GAO report says FTA could improve information on estimating project costs

The transit agency did not meet five of the 12 steps in GAO's Cost Estimating Assessment Guide

July 23, 2019
transit projects; cost estimating

A new report from the U.S. Government Accountability Office (GAO) says that the Federal Transit Administration (FTA) could improve information on estimating project costs for sponsors.

The report was commissioned by Congress for the GAO to evaluate factors affecting the costs to build transit projects. It examines stakeholders' views on factors that affect rail transit project costs, stakeholders' view on approaches sponsors have used to manage costs, and the extent to which FTA's cost estimating information for sponsors aligns with best practices in GAO's Cost Guide.

GAO interviewed a number of stakeholders and conducted case studies of four U.S. rail transit projects that received FTA grant funding to compare those projects' approaches with GAO-identified key project management principles.

In the report, project sponsors and other stakeholders identified a variety of approaches to manage project costs, several of which align with GAO key project management principles including ensuring management capability, making informed procurement decisions, managing risk, and managing stakeholder relationships.

The report notes that FTA's cost estimating information for sponsors aligns with multiple best practices, but that the agency could improve the information's usefulness. FTA's cost estimating information substantially or fully met seven of the 12 cost estimating steps outlined in GAO's Cost Estimating Assessment Guide, but did not meet standards for five of the steps including risk and uncertainty analysis, sensitivity analysis, identifying ground rules and assumptions, obtaining the data, and presenting cost estimates to management.

The GAO recommends that the FTA ensure its cost estimating information for sponsors is consistent with all 12 steps found in GAO's Cost Guide for developing reliable estimates. It also recommends the FTA provide a central, accessible source of cost estimating information for project sponsors. 

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SOURCE: U.S. Government Accountability Office

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