HSIPR Program Grantee FAQs
1. In the Appendix to the High-Speed Intercity Passenger Rail Guidance published in the Federal Register on June 23, 2009, the agency identifies the requirements for repaying grant funds provided to a grantee in the event that rail service is discontinued on a rail facility that was improved with funding provided by the FRA (see Appendix 3.2.12). What are the agency’s expectations for repayment for a non-construction grant where FRA funds are provided for planning, environmental assessment work, preliminary engineering, associated project management, or related activities and the purposes of the grant agreement are fulfilled but a decision is made not to advance rail passenger service for the project or corridor?
FRA recognizes that the purpose of these types of activities is often to develop information to enable the State to decide whether intercity or high-speed rail service is the right choice for a particular corridor and to identify in detail the costs, environmental impacts, and other considerations associated with constructing any needed improvements and operating the services. Thus, there may be good reasons identified from these activities for not advancing passenger rail in a particular corridor. Where the FRA and the State agree on the activities to be carried out by the State under the grant (which agreement will be reflected in the detailed Statement of Work attached to the grant), and the grantee diligently and responsibly completes the agreed upon work, the FRA will not expect the grantee to repay to FRA the grant funds expended if a decision is ultimately made not to pursue passenger rail improvements in the corridor. Of course, it is incumbent on both the State and the FRA to be careful and judicious in the expenditure of Federal and State funds on planning and preliminary engineering-related activities to assure these assets are wisely spent. The State must be realistic and pragmatic with respect to its vision for improved intercity passenger rail services and work with FRA in good faith to identify appropriate activities necessary to reach a decision point on advancing rail improvements in the specific corridor. The grant funding that is provided will be tied to the completion of specific and relevant project phases or milestones and additional funds will not be obligated until those phases or milestones are accomplished. It is also important to note that FRA’s expectations would be very different in situations where the purposes of the specific grant agreement are not accomplished, and FRA would very likely seek reimbursement for federal funds expended in such situations..
1. Can other agencies’ categories of activities that are excluded from the requirements of NEPA (categorical exclusions or CEs) be used for a project being submitted to FRA for funding under the HSIPR program?
FRA’s Procedures for Considering Environmental Impacts contain twenty actions that FRA has identified as categorically excluded. 64 Fed. Reg. 28547. FRA adopted these CEs over time as the agency implemented various programs and developed experience in evaluating the potential environmental impacts associated with those programs. FRA has determined that these categories of action typically can be implemented without significant environmental impacts. FRA’s CEs are based upon the agency’s experience in implementing programs and since FRA had not previously had large-scale discretionary funding programs to implement, the agency has not had the opportunity or necessity to develop as broad a set of CEs as other Department of Transportation operating administrations.
The Federal Highway Administration and the Federal Transit Administration both have CEs included in their environmental regulations that cover actions similar to those which FRA will be considering under the HSIPR Program. However, FRA is not authorized to use other operating administration CEs. FRA is initiating a process to work with CEQ to amend and expand our CEs, but that process will take time and will not immediately assist with HSIPR project compliance.
2. How will another agencies’ NEPA document be accepted by FRA for the HSIPR program?
FRA may be able to rely on environmental documentation prepared for another agency, but must reach an independent decision (CE, FONSI, or ROD), as required by CEQ regulations. Consistent with FRA’s Environmental Procedures, the possible environmental effects of an FRA action must be considered at the earliest possible time along with technical and economic studies. Where the FRA becomes a cooperating agency on a joint effort of environmental assessment and documentation, FRA will review the work of the lead agency to ensure that it will satisfy FRA requirements. For every major action, FRA must complete review and approval responsibilities for any final environmental document (see Section 6(c), FRA Procedures for Considering Environmental Impacts). FRA encourages applicants to coordinate planning efforts and determine, as early as possible, whether FRA may have an action that would require compliance. FRA is committed to working with applicants to ready the environmental documentation and encourages applicants to consider whether the proposed action under evaluation in the NEPA document is consistent with the application for funding under HSIPR.
Other important considerations for environmental documentation used to support HSIPR actions are listed in FRA’s NEPA HSIPR guidance document, Compliance With The National Environmental Policy Act In Implementing The High-Speed Intercity Passenger Rail Program issued August 13, 2009, and posted here. In general, if multiple federal agencies are involved in the NEPA documentation of a proposed action, then the documentation submitted in support of HSIPR actions should address differences in requirements for each agency.
