oversight

Administration of Metroliner and Turbo-Train Projects

Published by the Government Accountability Office on 1971-01-27.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

       inistration Of etroliner
             o-Train Proj         Et-164497(5)




Federal Railroad Administration
Department of Transportation




BY THE COMPTROLLER    GEJJERAL
OF THE UNITED  STATES
                          COMPTROLLER     GENERAL     OF   THE      UNlTED   STATES
                                        WASXINGTON.    D.C.      20548




       B- 164497(5)




       To the      President        of the Senate   and the
  L    Speaker       of the      House of Representatives

                This is our report       on our review         of administration                  of
       the Metroliner        and Turbo-Train        projects      by the Federal                       -5 I::
  I    Railroad     Administration,       Department         of Transportation.                        #?’i
  b,
+P-               Our     review  was made pursuant      to the Budget                      and Ac-
       counting         Act, 1921 (31 U.S.C.   53), and the Accounting                       and
       Auditing         Act of 1950 (31 U.S.C.     67).

                  Copies   of this report      are being    sent to the Director,
       Office      of Management      and Budget;       the Secretary      of Trans-
       portation:       and the Administrator,         Federal    Railroad    Ad-
       ministration.




        .   :-.
                                                              Comptroller             General
                                                              of the United           States
COMPTROLLER
          GENERAL'S                      ADMINISTRATION OF METROLINERAND TURBO-TRAIN
REPORT
     TO THECONGRESS                      PROJECTS
                                         Federal Railroad Administration
                                         Department of Transportation    B-164497(5)


DIGEST
------

WHYTHEREVIEWWASMADE
        The Federal Railroad Administration    (Agency) sponsors demonstrations to
        determine whether high-spzsoround      tr~~,Sp_o~~~i,o~~~~~~-~mprove_i~e~ccltJi
                                        -w^v>n,~~~.                   .1-"z-s."L-
                        ~u?V@?fisscal     years 1966-70 the Agency obligated over
        5        ion for demonstration programs.     (See footnote,   p. 4.)

        The Agency is sponsoring two high-speed passenger-train            demonstrations--
        the Metroliner    between New York City and Washington, D.C., and the Turbo-
        Train between New York City and Boston, Massachusetts,             The objectives
        of the two demonstration projects were to                he trains whilein      op-
        ey~j.g~-ggg& -~~p;su-~%..!+<'-
                       to determine -c---..l
                                      the,.-m-
                                             ~~~~~~.j.~~~s~~~~~~ 0 4w., e.cTfZGTF5~Z~$.~.-
        !JlC#g*.


        To accomplish the objectives,   the Agency planned that the Metroliners
        would make 18 round trips daily--nine   between Washington and New York
        City and nine between Philadelphia,   Pennsylvania,  and New York City ex-
        cept Saturdays, Sundays, and holidays when reduced service would be pro-
        vided.   The Turbo-Trains would make four round trips daily between New
        York City and Boston.

        The estimated cost to the Government for both demonstrations      is about
        $19.3 million.     Because significant  delays were encountered in the start
        of these projects and because equipment failures     were experienced during
        the trains'    operation, the General Accounting Office (GAO) reviewed the
        planning and administration     of these projects.


FINDINGSANDCONCLUSIONS
                                                                                   - ii:;
 3      The Penn Central Transportation   Company (Railroad) began routine pas- p - =-
Y       senger service with six Metroliners  in January 1969. The official    dem-
        onstration  did not start until October 1, 1970--3 years late--and with
        s-even round trips daily between Washington and New York City.    The Turbo-
        Train demonstration did not start until April 1969--over 2 years late--
        and with only one round trip daily.    (See pp. 11 and 20.)

        GAO found that the Metroliner   and Turbo-Train demonstration projects had
        not accomplished their objectives   as originally  planned, because tech-
        nical problems with the trains had delayed the start of the projects and
        had prevented the contractors   from maintaining  operational enough cars
        to run the number of round trips necessary to fully accomplish the dem-
        onstrations'  objectives.

Tear Sheet
Since the trains were an ~d~~oncement of the state of the art and never
before had been corlstru&.ed or used in the United States, the Agency did
not know whether the trains would operate as anticipated.    Nevertheless,
in 1966 the Agency authorized the Railroad to contract       for construction
of 50 Metroliners  and agreed to lease two Turbo-Trains      being developed
by the United Aircraft  Corporation.  (See p* 9.)

GAO found that, although the contracts for the demonstrations provided
that, in general, revenues from the operation of the trains in excess of
cost be shared, the contracts did not provide that a reduction be made
in the amounts of the contracts in the event the trains did not run as
often as anticipated.    Because it was not known whether the trains would
work satisfactorily,  the contracts should have provided for such a reduc-
tion.

