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The Capital Investment Grants (CIG) program is a discretionary grant program unlike most others in government. Instead of an annual call for applications and selection of awardees by the Federal Transit Administration (FTA), the law requires that projects seeking CIG funding complete a series of steps over several years to be eligible for funding. For New Starts and Core Capacity projects, the law requires completion of two phases in advance of receipt of a construction grant agreement – Project Development and Engineering. For Small Starts projects, the law requires completion of one phase in advance of receipt of a construction grant agreement – Project Development.
Funds must be obligated within three fiscal years after the fiscal year the funds were made available. For example, if the funds are made available in the fall of 2018, the funds must be obligated by September 30, 2021.
The Federal Transit Administration’s (FTA) Final Rule on Private Investment Project Procedures (PIPP) establishes procedures that allow recipients of FTA funds to identify perceived impediments to the use of public-private partnerships (P3s) and private investment in public transportation capital projects either proposed or under construction and in the Statewide Long-Range Transportation Plan or the Metropolitan Transportation Plan, and seek a waiver or modification of such impediments.
By law, the following activities must be completed within two years of entering the Project Development phase before a New Starts or Core Capacity project may enter the Engineering phase:
- Select a locally preferred alternative;
- Have the locally preferred alternative adopted into the fiscally constrained Long Range Transportation Plan;
- Complete the environmental review process and receive a Categorical Exclusion, a Finding of No Significant Impact, or a Record of Decision from FTA; and
- Develop sufficient information for FTA to evaluate and rate the project against the statutory project justification and local financial commitment criteria and receive a Medium or better overall rating.
Additionally, upon completion of the environmental review process, FTA encourages project sponsors to complete as much engineering and design work on the locally preferred alternative during Project Development as needed to feel comfortable with the project cost and scope.
To be considered for entry into the Engineering phase, at a minimum the following will be needed:
- At least 30 percent of the non-CIG capital funding for the project must be committed
- At least 30 percent engineering and design work must be completed on the project. At this level FTA expects the project sponsor to provide documents at the following level of detail:
- Project Management Plan and sub-plans that include processes and procedures to continuously manage the project during Engineering and a staffing plan that identifies key personnel and demonstrates the sponsor’s management capacity and capability;
- Project definition – key elements are identified and reasonably defined;
- Cost Estimate – addresses key items within the project's work breakdown structure at an appropriate level, includes a basis for the estimate, and includes required contingency based on the level of design and in accordance with FTA and industry best practices;
- Schedule – addresses key activities, milestones, and elements within the project's work breakdown structure and incorporates proposed delivery methodology;
- Third Party Agreements and Right-of-Way – are identified with a plan and schedule for completion;
- Geotechnical – a preliminary geotechnical report has been completed and provided to FTA where applicable;
- Project Delivery Method – the delivery method is identified (with related methodologies, activities, and milestones reflected throughout the other required products);
- Value Engineering Report– the report is substantially complete and a draft report shared with FTA where applicable. Additional value engineering products may be developed during the Engineering phase;
- Safety – a preliminary safety hazard analysis and a preliminary threat and vulnerability analysis have been completed and the development of safety and security design criteria has been initiated;
- Accessibility – the sponsor demonstrates steps that will be taken to ensure compliance with USDOT regulations and standards issued under the Americans with Disabilities Act (ADA), including a preliminary analysis of accessibility features such as accessible routes to, from and within the station sites or boarding locations; detectable warnings; signage and communications; curb ramps; and other accessibility features required under the ADA;
- Constructability Review Report – a draft report is submitted, where applicable. The report includes at a minimum the general construction approach, a discussion of site access, and other potential constraints. A more detailed Constructability Review is to be performed during the Engineering phase that may focus on the bid documents, among other aspects, that would affect procurement of the construction contracts.
FTA cannot discuss specific applications once the debrief period ends. Agencies have 30 days to request a debrief once the selected projects are published in the Federal Register Notice (FRN).
The PIPP is intended to establish a streamlined process that allows project sponsors to seek waivers or modifications of FTA requirements in order to:
- Accelerate the project development process;
- Attract private investment;
- Increase project management flexibility; and
- Lead to more innovation, improved efficiency, and/or new revenue streams.
