through corrective actions and ensure compliance with existing legislation, regulations, and standards. However, GSA officials said that they do not have a process in place to systematically review post award documents from delegated leases to determine whether the lease awarded met program requirements and were within the authority granted in the approval letter. We found that as of November 2018, GSA had reviewed approximately one percent of the post award documents agencies submitted into G-REX, according to G- REX data. GSA officials told us they had not developed a system for reviewing post award documents because GSA views it as primarily the responsibility of the agency with the delegated authority to ensure they comply with the 2014 Bulletin’s post award requirements. Further, according to GSA officials, GSA’s primary role in the lease delegation process is to review and approve requests for delegated leasing authority. As a result, GSA officials have determined that regularly reviewing post award documents is not the best use of their already constrained resources. However, GSA’s reliance on agencies to comply with all requirements absent any mechanism to ensure post award accountability could allow agencies to lease space outside of the delegated authority granted to them. GSA’s previously mentioned, ad hoc audits of USDA and BIA delegated leases reinforced the need for strengthened oversight to ensure that leases meet requirements, as both audits found problems. For example, the DOI’s OIG confirmed in 2014 GSA’s findings that BIA approved $32.7 million in delegated lease agreements that exceeded GSA square footage and purchase approval limits. GSA’s review of USDA’s delegated leases also found that approximately 540 lease files were missing the awarded lease documents in G-REX. In addition, the review found that no file, in its sample of 27 lease files, had all the required documents uploaded in G-REX. Furthermore, among our selected delegated leases, we found instances of agencies not uploading post award documents to G-REX after the lease was awarded. For example, one delegated lease file in our sample was still missing the executed lease over 2 years after the lease was signed. If post award documents are not uploaded as required, GSA may not even have the documentation necessary to determine if a delegated lease met program requirements and was within the authority granted. Even if all post award documents are uploaded, GSA still cannot verify that the leases were executed within the parameters of the granted delegated leasing authority and in accordance with program requirements without a systematic process for reviewing post award documentation. For example, as noted above, if GSA assessed a selection of delegated leases’ post award documents, it may have identified the missing executed lease and other deficiencies noted above and been able to notify the agency. Further, GSA cannot ensure that agencies are preventing fraud, waste, or abuse. Conclusions GSA oversees the delegated leasing program and is a guarantor of the government’s monetary obligations under a delegated lease in the event of default. However, if not properly managed, delegated leases run the risk of not being cost effective for the federal government. GSA has taken some actions to address previously identified issues with the program, but its current oversight and management of the program is compromised by a lack of key processes that make it unable to ensure the program is working as intended. Because GSA has not determined how to reasonably reconcile G-REX and FRPP data, pursuant to its own procedure, it is missing oversight opportunities, such as finding leases with annual rent or lease terms that do not meet program requirements. Additionally, without a way to regularly assess agencies’ policies and procedures to manage their delegated leasing activities or track their performance in meeting key management goals, GSA cannot be sure agencies can sufficiently manage their leases or secure cost-effective rates. Periodic reviews of an agency’s ability to manage its delegated leasing activities would help GSA ensure that it is providing this authority to agencies that can manage it effectively and efficiently. Finally, without a systematic process for monitoring a selection of submitted post award documents to help identify and promptly resolve issues and ensure compliance with existing legislation, regulations, and standards, GSA cannot ensure that delegated leases comply with the terms of the delegation and the program is free from fraud, waste, and abuse. Recommendations We are making the following four recommendations to GSA The Administrator of GSA should take steps to reconcile G-REX and FRPP to the extent practical. (Recommendation 1) The Administrator of GSA should develop a process for assessing at regular intervals, such as annually, agencies’ policies and procedures for managing their delegated leasing activities. (Recommendation 2) The Administrator of GSA should develop a process that would allow GSA to track agencies’ progress in meeting GSA management goals, such as cost effective lease rates, and avoiding holdovers. (Recommendation 3) The Administrator of GSA should develop a systematic, risk-based process for monitoring a selection of submitted post award documents. (Recommendation 4) Agency Comments We provided a draft of this product to GSA, VA, USDA, Interior, and Commerce for review and comment. In its comments, reproduced in appendix I, GSA concurred with the recommendations. GSA and USDA provided technical comments, which we incorporated as appropriate. VA, Interior, and Commerce did not have comments. We are sending copies of this report to the appropriate congressional committees, the Administrator of the General Services Administration, and other interested parties. In addition, the report is available at no charge on the GAO website at http://www.gao.gov. If you or your staff have any questions about this report, please contact me at (202) 512-2834 or RectanusL@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. GAO staff who made key contributions to this report are listed in appendix II. Appendix I: Comments from the U.S. General Services Administration Appendix II: Contact and Staff Acknowledgements Contact Lori Rectanus, (202) 512-2834 or RectanusL@gao.gov. Staff Acknowledgements In addition to the individual named above, other key contributors to this report were Keith Cunningham, Assistant Director; Sarah Jones, Analyst in Charge; Eli Albagli; Lacey Coppage; Josh Ormond; Colleen Taylor; Michelle Weathers; and Elizabeth Wood.


Background The Transportation Investments Generating Economic Recovery (TIGER) grant program is a discretionary program providing grants to projects of national, regional, or metropolitan-area significance in various surface transportation modes on a competitive basis, with recipients selected by the federal Department of Transportation (DOT). It originated in the American Recovery and Reinvestment Act (ARRA; P.L. 111-5 ), where it was called "national infrastructure investment" (as it has been in subsequent appropriations acts). Beginning with the FY2018 round of grants, DOT renamed the program the Better Utilizing Investments to Leverage Development (BUILD) program. Unless otherwise noted, all dollar amounts in this report are expressed in 2019 dollars to adjust for inflation over the life of the program, and all percentages are calculated on that basis. These figures therefore do not correspond to DOT data, which in general are not adjusted for inflation. The Origin of the Program The TIGER program began in the depths of the 2007-2009 recession as a way to both improve transportation infrastructure and stimulate economic activity. For much of its existence it was virtually the only significant discretionary surface transportation grant program, and virtually the only program that allowed local communities to apply for and receive highway funding directly from the federal government rather than through their state's department of transportation, which might have different priorities than the community. One of President Obama's first acts after taking office in January 2009 was to propose an economic stimulus bill. Congress passed ARRA after roughly a month of intense debate. The bill provided over $700 billion to stimulate the economy, mostly through reductions in taxes. It authorized $43 billion for transportation infrastructure, including $1.5 billion for a discretionary grant program to make capital investments in surface transportation infrastructure, which Congress labeled "national infrastructure investment." In implementing this new program, DOT retitled it Transportation Investments Generating Economic Recovery, although the annual DOT appropriations act continues to refer to it as national infrastructure investment. The program initially had two goals: to make investments that would improve the condition of the nation's surface transportation infrastructure, and to do so quickly to provide immediate stimulus to the economy. Thus ARRA required DOT to give priority to projects that were expected to be completed by February 17, 2012, three years after the legislation was enacted. Since it took nearly a year for DOT to set up an office to manage the program, solicit applications, review them, and select which projects to award, the process favored projects that could be completed within two years. The initial awards were announced on February 17, 2010. In that first round, DOT received 1,497 applications requesting $72.5 billion. It awarded 51 grants totaling $1.69 billion. See Table 3 for details about annual applications and awards. Unless otherwise noted, all dollar amounts in this report are expressed in 2019 dollars to adjust for inflation over the life of the program, and all percentages are calculated on that basis. These figures therefore do not correspond to DOT data, which in general are not adjusted for inflation. After Earmarks Ended During the early 2000s, transportation authorization and appropriations bills included growing numbers of earmarks directing discretionary grants to specific projects. In response to criticism of this practice, in 2011 the Republican conferences in both the House and the Senate prohibited Members from requesting earmarks. In his State of the Union Address on January 25, 2011, President Obama vowed to veto any legislation containing earmarks. In the 2012 surface transportation reauthorization legislation, the Moving Ahead for Progress in the 21 st Century Act (MAP-21; P.L. 112-141 ), Congress reduced opportunities for earmarking by abolishing most of DOT's discretionary grant programs, providing virtually all federal surface transportation funding to recipients based on formulas. The TIGER grant program, which has been funded in the annual DOT appropriations acts and was not included in MAP-21, became one of the few remaining discretionary transportation grant programs. The Obama Administration did not support continuing the program in its FY2010 and FY2011 budgets, but requested funding in FY2012 and following years. A pattern emerged in which the Republican majority in the House of Representatives proposed cutting funding or eliminating it altogether, the Senate supported the program, and the program ultimately received funding in each year's appropriations legislation. Since the Democratic Party regained the House majority in the 2018 midterm election, the House has supported sizable increases in the program ( Table 1 ). Evolution of the Program's Grant Criteria Since Congress has continued the TIGER/BUILD program on an annual basis, the annual DOT appropriations act gives Congress the opportunity to adjust the criteria for the program each year. Some criteria, such as a requirement that DOT must ensure an equitable distribution of grant funds geographically and between urban and rural areas, have been the same since the first year. Other criteria, such as the minimum and maximum grant size, have changed frequently. In general, the trend has been toward distributing the funding to a larger number of grantees (through such measures as lowering the maximum grant size). Table A-1 summarizes the changes in many of the program's grant criteria over the past decade. Merit Criteria: Considerations Beyond Economic Stimulus Born in the anxious days of early 2009, when there was genuine concern about the state of the U.S. economy, the initial focus of the TIGER/BUILD grant program was twofold: to make grants to surface transportation projects that would improve the nation's transportation infrastructure and that would be able to spend the money quickly in order to stimulate the economy. Other considerations included the likelihood of on-time completion and the benefits of the project compared to the costs. In subsequent years, as the economy began to recover, DOT added additional merit criteria to its project selection, as shown in Table 2 .These criteria were determined administratively, and have not been specified in appropriations legislation providing funds for the program. Some of these criteria can conflict with each other in specific instances. For example, a project could reduce congestion-related emissions on a roadway by supporting alternatives (e.g., transit improvements) or by altering the roadway to reduce congestion (e.g., adding lanes, adjusting traffic signal timing, reshaping intersections). The first option might also reduce dependence on oil, whereas the second might increase dependence on oil while reducing emissions and improving the efficiency of the movement of goods and people. How DOT reconciles such conflicts has not been disclosed. Program Issues Demand and Supply in Program Funding Beginning with the first round of awards in FY2009, each annual grant announcement has noted that the amount of funding applied for has greatly exceeded the amount of funding available through the program (see Table 3 ). After the relatively large first-year appropriation, in succeeding years the amount provided was around one-third of the first year of funding. The total amount applied for also dropped significantly after the first year. The reasons for the decline in funding may include the opposition of the House of Representatives to funding the program (see Table 1 ), the general limitations on the amounts provided in appropriations bills, and the competition for that funding among the proponents and constituencies of different programs. One possible reason for the dramatic decline in the amount applied for from FY2016 to FY2017 was the reduction in the maximum grant size that Congress decreed for FY2017 (and succeeding years), from a maximum of $100 million in FY2016 to $25 million in FY2017. Of the $9.8 billion applied for in FY2016, $3.8 billion was represented by a total of 87 applications that exceeded $25 million (nominal) and thus exceeded the maximum limit for FY2017. The combination of that lowered cap on grant amounts, combined with the introduction of several new discretionary transportation grant programs beginning in FY2017, may explain part of the decline in the amount applied for in FY2017. The amount applied for rose in FY2018, when the amount of funding available tripled. Congressional Directives for Distribution of Grants Geographic Distribution One of the directives Congress gave DOT regarding the distribution of TIGER/BUILD grants was that DOT "shall ensure an equitable geographic distribution." Beyond using the term "equitable," the only other legislative guidance on this point is the limitation on the amount of the program funding that can be awarded to projects in a single state. That limit ranged from a high of 25% to a single state during the FY2010-FY2015 rounds to a low of 10% during the FY2017-FY2019 rounds. There have been a total of 553 grants awarded over the period FY2009-FY2018. Every state and most territories have received at least one grant; America Samoa and the Northern Marianas Islands have not received a grant. California has received the most funding, 6.9% of the total over that period; that is considerably less than California's share of the total U.S. population (12.1%). Of the top 10 states by share of grant funding received, Texas, New York, Pennsylvania, and Florida also received smaller shares of funding than their shares of the nation's population, while Illinois, Washington, Massachusetts, and Missouri received larger shares of funding than their shares of the population (see Table 4 ). It would be difficult for DOT to match the funding awarded to each state's share of the nation's population, since projects are not distributed proportionally among the states on the bases of cost, merit, and number. Urban and Rural Area Grants Another congressional directive, in place since the second year of the program, is that DOT "shall ensure an appropriate balance in addressing the needs of urban and rural areas." DOT has responded to this directive in different ways over time. FY2009-FY2016 In the first year (FY2009) of the program, 7% of the funding went to projects in rural areas. Since then, Congress has directed that a specific minimum share of the grant funding go to projects located in rural areas. That share has typically been around 20% to 30% (see Table 5 and Figure 1 ). The definition of rural and urban areas used by the TIGER/BUILD Grant program has varied from that used by the U.S. Census Bureau. The Census Bureau defines urban areas as both Urbanized Areas of 50,000 or more people; Urban Clusters of at least 2,500 and less than 50,000 people. Rural areas are defined as those areas not included within an urban area. By this definition, 81% of the U.S. population lived in urban areas and 19% in rural areas over the 2011-2015 period. For most of its history, the