The Department of Transportation   did negotiate a $500,000 reduction in
the Metroliner   contract because the trains cannot be used to the extent
planned.    The $500,000 does not appear significant    when compared with
the remaining contract cost of $10.7 million      and the substantial    reduc-
tion in the use of the Metroliners    during the demonstration.       Because of
the recent start of the demonstration,     the amount of the Government's in-
vestment that will be recovered from revenues is unknown. (See pp- 15
and 17.1

The Agency has made full lease and maintenance payments for the Turbo-
Trains in accordance with c'ontracts which,as of October 1, 1970, totaled
about $1,085,000 and $924,000, respectively.    Because of the limited
operating schedule of the trains,   no recovery of the Government's in-
vestment through excess revenues is expected.     (See PP. 18 and 19.)
The Metroliner     demonstration is planned to run for 2 years from Octo-
ber 1, 1970. In April 1970 the Railroad informed the Secretary of
Transportation      that a research and development program using some of the
Metroliners    as prototypes was essential    to overcome the Metroliners'
technical deficiencies       and to ensure success of the demonstration.      As
of November 30, 1970, the Agency was negotiating        contracts with Westing-
house Electric      Corporation and General Electric   Company--builders   of
the Metroliner--for      go-day studies of technical   problems.   (See p. 14.)

The Turbo-Train demonstration was scheduled to end October 22, 1970. On
October 12, 1970, the Secretary of Transportation    announced that it
would be extended on a month-to-month basis pending negotiations       for ad-
ditional  use of the trains.    As of November 30 the Agency was still    ne-
gotiating  with United Aircraft   Corporation.

Because technical  problems have not been resolved, it appears that any
long-term extension of the demonstration would contribute   little  toward
the improved service which the Agency anticipated   would be provided by
the Turbo-Trains.   It is also questionable whether an extension would
provide additional  beneficial data on public reaction to the Turbo-
Trains.   (See p. 21.)



                                   2
RECOMMENDATIONS
            ORSUGGESTIONS
          When the Department sponsors future demonstration programs involving    new
          or novel equipment, it should encourage the use of a prototype to ensure,
          to the extent possible, that the equipment will perform as anticipated.
          Future contracts should provide for price adjustments if the equipment
          is not used to the degree planned.   (See p. 22.)


AGENCY
     ACTIONSANDUNRESOLVED
                       ISSUES
          The Department agreed with GAO's findings and proposals and on Decem-
          ber 21, 1970, the Agency issued a policy statement (FRA 4400.9) which
          provided for adopting the GAO proposals in sponsoring future demonstra-
          tions.   (See p. 22.)


kMTTERS
      FORCONSIDER4TION
                     BY Ti?ECONGRESS
          Members of the Congress have expressed interest   in the reasons for the
          delays in the start of the Metroliner  and Turbo-Train demonstrations
          and in the current status of these projects,




Tear
.-.__   Sheet
                            Contents
                                                                  Page

DIGEST                                                              1

CHAPTER

   1       INTRODUCTION                                             4
               Photograph     of Metroliner    train                7
               Photograph     of Turbo-Train                        8

   2       OBSERVATIONSON THE ADMINISTRATION OF THE
           METROLINER AND TURBO-TRAIN PROJECTS                      9
              Metroliner     demonstration                         11
                   Technical problems delayed the
                      start of the demonstration                   11
                    Status of the Metroliner     demonstra-
                      tion                                         14
                    Federal costs                                  15
                    Suburban stations                              17
               Turbo-Train    demonstration                        18
                   Technical problems delayed and
                      curtailed   the demonstration                20

   3       GAO PROPOSALSAND AGENCY COMMENTS                        22

   4       SCOPE OF REVIEW                                         23

APPENDIX

       I   Letter dated September 28, 1970, from the
             Assistant  Secretary  for Administration,
              Office of the Secretary,  to the General
             Accounting Office                                     27

  II       Principal     officials     of the Department of
              Transportation       and Department of Commerce
              responsible       for the administration   of the
              activities      discussed in this report             29

                             ABBREVIATIONS

GAO        General   Accounting    Office
NHRR       New York,   New Haven and Hartford          Railroad
COMPTROLLER  GENERAL'S              ADMINISTRATION OF METROLINERAND TURBO-TRAIN
lK!'ORT TO THE CONGRESS             PROJECTS
                                    Federal Railroad Administration
                                    Department of Transportation    B-164497(5)


DIGEST
-----_

WHYTHE REVIEW WASMADE

    The Federal Railroad Administration      (Agency) sponsors demonstrations to
    determine whether high-speed ground transportation       can improve intercity
    transportation.      During fiscal years 1966-70 the Agency obligated over
    $25 million     for demonstration programs.   (See footnote, p. 4.)

    The Agency is sponsoring two high-speed passenger-train    demonstrations--
    the Metroliner    between New York City and Washington, D.C., and the Turbo-
    Train between New York City and Boston, Massachusetts.     The objectives
    of the two demonstration projects were to test the trains while in op-
    eration,and    to determine the public's response to new equipment and ser-
    vice.