1. What is the Freedom of Information Act, and how does it affect HSIPR grantees?
As a Federal agency, the Federal Railroad Administration (FRA) is subject to the Freedom of Information Act (FOIA), which generally provides that any person has a right, enforceable in court, to obtain access to Federal agency records, except to the extent that such records (or portions of them) are protected from public disclosure by one of nine exemptions or by one of three special law enforcement record exclusions. 5 U.S.C. § 552. Materials submitted by grantees under the HSIPR Program become Federal agency records and are thus subject to the FOIA and to public release in response to individual FOIA requests.
2. Is proprietary information, submitted by a grantee or a stakeholder, subject to FOIA?
Certain information submitted by a grantee or a stakeholder could be exempt from public release under FOIA. FOIA Exemption 4 protects trade secrets and commercial or financial information obtained from a person if disclosure of the information is likely to cause substantial harm to the competitive position of the person from whom the information was obtained.
3. If a State is submitting proprietary information, which may fall under Exemption 4, what should the State do?
49 CFR § 209.11 discusses FRA's existing procedures for requesting confidential treatment of documents filed with FRA in connection with the agency's safety activities. However, the principles are the same for the HSIPR program and the outlined procedures should be followed by any entity seeking confidential treatment for documents submitted to the agency. Grantees seeking exempt treatment must provide a detailed statement supporting and justifying their request. See 49 CFR § 209.11(c)-(d). The burden is on the entity requesting confidential treatment to identify all information for which exempt treatment is sought and to persuade the agency that the information should not be disclosed as consistent with existing law. See also 49 CFR § 7.17 describing the Department of Transportation's submitter consultation process as a part of the agency's FOIA implementing regulation. The final decision as to whether the information meets the standards of Exemption 4 and is exempt from release rests with the FRA. 49 CFR § 209.11(e). FRA would notify the submitter of any decision to release a document over the objection of the submitter (49 C.F.R. § 7.17(b)).
1. What is a cooperative agreement and how is it different from a grant agreement?
A cooperative agreement and a grant agreement are types of funding instruments used to obligate Federal funds. Both grant and cooperative agreements are used to support a public purpose. However, a cooperative agreement is utilized when substantial involvement is anticipated between the federal awarding agency and the recipient during the contemplated grant activity.
Because the administration of the HSIPR program will be a highly collaborative effort, FRA anticipates funding most projects through cooperative agreements.
FRA will determine, based upon a project’s complexity and level of development, whether a cooperative agreement or a grant agreement will be used to provide funding.
2. What is a Letter of Intent (LOI)? How will an LOI be used within the HSIPR program?
An LOI is a contingent commitment to allocate funding to corridor programs, based upon mutually agreed on milestones and fulfillment of certain conditions by grantees. For the HSIPR program, the issuance of a LOI represents FRA’s intention to issue funding agreements over the lifetime of a large-scale, multi-phase construction project. The funding agreements will cover specific phases of projects based upon the milestones articulated in the LOI. While an LOI represents a contingent commitment, it does not mark an obligation of funds. Grant or cooperative agreements are the exclusive mechanisms used to obligate Federal funds.
After an LOI is issued by FRA to a grantee, the issuance of future grant or cooperative agreements is contingent upon the achievement of the milestones and conditions as outlined in the LOI.
1. What are the reporting and certification requirements for grant recipients under the High-Speed Intercity Passenger Rail (HSIPR) program?
During the term of the grant or cooperative agreement, all HSIPR recipients must fulfill FRA reporting requirements. In addition, all American Recovery and Reinvestment Act (ARRA) recipients must complete two additional reports and submit three certifications. All grant recipients that are subject to Federal Funding Accountability and Transparency Act (FFATA) requirements must complete one additional report. For more information on the different report types, click on the type below.
FRA Reporting Requirements:
All FRA funding recipients are required to submit a quarterly progress report and financial report (SF-425), as well as a final report at the end of the grant period of performance.