TIGER/BUILD program has defined urban areas as areas located in an Urbanized Area, and rural areas as everything else. Urban Clusters as defined by the Census Bureau were thus considered rural areas for purposes of the program. By this definition, roughly 70% of the U.S. population lived in urban areas and 30% in rural areas in 2015. During the period FY2009-FY2016, the proportion of TIGER/BUILD grant funding awarded to projects in rural areas as defined by the program, measured in 2019 dollars, was around 21%. FY2017-FY2018 In the program's 2017 Notice of Funding Opportunity (NOFO), the new Trump Administration announced that it would give special consideration to projects in rural areas. No rationale for this special consideration has been given, but one is implied in the observation that "While only 19 percent of the nation's population lives in rural areas, 51 percent of all traffic fatalities occurred on rural roads (2014)." In announcing the FY2017 round of awards, the Secretary of Transportation noted that "an effort was made to re-balance the under-investment in rural communitiesâto address overlooked needs." This assertion that there had been under-investment in the transportation needs of rural communities was reiterated in the FY2018 NOFO; that assertion is not included in the FY2019 NOFO, but that document reiterates that special consideration will be given to project applications from rural areas. Under this new policy, the proportion of program funding requested for rural areas rose from 35% in the FY2016 round to 44% in the FY2017 round, and the share of program funding awarded to rural areas rose from 21% to 65% (see Table 5 ). Another factor that may have influenced this shift is that although the amount of grant funding available in the FY2017 round ($500 million) was the same as in the previous couple of rounds, the number of applications and amount of funding applied for dropped significantly in FY2017, particularly from urban areas (see Table 6 ). Why that happened is not clear. The current surface transportation authorization act (MAP-21), which was enacted in December 2015, created several new discretionary grant programs for surface transportation; that, combined with the new lowered cap of $25 million on maximum TIGER/BUILD grant sizes that took effect in FY2017, may have led sponsors of more expensive projects, which are often located in urban areas, to seek funding from the new grant programs rather than from the TIGER/BUILD program. The Administration's stated rationales for prioritizing funding for projects in rural areas are open to question. While 71% of the nation's roads are in rural areas, they account for only 30% of total vehicle miles traveled, and over the period FY2009-FY2015, 37% of federal highway funding went to rural roads. Rural roads are on average in better condition than urban roads; in 2012 93% of the vehicle miles traveled on rural roads were on roads with pavement conditions rated as acceptable or good, compared with 78% of the vehicle miles traveled on urban roads. The Administration's claim that safety factors justify directing two-thirds of BUILD grants to rural areas is only partially supported by available data. While a disproportionate share of highway deaths occurs on rural roads, that proportion has been trending downward, declining from around 60% in the early 2000s to 46% in 2017. The number of traffic fatalities in rural areas declined by 18% from 2008-2017, while the number of fatalities in urban areas increased by 17% over the same period. Moreover, road conditions are only one factor among the reasons why the share of highway fatalities in rural areas exceeds the share of population in those areas. Other factors include driver behavior (e.g., higher typical speeds, lower rates of seat belt use, and higher driver fatigue rates), typically longer travel times for emergency medical care, and vehicle condition. In the FY2019 DOT appropriations act, Congress made two changes that may constrain the Administration's discretion to steer funding toward projects in rural areas: limiting the share of program funding that can go to rural areas to 50%, and changing the definitions of urban and rural areas used in the BUILD program. Urban areas would be defined as areas "located within (or on the boundary of) a Census-designated urbanized area that had a population greater than 200,000 in the 2010 Census." Areas outside that are considered rural. By this definition, roughly 60% of the U.S. population lived in urban areas, and roughly 40% in rural areas, in 2015. Thus, some areas that in previous rounds of applications would have been considered urban areas would now be considered rural for the purposes of the BUILD program. How this change will affect the distribution of funds in FY2019 and subsequent years is unclear. Grants to a Variety of Modes Since the second year of the program, Congress has directed DOT to ensure that the program makes "investment in a variety of transportation modes." A unique feature of the BUILD grant program is its flexibility: any surface transportation infrastructure is eligible for funding. Throughout most of the program's life, this flexibility has been reflected in the grants awarded; while road projects received more funding than projects in other modes, other modes collectively received two-thirds of the total program funding (see Table 7 ). This situation changed beginning with the FY2017 round of grants; for FY2017-FY2018, road projects received over two-thirds of the funding awarded, with the remainder divided among four other modes, one of whichâbicycle-pedestrian projectsâreceiving no funding at all. Distribution Requirements Versus Economic Impact in GrantÂ Awards From the first round of funding through FY2017, Congress directed that grants be made for projects that will have a significant impact on the nation, a metropolitan area, or a region. Surface transportation projects that are likely to have a significant impact on the nation, or even a multistate region, are typically quite expensive; for example, Amtrak's Hudson River Tunnel Project, to replace the deteriorating tunnels that carry Amtrak and commuter trains under the Hudson River between New Jersey and New York, is estimated to cost over $11 billion. Given the relatively modest amounts of funding available for TIGER/BUILD grants each year and Congress's directive that grant funding be awarded equitably across the nation, between rural and urban areas, and among surface transportation modes, the amount of money any single project is likely to receive limits the ability of the TIGER/BUILD program to provide more than a small share of the funding needed to complete projects that could have a significant impact on the nation. The largest single grant awarded during the FY2009-FY2018 period was for $118.5 million, and that was for a project that spanned two states (see Table 8 ). Three grants have been awarded for more than $100 million; of the 553 grants awarded, few have been for more than $50 million. Of the 10 largest grants awarded, nine were awarded in the first year of the program, when available funding was far larger than in any subsequent year (see Table 8 ). Even though the maximum grant size permitted was $200 million from FY2010 to FY2015 and $100 million in FY2016, the largest grant awarded since FY2010 has been $25 million. The first year of grants also saw the largest average grant size, $33 million; in subsequent rounds of funding, the average size of grants in each round has fluctuated between $9 million and $17 million (see Table 9 ). In addition to the lower limit on the maximum grant amount, one factor that may have led to the decrease in the average size of grants after the first year was that the total amount of TIGER/BUILD grant funding available in each year until FY2018 was less than half the amount in FY2009, so DOT may have chosen to make smaller grants in order to distribute the available funding widely. In a 2014 review of the program, the U.S. Government Accountability Office (GAO) reported that while DOT had selection criteria for the TIGER grant program, it had sometimes awarded grants to lower-ranked projects while bypassing higher-ranked projects without explaining why it did so, raising questions about the integrity of the selection process. DOT responded that while its project rankings were based on transportation-related criteria, such as safety and economic impact, sometimes it had to select lower-ranking projects over higher-ranking ones to comply with other selection criteria established by Congress, such as geographic balance and a balance between rural and urban awards. Attempt to Increase the Program's Funding Leverage In FY2018, the Notice of Funding Opportunity soliciting grant applications noted two changes to the program under the Trump Administration: the program was renamed the Better Utilizing Investments to Leverage