    To accomplish the objectives,   the Agency planned that the Metroliners
    would make 18 round trips daily--nine   between Washington and New York
    City and nine between Philadelphia,   Pennsylvania, and New York City ex-
    cept Saturdays, Sundays, and holidays when reduced service would be pro-
    vided.   The Turbo-Trains would make four round trips daily between New
    York City and Boston.

    The estimated cost to the Government for both demonstrations is about
    $19.3 million.     Because significant  delays were encountered in the start
    of these projects and because equipment failures     were experienced during
    the trains'    operation, the General Accounting Office (GAO) reviewed the
    planning and administration     of these projects,


FINDINGS AND CONCLUSIONS

    The Penn Central Transportation   Company (Railroad) began routine pas-
    senger service with six Metroliners  in January 1969. The official    dem-
    onstration  did not start until October 1, 1970--3 years late--and with
    seven round trips daily between Washington and New York City.     The Turbo-
    Train demonstration did not start until April 1969--over 2 years late--
    and with only one round trip daily.    (See pp. 11 and 20.)

    GAO found that the Metroliner   and Turbo-Train demonstration projects had
    not accomplished their objectives   as originally  planned, because tech-
    nical problems with the trains had delayed the start of the projects and
    had prevented the contractors   from maintaining  operational enough cars
    to run the number of round trips necessary to fully accomplish the dem-
    onstrations'  objectives.


                                      I
Since the trains were an advancement of the state of the art and never
before had been constructed or used in the United States, the Agency did
not know whether the trains would operate as anticipated.      Nevertheless,
in 1966 the Agency authorized the Railroad to contract for construction
of 50 Metroliners  and agreed to lease two Turbo-Trains   being developed
by the United Aircraft  Corporation.   (See p. 9.)

GAO found that, although the contracts for the demonstrations    provided
that, in general, revenues from the operation of the trains in excess of
cost be shared, the contracts did not provide that a reduction be made
in the amounts of the contracts in the event the trains did not run as
often as anticipated.    Because it was not known whether the trains would
work satisfactorily,  the contracts should have provided for such a reduc-
tion.

The Department of Transportation   did negotiate a $500,000 reduction in
the Metroliner   contract because the trains cannot be used to the extent
planned.    The $500,000 does not appear significant    when compared with
the remaining contract cost of $10.7 million      and the substantial    reduc-
tion in the use of the Metroliners    during the demonstration.       Because of
the recent start of the demonstration,     the amount of the Government's in-
vestment that will be recovered from revenues is unknown. (See pp. 15
and 17.)

The Agency has made full lease and maintenance payments for the Turbo-
Trains in accordance with contracts which,as of October 1, 1970, totaled
about $1,085,000 and $924,000, respectively.   Because of the limited
operating schedule of the trains,  no recovery of the Government's in-
vestment through excess revenues is expected.    (See PP. 18 and 19.)
The Metroliner     demonstration is planned to run for 2 years from Octo-
ber 1, 1970. In April 1970 the Railroad informed the Secretary of
Transportation     that a research and development program using some of the
Metroliners    as prototypes was essential   to overcome the Metroliners'
technical deficiencies      and to ensure success of the demonstration.    As
of November30, 1970, the Agency was negotiating contracts with Westing-
house Electric     Corporation and General Electric   Company--builders of
the Metroliner--for     go-day studies of technical   problems.   (See p. 14.)

The Turbo-Train demonstration was scheduled to end October 22, 1970. On
October 12, 1970, the Secretary of Transportation    announced that it
would be extended on a month-to-month basis pending negotiations       for ad-
ditional  use of the trains.    As of November 30 the Agency was still    ne-
gotiating  with United Aircraft   Corporation.

Because technical  problems have not been resolved, it appears that any
long-term extension of the demonstration would contribute    little  toward
the improved service which the Agency anticipated    would be provided by
the Turbo-Trains.   It is also questionable whether an extension would
provide additional  beneficial data on public reaction to the Turbo-
Trains.   (See p. 21.)



                                   2
RECOMMENDATIONS
            ORSUGGESTIONS
   When the Department sponsors future demonstration programs involving    new
   or novel equipment, it should encourage the use of a prototype to ensure,
   to the extent possible, that the equipment will perform as anticipated.
   Future contracts should provide for price adjustments if the equipment
   is not used to the degree planned.   {See p. 22.)


AGENCY
     ACTIONSANDUNRESOLVED
                       ISSUES
   The Department agreed with GAO's findings and proposals and on Decem-
   ber 21, 1970, the Agency issued a policy statement (FRA 4400.9) which
   provided for adopting the GAO proposals in sponsoring future demonstra-
   tions.   (See p. 22.)


MATTER5
      FORCONSIDERATION
                    BY THECONGRESS
   Members of the Congress have expressed interest   in the reasons for the
   delays in the start of the Metroliner  and Turbo-Train demonstrations
   and in the current status of these projects.




