04-8321. Notice of Funds Availability and Request for Comment To Assist in the Development and Implementation of a Procedure for Fair Competitive Bidding by Amtrak and Non-Amtrak Operators of State-Supported Intercity Passenger Rail Routes

AGENCY:

Federal Railroad Administration (FRA), Department of Transportation (DOT).

ACTION:

Notice.

SUMMARY:

Under this Notice, the FRA solicits comments from interested parties on how the Secretary of Transportation, working with affected States, could develop and implement a procedure for fair competitive bidding by Amtrak and non-Amtrak operators for State-supported intercity passenger rail routes. FRA also encourages interested States to submit a Statement of Interest in receiving a grant to support an initiative leading to a fair and open competitive selection of an operator to provide passenger rail service over a specific intercity route that receives or will receive State financial support. Services eligible for funding under programs administered by the Federal Transit Administration are not eligible for a grant under this notice. Responses to this notice are sought on or before May 28, 2004.

DATES:

All submissions of Statements of Interest and comments must be received in FRA's offices by close of business Friday, May 28, 2004. The deadline for the submission of applications will be noted in the solicitation from FRA to prospective grantees as a result of the evaluation of the Statements of Interest.

ADDRESSES:

Applicants must submit an original and six (6) copies to the Federal Railroad Administration at one of the following addresses:

Postal address (note correct zip code): Federal Railroad Administration, Attention: Alex Chavrid, Chief, Passenger Programs Division (RDV-11), Mail Stop #20, 1120 Vermont Ave., NW., Washington, DC 20590.

FedEx/courier address (note correct zip code): Federal Railroad Administration, Attention: Alex Chavrid, Chief, Passenger Programs Division, (RDV-11), Room #773, 1120 Vermont Ave., NW., Washington, DC 20005.

Due to delays caused by enhanced screening of mail delivered via the US Postal Service, applicants are encouraged to use other means to assure timely receipt of materials.

FOR FURTHER INFORMATION CONTACT:

Mark Yachmetz, Associate Administrator for Railroad Development (RDV-1), Federal Railroad Administration, 1120 Vermont Avenue NW., Washington, DC 20590. Phone: [phone]; Fax: [phone].

SUPPLEMENTARY INFORMATION:

The demonstration will be supported with up to $2,485,250 of Federal funds provided to FRA as part of the Transportation, Treasury, and Independent Agencies Appropriations Act, 2004 (included as Division F of the Consolidated Appropriations Act, 2004 (Public Law 108-199 (January 23, 2004)). FRA anticipates soliciting one or more grant applications and awarding one or more grants to eligible participants before September 30, 2004. The funds made available under this program will be available for activities related to developing and/or implementing a fair and open competitive process for selecting an operator of a State-supported intercity passenger rail route. FRA anticipates that no further public notice will be made with respect to selecting applicants for this demonstration.

Purpose: From the creation of Amtrak in 1971 until the enactment of the Amtrak Reform and Accountability Act (ARAA) in 1997, the National Railroad Passenger Corporation, better known as Amtrak, had the exclusive right to operate intercity passenger rail service over the routes where it provided service. ARAA eliminated Amtrak's monopoly as the exclusive intercity passenger rail service operator on these routes. Some have argued since enactment of ARAA that competition in the selection of intercity rail passenger service operators could result in improved service and/or lower costs. On June 22, 2002, Secretary of Transportation, Norman Y. Mineta, identified the five principles for intercity passenger rail reform advocated by the U.S. Department of Transportation. Included among these principles are: “Introduce carefully managed competition to provide higher quality rail services at reasonable prices.” Subsequently, on June 27, 2003, Secretary Mineta submitted to Congress proposed legislation: “The Rail Passenger Reform Investment Act” that would take this principle and make competitive selection of intercity passenger rail service operators by States the foundation for a new approach to providing intercity passenger rail service in the United States. Since the enactment of ARAA, some States have contemplated using competitive processes to select operators of intercity passenger rail service they deem important enough to support financially. However, to date there has not yet been a successful process through which a fair and open competition has resulted in the selection of an operator other than Amtrak. Section 151 of the General Provisions of the Transportation, Treasury, and Independent Agencies Appropriations Act, 2004 (included as Division F of the Consolidated Appropriations Act, 2004 (Public Law 108-199 (January 23, 2004)) provides as follows: “For the purpose of assisting State-supported intercity rail service, in order to demonstrate whether competition will provide higher quality rail passenger service at reasonable prices, the Secretary of Transportation, working with affected States, shall develop and implement a procedure for fair competitive bidding by Amtrak and non-Amtrak operators for State-supported routes: Provided, That in the event a State desires to select or selects a non-Amtrak operator for the route, the State may make an agreement with Amtrak to use facilities and equipment of, or have services provided by, Amtrak under terms agreed to by the State and Amtrak to enable the non-Amtrak operator to provide the State-supported service: Provided further, That if the parties cannot agree on terms, the Secretary shall, as a condition of receipt of Federal grant funds, order that the facilities and equipment be made available under reasonable terms and compensation: Provided further, That when prescribing reasonable compensation to Amtrak, the Secretary shall consider quality of service as a major factor when determining whether, and the extent to which, the amount of compensation shall be greater than the incremental costs of using the facilities and providing the services: Provided further, That the Secretary may reprogram up to $2,500,000 from the Amtrak operating grant funds for costs associated with the implementation of the fair bid procedure and demonstration of competition under this section.” (Note: Section 168 of Division H of the Consolidated Appropriations Act, 2004, imposes an across-the-board rescission of 0.59 percent to all appropriations in the act, thereby reducing the appropriation that is available for costs associated with the implementation of the fair bid procedure and demonstration of competition to $2,485,250.)

