Proposed Rule2025-12174
Project Management Oversight
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
July 1, 2025
Issuing agencies
Transportation DepartmentFederal Transit Administration
Abstract
FTA is proposing to modify the applicability of project management oversight by raising the total cost and Federal investment thresholds to align with the statutory thresholds for Small Starts projects under FTA's Capital Investment Grant program.
Full Text
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<title>Federal Register, Volume 90 Issue 124 (Tuesday, July 1, 2025)</title>
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[Federal Register Volume 90, Number 124 (Tuesday, July 1, 2025)]
[Proposed Rules]
[Pages 28690-28693]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-12174]
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DEPARTMENT OF TRANSPORTATION
Federal Transit Administration
49 CFR Part 633
[Docket No. FTA-2025-0010]
RIN 2132-AB59
Project Management Oversight
AGENCY: Federal Transit Administration (FTA), Department of
Transportation (DOT).
ACTION: Notice of proposed rulemaking (NPRM).
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SUMMARY: FTA is proposing to modify the applicability of project
management oversight by raising the total cost and Federal investment
thresholds to align with the statutory thresholds for Small Starts
projects under FTA's Capital Investment Grant program.
DATES: Comments should be filed by September 2, 2025. FTA will consider
comments received after that date to the extent practicable.
ADDRESSES: You may send comments, identified by docket number FTA-2025-
0010, by any of the following methods:
<bullet> Federal Rulemaking Portal: <a href="https://www.regulations.gov">https://www.regulations.gov</a>.
Follow the instructions for sending comments.
<bullet> Fax: (202) 493-2251.
<bullet> Mail: Docket Management Facility, U.S. Department of
Transportation, 1200 New Jersey Avenue SE, West Building Ground Floor,
Room W12-140, Washington, DC, 20590-0001.
<bullet> Hand Delivery/Courier: West Building Ground Floor, Room
W12-140, 1200 New Jersey Avenue SE, Washington, DC, between 9 a.m. and
5 p.m. ET, Monday through Friday, except Federal holidays.
Instructions: All submissions received must include the agency name
and docket number or Regulatory Information Number (RIN) for this
rulemaking. All comments received will be posted without change to
<a href="https://www.regulations.gov">https://www.regulations.gov</a>, including any personal information
provided.
Docket: For access to the docket to read background documents or
comments received, go to <a href="https://www.regulations.gov">https://www.regulations.gov</a>. Background
documents and comments received may also be viewed at the U.S.
Department of Transportation, 1200 New Jersey Ave. SE, Docket
Operations, M-30, West Building Ground Floor, Room W12-140, Washington,
DC 20590-0001, between 9 a.m. and 5 p.m. EST, Monday through Friday,
except Federal holidays.
FOR FURTHER INFORMATION CONTACT: For program matters, contact Corey
Walker, Office of Program Management (TPM), (202) 366-0826 or
<a href="/cdn-cgi/l/email-protection#bdded2cfd8c493cadcd1d6d8cffdd9d2c993dad2cb"><span class="__cf_email__" data-cfemail="e7848895829ec990868b8c8295a7838893c9808891">[email protected]</span></a>. For legal matters, contact Mark Montgomery,
Office of Chief Counsel, (202) 366-1017 or <a href="/cdn-cgi/l/email-protection#5835392a33763537362c3f37353d2a21183c372c763f372e"><span class="__cf_email__" data-cfemail="dcb1bdaeb7f2b1b3b2a8bbb3b1b9aea59cb8b3a8f2bbb3aa">[email protected]</span></a>.
Office hours are from 8:30 a.m. to 5 p.m., Monday through Friday,
except Federal holidays.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Executive Summary
A. Statutory Authority
B. Background
C. Summary of Provisions
II. Regulatory Analyses and Notices
I. Executive Summary
This NPRM proposes to amend the PMO regulation at 49 CFR part 633.
The proposed rule would modify the applicability of project management
oversight by raising the total cost threshold from $300 million to $400
million and the Federal investment threshold from $100 to $150 million,
to align with the statutory thresholds for Small Starts projects under
FTA's Capital Investment Grant (CIG) program. This amendment would
reduce the number of projects subject to project management oversight
requirements and therefore reduce regulatory burden.
A. Statutory Authority
This rulemaking is issued under the authority of 49 U.S.C. 5327,
which requires the Secretary to conduct oversight of major capital
projects and to promulgate a rule for that purpose that includes a
definition of major capital project to delineate the types of projects
governed by the rule.