                                            3
                                CHAPTER1

                             INTRODUCTION
                                  --

       The General Accounting Office    has reviewed selected         as-
pects of the two high-speed passenger-train          demonstration
projects   of the Federal Railroad    Administration       (Agency),
Department of Transportation.      The demonstration        trains   are
operated by the Penn Central     Transportation      Company (Rail-
road) between New York City and Boston and between Washing-
ton and New York City.      The Agency is responsible,         however,
for the management of the projects.        This report      contains
our observations    on the conduct and current       status of the
two projects.     The scope of our review is described           on
page 23.

        The Agency was created within            the Department of Trans-
portation      when it was established          on April   1, 1967.     The
Agency comprises (1) the Bureau of Railroad                 Safety,   trans-
ferred    from the Interstate          Commerce Commission, which is re-
sponsible      for the safety of railroad           equipment and the hours
of service of railroad            employees, (2) the Alaska Railroad,
transferred       from the Department of the Interior,            which is
responsible       for assisting      in the development of the economy
of Alaska,       and (3) the Office        of High-Speed Ground Transpor-
tation,     transferred      from the Department of Commerce, which
is responsible        for carrying      out the provisions     of the High-
Speed Ground Transportation             Act of 1965, as amended
(49 U.S.C. 16311, as it relates               to research and development
on high-speed        ground    trans   ortation    systems and the conduct
of demonstration         programs.   H

      The High-Speed Ground Transportation     Act of 1965 autho-
rized the Agency to sponsor demonstration      projects to deter-
mine the contributions  that high-speed    ground transportation
modes could make to more efficient    and economical intercity


'In this report,   we have attributed  all Government involve-
  ment in the projects  to the Agency.    All actions taken
  prior  to April 1, 1967, however, were the responsibility
  of the Department of Commerce.



                                     4
transportation      systems.   The two high-speed passenger-train
demonstrations      account for about $19 million   of the $25 mil-
lion obligated      by the Agency for demonstration   projects    dur-
ing fiscal     years 1966-70.

        The objectives     of the two high-speed passenger-train
demonstrations       were to test the trains'       operating      character-
istics    and to measure and evaluate public response to new
equipment and to changes in various service factors.                    The
demonstration       between Washington and New York City, which
began on October 1, 1970, utilizes           Metroliners--high-speed
electric    trains.      The demonstration    between New York City
and Boston utilizes        two three-car    gas-turbine      trainsets,
commonly referred        to as Turbo-Trains.       (See photographs of
trains    on pp. 7 and 8.)

        Two types of rail passenger trains            were selected for
conducting       the demonstrations,      because of the different        con-
ditions     on the routes over which each type of train would
operate.       The route between Washington and New York City was
fully    electrified    but the route between New York City and
Boston was not and thereby prohibited             the Metroliners      from
operating      all the way to Boston.        Further,     the route between
New York City and Boston contained numerous curves and draw-
bridges that prohibited          attainment    of high speeds with the
Metroliner       or conventional     equipment.     The Turbo-Trains      are
designed to attain        higher speeds than conventional          equip-
ment: especially       on curved track,      without requiring      substan-
tial    improvements in the roadbed.          The Turbo-Trains      are ca-
pable of operating        at speeds of about 170 miles per hour
(m.p.h.).        The Metroliners     can operate at speeds of about
150 m.p.h.

       Although the Agency initiated     the demonstration      proj-
ects, the Railroad     and the suppliers    of the Metroliners--
Budd Company, Westinghouse 'Electric       Corporation,    and General
Electric    Company-- and the lessor of the Turbo-Trains,        the
United Aircraft    Corporation,   have incurred     substantial    ex-
penditures    in support of or in relation     to the demonstration
projects.     As of October 1, 1970, the total       estimated   cost
to the Government for the Metroliner        demonstration     was about
$12.9 million.     The Railroad   and its equipment suppliers
have reported costs of over $60 million         in support of the
demonstration.      The Government is paying the entire      cost of
the Turbo-Train     demonstration,   which, as of October 1, 1970,
was estimated    at about $6.4 million.      The Government, how-
ever, is leasing the Turbo-Trains        for about $1.1 million
from United Aircraft     Corporation   which reported that it had
incurred   expenditures   of about $7.5 million     in the develop-
ment of the Turbo-Trains.

        The principal  officials  of the Department of Transpor-
tation    and Department of Commerce responsible    for the admin-
istration    of the activities   discussed in this report are
listed    in appendix II.




                                 6
l
One of two three-car Turbo-Trains   used for
New  York City to Boston demonstration
                             CHAPTER2

   OBSERVATIONSON THE ADMINISTRATION OF THE METROLINER

                    AND TURBO-TRAIN PROJECTS

      The Metroliner    and Turbo-Train  demonstration    projects
have not accomplished their objectives       on a timely basis
and have not been conducted as originally        planned.    Techni-
cal problems encountered with the trains       delayed the start
of the projects     and prevented the contractors     from maintain-
ing operational    enough cars to run the number of round
trips  necessary to fully     accomplish the projects'    objectives.