Upon receipt of a request to enter Project Development as a New Starts, Small Starts or Core Capacity project, FTA will review the materials provided by the project sponsor. If anything is unclear, or documentation from the list above is missing, FTA will follow-up with the project sponsor via email. Upon receipt of complete information from the project sponsor, FTA will send a letter within 45 days indicating the sufficiency of the information for entry into Project Development to both the project sponsor and Congress per the direction in the FAST Act.
A letter from FTA indicating the project may enter Project Development does not imply a funding commitment or endorsement of the project by FTA, and should not be construed as a major milestone. Instead, it merely indicates the project sponsor may begin the initial stage of the process.
An eligible project is one that will test an innovative project delivery technique that is prohibited by current FTA regulations or FTA policy. A PIPP waiver request cannot be used to waive or modify statutory requirements. However, if a project sponsor believes an FTA regulation or policy that implements a statutory requirement impedes P3s or private investment, and has a means of compliance with a statutory requirement that is not consistent with the FTA regulation or policy but will remove the perceived impediment to a P3, the project sponsor may propose an alternative method of compliance.
The waiver or modification request must demonstrate that the experimental feature, if approved, will advance the goals of the PIPP. FTA encourages applicants to discuss potential waiver or modification requests with FTA’s private sector liaison or the relevant FTA Regional Office prior to applying.
Direct recipients receive funding directly from FTA. Designated recipients have been designated by the state governor or his/her designee to receive and/or sub-allocate.
There is not a set timeframe within which projects must complete the process leading up to a construction grant agreement. Some projects naturally take longer than others to develop because of project complexity, size, number of project partners involved, and/or amount of non-CIG capital funding needed for the project.
There are some timeframes that project sponsors should keep in mind:
- New Starts and Core Capacity projects are required by law to complete the Project Development phase within two years of entering that phase. While the law provides for an extension to the two year timeframe, this is expected to be the rare exception rather than the rule. Thus, FTA advises project sponsors to do “up front” work in advance of seeking entry into Project Development to ensure they can complete the Project Development activities within two years.
- Within three years of granting New Starts or Core Capacity projects approval to enter the Engineering phase, or within three years of Small Starts projects entering the Project Development phase, FTA expects project sponsors to make sufficient progress on their projects. This includes obtaining funding commitments for at least half of the non-CIG capital funding needed for the project, and advancing the level of project design.
Eligible applicants include designated recipients, states, local governmental authorities, and Indian tribes. Eligible subrecipients may partner with eligible recipients but cannot be the primary applicant.
An applicant may submit a request for a waiver or modification of FTA requirements to the dedicated FTA e-mail address: pipp.fta@dot.gov, with a copy sent to the appropriate FTA Regional Administrator. FTA staff will coordinate the review of the request with the PIPP Steering Committee and the Regional Administrator. The FTA Administrator will notify the grant recipient in writing as to whether the request for modification or waiver is approved or denied.
If an application is approved, FTA will negotiate an Early Development Agreement (EDA) with the project sponsor to establish the parameters of the approved application.
Project sponsors wishing to enter the Project Development phase as a New Starts, a Small Starts, or a Core Capacity project should submit a letter to the Associate Administrator for FTA’s Office of Planning and Environment that includes the following information:
- The name of the study sponsor, any partners involved in the study, and the roles and responsibilities of each
- Identification of a project manager and other key staff that will perform the Project Development work
- A brief description and clear map of the corridor being studied including its length and key activity centers
- The transportation problem in the corridor or a statement of purpose and need
- Identification of a proposed project if one is known and alternatives to that project if any are being considered
- Identification of a cost estimate for the project, if available
- Identification of whether the project would be a New Starts, Small Starts, or Core Capacity project
- A brief description of current levels of transit service in the corridor today
- Electronic copies of or weblinks to prior studies done in the corridor, if any
- The anticipated cost to complete Project Development, not including the cost of any work done prior to officially entering the Project Development phase
- Identification of the non-CIG capital funding available and committed to conduct the Project Development work
- Documentation demonstrating commitment of funds for the Project Development work (e.g. Board resolutions, adopted budgets, approved Capital Improvement Programs, approved Transportation Improvement Programs, letters of commitment)
- If the project is a New Starts or Core Capacity project, an anticipated draft timeline for completing the following activities (which should demonstrate the ability to complete the Project Development work within 2 years as prescribed in FAST):
- compliance with NEPA and related environmental laws;
- selection of a locally preferred alternative;
- adoption of the locally preferred alternative in the fiscally constrained long range transportation plan;
- completion of the activities required to obtain a project rating under the evaluation criteria outlined in the law
- completion of the readiness requirements for entry into Engineering; and
- anticipated receipt of a construction grant agreement from FTA
- anticipated start of revenue service
- If the project is a Small Starts project, an anticipated timeline for completing the following activities:
- compliance with NEPA and related environmental laws;
- selection of a locally preferred alternative;
- adoption of the locally preferred alternative in the fiscally constrained long range transportation plan;
- completion of the activities required to obtain a project rating under the evaluation criteria outlined in the law; and
- anticipated receipt of a construction grant agreement from FTA
- anticipated start of revenue service
Only designated recipients of FTA funds, states, local governmental authorities and Indian tribes are eligible to apply for funds. If you are unsure about whether you can apply for funding, please contact your FTA Regional Office or your state’s Department of Transportation.