B. Background
Recognizing a compelling need to strengthen the management and
oversight of major capital projects, in the Surface Transportation and
Uniform Relocation Assistance Act of 1987 (STURAA) (Pub. L. 100-17)
(April 2, 1987), Congress authorized FTA's predecessor agency, the
Urban Mass Transportation Administration (UMTA), to conduct oversight
of major capital projects and to promulgate a rule for that purpose.
The statute, now codified at 49 U.S.C. 5327, authorizes FTA to obtain
the services of project management oversight contractors (PMOCs) to
assist FTA in overseeing the expenditure of Federal financial
assistance for major capital projects. Further, the statute requires
FTA to promulgate a regulation that includes a definition of ``major
capital project'' to identify the types of projects governed by the
rule. Accordingly, UMTA promulgated a rule for oversight of major
capital projects on September 1, 1989, at 49 CFR part 633 (54 FR
36708). At that time, the average total cost of CIG projects was $266
million (not adjusted for inflation). The UMTA regulation defined
``major capital project'' as any project for the construction of a new
fixed guideway or extension of an existing fixed guideway or a project
involving the rehabilitation or modernization of an existing fixed
guideway with a total project cost of $100 million or more. The rule
limited covered projects to those receiving funds made available under
sections 3, 9, or 18 of the Urban Mass
[[Page 28691]]
Transportation Act of 1964, as amended; 23 U.S.C. 103(e)(4); or section
14(b) of the National Capital Transportation Amendments of 1979.
By 2011, the annual dollar value of the Federal transit capital
programs was nearly five times the level authorized under STURAA in
1987, and the number of active PMOC task orders was more than double
the number in 1987. Furthermore, FTA funded a larger number of projects
with a total cost of more than one billion dollars that presented
significant oversight challenges. On September 13, 2011, FTA published
a Notice of Proposed Rulemaking (NPRM) (76 FR 56378) that proposed to:
(1) enable FTA to identify the necessary management capacity and
capability of a sponsor of a major capital project more clearly; (2)
spell out the many facets of project management that must be addressed
in a project management plan; (3) tailor the level of FTA oversight to
the costs, complexities, and risks of a major capital project; (4) set
forth the means and objectives of risk assessments for major capital
projects and; (5) articulate the roles and responsibilities of FTA's
PMOCs.
After the NPRM was published, however, the Moving Ahead for
Progress in the 21st Century Act (MAP-21) (Pub. L. 112-141) (July 6,
2012) expanded the scope of the project management oversight
requirements to cover major capital projects for public transportation
under any provision of Federal law. Moreover, MAP-21 shifted the
initiation of project management oversight to the project development
phase and removed the statutory requirement that recipients of
financial assistance for projects with a total cost of $1 billion
submit an annual financial plan. Given the fundamental changes to the
project management oversight requirements and scope, FTA withdrew the
NPRM (78 FR 16460) to reexamine its proposed definition of major
capital project and its policy and procedures for risk assessment.
Subsequently, the Fixing America's Surface Transportation (FAST) Act
(Pub. L. 114-94) (December 4, 2015) further amended 49 U.S.C. 5327 to
limit project management oversight to quarterly reviews, absent a
finding that more frequent oversight was necessary, and mandated that
the Secretary prescribe regulations outlining a process for at-risk
recipients to return to quarterly reviews.
FTA has become much more knowledgeable about the risks common to
major capital projects, having conducted its own risk assessments since
2005, witnessed some project sponsors' lack of management capacity and
capability and appropriate project controls for some projects, and
studied the reasons for cost and schedule changes on many major capital
projects. Consequently, on September 23, 2020, following a notice of
proposed rulemaking (84 FR 44590) and an opportunity for comment, FTA
published a final rule (85 FR 59672) that changed the applicability of
the regulation by shifting the definition of a ``major capital
project'' from one based on the type of project or total project cost
to one based on both the amount of Federal financial assistance and the
total project cost, which FTA views as a more appropriate benchmark
than the type of project or total capital cost of a project alone.
The rule applied a project cost threshold to all fixed guideway
capital projects. As a default, the rule raised the total project cost
threshold to $300 million or more and required that the project receive
$100 million or more in Federal investment to be subject to project
management oversight. A key consideration for selecting these
thresholds was that they reflect the thresholds Congress chose to
distinguish Small Starts projects from New Starts projects in the CIG
program. New Starts projects have more steps to complete in the CIG
process and tend to be more complex, potentially requiring more
oversight. Reducing the number of lower-risk Small Starts projects
undergoing project management oversight will allow FTA to focus on
higher-risk New Starts projects while yielding annual cost savings to
FTA and its recipients.