Prime recipients of individual Federal grants of $25,000 or more that are awarded on or after October 1, 2010, are required to submit a report required by the Federal Funding Accountability and Transparency Act. A prime recipient is an entity that directly receives Federal funding to implement a project. ARRA grants are not subject to FFATA reporting requirements.
All American Recovery and Reinvestment Act recipients are required to complete a quarterly 1512(c) Jobs Accountability Report, an annual 1201 Periodic Report, and three required certifications (section 1201, section 1511, and section 1607). FY 2009 HSIPR prime recipients should verify whether their award includes AARA funding by referring to the attachments incorporated into the grant or cooperative agreement notice of grant award (NGA) and listed on the first page of the NGA.
Click here for a summary table of FRA, ARRA, and FFATA reporting requirements.
1. Can a state selected to receive a HSIPR grant begin work to implement a project in advance of execution of the formal grant/cooperative agreement between the applicant and FRA and be reimbursed for costs incurred in that effort once the agreement is executed?
FRA recognizes that some selected applicants are interested in beginning to implement projects in advance of the execution of the grant/cooperative agreement and that there are seasonal or other relevant considerations that factor in to these requests. FRA urges applicants to proceed with caution in this area. FRA is moving expeditiously to complete the necessary reviews and other activities leading to the execution of the formal agreements. In the mean time, working from the feedback they receive from their FRA customer service lead, applicants can productively focus on strengthening their scopes of work, negotiating railroad and other stakeholder agreements, and on other elements of their projects.
Applicants may also proceed with activities related to project implementation consistent with the principles outlined below but applicants do so at their own risk – any costs that are later found to have been incurred in a manner inconsistent with the scope, budget, and terms of the formal agreement will not be reimbursed by FRA. In FRA’s view, the option of advancing projects poses less risk in connection with activities related to design, engineering and assessment of environmental impacts then it does with construction activities.
- With respect to reimbursement for pre-award cost, FRA addressed this issue in Section 4.3.8 of the HSIPR Guidance (74 Fed. Reg. 29900, June 23, 2009), which identifies the principles relevant to the reimbursement for costs incurred prior to execution of the grant/cooperative agreement.
- For projects to be funded under the Recovery Act, FRA will consider reimbursement of costs back to February 17, 2009 but only to the extent such costs are otherwise appropriate under allowable cost principles (e.g., conforming with OMB Circular A-87 (2 C.F.R. Part 225), the common grant rule ("Uniform Administrative Requirements for Grants and Cooperative Agreements with State and Local Governments", 49 C.F.R. Part 18), and Appendix 3 of the HSIPR Guidance (identifying Recovery Act and Passenger Rail Investment and Improvement Act (PRIIA) requirements), are directly related to the award (e.g. eligible for inclusion in the grant/cooperative agreement scope of work as reflected in the application submitted and the award made), and involve either pre-construction activities (preliminary engineering, NEPA compliance, or final design) or construction activities that were subject to an environmental determination under NEPA (including section 106 historic preservation reviews and section4(f)) made by FRA (signed Record of Decision, Finding of No Significant Impact or Categorical Exclusion Determination) prior to the commencement of such construction activities.
- Projects for which construction activities commenced prior to receipt of an FRA environmental determination under NEPA (including section 106, section 4(f)) are not eligible for funding.
Applicants should already be familiar with OMB Circular A-87 (2 C.F.R. Part 225) and the common grant rule (49 C.F.R. Part 18) because these requirements apply to their other Federal grant activities. Important considerations to be aware of include: the need to follow the state’s procurement policies as consistent with 49 C.F.R. §18.36 in acquiring goods and services; and the additional requirements that apply to grant-funded sole-source, non-competitive procurements.
Appendix 3 of the HSIPR Guidance reflects a number of requirements that are mandated by the Recovery Act or PRIIA through which Recovery Act funds are appropriated. A few of the key considerations to be aware of here include: reporting requirements (including both standard federal reports and Recovery Act specific reports); maintenance of effort requirements; buy America; the requirement that to the maximum extent possible contracts funded with Recovery Act funds be awarded as fixed-price contracts employing competitive procedures; and having in place FRA approved railroad or other stakeholder agreements.
