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Suggested Citation:"Summary ." National Academies of Sciences, Engineering, and Medicine. 2018. Contracting Commuter Rail Services, Volume 1: Guidebook. Washington, DC: The National Academies Press. doi: 10.17226/25266.
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Suggested Citation:"Summary ." National Academies of Sciences, Engineering, and Medicine. 2018. Contracting Commuter Rail Services, Volume 1: Guidebook. Washington, DC: The National Academies Press. doi: 10.17226/25266.
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Suggested Citation:"Summary ." National Academies of Sciences, Engineering, and Medicine. 2018. Contracting Commuter Rail Services, Volume 1: Guidebook. Washington, DC: The National Academies Press. doi: 10.17226/25266.
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Suggested Citation:"Summary ." National Academies of Sciences, Engineering, and Medicine. 2018. Contracting Commuter Rail Services, Volume 1: Guidebook. Washington, DC: The National Academies Press. doi: 10.17226/25266.
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Suggested Citation:"Summary ." National Academies of Sciences, Engineering, and Medicine. 2018. Contracting Commuter Rail Services, Volume 1: Guidebook. Washington, DC: The National Academies Press. doi: 10.17226/25266.
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Suggested Citation:"Summary ." National Academies of Sciences, Engineering, and Medicine. 2018. Contracting Commuter Rail Services, Volume 1: Guidebook. Washington, DC: The National Academies Press. doi: 10.17226/25266.
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Suggested Citation:"Summary ." National Academies of Sciences, Engineering, and Medicine. 2018. Contracting Commuter Rail Services, Volume 1: Guidebook. Washington, DC: The National Academies Press. doi: 10.17226/25266.
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Suggested Citation:"Summary ." National Academies of Sciences, Engineering, and Medicine. 2018. Contracting Commuter Rail Services, Volume 1: Guidebook. Washington, DC: The National Academies Press. doi: 10.17226/25266.
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1 The purpose of TCRP Research Report 200: Contracting Commuter Rail Services, Volume 1: Guidebook is to provide an easy-to-use reference to assist public agencies and other key stakeholders with contracting commuter rail services. Previously, there has been no general reference to document current practice or no generally recognized guidelines to consider in determining how to provide commuter rail service. This guidebook describes commuter rail systems in North America, shares information about different approaches for provid- ing commuter rail service, and offers step-by-step decision trees to help determine how to implement commuter rail or to evaluate changes in the approach to service delivery of an existing system. Finally, this guidebook discusses trends in contracting commuter rail services and possible additional research that could be helpful to the industry. A companion volume, TCRP Research Report 200: Contracting Commuter Rail Services, Volume 2: Commuter Rail System Profiles, presents a profile for each of the 31 commuter rail systems. What Is Commuter Rail? For the purposes of this guidebook, commuter rail service commonly refers to passenger trains operated to carry riders living in suburban areas to and from work in city centers. Commuter rail often uses track shared with freight rail operations or track that was sold by a freight operator and may now be owned by the public transportation provider with an arrangement that allows for joint use by freight, intercity passenger, and commuter trains. The 31 commuter rail systems in North America as of 2017 are shown in Figure 1. History of Commuter Rail in North America Commuter rail has been part of the development and evolution of the rail mode in the United States since the Long Island Rail Road began operation in 1834. Up through the late 1950s, commuter rail services were owned, operated, and paid for by the privately owned freight railroads. Starting in the 1960s, many railroads reduced the level of commuter service provided due in large part to declining ridership after World War II. Commuter rail passenger numbers reached the lowest point following these service reductions. In response, the pri- vate railroads further reduced passenger operations or eliminated the services all together. To maintain commuter rail service, public agencies (municipalities and public transit agencies) began to offer financial assistance to the private railroads, either as direct operating grants or as purchase-of-service agreements. These early agreements often lacked any type of perfor- mance standards or requirements. The agreements called for the railroad to keep operating the service and for the public agency to pay an agreed-upon amount for the operation. S U M M A R Y TCRP Research Report 200: Contracting Commuter Rail Services, Volume 1: Guidebook