       The Metroliners    and Turbo-Trains     were an advancement
of the state of the art.         No similar   equipment had ever been
constructed    or used in regular passenger service in the
United States.       In 1966 the Agency agreed to lease two
Turbo-Trains    being developed by the United Aircraft           Corpo-
ration    and authorized   the Railroad     to contract    for the con-
struction    of 50 Metroliners,     without knowing whether the
trains    would be able to operate to the degree anticipated
for the demonstrations.         In view of the significant       Govern-
ment funds committed to the demonstrations,             the Agency
should have encouraged the development and testing             of proto-
types to provide greater assurance that later demonstra-
tions could be carried       out as planned.

       The Agency's contracts     with the Railroad    and with the
lessor of the Turbo-Trains      did not provide for a reduction
in the amount of the contracts        in the event the trains
could not be used as planned.         As the Agency did not know
whether the trains would perform as anticipated,           a provi-
 sion should have been included in the contracts         to protect
the investment of the Government.          The Department informed
us, however, that a reduction        of $500,000 in the amount of
 the contract    had been negotiated    with the Railroad    in con-
 sideration   of the fact that the Metroliner       demonstration
which began on October 1, 1970 (3 years after planned),was
 decreased in scope.     No reduction    has been made in the pay-
ments required under the contracts         with United Aircraft
 Corporation   for the lease and maintenance of the



                                   9
Turbo-Trains,     even though the sccpe of the demonstration
was substantially     reduced.

      Our more detailed   comments on the administration      of
the demonstrations    are contained in the following     sections
of this chapter.




                                 10
METROLINER DEMONSTRATION

      On April 15, 1966, the Agency awarded a contract    to the
Pennsylvania   Railroad Company-- now part of the Penn Central
Transportation   Company-- to conduct a high-speed passenger-
train demonstration    between Washington and New York City, a
distance of 226 miles.

      The purpose of the demonstration          was to test public re-
sponse to improved passenger rail transportation                  and to pro-
vide information        on public response to various service fac-
tors in intercity         rail passenger service;     such as changes in
fare levels,      faster,     more convenient  service,      improved train
information,      and improved baggage-handling         facilities.      Con-
ventional    train    equipment, as well as the new Metroliner
equipment, was to be used to measure these service factors.

       Under the terms of the contract,       the Railroad      agreed to
(1) upgrade and maintain to certain         specifications      the road-
bed and the facilities       between Washington and New York City,
(2) procure at least 28, but no more than 50, electrically
propelled    rail passenger cars (Metroliners),          and (3) assist
in the conduct of the demonstration.          The Agency was respon-
sible for (1) assisting       in the development and preparation
of specifications      for the Metroliners,     (2) approving a con-
tract   for the manufacture of the railcars         and (3) consulting
with the Railroad     on the nature and extent of experimental
features   of the demonstration.

Technical problems delayed         the start
of the demonstration

      At the time the contract  was awarded, the Agency esti-
mated that the demonstration   would begin about October 1967
and run for 2 years.   The Agency planned that the Metro-
liners would make nine round trips   daily between Washington
and New York City and an additional   nine round trips  daily
between Philadelphia  and New York City except Saturdays,     Sun-
days o and holidays, when reduced service would be provided.

      October 1967 was established   as the anticipated     start-
ing time because both the Agency and the Railroad       felt that
the most time-consuming   task prior to the initiation      of the
demonstration  would be to upgrade the roadbed to accommodate


                                     11
the higher speeds of the Metroliners.      The Metroliners,   ac-
cording to the contract,     would be capable of operating   at
speeds of 150 m.p.h. and of traveling     between the two cities
in a maximum elapsed time of 3 hours, with four intermediate
stops.   The Railroad   ordered the 50 Metroliners    in May 1966
and they were to be delivered     in an operative  condition  by
September 30, 1967.

       In April 1966, the Railroad          began upgrading its roadbed
to provide for the safe operation             of the Metroliners.       A sig-
nificant    number of railroad        crossties     were replaced,     a sub-
stantial    amount of continuous welded track was laid,               and a
major portion      of the catenary wire--the         overhead electric
wire--was    replaced.      This work was substantially         completed
in October 1967, but the Metroliners             were not delivered      be-
cause of technical        problems which arose as manufacturing
progressed,     primarily     because of the sophisticated         nature of
the equipment.       The major technical        problems which delayed
delivery    of the Metroliners       are presented below.

      1. Pantograph-catenary      interaction:     The ability    of the
         pantograph-- the power collection        device on top of
         the railcars--   to conduct electrical       current  from the
         catenary wire to the railcars         at high speeds had not
         been determined prior to the time the Metroliner            was
         being tested.     This problem was solved during the
         testing   of the trains.

      2. Use of two propulsion-braking            systems for the Metro-
          liners:     The Railroad,      with the Government's concur-
          rence, required       the railcar     manufacturer   to use
          propulsion-braking       systems from each of two suppli-
          ers.     Unanticipated    interfacing     problems arose when
          railcars    having one system were joined with railcars
          having another system.          These compatibility     problems
          were solved during the testing           of the trains.