Subsequently, the Infrastructure Investment and Jobs Act (Pub. L.
117-58; November 15, 2021) amended 49 U.S.C. 5309 to raise the
thresholds for Small Starts projects in the CIG program to $400 million
or more in total costs and $150 million or more in Federal investment.
Accordingly, FTA proposes to amend the definition of ``major capital
project'' under 49 CFR 633.5 to align with these statutory thresholds,
consistent with the rationale in its 2020 final rule.
C. Summary of Provisions
FTA proposes to amend the definition of ``major capital project''
in 49 CFR 633.5 by raising the total cost and Federal investment
thresholds to match those established for Small Starts projects under
49 U.S.C. 5309. The current regulation defines the term as a project to
construct, expand, rehabilitate, or modernize a fixed guideway of $300
million or more that receives $100 million or more in Federal financial
assistance. This NPRM proposes to raise the thresholds to $400 million
and $150 million, respectively.
II. Regulatory Analyses and Notices
Executive Order 12866 and 13563 (Regulatory Review)
E.O. 12866 (``Regulatory Planning and Review''), as supplemented by
E.O. 13563 (``Improving Regulation and Regulatory Review''), directs
Federal agencies to assess the benefits and costs of regulations and to
select regulatory approaches that maximize net benefits when possible.
OMB has determined the proposed rule is not significant within the
meaning of E.O. 12866 and has not reviewed the rule under that order.
Project management oversight requirements apply to all major
capital projects. The current definition of a ``major capital project''
includes all projects involving the construction, expansion,
rehabilitation, or modernization of a fixed guideway with a total
project cost of $300 million or more and $100 million or more in
Federal investment. The proposed rule would increase the total project
cost threshold to $400 million and the Federal investment threshold to
$150 million.
Removing project management oversight from projects with total
costs between $300 and $400 million and Federal investment between $100
million and $150 may increase the risk of materially exceeding budget
or falling behind schedule for some projects; however, the potential
negative impacts are not quantifiable. First, it is not the case that
project management oversight eliminates the risk of cost or schedule
overruns, nor that the lack of project management oversight necessarily
implicates a high risk of such overruns.
Second, falling under the total cost and Federal investment
thresholds does not preclude a project from receiving project
management oversight. Section 633.5(e)(2) allows the Administrator to
determine on a case-by-case basis that certain projects should be
subject to project management oversight based on an assessment of risk,
which would include an analysis of the likelihood of budget and
schedule overruns. Of the 33 CIG projects currently in construction,
FTA utilized this provision to designate six as major capital projects
based on this risk assessment to receive additional oversight.
The proposed rule would result in cost savings for recipients and
for FTA by reducing the number of capital projects subject to project
management oversight. Removing the oversight requirements would reduce
labor hours for oversight procedures, which include
[[Page 28692]]
attending meetings, preparing quarterly reports and other requested
documents, and accompanying contractors at project construction sites.
Currently, there are 59 CIG and formula-funded major capital
projects for public transportation subject to project management
oversight. Seventeen of those projects have total costs between $300
million and $400 million or Federal investments between $100 million
and $150 million. Eight of the projects between the existing and
proposed thresholds have received grant agreements and are in
construction. Those projects would not be impacted by the new
thresholds under this proposed rule if it becomes a final rule.
However, the remaining nine projects still in project development would
no longer meet the definition of major capital project and not be
subject to project management oversight requirements if the new
thresholds become final before the project receives a grant agreement.
In 2020, FTA estimated that the oversight required approximately 1
FTE (full-time equivalent) of recipient time (2,080 hours) and 0.5 FTE
of FTA staff time (1,040 hours) per project per year. Removing
oversight requirements for nine projects annually would result in
annual savings of 18,720 hours for recipients and 9,360 hours for FTA
staff.
To estimate cost savings for project sponsors, FTA used May 2024
occupational wage data from the Bureau of Labor Statistics, the latest
available as of May 2025, in the ``Transit and Ground Passenger
Transportation'' industry (North American Industry Classification
System code 485000).\1\ To estimate the wages of agency staff
completing the auditing requirements, FTA used the ``General and
Operations Managers'' job category (code 11-1021). FTA used median
hourly wages ($42.45) as a basis for the estimates, multiplying the
wages by 1.62 ($42.45 x 1.62 = $68.69) to account for employer
benefits.\2\
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\1\ Bureau of Labor Statistics. 2025. ``May 2024 National
Occupational Employment and Wage Estimates: United States: NAICS
485000--Transit and Ground Passenger Transportation.'' <a href="https://data.bls.gov/oes/#/industry/485000">https://data.bls.gov/oes/#/industry/485000</a>.