Development (BUILD), and the practical reflection of that name change was a statement that DOT would give priority to grant applicants that provided new, nonfederal revenue for projects for which they were seeking BUILD funding. "New revenue" was defined as "revenue that is not included in current and projected funding levels and results from specific actions taken to increase transportation infrastructure investment." Examples given in the notice included sales or gas tax increases, tolling, tax-increment financing, and asset recycling. Borrowing (issuing bonds) did not count as a new revenue source. DOT would not consider any source of revenue that had been authorized prior to January 1, 2015, as new revenue. The Administration presented this new stance as a way of increasing the leverage of federal funding to raise more revenue from other sources. Critics charged that the policy penalized states and localities that had already acted to raise more revenue for transportation projects. Critics also noted the irony of the Administration encouraging states and localities to provide additional revenue for transportation investment when Congress had been unable to increase the federal excise tax on motor fuel, the primary source of federal surface transportation revenues, since 1993. Critics also noted that favoring projects involving additional revenue from new sources posed a particular challenge for rural areas, as the number of residents who might pay a new sales tax or highway toll is by definition relatively low. Despite that concern, in the FY2018 round of awards, projects in rural areas received a higher proportion of the program's funding than ever before in the history of the program: 69% (see Table 5 ). The information about the projects receiving grants is not sufficiently detailed to show how much additional nonfederal revenue was raised in connection to the projects. In the FY2019 DOT Appropriations Act, Congress directed DOT not to use an applicant's ability to generate nonfederal revenue as a selection criterion in approving future BUILD grants. Measures of Program Impact In 2016 and 2018 DOT published reports measuring the performance of projects that received TIGER grants. The reports state that, given the array of projects that can receive TIGER grants, measuring their performance is challenging and, for the same reason, valuable. DOT has required grantees to develop performance plans and measures for each project, beginning before the construction of the project and continuing for years after the project is completed. The sponsor of each project is responsible for setting up performance measures it considers relevant to its project. There is no requirement for comparability of the measures across projects. The DOT reports do not summarize the projects and their benefits. Rather, each presents a number of case studies of individual projects, including the performance measures chosen by each grantee. Appendix. TIGER/BUILD Grant Program Criteria, FY2009-FY2019


Background The U.S. Freight Rail System The U.S. freight rail network is a private industry that moves about 40 percent of U.S. freight across about 140,000 miles of track. Freight railroads are responsible for the safety of their trains, tracks, and personnel. These railroads rely on their revenues for funding to perform track inspections and maintenance. Close to 600 freight railroads operate in the United States, and they are divided into three classes according to revenues. The seven Class I freight railroads, those with approximately $447.6 million or more in annual revenue over 3 consecutive years, account for more than 90 percent of the annual revenues of the railroad- freight industry and employ 90 percent of railroad employees. Class I freight railroads move freight over long-haul routes and face competition from each other and from other freight-shipping modes, such as trucks and barges. Class II and III railroads tend to operate over much smaller geographic areas than Class I railroads and employ fewer people. Trains operate on different types of train tracks, including main line tracks—the primary rail arteries trains use to travel—and sidings, which are primarily auxiliary tracks for trains to pass one another. Trains can be stored, sorted, and assembled in railyards. Railroads use main line and sidings to enable trains to enter and leave the yard. Outside railyards, some sections of main line track have sidings that lead to a parallel set of rails to allow trains to pass one another. In addition, some portions of main line track consist of two or more parallel sets of track to allow trains to pass one another or travel in opposite directions. See figure 1 for an illustration of different track types and siding. Freight Train Operations Train Makeup and Handling Train makeup refers to the placement of individual railcars that make up a train. A typical train consists of a locomotive—the power and control unit where the train operator sits at the front of the train—followed by connected railcars. The lead locomotive pulls the train and provides control for other functions, including braking. Freight trains carry a variety of freight using different types of railcars that vary in capacity, length, and weight. When assembling a train, railroads consider a variety of factors— such as each car’s weight, length, freight, and whether it is loaded or empty—when determining its position in the train. Train make up is also dependent on external conditions, such as variations in terrain and weather conditions. Railroads can place radio-controlled locomotives, called distributed power (DP) units, throughout trains to spread out pulling and pushing power, which we discuss in more detail below. Proper train makeup is critical for ensuring a train is able to effectively negotiate track and prevent derailment, according to FRA. Improperly assembled trains are more susceptible to derailment, in part because of vertical, longitudinal, and lateral forces throughout the train—also known as “in-train” forces—that can affect the stability of a train on its tracks, depending on a variety of factors, including the train’s speed and terrain. For example, excessive “in-train” forces can cause a long, heavy train to pull apart or climb off the track upon a change of grade (e.g., going up or down hills) or when the train enters a curve. “Unit trains”—which carry a single commodity, such as coal or oil, to one destination—experience in-train forces that are easier for railroads to model and engineers to predict because the railcars are generally uniform in size and weight. In comparison, determining train makeup is more complex in mixed freight trains, which can experience more unpredictable in-train forces resulting from railcars of different weights, lengths, and freight (e.g., bulk goods such as grain and coal, consumer goods such as automobiles, or hazardous materials). For example, if a train is assembled in a manner in which empty railcars alternate with loaded, heavy railcars, braking can create compression at the couplers and cause “buckling”—when an empty train car is compressed between heavier railcars and derails from the train tracks. Braking and Distributed Power Freight trains in the United States utilize air-braking systems to control speed and stop. A conventional air-braking system is controlled by an air pressure signal from the leading locomotive, which sends a signal through the train to engage brakes. Because each railcar receives this signal sequentially, it takes multiple seconds for railcars at the end of the train to receive the air pressure signal and begin braking, depending on the train’s length. The application of air brakes generates in-train forces, as railcars at the front of the train that have applied brakes will be pushed by railcars further back that have not yet received the air signal. Other technologies, including two-way end-of-train devices and DP, are frequently used by U.S. railroads in conjunction with conventional brakes to provide improved braking performance or other benefits. End-of-train devices measure brake pressure and transmit this information via radio signal to the front of the train. An end-of train-device can also engage air brakes at the rear end of a train in an emergency to decrease the time required to apply the brakes on all cars. As previously mentioned, railroads can also place radio-controlled locomotives, called DP units, throughout trains to spread out pulling and pushing power and improve braking. For example, engineers can engage a DP locomotive’s air brakes at the same time as a leading locomotive to decrease the time needed to activate brakes throughout the train. (See fig. 2.) Engineers can also use a locomotive’s dynamic brake system, which uses traction generated by the engine, to slow a train. While most railroads employ conventional brakes, railroads can also employ electronically