      3. Dynamic-braking    system:   In addition to air brakes,
         dynamic brakes --brakes using electrical    current--
         were required    on all the Metroliners.   Dynamic
         brakes were necessary as a safety precaution       to pre-
         vent overheating    of train wheels as a result    of brak-
         ing at high speeds using only air brakes.       The
         dynamic-braking    system provided by one supplier    did


                                    12
          not meet the specifications      included in the contract
          for the construction     of the railcars.   The problem
          was resolved by increasing     the use of the air brakes
          over that anticipated.      It should be noted that the
          trains  will stop within    the distance specified,   us-
          ing both dynamic and air brakes or air brakes alone.

      4. Short-circuited      substations:        The Metroliners      short-
         circuited     the Railroad      substations--the      point at
         which electrical       current is transferred         from a
         higher voltage level to the ll,OOO-volt               catenary
         wire--by     drawing more electricity          than the substa-
         tions could produce.          The problem was solved by mod-
         ifying    the substations       to permit the Metroliners         to
         draw sufficient      electrical      current.

       Pending the Railroad's         ability      to maintain enough Metro-
liners    in an operative      condition      to start the demonstration,
the Agency authorized        the Railroad        to use the available
Metroliners     in regular     passenger service.          On January 16,
1969, the Railroad placed six Metroliners                 in regular   passen-
ger service between Washington and New York City.                    The ser-
vice began with one train of six Metroliners                  making one round
trip daily.      During the operation           of the train under normal
service conditions,       the Metroliners          encountered additional
technical    problems with the electrical             and propulsion    sys-
tems. Each Metroliner          has approximately        3,000 electronic
components which require         a high level of maintenance to pre-
vent equipment failure,          The problems encountered with the
propulsion    system were concerned primarily              with overheating
of the trains'     transformers       and gear boxes.

        The start   of the demonstration           was delayed by the in-
ability    of the Railroad to upgrade and maintain the track
to the contract        specifications        in addition    to the technical
problems encountered with the trains.                  Agency officials      in-
formed us that the contract             had been amended to delete the
precise track specifications              and to substitute,      therefore,
a minimum level of track maintenance work by the Railroad
during the demonstration            period,      The maintenance work will
include installing        additional        continuous-welded     rail and
repairs    such as resurfacing          tops of rail-heads       and renewing
railroad    crossties.



                                        13
Status    of the Metroliner     demonstration
                                     II-
      Although the technical   problems with the MetI-oliness
have not been resolved,    the demonstration   began on Octo-
ber 1, 1970, and, under the contract      with the Railroad,   is
scheduled to run for 2 years,      The demonstration    is to be
made with seven round trips    daily between Washington and
New Yor'k City instead of the more extended service origi-
nally planned.    (See p. 11.)   At th e start   of the demonstra-
tion the Railroad had accepted 49 of the 50 Metroliners;
one Metroliner   was used for spare parts.
        The Railroad by letter     dated April 6, 1970, advised the
Secretary    of Transportation      that a research and development
program should be undertaken          immediately    to overcome the
technical    problems of the Metroliners.          The Railroad      sug-
gested that two of the Metroliners          be used as prototypes         to
determine remedies for known deficiencies              and potential
weaknesses not fully      apparent.      The Railroad     suggested also
that the remedies be applied to four additional               Metroliners
which would be used as prototypes          under actual service con-
ditions,     Data from the prototype       operation     would then be
used to modify the remaining fleet          of Metroliners.

        The Railroad    estimated that the total      cost of this pro-
gram would be about $15 million        and stated that such a pro-
gram was necessary to avoid the threat           of total  failure  of
the project.       As of November 30, 1970, the Agency was nego-
tiating    contracts   with Westinghouse Electric       Corporation
and General Electric        Company for go-day studies of Metro-
liner technical      problems.    The Railroad's    proposal is being
held in abeyance pending the results          of the studies.
Federal   costs

      The Agency's contract          with the Railroad provided for a
Government contribution          of $9.6 million       for the conduct of
the demonstration.         Beginning      in August    1967, the amount
provided in the contract          was   increased    to   about $11 million
by contract      amendments to provide for improvements to sta-
tion facilities,       including     the construction       of one new sub-
urban station,      the necessary track and electrical              work for
a second suburban station,           and   grade-crossing      protection
along the demonstration          route.


                                    14
       The Agency entered into several other contracts           for the
preliminary    design of the Metroliners,       collection    of reve-
nue data, auditing,       a computer simulation     of rail   opera-
tions,   terminal    improvements,  and construction       of the sta-
tion facility     for the second suburban station.

       The Government's cost for the demonstration          project,
as provided for in the basic contract           with the Railroad,
was based, in part, on the expected use of the Metroliners.
(See p. 11.)      The Department has informed us that, although
not provided for in the contract,          a reduction   of $500,000
in the amount of the contract          has been negotiated   with the
Railroad    because the trains      cannot be used to the extent
planned.     In our opinion,     the $500,000 reduction     does not
appear significant       when compared with the remaining con-
tract cost of $10.7 million         for the demonstration    and the
substantial    reduction    in the use of the Metroliners       during
the demonstration      period.