The waiver or modification request is the formal documentation of an applicant’s request for the use of an experimental procedure in the project development process.
The request must include the following information for it to be considered complete and reviewed by FTA:
- Provide a brief project description.
- Identify whether the project is to be delivered as a public-private partnership, as a joint development, or with another private sector investment.
- Describe in detail the role of the private sector investor, if any, in delivering the project.
- Identify the specific FTA requirement(s) that the recipient requests to have modified or waived and a proposal as to how the requirement(s) should be modified.
- Provide a justification for the modification(s) or waiver(s), including an explanation of how the FTA requirement(s) presents an impediment to a public-private partnership, joint development, or other private sector investment.
- Explain how the public interest and public investment in the project will be protected and how FTA can ensure the appropriate level of public oversight and control, as determined by the FTA Administrator, is undertaken if the modification(s) or waiver(s) is allowed.
- Provide other recipients’ concurrence with the submission of the application and waiver of the right to submit a separate application for the same project, where a project has more than one recipient at the time of application.
- Provide a financial plan identifying sources and uses of funds proposed or committed to the project.
- Explain the expected benefits that the modification or waiver of FTA requirements would provide to mitigate impediments to the greater use of public-private partnerships and private investment in the project.
During Project Development, prior to the completion of the environmental review process required under the National Environmental Policy Act (NEPA), FTA will work with project sponsors to assess the strengths and weaknesses of alternatives still under consideration and provide technical assistance on how to meet the requirements to enter Engineering. Technical assistance may include workshops or other methods focusing on the readiness requirements to enter Engineering.
Formal oversight will generally begin at the completion of NEPA and will be tailored based on the how far the project has advanced in design, the complexity of the project, and the project sponsor’s capability to undertake engineering and construction.
PIPP waiver and modification requests will be reviewed by FTA based on the following criteria:
- Are the proposed experimental features prohibited under current policies and procedures?
- Does the waiver or modification request extend beyond procurement issues covered by the PIPP?
- Will an approved waiver or modification request improve the delivery time, quality, and/or cost of the project?
- Will an approved waiver or modification influence future Federal public transportation policy and procedures?
- Is there a plan by the project sponsor for evaluating how the features of the waiver or modification will contribute to the overall success of the project?
The overall intent of the PIPP is to foster innovation and explore the full range of opportunities to make the project delivery process more efficient. Any proposals that meet this intent and are consistent with the criteria noted above will be given strong consideration.
A local government authority includes:
- a political subdivision of a state,
- an authority of at least one state or political subdivision of a state,
- an Indian tribe, or
- a public corporation, board, or commission established under the laws of a state.
By law, FTA evaluates and rates Capital Investment Grants Program New Starts or Core Capacity projects prior to allowing them into the Engineering phase. FTA evaluates and develops ratings for the project justification and local financial commitment criteria.
FTA also reviews the project sponsor’s Project Management Plan and subplans to ensure that the sponsor has the technical capacity and capability to deliverthe project. Lastly, FTA reviews the project definition, scope, cost and schedule for reasonableness, undertakes and completes a risk assessment. These reviews may be expedited based on factors including the complexity of the project and the project sponsor’s management capacity and capability.
This will vary depending on the complexity of the waiver or modification request and the project. FTA will strive to respond to complete applications within 60 days. If FTA determines an application is incomplete or if FTA has questions, FTA will not wait 60 days to respond, but will notify the applicant as soon as it makes that determination.