controlled pneumatic brakes—which provide an electronic brake signal instantaneously throughout a train—allowing railcars to brake faster than with conventional air brakes. As we previously reported, electronically controlled pneumatic brakes reduce the in-train forces that occur during braking when individual cars push and pull against one another. Train Crews Freight trains in the United States generally operate with two crew members—the conductor and the engineer. The conductor is responsible for the train, freight, and crew. The engineer operates the locomotive, including application of air brakes, dynamic brakes, and any radio- controlled DP locomotives. Train crews use hand-held radios to communicate when they are working in different parts of the train. For example, if the crew detects a train maintenance issue, the conductor may need to leave the locomotive and walk the length of the train to address the problem. In these situations, the conductor may use a hand- held radio to communicate. The Role of Federal Agencies and States FRA and States The U.S. Department of Transportation (DOT) is responsible for ensuring the safety of the transportation system. Within DOT, FRA is the primary federal agency responsible for formulating railroad safety policies and regulations and for monitoring and enforcing railroads’ compliance with requirements. FRA’s mission is to enable the safe, reliable, and efficient movement of people and goods. FRA provides regulatory oversight of the safety of U.S. railroads, including both passenger and freight. FRA issues and enforces safety regulations including requirements governing track, signal, and train control systems, grade-crossing warning systems, mechanical equipment such as locomotives and railcars, and railroad-operating practices. In developing most of its regulations, FRA seeks input from the railroad industry and other organizations through its Railroad Safety Advisory Committee. FRA provides oversight of railroad safety through a variety of activities, including periodic inspections and enforcement actions. FRA has safety inspectors and specialists in eight regional offices that are primarily responsible for the enforcement of federal laws and regulations related to railroad safety. FRA conducts inspections of railroads to monitor compliance with safety regulations, such as those governing the transport of hazardous materials, among other issues. In addition, 31 states conduct inspections for compliance with federal safety regulations. FRA trains state inspectors to enable them to conduct inspections according to FRA’s standards. In addition to these activities, FRA conducts other types of safety oversight to reduce train accidents, such as analyzing railroad safety data, investigating accidents, and reviewing complaints. FRA also funds research and development to support its safety oversight. FRA’s Office of Research, Development, and Technology conducts research to understand railroad safety risks and improve safety. This work contributes information used to inform FRA’s development of regulations, standards, and best practices. Other Federal Agencies Other federal agencies also have roles in overseeing freight railroads, such as through promoting safety or regulating railroad industry economics. For example, NTSB is an independent federal agency that produces safety studies and investigates transportation-related accidents across all transportation modes to determine probable causes, identify safety issues, and make recommendations to prevent recurrences. STB oversees significant rail-service matters and resolves rate and service disputes between railroads and their customers, known as “shippers.” Class I railroads report data to STB on the amount and type of freight they transport. STB produces and releases statistical data derived from the railroad’s submitted data. Freight Train Length Has Increased, and Railroads Identified Advantages to Operating Longer Trains According to officials from all seven Class I freight railroads and representatives from AAR, FRA, STB, and other stakeholders we interviewed, freight train-length has increased in recent years; however, the data are limited. According to data that two Class I railroads provided to us, their average train length increased over the 10-year period of 2008 through 2017 by about 1,500 feet for one railroad (from about 6,000 to 7,500 feet, or up to about 1.4 miles) and about 1,200 feet for the other railroad (from about 4,900 to 6,100 feet, or up to about 1.2 miles). These data represent an increase in the average length of a train of about 25 percent for both railroads. Two additional Class I railroads reported average train lengths between about 5,800 and 6,600 feet for the year 2017. However, we were not able to verify increases more broadly because FRA, STB, and AAR do not collect comprehensive data on train- length in feet, and while such data are collected by Class I railroads, they are not publicly available. Officials from two Class I railroads stated that operating longer trains is not a new practice, and one official noted that the railroad has been operating trains in excess of 10,000 feet in selected rail corridors for almost 30 years. Officials from AAR added that increases in train length over time have likely been gradual. While two Class I railroads provided data on average freight train-length over time, officials from each of the seven Class I railroads stated that they operate longer trains. Railroad officials said they operate these trains in certain rail corridors that have the capacity to accommodate longer trains, and not over their entire rail networks. For example, officials from one Class I railroad said they are running on a daily basis a 12,000-foot train—which is about 2.3 miles long—and another reported that twice weekly it operates a 16,000-foot train—which is about 3 miles long—on a route linking the mid-west to the west coast. Both of these Class I railroads noted that longer trains such as these are a small percentage of the trains they operate. More specifically, one of these railroads reported that over the previous 24 months, about 1 percent of its train-miles were traveled by trains over 10,000 feet long, and the other reported that about 2 percent of its current train-miles were traveled by trains over 10,000 feet long. Other data describing the average number of railcars per train and average weight of trains indicate an overall increase over the past 10 years. However, these measures are not proxies for freight train-length since the length and weight of railcars can vary significantly depending on their design and freight. Class I railroads are required to report data, such as the freight car-miles, to STB annually, and AAR aggregates and makes this information publicly available in various publications. We analyzed these data and found that the average number of railcars per freight train across all Class I railroads increased from 71.0 to 73.2 railcars per train (an increase of about 3 percent) from 2008 through 2017. Additionally, FRA and some Class I railroad officials stated that railroads operate freight trains that have more than twice this average number of railcars—including trains with 150 railcars or more. Similarly, the average train weight increased from about 5,978 tons to 6,577 tons per train (an increase of about 10 percent) from 2008 through 2017. Class I railroad officials said that there are advantages to operating longer freight trains in some rail corridors and that operating longer trains is part of strategic planning for many railroads for a variety of reasons. Officials from all Class I railroads stated that they operate longer trains in some rail corridors as a way to increase efficiencies, such as fuel efficiency, and decrease costs by reducing the number of train crew and other costs. Additionally, railroad officials said that running longer trains can mean that they do not need to operate as many trains—officials from six Class I railroads specifically indicated they are operating fewer shorter trains as a result of operating longer trains. Further, Class I railroad officials stated that market forces, such as competition from the trucking industry, create an incentive for them to increase efficiency. Class I railroad officials also stated that the use of certain technologies, such as DP locomotives, enables them to operate longer trains more safely. Other Class I railroad officials attributed their increased usage of longer trains to capital improvements on railroad tracks, such as lengthening the sidings to accommodate longer trains. Stakeholders Identified Considerations for Safely Operating Longer Freight Trains and Potential Impacts on Communities Considerations for Operating Longer Trains Include Train Makeup and Handling and Crew Training Train Makeup and Handling While the need for proper train makeup and handling are