Identifying in detail the scope and budget for activities that will be funded under each HSIPR award and reflecting those activities in the statement of work that will be included in the grant/cooperative agreement is one of the principal activities that FRA will be initially undertaking and is one of the key conditions precedent to execution of the grant/cooperative agreement. To be eligible for reimbursement, incurred pre-award costs must be consistent with the statement of work that is ultimately included in the signed grant/cooperative agreement, which may end up differing from that which was originally proposed in the application.
For projects funded under the FY 2008/2009 DOT appropriations acts (Track 3 and 4 projects), FRA will consider reimbursement of pre-award costs incurred as early as March 11, 2009. Recovery Act specific requirements (e.g., maintenance of effort, jobs reporting) do not apply to these funds (see HSIPR Guidance Appendix 3.3) nor do certain PRIIA requirements (e.g., labor protection requirements). OMB Circular A-87 (2 C.F.R. Part 225) and the common grant rule (49 C.F.R. Part 18) apply to the expenditure of these funds as does the need for an FRA approved railroad agreement for construction projects on railroad owned right-of-way.
Applicants considering incurring pre-award costs should carefully review the HSIPR Guidance and may wish to consult with the assigned FRA Customer Service Representative with respect to specific activities. A key consideration for the FRA is focusing the agency’s resources on advancing to signed financial assistance agreements as expeditiously as possible as this will help assure a common understanding of both the agency and the applicant on what is being funded and the requirements associated with that funding.
1. What are stakeholder agreements?
Grantees must reach agreement with all directly involved rail Owners and/or rail Operators in order to implement and to operate their proposed projects. Congress and the Federal Railroad Administration (FRA) have articulated certain requirements for such agreements, in order to ensure that the projects are implemented as planned (i.e., the projects are on schedule, on budget, and as designed), and that the transportation benefits of the projects funded with Federal financial assistance are realized.
2. Are stakeholder agreements required for all high-speed and intercity passenger rail (IPR) grants awarded by FRA under the High-Speed Intercity Passenger Rail (HSIPR) program?
No. FRA’s HSIPR program accepted applications and made awards though four different funding tracks (see FRA’s HSIPR Interim Program Guidance published in the Federal Register on June 23, 2009, 74 Fed. Reg. 29900, for a description of the four tracks). Tracks 1 and 2 are funded through the American Recovery and Reinvestment Act of 2009 (Recovery Act or ARRA) and the Passenger Rail Investment and Improvement Act of 2008 (PRIIA). Tracks 3 and 4 are funded through the Department of Transportation and Related Agencies Appropriations Acts for FY 2008 and 2009. Track 1 and Track 2 projects involve most of the awards made under the HSIPR program and have the most detailed stakeholder agreement requirements, as described in greater detail below and in FRA’s HSIPR Interim Program Guidance. Certain Track 1 and Track 2 projects involve preliminary engineering or the completion of environmental documentation, and stakeholder agreements are not needed for these projects at this stage of project development. Similarly, Track 3 projects involve planning projects and, consequently, no stakeholder agreements are required for these grants. Finally, Track 4 projects involve construction under simplified grant procedures and neither Recovery Act nor PRIIA requirements apply to these projects, allowing Grantees to employ less detailed stakeholder agreements if they choose.
3. Is there a specified format for these agreements?
In general, these agreements may be structured as a tripartite agreement between the Grantee, Owner, and Operator, or, alternatively, these agreements may be structured as three bilateral agreements, between Grantee and Owner, Grantee and Operator, and Owner and Operator, with each such agreement incorporating by reference the other two related agreements. However, these two agreement structures may not be sufficient to address more complex conditions that involve numerous necessary parties (such as a sub-grantee).
4. Should these agreements discuss their project’s service outcomes and is a service outcomes template available?
Yes to both questions. If applicable, these agreements must use the Service Outcomes Table template and its accompanying text (see Exhibit A), to articulate the project’s measurable service outcomes. A Service Outcomes Table must be prepared for each IPR service and train origin/destination pair on the route receiving investment. In addition, these agreements must provide that, upon completion of the project, the Owner agrees to achieve the service outcomes identified in the Service Outcomes Table for each IPR train operating on Owner between A and B.
5. Should these agreements address the Grantee’s and the Operator’s right to enforce the Owner’s achievement of the project’s service outcomes?