2 Contracting Commuter Rail Services, Volume 1: Guidebook As late as the early 1980s, commuter rail served only a handful of U.S. cities. These included Boston, New York City/Connecticut, New York City/New Jersey, Philadelphia, Baltimore, Chicago, and San Francisco. Canada had such services in two cities: Montreal, dating back several decades, and Toronto since 1967. The 12 commuter rail systems in these cities are grouped together as the legacy systems. The modern era of commuter rail started in the late 1980s as new commuter rail systems opened as public transit services. These 19 commuter rail systems are classified as new starts. The most recent new start opened in August 2017. Approaches to Providing Commuter Rail Over the last 40 years, there has been considerable change in the way commuter rail services are provided in the United States and in Canada. The commuter rail industry in North America has grown to 31 systems serving 25 metropolitan areas in North America, including two new systems opening service in 2016 and 2017. This expansion of com- muter rail has led to a variety of strategies and approaches for managing the operation and maintenance of these systems. While several legacy systems operate and maintain the commuter rail service directly with agency staff, until recently, most new start systems contracted operating and maintenance functions. Recently, some new start systems are rethinking whether all or selected functions for operating and maintaining commuter rail can be agency operated. Figure 1. Map of 31 commuter rail systems in North America in 2017.

Summary 3 Each commuter rail system is either agency operated or contracted. There are also com- muter rail agencies that are mixed, that is, they operate directly and contract for services. The following is a description of the three types of commuter rail systems: • Agency operated. Agency personnel perform the primary functions of train operations, dispatch, maintenance of equipment, and maintenance of way. The agency may contract for support services to outside vendors, but the primary functions are the responsibility of the agency personnel. Eight of 31 commuter rail systems are agency operated. • Contracted. The commuter rail agency contracts one or more of the primary functions to a third-party contractor, excluding functions required to be performed by the host railroad as a condition of access to the railroad. The contractor may be a private company, joint venture, special purpose company formed specifically to provide a service or ser- vices, or a public–private partnership (P3). A contracted service is a purchase-of-service agreement with the host railroad. Twenty of 31 commuter rail systems are contracted. • Mixed. Public agency personnel perform one or more of the primary functions and con- tract other essential services. Three of 31 commuter rail systems are mixed. Each contracted commuter rail system is then categorized as bundled or unbundled as follows: • Bundled. The commuter rail agency combines the primary functions for commuter rail service into one contract with a prime contractor. Support functions may be included in the bundled contract or contracted separately. Of the 20 commuter rail systems that are contracted, 12 are bundled. The commuter rail agency may have a separate trackage rights agreement or similar shared use agreement with the host railroad. • Unbundled. The commuter rail agency has two or more separate contracts, not includ- ing required agreements with the host railroad, to provide the primary functions of train operations, dispatch, maintenance of equipment, and maintenance of way. Of the 20 commuter rail systems that are contracted, eight are unbundled. The host railroad may be the freight railroad, the intercity passenger rail operator, a state department of transportation, or another commuter rail agency where track is shared. In some circumstances, a commuter rail agency may enter into an agreement for the host rail- road to perform certain functions (e.g., maintenance of way or dispatch) as a condition of access to the railroad. A trackage rights agreement with the host railroad is another form of an agreement that establishes conditions for access to the railroad. Table 1 illustrates the approach to commuter rail service delivery for each commuter rail system and which type of entity is responsible for each primary functional area. The approaches to service delivery for commuter rail are agency operated, contracted–bundled, contracted–unbundled, and mixed agency operated and contracted. The order is by service delivery approach and then by the year that public service opened. Understanding Factors That Influence Different Approaches There are many factors to consider when an agency decides whether to contract out the primary functions for commuter rail. From the case study research of commuter rail sys- tems for this guidebook, three key factors emerged: • Ownership or control of the railroad. The owner of the railroad may set requirements for which functions the owner will continue to provide as a condition for access to the track or place restrictions on what or how the commuter rail agency will provide the related functions of commuter rail.

4 Contracting Commuter Rail Services, Volume 1: Guidebook System Service Area Year Open to Public Service Train Operations Dispatch Maintenance of Way Maintenance of Equipment Agency Operated and Maintained Commuter Rail (8) PATH New York City–New Jersey 1962 LIRR New York City–Long Island, NY 1966 Metro-North New York City–North and East NY 1983 NJ TRANSIT New Jersey–New York City 1983 SEPTA Philadelphia, PA 1983 South Shore Line South Bend, IN–Chicago, IL 1989 FrontRunner Ogden–Salt Lake City–Provo, UT 2008 SMART Sonoma–Marin counties, CA 2017 Contracted Commuter Rail–Bundled (12) MBTA Boston, MA 1964 MARC Brunswick and Camden Lines and Penn Line, Baltimore, MD 1983 SLE New Haven–New London, CT 1990 Caltrain San Francisco–San Jose, CA 1992 COASTER San Diego County, CA 1995 TRE Dallas–Fort Worth, TX 1996 ACE Stockton–San Jose, CA 1998 Rail Runner Albuquerque–Santa Fe, NM 2006 Music City Star Nashville, TN 2006 MetroRail Austin, TX 2010 A-train Denton County, TX 2011 RTD Denver, CO 2016 Contracted Commuter Rail–Unbundled (8) GO Transit Toronto–Hamilton, Ontario, Canada 1967 RTM Montreal, Quebec, Canada 1982 Tri-Rail South Florida 1989 Metrolink Los Angeles, CA 1992 VRE Northern VA–Washington, D.C. 1992 WCE Vancouver, BC, Canada 1995 Sounder Tacoma–Seattle–Everett, WA 2000 SunRail Central Florida–Orlando, FL 2014 Mixed Agency Operated and Contracted Host Railroad (3) Metra Chicago, IL 1983 Northstar St. Cloud–Minneapolis, MN 2009 WES Wilsonville–Beaverton, OR 2009 Updated March 2018 Agency Operated Amtrak or VIA Rail Canada Host Railroad Contractor Table 1. Approaches to service delivery for commuter rail systems.