not unique to longer trains, it is particularly important for their safe operation, according to stakeholders we spoke with. As previously discussed, the length of each train and its makeup—the manner in which its cars and locomotives are arranged—can affect the forces involved on a moving train. Stakeholders we spoke with said that the consequences of improper train makeup may be more pronounced in longer trains—especially in situations with extremes in track grade, curvature, or weather conditions—and may add to the challenges of operating longer trains. For example, FRA has investigated accidents in which it determined that train makeup and handling were the probable cause and contributing factors in train derailments of longer freight trains. According to officials from FRA, NTSB, railroad employee unions, and other stakeholders, longer mixed- freight trains may be more difficult to handle than unit trains in certain circumstances due to variations in car length and weight and the extent to which additional DP locomotives are employed. Stakeholders noted that placing additional DP locomotives within a train can improve train handling and prevent train separations and derailments. Stakeholders added that using DP can also help improve air brake performance and reduce braking response time, as previously discussed. In addition, according to stakeholders, use of properly positioned DP locomotives can improve radio communication between the lead locomotive and rear DP locomotives on longer trains. Union representatives added that in their view, the safest train-braking operations are when DP locomotives are used in conjunction with electronically controlled pneumatic brakes. According to representatives from AAR and Class I railroads, however, freight railroads have faced challenges with these braking systems, including reliability issues, as we have noted in a previous report. While there are no comprehensive federal regulations that govern train makeup, including use of DP locomotives, representatives of Class I railroads told us they consider a variety of factors when determining train makeup to ensure safe operation of all of their trains, including tonnage, train-length, and terrain. According to one railroad, using software to determine train makeup and predict train handling needs is an industry standard and critical best practice. Another railroad told us they use computer simulations to develop rules for train makeup in order to operate longer and heavier trains. Some railroads told us they impose length and weight restrictions on specific routes to ensure safe train operation and manage corridor capacity. Union representatives and rail experts we spoke with told us that in their view, railroads do not always properly assemble their longer trains, for example placing heavy railcars behind lighter railcars, a practice that can increase the likelihood of derailment. These stakeholders also said that railroads do not always use DP with longer trains, which experts attributed to the extra cost of deploying additional locomotives. We did not independently verify how the railroads we spoke with assemble or operate longer trains. Training Crews to Operate Longer Trains Stakeholders we interviewed said that it is essential that crews are properly trained to operate longer freight trains. FRA regulations require railroads to train and certify their train crews. More specifically, FRA requires qualified locomotive engineers to demonstrate proficiency in operating trains in the most demanding type of service they may be permitted to perform, which includes operating longer trains. Railroads are required to conduct annual performance evaluations of engineers to ensure that they can safely operate trains according to federal railroad safety requirements. Representatives of Class I railroads told us they train their crews on trains and simulators with various routes, scenarios, and train lengths. However, union representatives said that some railroads do not provide sufficient training for crews to operate longer trains, and that some locomotive engineers and conductors lack the necessary training and experience to handle longer trains, a situation that can be challenging even for properly trained crew. As discussed later, FRA is planning to review this issue when it performs planned audits of Class I railroads’ training programs. Stakeholders we interviewed identified additional challenges for crews when operating longer freight trains related to crew members’ fatigue. For example, according to FRA, union representatives, and other stakeholders, a longer train may require crew members to walk a long distance if the train stops unexpectedly. For example, when there is a mechanical or other problem that causes a train to stop, the conductor may have to walk from the lead locomotive to the problem area and back again. This could mean walking 4 miles to the end and back on a 2-mile- long train. Also, according to FRA officials, as with any train that is left unattended, the crew must apply a sufficient number of handbrakes to prevent unintended movement. With longer and heavier trains, railroads may require additional handbrakes to be applied. According to union representatives, such physically demanding tasks can increase crew fatigue. Longer Trains May Impact Grade Crossings in Communities Stakeholders we interviewed expressed divergent views about whether longer trains may increase or decrease blockages at grade crossings. Our prior work has noted a connection between the volume of freight rail traffic and the potential for grade-crossing blockages to increase. In 2014, we found that trends in freight flows, if they continue as expected, may exacerbate congestion issues in communities, particularly along certain corridors. FRA officials told us that complaints about blocked highway-rail grade crossings have increased in recent years. They noted that blocked crossings are a local concern and it is not clear the extent to which longer freight trains are contributing to increases in reporting about such blockages. According to FRA, trains sometimes block crossings for a limited time or for hours if an accident or mechanical problem occurs. They noted that such blockages can be created by trains of any length and that in their experience, railroads prioritize movement of longer trains, making it less likely that such trains would be responsible for prolonged blockages of crossings. Furthermore, officials from FRA and Class I railroads and others we spoke with pointed out that longer trains may decrease the frequency of blocked crossings, as railroads may run fewer trains. In contrast, officials from the National League of Cities, as well as state and local officials we spoke with, expressed concerns over increased frequency of longer trains and their impact on grade crossing safety. Although they also acknowledged that trains of any length can block grade crossings, they raised concerns that longer trains prolong the duration of a blockage and can block more crossings concurrently, making it harder for vehicles to find an alternate route around the train. Consequently, these stakeholders are concerned that longer trains create increased delays for emergency responders and increase the likelihood of unsafe behavior among motorists and pedestrians, as outlined below. Delayed emergency response. According to national, state, and local officials we interviewed, longer trains pose concerns about the potential for emergency response delays if responders encounter a train blocking one or more crossings and cannot quickly find an alternate route around it. (See fig. 3.) For example, officials in Mount Victory, Ohio, reported that 22 freight trains travel through their town daily, including a 16,000-feet train, which is nearly 3 miles long. This train blocks 4-to-5 grade crossings concurrently, which increases the time to access parts of the town, according to local officials. Our prior work has found that blocked highway-railroad grade crossings can have significant impacts on emergency response time and outcomes. For example, we reported an instance of a fire that destroyed a house while train traffic blocked the only two crossings in the town and prevented fire crews from responding in time. In another example, a local official in Texas said that one Class I railroad assembles trains and conducts brake checks on the main line tracks because the trains are too long to fit into sidings and railyards. Executing such procedures on mainline track has blocked grade crossings for up to several hours and poses safety challenges for surrounding communities, according to this local official. As a result of situations like these, communities are looking for ways to mitigate delays in emergency services when emergency vehicles must find ways around blocked grade crossings. For instance, some local officials in Washington and Ohio