\2\ Multiplier derived using Bureau of Labor Statistics data on
employer costs for employee compensation in December 2024 (<a href="https://www.bls.gov/news.release/ecec.htm">https://www.bls.gov/news.release/ecec.htm</a>). Employer costs for state and
local government workers averaged $63.46 an hour, with $39.22 for
wages and $24.23 for benefit costs. To estimate full costs from
wages, one would use a multiplier of $63.46/$39.22, or 1.62.
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To estimate cost savings for FTA, FTA estimated an hourly wage of
$64.06 for oversight staff, based on the hourly wage rate for federal
GS (General Schedule) employees at step 5 of the GS-13 grade level in
the Washington, DC locality pay area.\3\ The hourly rate was then
multiplied by 1.62 to account for employer benefits ($64.06 x 1.62 =
$103.65).
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\3\ Office of Personnel Management. 2023. ``Salary Table 2024-
DCB.'' <a href="https://www.opm.gov/policy-data-oversight/pay-leave/salaries-wages/salary-tables/pdf/2024/DCB_h.pdf">https://www.opm.gov/policy-data-oversight/pay-leave/salaries-wages/salary-tables/pdf/2024/DCB_h.pdf</a>.
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The proposed rule would result in annual cost savings of $2.3
million (18,720 recipient hours x $68.69 + 9,360 FTA hours x $103.65)
in undiscounted 2024 dollars, $1.9 million at a 3 percent discount rate
(discounted to 2024), and $1.5 million at a 7 percent discount rate
over the ten year period from 2025 to 2035. Additionally, there would
be cost savings for future FTA projects between $300 million and $400
million in total cost or $100 million and $150 million in Federal
investment, that would have otherwise been subject to project
management oversight under the current thresholds. However, because
projects under the CIG and formula programs comprise a broad range of
complexity, total costs, and amounts of Federal investment and vary
from year to year, these cost savings are unquantifiable.
Executive Order 14192 (Deregulatory Action)
E.O. 14192 (``Unleashing Prosperity Through Deregulation'')
requires that for ``each new [E.O. 14192 regulatory action] issued, at
least ten prior regulations be identified for elimination.''
Implementation Guidance for E.O. 14192, issued by OMB (Memorandum M-25-
20, March 25, 2025) defines an E.O. 14192 deregulatory action as ``an
action that has been finalized and has total costs less than zero.''
This proposed rule, if finalized, is expected to have total costs less
than zero, and therefore is expected to be an E.O. 14192 deregulatory
action.
Regulatory Flexibility Act
The Regulatory Flexibility Act of 1980 (RFA) (5 U.S.C. 601 et seq.)
requires Federal agencies to assess the impact of a regulation on small
entities unless the agency determines that the regulation is not
expected to have a significant economic impact on a substantial number
of small entities.
This proposed rule would not change any requirements for public
transportation projects with a total cost of $400 million or more and
Federal investment of $150 million or more, nor for projects with a
total cost of less than $300 million and Federal investment of less
than $100 million. The NPRM would narrow the applicability of project
management oversight requirements, thereby reducing burden on capital
projects with total costs between $300 million and $400 million and
Federal investments between $100 million and $150 million. The only
small entities impacted by the proposed rule would be project sponsors
of projects with total costs and amounts of Federal investment between
the existing and proposed thresholds, and that impact would be a burden
reduction. FTA therefore certifies that the proposed rule would not
have a significant effect on a substantial number of small entities.
Unfunded Mandates Reform Act of 1995
FTA has determined that this proposed rule does not impose unfunded
mandates, as defined by the Unfunded Mandates Reform Act of 1995 (Pub.
L. 104-4, March 22, 1995). This rule does not include a Federal mandate
that may result in expenditures of $100 million or more in any one
year, adjusted for inflation, by State, local, and tribal governments
in the aggregate or by the private sector.