Section 151 provides the Secretary of Transportation with significant flexibility and latitude in establishing the referenced “fair bid procedure.” The purpose of this notice is threefold. First, FRA seeks comment and recommendations on how such a “fair bid procedure” should be structured, what issues should be addressed in such a procedure, how they could be best addressed, how the available funds should best be used and whether the available funds are adequate for the intended purpose. Second, FRA seeks to identify the extent of interest among the States in competitively selecting operators of State-supported intercity rail passenger service. Finally, FRA wishes to identify the State or States that could implement or make the most progress toward implementing a “fair bid procedure” in the most timely manner with the available Federal funding.

Authority: The authority for the program can be found in Section 151 of the Transportation, Treasury, and Independent Agencies Appropriations Act, 2004 (included as Division F of the Consolidated Appropriations Act, 2004 (Public Law 108-199 (January 23, 2004)). The Secretary of Transportation's responsibilities under this program have been delegated to the Federal Railroad Administration.

Funding: The Transportation, Treasury, and Independent Agencies Appropriations Act, 2004, provides $2,485,250 for this purpose. It is anticipated that the available funding could be used for one or more grants. If two grants are awarded, FRA may choose not to award the grants in equal amounts. Additional funding for this or related work may be available in subsequent fiscal years and may be awarded without further competition.

Eligible Participants: Any State that presently provides financial assistance for an intercity passenger rail service operated by Amtrak or any State or group of States that is willing to provide financial assistance for an intercity rail passenger service, the operator of which is selected through a fair bid procedure, is eligible to participate in this program. Comment and recommendations on how such a “fair bid procedure” should be structured, what issues should be addressed in such a procedure, how they could be best addressed, how the available funds should best be used and whether the available funds are adequate for the intended purpose are solicited from eligible participants and any other interested party.

Requirements for Statements of Interest: The following points describe the minimum content that is required in Statements of Interest.

1. Describe the service to be subject to fair bid competition, including frequencies of service, schedules for operation, any unique aspects of the service sought by the State, endpoints and intermediate stops and connections to other intercity and commuter rail and transit services, and estimates of annual ridership, revenue and expenses during the period of operation covered by the fair bid competition.

2. Describe the analysis, if any, undertaken regarding the incorporation of this service into State and/or regional transportation plans.

3. Describe the experience or analysis, if any, undertaken by the State regarding competitive selection of passenger service providers, by any mode of intercity transportation, for commuter rail service or for local transit service.

4. Describe how the State or States envision their role and that of the selected operator in defining the key attributes of the service to be provided.

5. Describe the history, if any, of State and other non-Federal financial support for this service and the financial support the State and other non-Federal sources propose during the period of operation resulting from the fair bid competition, clearly indicating the estimated amount and sources for the required non-Federal funds required.

6. Identify the entity that would conduct the fair bid competition. To the extent this entity does not presently have legal authority to undertake such a competition, identify the process and schedule under which this authority would be provided.

7. Describe the route over which the service would be operated, including the owner of the rail infrastructure, the traffic types (including ownership of trains), volumes, and speeds presently involved in operation on the track segment(s) over which the service would operate.

8. Describe any communications between the State and the owner of the rail infrastructure over which the service would operate that addresses the issue of access for passenger service operated by an entity other than Amtrak, including the terms and conditions under which this access would be provided.

9. Describe how the State or States would propose that a fair bid procedure to be implemented by the Secretary should address the issue of access to rail infrastructure.

10. Describe the equipment proposed for use in providing the service, its current ownership, current use and any commitment that the State might have for access to this equipment.

11. Describe how the State or States would propose that a fair bid procedure to be implemented by the Secretary should address the issue of access to rail passenger equipment.

12. Describe the provisions the State or States would make to address the liability of the operator selected under the fair bid competition, the owner of the rail infrastructure and others in the event of an accident.

13. Describe how the State or States would propose that a fair bid procedure to be implemented by the Secretary should address the issue of liability.

14. Describe any other issues that need to be addressed either by the Secretary or by the State or States to implement a fair bid competitive process for selection of an operator of an intercity passenger rail service.

Format: Statements of Interest or comments may not exceed twenty-five pages in length.

Selection Criteria: The following will be considered to be positive selection factors in evaluating Statements of Interest for this demonstration:

1. The contribution the proposed fair bid competitive selection will make to understanding the issues that must be addressed in competitive selection of intercity rail operators.

2. The timeliness of the initiation of the competitive bid process and initiation of the competitively bid service.

3. The ability of the State or States to adequately address the challenges facing a competitive selection of an operator of intercity passenger rail service.

4. Financial commitment from non-Federal sources.

5. Cost to the Federal Government.

6. Past and likely future State commitments to support the service in question.

7. Projected ridership, revenues, expenses and capital needs of the expected service.

8. Likely effects of the competitively bid service on other Amtrak services.

9. Length of the demonstration period and prospects for the service at the end of the demonstration period.

Issued in Washington, DC on April 7, 2004.

Mark E. Yachmetz,

Associate Administrator for Railroad Development.