     A summary of the Government's total      estimated  costs
for the Metroliner  demonstration   project   as of October 1,
1970, is presented on the following     page.




                                  15
                                                           Estimated
                   Description                                cost

Contract   for operation    of demonstration                               $ 9,600,OOO
Contract additions:
     Improvements to existing     stations                 $   281,295
     Pop-out windows for rail cars                               4,000
     Grade-crossing    protection                               14,000
     Data for computer simulation       of rail
        operations                                              45,251
     Suburban stations:
          Lanham, Maryland                                 l,O51,594
          Woodbridge, New Jersey                               204,111
                   Total     additions                                       1,600,251
     Less negotiated       contract      reduction                           -500,000
Contract   as amended                                                       10,700,251
Other contracts:
     Design railcars                                           100,000
    Collection    of revenue data and audit                     36,785
    Computer simulation      of rail operations                125,842
     Improvements to existing      stations                     40,556
     Suburban stations:
          Lanham, Maryland                                      34,931
          Woodbridge, New Jersey:
               Federal Railroad Administration                 608,886
               Federal Highway Administration                  516 ,495a
                   Total     other    contracts                              1,463,495
Anticipated     expenditures    during demonstra-
  tion:
      Experimental    service changes                          400,000
      Terminal improvements                                    150,000
      Grade-crossing     improvements:
           Federal Railroad Administration                      61,000
           Federal Highway Administration                      150,000
                   Total anticipated            expendi-
                     tures                                                     761,000
                   Total,     Government        costs                      $12,924,746
aSection 11 of the Federal-Aid     Highway Act of 1968 authorizes     the
 Federal Highway Administration     to purchase land and construct
 parking facilities adjacent to Federal-aid     highways if such facili-
 ties are served by a mass-transit     commuter system.   Funds are being
 provided by the Federal Highway Administration      for construction     of
 a parking facility for rail commuters at the Woodbridge station.


                                           16
       Under the terms of the contract,    the Railroad     is re-
quired to reimburse the Government for its costs if the
Railroad's   additional   revenues from the demonstration       ex-
ceed its additional     operating  costs.  The contract     provides
for payment to the Government of an amount equal to one
half of the excess of income over the operating         costs up to
the Government's costs of $10,7 million       under the contract,
as amended. Since the demonstration       did not start until
October 1, 1970, the amount of the Government's         investment
that will be recovered is unknown,

Suburban stations
       So that more convenient       service may be provided during
the demonstration,       the Government agreed to participate           in
the cost of constructing         two new suburban stations.       The
stations    are located outside Washington in Lanham, Maryland,
at the junction      of the Capital    Beltway and the Railroad's
main line and outside New York City in Woodbridge, New Jer-
sey, at the junction        of the Garden State Parkway and the
Railroad's     main line.     The States of Maryland and New Jer-
sey and Prince Georges County in Maryland agreed to partic-
ipate in the cost of constructing           the stations.     The total
estimated cost of constructing         the stations      is about
$4.2 million,     ofwhich the Government has agreed to contri-
bute $2,4 million.
       The station    in Lanham, Maryland, was opened to service
on March 16, 1970. As of October 1, 1970, two Metroliners
and four conventional      New York-bound trains       and four Metro-
liners   and four conventional      Washington-bound     trains  stop
at the Lanham station.       The station     in Woodbridge, New Jer-
sey, will not open for service until           about June 1971.     The
completion    of the Woodbridge station        has been delayed be-
cause of a change in the original          design of the station
that was necessary to provide a larger facility             to accommo-
date the commuter traffic       and because of the heavy volume
of rail traffic     at the station's     location   that prevents
ta'king any section of track out of service for an extended
period of time.
       Prince Georges County, Maryland, will own the station
building    at Lanham and will lease the parking lot from the
State.     The Railroad will own the platforms   and pedestrian
tunnel,     The Woodbridge  station will  be owned entirely   by
the State of New Jersey.

                                     17
TURBO-TRAIN DEMONSTRATION
      To test public reaction      to improved intercity    service
and to test the operating      characteristics   of gas-turbine
powered Turbo-Trains,     the Agency entered into contracts       with
the United Aircraft    Corporation    and with the New York, New
Haven and Hartford    Railroad   (NHRR) to permit the use of
Turbo-Trains   over its shoreline     route between Boston and
New York City.

       In January 1966, the Agency entered into a contract
with the United Aircraft          Corporation   for the lease of two
three-car    Turbo-Trains      for 2 years for about $1.2 million.
In addition,     the Agency agreed to provide about $250,000 for
the cost of tests considered necessary by the Agency to de-
termine whether the Turbo-Trains            met the specifications    set
forth in the lease contract.            Among the tests performed were
brake tests and stop-distance           tests.   Although the Turbo-
Trains satisfactorily        passed these tests by December 1968,
the trains,    as accepted,       did not meet the ride-quality     and
noise-level    specifications.        As a result,    the lease costs
were reduced by $98,000.

