OIG to Amtrak: ‘Better FDT Program Planning Would Improve Oversight, Reduce Risks’
The estimated $6 billion FDT program is “the single largest infrastructure effort that Amtrak is leading, with construction scheduled to start this year,” according to the OIG. The program will replace the 1.4-mile-long, 150-year-old Baltimore and Potomac (B&P) Tunnel in Baltimore, Md., with a new 2-mile twin-bore tunnel, and includes a comprehensive upgrade of a 10.2-mile section of the Northeast Corridor south of Baltimore. The Federal Railroad Administration (FRA) awarded Amtrak $4.7 billion in grant funds to advance the program. Amtrak, the lead sponsor and asset owner, and the State of Maryland have spent or plan to provide the remaining $1.3 billion, the OIG reported. As of August 2024, the FDT program was progressing through final design.
Given the program’s size, scope and importance, the OIG said its objective was to assess Amtrak’s management and oversight. The Office reviewed guidance from company policies and industry sources for program and project management, as well as the company’s program management and planning documents; it also interviewed officials from the company’s Capital Delivery department—responsible for the FDT program—and other supporting departments, plus officials from the FRA and contractors who have roles in the program.
According to the OIG, Amtrak is developing its management structure for the FDT program but initially did not have “an effective structure or sufficient staff in place.” In December 2022, Amtrak “decided to hire a contractor—a ‘delivery partner’—to provide management and oversight, but until it onboarded the contractor more than a year later, it relied on an overwhelmed internal team to manage multiple, complex, and concurrent commitments,” the Office said. “As a result, the requisite planning has yet to be completed despite the program approaching major construction, which significantly increases the risk of cost overruns and delays.” According to the OIG, two factors led to these challenges:
- “The program team was short-staffed. The Capital Delivery department—a nascent department when it took over the FDT program—initially assigned responsibility for the $6 billion program to one person, who had limited support to provide the management and oversight needed for a program of this magnitude. The team has steadily grown in numbers since 2022 but was initially overtasked.”
- “The decision on the management structure was not made early enough. The company did not identify and establish a management structure early enough to provide strong oversight as the program advanced through planning into construction. Company officials told us, and we agree, that an earlier decision would have allowed the company to procure the FDT program’s delivery partner sooner and realize its benefits more immediately.”
Because of this, the OIG said Amtrak did not complete all the necessary planning, which resulted in “delays and other challenges.” Further, the OIG said, the delivery partner must now concurrently advance four areas of planning: scheduling, communications, document management, and risk management. “Proceeding further into construction before completing this planning could significantly increase cost and schedule risks,” the OIG said. “More broadly, given the scale of the company’s historic capital plans, avoiding similar challenges on other programs will be key to protecting and maximizing taxpayer investments.”
The OIG recommended that the Capital Delivery department advance the requisite planning before major construction begins and that Amtrak “improve its program planning processes to ensure that it implements a management structure and provides sufficient staff early enough to avoid similar challenges on future programs.”
Amtrak Executive Vice President Capital Delivery Laura Mason and Executive Vice President Strategy and Planning Dennis Newman, in commenting on an OIG report draft, “agreed with our recommendations and detailed the actions the company plans to take or has taken to address them,” according to the OIG.
Further Reading:
- Amtrak Selects Frederick Douglass Tunnel Delivery Partner
- Amtrak Awards Two Contracts for Frederick Douglass Tunnel Program