said they have revised their emergency response plans to avoid grade crossings that are likely to be blocked. Motorist and pedestrian behavior. Stakeholders we spoke with expressed concerns that longer trains may increase the likelihood of unsafe behavior among motorists and pedestrians. For example, fatalities can occur when motorists or pedestrians engage in risky behavior such as trying to make it across the tracks before an approaching train reaches the crossing. Moreover, pedestrians have been known to crawl over, through, or under stopped trains (see fig. 4). For example, local officials in Ohio and Texas told us that they have witnessed children crawling through stopped trains to get to school. Research sponsored by FRA has identified driver behavior as the main cause of highway-rail grade crossing collisions, but other factors such as train and traffic volume can contribute to the risk of a crash occurring. Although there are no current federal regulations that directly address blocked crossings or limit the amount of time trains can block grade crossings, some states and localities have attempted to address this issue. For example, some states and localities have passed laws limiting the duration of blocked crossings and proposed fines for railroads, but state and local officials and other stakeholders we spoke with said that federal law preempts such efforts. Other states and local communities have attempted to address blocked crossings through studies and communication with federal agencies and railroads, with mixed success. For example, the Texas Department of Transportation has undertaken mobility studies for the towns of El Paso and Laredo to identify options to address blocked crossings, such as constructing bridges or underpasses. According to officials with the Texas Department of Transportation, these studies identified alternatives that may help alleviate some of the vehicular/rail conflicts if they were implemented; however, the implementation of alternatives for any potential projects are constrained by the availability of funds. In other examples, local officials from Ohio and Illinois told us they have contacted Class I railroads and FRA to find solutions when idle trains lead to blocked crossings, especially when emergency access is a concern but continue to face challenges. Class I railroads and FRA officials said they work with local communities to find solutions to these issues. Additionally, state and local officials noted that they do not have access to information on the length of trains that travel through their communities. Some added that freight railroads are not required to provide such data and that local efforts to gather this information, such as through videotaping train movements and analyzing data, are costly. This circumstance makes it challenging for state and local officials to assess the extent to which longer trains may or may not be contributing to blocked crossings. FRA Is Studying Operational Risks of Longer Trains but Lacks a Strategy for Sharing Research Results and Is Not Fully Assessing Community Risks FRA Is Studying Operational Risks of Longer Freight Trains In the fall of 2017, FRA began a study to understand operational risks of long freight trains. The study is examining issues related to train makeup and handling, including the use of DP locomotives, crew training and fatigue, and braking performance for longer trains. The study intends to identify strategies to reduce any risks identified. According to FRA, as the railroad industry has increased the length of freight trains, past accepted practices for train makeup and handling may not be appropriate for longer trains. For example, according to FRA, the current performance standard for air brakes was last updated in 1947 and based on tests for trains with up to 150 cars. FRA officials stated the study will conduct air brake tests to evaluate brake performance for trains with 150-to-250 railcars and use this data to conduct computer simulations of trains in a variety of configurations—for example, with and without DP and with DP locomotives at different locations throughout a train—to evaluate in-train forces. According to FRA officials, this information will help FRA determine whether rail safety issues exist for trains with over 150 railcars and if regulatory actions are necessary. The study employs a two-phase approach that includes data analysis, literature review, computer simulations, and brake testing. FRA officials said the agency plans to complete the first phase of its study and issue a report by the end of 2020 and issue a report on the second phase by the end of 2021. Table 1, below, outlines specific tasks of the study by phase. As we previously mentioned, FRA provides oversight of railroad safety through a variety of activities to ensure compliance with regulations, such as conducting inspections of railroad operations and reviewing and approving new and materially modified railroad crew training programs. According to FRA officials, these activities address safety for all freight trains, including longer trains. In addition to these activities, FRA plans to begin new, more in-depth audits of Class I railroads’ training programs on a systematic basis in 2019 to determine whether engineers are being adequately trained to operate longer trains and perform other types of demanding service. According to FRA, these audits will determine whether locomotive engineer certification programs are in compliance with federal rail safety regulations. For example, federal regulations require that railroads provide training to their engineers—through classroom lessons and in trains or simulators—on the most demanding type of service they may be called upon to perform. According to FRA officials, this would include operation of longer freight trains in challenging terrain. FRA plans to audit the training programs of three Class I railroads by the end of 2019, selected based upon safety risk factors, with additional audits of other railroads planned for the following year. Once the audits are complete, FRA plans to discuss its findings with each audited railroad and make recommendations for improvements, as needed. FRA Lacks a Strategy for Sharing the Results of Its Study on Longer Trains While FRA’s study to assess operational safety risks of longer trains is under way, the agency lacks a current, documented strategy for how it will use and share the results of its research with relevant stakeholders. According to FRA officials, after internal review and approval, the agency routinely shares its research results at conferences and on its website. However, FRA’s strategic plan for research and development, which outlined how the agency shares research results and engages with internal and external stakeholders in support of FRA’s rail safety mission, expired in 2017. More specifically, this plan outlined key internal and external stakeholders and their roles—including labor and industry partners—and specific outreach strategies, such as holding periodic, public events to present FRA’s research and development. This plan also stated that FRA’s research provides the scientific and technological basis for its rulemaking and regulation enforcement and that effectively sharing the results of its studies increases the likelihood that its research will have “real world” impacts. According to FRA officials, the agency is currently updating its strategic plan for research and development, which will outline FRA’s goals and objectives for its research, and expects to finalize the plan by the summer of 2019. FRA does not have any other documented policies in place for how it will use or disseminate the results of its study. Federal internal control standards call for management to communicate quality information—using appropriate methods—both internally and externally in order to achieve an entity’s objectives and respond to risks. Further, our work on best practices for strategic planning has found that formulating specific strategies and linking them with goals and objectives is critical for agencies to achieve these goals and objectives. In addition, we previously identified generally accepted research standards for sound studies, standards that include presentation of results. These standards call for relevant stakeholders to be informed of research results and any recommendations upon completion of a study. The Transportation Research Board—a part of the National Academies of Sciences, Engineering, and Medicine which provides research-based solutions to improve transportation, among other things—has found that organizations that develop processes and a systematic approach to implementing research are more effective and efficient at applying research results. FRA’s study is a first step for determining how, if at all, makeup and handling for longer trains as well as their crews’ needs may differ from shorter