Summary 5 • Commuter rail agency governance. The governance structure of the commuter rail agency may affect whether the agency considers directly operating or contracting commuter rail functions. In some cases, the agency providing commuter rail was cre- ated to serve limited functions (e.g., planning, funding, project implementation, and administration). In these cases, a part of the commuter rail agency mission is to con- tract for the functions of operating and maintaining commuter rail. Other agencies have a policy to contract with the private sector to provide all transit services, includ- ing commuter rail. • Agency rail capability and capacity. The capability and capacity of the public agency that sponsors commuter rail is critical to determining whether a commuter rail agency should consider contracting part or most of its services. For example, if the commuter rail mode is part of a multimodal rail transit agency with other rail modes (light rail or heavy rail), the transit agency may decide to operate directly some or all commuter rail functions. If a transit or commuter rail agency decides to contract two or more functions, the agency must then decide whether to bundle or unbundle the work. From the case study research of commuter rail systems, three key factors emerged for determining whether to bundle or unbundle: • Functions provided by the railroad owner or other rail operator. The first factor that can influence whether to bundle contracted functions is whether those functions are provided by the railroad owner or by the operator. Many commuter rail agencies oper- ate their services on rail facilities that are owned by a railroad company. The owner of the railroad may set requirements for which functions the owner will continue to provide as a condition for access to the track or place restrictions on what or how the commuter rail agency will provide the related functions of commuter rail. The owner requirements will define what functions can be contracted, specific conditions that may be required in a contract, and if bundling or unbundling those functions or services is appropriate. • Competition. When contracting for services, competition among prospective contrac- tors is a factor. Competition can drive innovation and cost-efficiency, which has the potential to provide the contracting agency with a higher return on investment. How- ever, the commuter rail industry is not a large marketplace due to the specific oper- ating characteristics of the commuter rail mode, the required skills and qualifications for employees, and the obligations to meet Federal Railroad Administration (FRA) or Transport Canada regulations. There are a limited number of qualified contractors for each of the primary functions for commuter rail. • Operating environment. Every decision related to bundling or unbundling contracted services in a procurement is contextual, that is, made within the context of the local operating environment. Local context factors may include contract timing, right-of-way ownership and control, labor agreements, environmental considerations, regional trans- portation plans, and more. Some case study agencies demonstrated that a decision to bundle or unbundle a service was based on a policy change at the commuter rail agency or the timing for when those changes have to be made. Considering these factors, this guidebook provides the framework for a decision tree analysis. Decision trees can facilitate decision-making by presenting a step-by-step process for assessing a specific situation and guiding the user toward a resolution that is most appro- priate. The decision trees guide the user through an assessment of the factors that affect the approach to service delivery for each function by presenting a series of yes-or-no questions.