Yes. These agreements must provide that, if, in any calendar month, the Monthly Actual Average “Host-Responsible Delay Minutes” per trip on any IPR train operating between A and B exceeds the “Delay Ceiling,” and/or if Host does not achieve all of the service outcomes identified in the Service Outcomes Table for each IPR train operating on Host between A and B, Host shall make, at Host’s sole expense, any operational, maintenance, or capital improvements necessary to reduce the Monthly Actual Average Host-Responsible Delay Minutes per trip on each IPR train to or below the Delay Ceiling and to otherwise achieve all of the service outcomes identified in the Service Outcomes Table within two calendar months. These agreements must also provide that the Grantee and the Operator may enforce this provision through use of an agreed-upon arbitrator, or in court. The terms “Host-Responsible Delay Minutes” and “Delay Ceiling” are defined in the Service Outcomes Table available at Exhibit A.
6. Should these agreements address the additional capacity created by the project?
Yes. Where FRA is making a significant investment that will result in additional capacity beyond what is required for the scheduled IPR service that will operate immediately following completion of the project, FRA expects that the agreement will recognize this investment and reserve the Grantee’s right to such capacity for future IPR service. A Grantee’s failure to secure this future capacity will be a significant factor in the Grantee’s subsequent requests to obtain additional IPR service improvement funding from FRA. FRA recommends that the Grantee, Owner, and Operator model the improvement prior to the proposed investment, based on projected 30-year freight and passenger needs, in order to measure the benefits of the improvement and to quantify the projected capacity. In addition, where appropriate, the modeling should be for the entire corridor and should include all projected improvements for the corridor.
7. Should these agreements discuss audit and investigation authority?
Yes. The agreements must have provisions regarding the audit and investigation authority of the Grantee, FRA, U.S. Department of Transportation (U.S. DOT), and the Comptroller General (and their representatives) in regards to project information controlled by the Owner, the Operator, and their contractors.
8. How should these agreements discuss compensation?
The agreements must address, if applicable, the Owner’s compensation for the Grantee’s use of the rights-of-way, as well as a discussion of the contract sum, among other things.
9. How should these agreements discuss design and implementation?
The agreements must, if applicable, contain an assurance by the Owner that the project infrastructure capacity can accommodate both the existing and future freight and passenger operations. In addition, the agreements must address the physical design of the project, the implementation plan, what entities will be performing which aspects of the project, and must provide that the project will comply with all applicable FRA, American Railway Engineering and Maintenance-of-Way Association (AREMA), American Association of State Highway and Transportation Officials (AASHTO), and/or Association of American Railroads (AAR) standards, as applicable.
10. How should these agreements discuss ownership and access?
The agreements must, if applicable, address which entity will maintain ownership of the rights-of-way. In addition, the agreements must provide that the Grantee, FRA, U.S. DOT, and the Comptroller General (and their representatives) may make site visits.
11. How should these agreements discuss operations?
The agreements must, if applicable, address the Grantee’s, or the Grantee’s operator’s, use of the Owner’s rights-of-way, and must demonstrate that the Grantee will have satisfactory continuing control over the use of and access to equipment or facilities acquired, constructed, or improved by the project. In addition, the agreements must: address whether the Grantee intends to assign the operating responsibilities to a third party; and prohibit subsequent grants of superior access to other users or uses. The agreements for projects funded under Tracks 1 and 2 must also provide that persons conducting rail operations over rail infrastructure constructed or improved with grant funds will be considered a “rail carrier” in compliance with 49 U.S.C. § 24405(b).
12. How should these agreements discuss maintenance?
The agreements must address the financial and operational responsibilities for maintenance, and must provide that the project property will be maintained in a state of good repair and to the level of utility existing when the project improvements are placed in service for a period of at least 20 years. The agreements must define the term “level of utility” as a condition which permits the current and future schedules to be operated with a reasonable degree of regularity and with a reasonable degree of passenger comfort, as measured by, among other things, maximum operating speeds, capacity, slots identified (number and timing of slots), and FRA class of track. In addition, the agreements must provide for at least a 1 year period of maintenance following any IPR service discontinuation during the 20 year period.