trains. If study results are effectively shared with relevant stakeholders, then those best situated to act on the results may be more likely to do so. For example, FRA officials—who have rulemaking and enforcement authority—could identify and implement changes needed to improve the safety of longer train operations, such as by issuing relevant guidance, rulemaking, or other actions. Similarly, external stakeholders, such as Class I railroads and workers, would have the opportunity to use study results to inform their practices and policies, such as making changes to internal train-makeup rules or operators’ training programs for longer trains. As FRA updates its strategic plan for research and development, formulating specific strategies for how it will share its research results with internal and external stakeholders would help to ensure FRA is in the best position to achieve its research goals and objectives in support of the agency’s mission of enabling the safe, efficient, and reliable transportation of people and goods. FRA Is Not Fully Assessing Community Impacts Related to Longer Trains While FRA is taking steps to assess operational safety risks of longer trains through its study and other efforts, it is not assessing whether longer freight trains impact communities by blocking more grade crossings. Safety at grade crossings has been a longstanding issue in the United States, and according to stakeholders we spoke with, some of these issues may be exacerbated by longer trains. In 2006, as part of its report on the impacts of blocked grade crossings on emergency response services, FRA stated that future growth in rail and highway traffic will likely increase blocked crossings, and more recently FRA officials stated that this is still the case. In addition, while collisions at grade crossings have declined over time, FRA also expects the risk of grade-crossing incidents to grow as both rail and highway traffic increase during the next decade. However, FRA officials also stated that there is no evidence that more blocked crossings results in more grade-crossing incidents. Further, according to FRA, the agency is not in a position to address community- specific public safety issues. We have previously reported that the amount of time that grade crossings are blocked depends on a number of factors and is typically a function of the number, speed, and length of trains. Although there are no federal regulations directly addressing blocked grade crossings, to gauge the extent of reported instances of blocked crossings, in early 2018, FRA began to track data on the location of blocked-crossing complaints from state rail-safety managers in nine states. FRA officials stated they intend to use this data to identify communities where frequently blocked grade crossings are reported and work with the railroads and communities for resolution. However, FRA officials said they do not plan to explore any potential impacts of longer trains on grade crossings in communities, as FRA officials have stated they do not believe that longer trains are having an impact on blocked crossings. For example, FRA does not plan to use any of the information gathered in its longer train study—which will include a sampling of the routes longer trains travel—to inform the agency’s work on blocked crossings because FRA officials stated that they do not expect the study will yield relevant information. State and local officials we spoke with, as previously mentioned, expressed concerns about the potential for longer trains to increase the number of blocked grade crossings, causing delays for emergency responders and affecting the behavior of motorists and pedestrians. Federal internal control standards state that effective use of information and communication are vital for an entity to achieve its objectives. These standards call for management to use quality information—relevant, reliable information that is current, complete, accurate, accessible, and timely—to achieve an agency’s objectives and respond to risks. Further, we previously identified essential practices for agencies to help manage risks and identify opportunities that could impact the achievement of agencies’ goals. These risk-management practices call on agencies to systematically identify risks and use the best information available to assess them. Community officials acknowledged that while they believe longer trains are making blocked crossings worse, they do not have access to information needed to confirm this observation. As previously discussed, some local communities continue to face challenges after reaching out to FRA and Class I railroads to find solutions to issues related to grade crossings. As these issues continue to evolve and FRA works to identify locations where blocked crossings are reported, working with railroads and local communities to identify any potential impacts of longer trains on grade crossings would help FRA to determine whether and how longer trains are affecting these communities and what could be done to address those impacts. In addition, it would allow FRA to determine whether it should take additional action to ensure that longer trains are operating safely and to work with railroads to minimize their impact to the communities through which they travel. Conclusions FRA faces a challenging task in assessing the safety impacts of longer trains and has taken some important steps to collect needed information through its study of longer trains’ operations. However, without documented strategies for how it plans to communicate the results of its research, FRA may lose an opportunity to effectively work with internal and external stakeholders—such as railroads, railroad workers, and local communities—to address any risks of operating longer trains in support of the agency’s mission of enabling the safe, efficient, and reliable transportation of people and goods. In addition, local community officials we spoke with raised concerns that longer trains are creating safety risks by causing emergency response delays and exacerbating dangerous motorist and pedestrian behavior, but acknowledged that they lack access to information on longer trains. FRA, however, is uniquely positioned to assess whether these concerns have merit. As FRA has stated, it expects that future growth in rail and highway traffic will increase incidences of blocked crossings and the risk of grade-crossing incidents. As traffic continues to grow—including railroads’ potential increased use of longer trains—having better information could be useful to FRA and other stakeholders. Without examining the potential impacts of longer trains on local communities, including on blocked grade crossings, FRA may lose an opportunity to identify what, if any, additional actions should be taken to ensure the safety of longer trains and the communities through which they travel. Recommendations We are making the following two recommendations to FRA: The Administrator of FRA should develop a strategy for sharing FRA’s research results with internal and external stakeholders and implement that strategy for its research on the safety impacts of very long trains. (Recommendation 1) The Administrator of FRA should work with railroads to engage state and local governments to (a) identify community-specific impacts of train operations, including longer trains, where streets and highways cross railroad rights-of-way and (b) develop potential solutions to reduce those impacts. (Recommendation 2) Agency Comments We provided a draft of this report to DOT, NTSB, and STB for their review and comment. In its comments, reproduced in appendix I, DOT concurred with the recommendations. DOT and STB also provided technical comments, which we incorporated as appropriate. NTSB had no comments. As agreed with your office, unless you publicly announce the contents of this report earlier, we plan no further distribution until 30 days from the report date. At that time, we will send copies of this report to the appropriate congressional committees, the Secretary of Transportation, the Chairman of NTSB, the Chairman of STB, and other interested parties. In addition, the report will be available at no charge on the GAO website at http://www.gao.gov. If you or your staff have any questions about this report, please contact me at (202) 512-2834 or FlemingS@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. GAO staff who made key contributions to this report are listed in appendix II. Appendix I: Comments from the U.S. Department of Transportation Appendix II: GAO Contact and Staff Acknowledgments GAO Contact Staff Acknowledgments In addition to the contact named above, Andrew Huddleston (Assistant Director); Jean Cook (Analyst in Charge); Jason Coates; Philip Farah; David Hooper; Rosa Leung; Gail Marnik; John Mingus; Madhav Panwar; Malika Rice; Kelly Rubin; and Michelle Weathers made key contributions to this report.