6 Contracting Commuter Rail Services, Volume 1: Guidebook In doing so, the commuter rail agency is better equipped to make informed decisions about contracting part or all of the primary functions. Table 2 provides a summary of the opportunities and challenges for each approach to service delivery based on case study research. These factors are key in the decision to bundle or unbundle commuter rail services. Guidance for Decision Tree Analysis To implement commuter rail, or to evaluate changes in the approach to service deliv- ery, a commuter rail agency will make numerous decisions. Uniform processes for decision-making contribute to consistency, transparency, and efficiency. Decision trees facilitate such decision-making by presenting a step-by-step process for assessing a spe- cific situation and methodically evaluating options to reach a final resolution that is most appropriate. This guidebook presents decision trees for use when assessing decisions related to the primary functions of maintenance of way, maintenance of equipment, train operations, and dispatch. The decision trees guide users through an assessment of cor- ridor-specific conditions and agency capability and capacity to operate the functions directly. The decision trees also guide users through an assessment of the benefits of assigning functions to the host railroad or to another rail operator or contracting the services. After determining the best approach for the primary functions, a commuter rail agency must make the decision of whether to bundle or unbundle contracted functions, if applicable, and decisions about the responsibility for support functions. There are no requirements or mandates for these decisions; everything is contextual. Every commuter rail agency has a different operating environment and specific conditions unique to that operation. There are no absolutes on how to provide commuter rail service. All decisions must be made within the context of the local commuter rail system. Trends to Watch A few key trends have emerged from a review of the case studies: • Agency-operated commuter rail systems. Until 2008, legacy systems were the only commuter rail systems that were agency operated. Between 2008 and 2017, four new start commuter rail systems opened with all or some functions directly operated by the public agency—FrontRunner, WES, Northstar, and SMART. FrontRunner and SMART are fully agency operated. The public transit agency for Northstar and WES provides maintenance of equipment, and other functions are the responsibility of the host railroad. • Public–private partnerships. Denver Regional Transportation District is developing a four-line commuter rail system through a public–private partnership as part of a Federal Transit Administration public–private partnership pilot program. In 2016, Denver Regional Transportation District opened the University of Colorado A Line to the Denver Airport and the B Line to Westminster. It is anticipated that the G Line will open in late 2018, and the N Line will open in 2019 or later.

Summary 7 Service Delivery Approach Strengths Challenges Agency Operated • Direct accountability to the customer. • Central services costs shared across all modes. • Seamless customer experience, no transitions in service accountability. • Risk that the addition of a new or additional mode for commuter rail could affect other modes negatively. • Challenges introducing FRA-regulated commuter rail into a transit agency that historically provides bus or light-rail transit. Contracted– Bundled • One contractor is accountable for all contracted service functions. • Contract administration is more efficient—consistent procedures and efficient management and oversight. • Opportunity to establish a partnership between commuter rail agency and contractor with a culture for quality performance. • In a large system, risk that the scope may be too large for one contractor to manage. • Greater risk if contractor fails to perform. • Transition when the contractor changes can be difficult. • Market for competition. Contracted– Unbundled • Contractor skills and experience are specific to the function. • Contractor can focus on performance in area with greatest opportunity to succeed. • Encourages additional opportunities to contract with the commuter rail agency. • Contractors may defer responsibility to another contractor (finger pointing). • Contract administration is more complex—less efficient management and oversight. • Partnerships require more effort on the part of the commuter rail agency. Mixed Agency Operated and Contracted • Direct accountability to the customer. • Central services costs shared across all modes. • Commuter rail agency adds contractor • Risk that the addition of a new or additional mode for commuter rail could affect other modes negatively. • Challenges introducing FRA-regulated commuter rail into a expertise where and if needed to mitigate risk. transit agency that historically provides bus or light-rail transit. Table 2. Opportunities and challenges by approach to service delivery.

8 Contracting Commuter Rail Services, Volume 1: Guidebook • Procurement practices. Part of the case study research included documentation of recent procurements for different commuter rail systems for bundled and unbundled services. The findings are as follows: – A recent procurement for train operations, dispatch, and maintenance of equipment reflected increased competition from more contractors possibly interested in taking on complex contracts; however, historical experience frequently reflects two or three proposals per competitive procurement. – Commuter rail agencies are looking at setting contracts with longer performance periods to establish an effective working relationship with contractors, to increase pricing stability, and to reduce transactional costs for reprocurement. Recent procure- ments among the case studies reflected terms up to 20 years. – Case studies reflected a move to fixed price or unit price procurements, with set esca- lation rates to increase predictable costs for financial planning. Another purpose for fixed-price contracts was to shift some of the financial risk to the contractor. – Some commuter rail agencies include contract terms that link performance metrics with either financial incentives or penalties.

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TRB's Transit Cooperative Research Program (TCRP) Research Report 200: Contracting Commuter Rail Services, Volume 1: Guidebook is the first of a two-volume set that provides an evaluation of the advantages and disadvantages of each potential approach for providing commuter rail service. The guidebook includes an overview of the primary functions for commuter rail delivery—train operations, dispatch, maintenance of way, and maintenance of equipment. The guidebook includes a decision tree analysis and summarizes current trends for contracting commuter rail services, along with highlighting innovative approaches for contracting transportation services.

Volume 2: Commuter Rail System Profiles describes the 31 commuter rail services in North America and the various delivery approaches, and documents a broad range of strategies and approaches for managing the operation and maintenance issues associated with the contracting of commuter rail services.

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