Executive Order 13132 (Federalism Assessment)
E.O. 13132 requires agencies to assure meaningful and timely input
by State and local officials in the development of regulatory policies
that may have a substantial direct effect on the States, on the
relationship between the National Government and the States, or on the
distribution of power and responsibilities among the various levels of
government. This action has been analyzed in accordance with the
principles and criteria contained in E.O. 13132, dated August 4, 1999,
and FTA determined this action will not have a substantial direct
effect or sufficient federalism implications on the States. FTA also
determined this action will not preempt any State law or regulation or
affect the States' ability to discharge traditional State governmental
functions.
Executive Order 12372 (Intergovernmental Review)
The regulations implementing E.O. 12372 regarding intergovernmental
consultation on Federal programs and activities do not apply to this
rulemaking.
Paperwork Reduction Act
In compliance with the Paperwork Reduction Act of 1995 (44 U.S.C.
3501 et seq.), and OMB implementing regulation at 5 CFR 1320.8(d),
Federal agencies must obtain approval from the Office of Management and
Budget (OMB) for each collection of
[[Page 28693]]
information they conduct, sponsor, or require through regulations. The
costs and burdens associated with the information collection
requirements under 49 CFR part 633 are included in the individual
information collections of FTA's major capital programs. FTA has
analyzed this proposed rule under the Paperwork Reduction Act and
determined that it does not impose additional information collection
requirements for the purposes of the Act above and beyond the existing
information collection clearances from OMB. If the final rule results
in a measurable reduction in burden hours or costs associated with
existing information collections, FTA will revise the relevant
information collection requests accordingly in compliance with the
Paperwork Reduction Act.
National Environmental Policy Act
FTA has analyzed this rule for the purposes of the National
Environmental Policy Act of 1969 (NEPA). In accordance with 42 U.S.C.
4336 and DOT NEPA Order 5610.1C, FTA has determined that this rule is
categorically excluded pursuant to 23 CFR 771.118(c)(4), ``[p]lanning
and administrative activities that do not involve or lead directly to
construction, such as: [p]romulgation of rules, regulations, and
directives.'' This rulemaking is not anticipated to result in any
environmental impacts, and there are no unusual or extraordinary
circumstances present in connection with this rulemaking.
Executive Order 13175 (Tribal Consultation)
FTA has analyzed this proposed rule under E.O. 13175, dated
November 6, 2000, and it will not have substantial direct effects on
one or more Indian Tribes; will not impose substantial direct
compliance costs on Indian Tribal governments; and will not preempt
tribal laws. Therefore, a Tribal summary impact statement is not
required.
Executive Order 13211 (Energy Effects)
FTA has analyzed this action under E.O. 13211, Actions Concerning
Regulations That Significantly Affect Energy Supply, Distribution, or
Use. FTA has determined this action is not a significant energy action
under that order and is not likely to have a significant adverse effect
on the supply, distribution, or use of energy. Therefore, a Statement
of Energy Effects is not required.
Privacy Act
Anyone can search the electronic form of all comments received into
any of our dockets by the name of the individual submitting the comment
(or signing the comment, if submitted on behalf of an association,
business, labor union, etc.). You may review DOT's complete Privacy Act
Statement in the Federal Register at 65 FR 19477 (April 11, 2000).
Regulation Identifier Number
A Regulation Identifier Number (RIN) is assigned to each regulatory
action listed in the Unified Agenda of Federal Regulations. The
Regulatory Information Service Center publishes the Unified Agenda in
April and October of each year. The RIN contained in the heading of
this document can be used to cross-reference this proposed rule with
the Unified Agenda.
List of Subjects in 49 CFR Part 633
Government contracts, Grant programs-transportation, Mass
transportation, Reporting and recordkeeping requirements.
In consideration of the foregoing, and under the authority of 49
U.S.C. 5327 and 5334, and the delegation of authority at 49 CFR 1.91,
the Federal Transit Administration proposes to amend title 49, Code of
Federal Regulations, part 633, as set forth below:
PART 633--PROJECT MANAGEMENT OVERSIGHT
0
1. The authority citation for part 633 is revised to read as follows:
Authority: 49 U.S.C. 5327; 49 U.S.C. 5334; 49 CFR 1.91.
0
2. Revise Sec. 633.5 to read as follows:
Sec. 633.5 Definitions.
* * * * *
Except as provided in Sec. 633.19, Major capital project means a
project that:
(1) * * *
(i) Has a total project cost of $400 million or more and receives
Federal funds of $150 million or more; and
* * * * *
Issued in Washington, DC, under authority delegated in 49 CFR
1.91.
Tariq Bokhari,
Acting Administrator.
[FR Doc. 2025-12174 Filed 6-27-25; 4:15 pm]
BILLING CODE 4910-57-P
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