13. How should these agreements discuss labor issues?
The agreements for projects funded under Tracks 1 or 2 must comply with the labor requirements articulated in 49 U.S.C. § 24405; specifically as that section concerns collective bargaining agreement assurances, Davis-Bacon Act requirements, employee protective arrangements, and the replacement of existing IPR service. In addition, the agreements must comply with ARRA’s whistleblower protections at § 1553.
14. How should these agreements discuss remedies and liability?
The agreements must discuss the Grantee’s right to specific performance of the agreed-upon IPR service in the event of certain types of default by the Owner, as well as subsequent remedies if specific performance is not achieved. For example, as discussed in Q&A number 5, these agreements must provide that the Grantee and the Operator may enforce the Owner’s achievement of the project’s service outcomes, as articulated in the Service Outcomes Table, through use of an agreed-upon arbitrator, or in court. In the event that the Grantee and/or the Operator has filed a complaint with a court or an arbitrator, in an attempt to require specific performance, and the Owner does not achieve specific performance within six months of the date of the complaint, the Grantee may subsequently require the Owner to repay a pro rata share of the FRA grant funds, based upon the percentage of the 20-year period remaining at the time of failure to specifically perform, in no later than 18 months, to the Grantee. In addition, these agreements must provide that the Grantee’s failure to require strict performance of any provision of the agreement shall not waive, affect, or diminish any right of the Grantee to demand strict compliance and performance therewith. As to Track 1 and Track 2 projects, agreements must provide that the Grantee and/or the Operator will maintain a minimum of $200 million of liability coverage pursuant to 49 U.S.C. §§ 28103 and 24405(c). These agreements must also provide that the project property, equipment, and supplies financed under the grant are subject to the property management standards of 49 CFR parts 18 or 19, and that such property, equipment, and supplies will be used for the project purposes for the duration of their useful life, as determined by FRA.
15. Are there other provisions these agreements should contain?
Yes. There are a number of provisions that are required for stakeholder agreements that are tied to standard Federal government grant program requirements which are included in FRA’s template grant/cooperative agreement. For example, all agreements should contain: An assurance that Grantee will have access to information necessary to perform the required governmental reporting; An assurance that the project’s performance will be governed by applicable administrative and cost principles; An assurance that the parties agree to comply with applicable fair employment practices/equal opportunity; An assurance that the parties agree to comply with the environmental protection requirements of the grant/cooperative agreement; An assurance that the parties agree to comply with the data, patent, and copyright requirements of the grant/cooperative agreement; An assurance that the parties agree to comply with the False Claims Act obligations of the grant/cooperative agreement; An assurance that the agreements will not be materially amended without FRA’s prior written consent; An acknowledgment of the application of Federal law as articulated in the grant/cooperative agreement; An assurance that the parties agree to comply with the procurement standards of 49 CFR parts 18 or 19; An assurance that the parties agree to comply with the cargo preference requirements of 46 U.S.C. § 1241(b); An assurance that the requirements of these agreements flow-down to contractors and other lower-tier contracts in compliance with the grant/cooperative agreement; and An assurance that the agreement shall apply to and be binding upon the successors, assigns, subsidiaries, agents, affiliates, and lessees of the parties executing the Agreement, and any person acting under, through, or for the parties.
16. Are there additional provisions these agreements should contain because the Federal funding is provided through ARRA and PRIIA?
Yes. In addition to several requirements already noted above, agreements for Track 1 and 2 projects should also include other provisions, as follows: An assurance that the parties agree to comply with the Buy American requirements pursuant to 49 U.S.C. § 24405(a); An assurance that grant funds will not be used for certain prohibited activities pursuant to ARRA § 1604; To the maximum extent possible, a commitment to the use of fixed-price contracts through competitive procedures pursuant to ARRA § 1554; An assurance that the parties agree to comply with the ARRA funding announcement requirements; and An assurance that Grantee will have access to information necessary to perform the additional reporting requirements pursuant to ARRA § 1201 and 1512(c).
17. Does this FAQ contain a comprehensive list of provisions that are required to be in the stakeholder agreements?
No. This FAQ is intended to highlight provisions of interest in order to facilitate successful stakeholder agreements. For additional information, please refer to the HSIPR Interim Guidance, FRA’s sample grant/cooperative agreement, and FRA’s memorandum regarding stakeholder agreements (which further elaborates upon the issues outlined here).