       In February 1967, the Agency entered into a contract
with United Aircraft      Corporation      to service and maintain
the Turbo-Trains     for a 2-year period (corresponding           to the
period of the lease) for about $2 million              and for safety and
comfort modifications       to the Turbo-Trains        for about $326,000.
Service and maintenance of the trains            included cleaning of
the interior    and exterior,     fueling,    furnishing     of spare
parts,   and providing    a maintenance facility          to accomplish
these tasks.     The Agency contracted        also with United Air-
craft Corporation      for the availa3ility        of the Turbo-Trains
for testing    and training    prior to the start of the lease pe-
riod.

      The contracts  with United Aircraft    Corporation  provided
that,  during the 2-year lease period which began October 22,
1968, the Agency would make fixed monthly lease and mainte-
nance payments of about $47,000 and $40,000, respectively.
The monthly payments were established,     in part, on the ba-
sis of anticipated   use of the trains;   however, the contracts
did not provide for a reduction    in the payments in the event
the trains   could not be used to the degree anticipated.


                                   18
        Although technical  problems resulted   in a significant
reduction     in the use of the trains  compared with the planned
utilization,     the Agency paid the fixed monthly lease and
maintenance payments which, as of October 1, 1970, totaled
about $1,085,000 and $924,000, respectively.

      The Agency entered into contracts        with NEW? for (1) im-
proving and maintaining     certain   portions    of the roadbed be-
tween Woodlawn, New York--the       point at which the trains     op-
erate at slower speeds in and out of Grand Central Station
in New York City--and    Boston, (2) additional        testing of the
Turbo-Trains,   (3) train ing of NHRP personnel in the opera-
tion of the train,    and (4) insurance on the Turbo-Trains.

        The Railroad acquired NHRR on January 1, 1969, and
under contract      with the Agency operated the Turbo-Trains
during the demonstration.       The contract    provided for the
Agency to share equally in any increase in the total passen-
ger revenue from shoreline      operations   resulting     from opera-
tion of the Turbo-Trains.       An Agency official      informed us,
however, that, because of the operating         schedule of the
trains,    no recovery of revenue was expected.

       Because NHRR was in bankruptcy   at the time the demon-
stration   was planned in 1965, the Agency is paying the total
cost of the demonstration.     Prior to the decision to extend
the demonstration    period (see pa 211, the Agency estimated
the cost of the demonstration     to be $6.4 million.




                                  19
Technical    problems delayed -- and
curtailed    the demonstration

        When contracting      for the lease of the Turbo-Trains           in
January 1966, the Agency planned that the trains                be de-
livered    about 10 months later,         with the demonstration      pro-
gram to begin shortly         thereafter.      No specific   date was set
for the start of the demonstration.               Because of engineering
and construction       problems, the trains         were not accepted un-
til October 21, 1968--approximately             23 months after the
scheduled delivery        date.    These problems concerned primarily
the ride quality       and noise level of the trains.           As previ-
ously stated,     the lease costs were reduced because the
trains   did not meet the contract           specifications   for ride
quality    and noise level.

       Shortly after the Railroad acquired NHRR, it requested
the Agency to provide for additional         testing   of the braking
capabilities     of the Turbo-Trains.      The Railroad informed
the Agency that the previous tests had not been satisfactory
for its purposes and had not been witnessed by Railroad              em-
ployees who were currently       responsible    for train operation.
In February and March 1969, the Agency conducted a series
of stop-distance      and braking tests to the satisfaction        ofthe
Railroad.     The estimated    costs of these additional     tests
was about $30,000.

        The demonstration    began on April 8, 1969, with one
Turbo-Train     making one round trip daily between New York
City and Boston.       Although it was planned that each Turbo-
Train would make two round trips         daily between New York City
and Boston, technical       problems with the trains    resulted   in
the demonstration      consisting   primarily  of one Turbo-Train
making one round trip daily and the other train being used
for backup purposes in the event of equipment failure.             The
technical    problems were concerned primarily      with the reli-
ability    of the trains'    gear boxes, which resulted     in in-
creased maintenance and which prevented the lessor from en=-
suring the availability        of both trains.

      The Agency anticipated  spending about $300,000 for ex-
perimental  service changes designed to measure public reac-
tion to improved intercity   service; however, the equipment


                                    20
failures  prevented operation of the Turbo-Trains      to the ex-
tent necessary to conduct the experimental    service,
         In addition,      the Railroad would not increase the speed
 of the Turbo-Train          to enable it to make two daily round
 trips     because the Railroad        felt that the roadbed and numer-
 ous grade crossings           between New York City and Boston made it
 unsafe to operate the trains             at higher speeds.        The trains
 were operated at about 100 m.p.h.,               although they were cap-
 able of speeds up to about 170 m.p,h.                  The Agency antici-
 pated spending about $850,000 for grade-crossing                   and right-
 of -way improvements,          but these improvements were held in
 abeyance pending action by the Congress on the Federal-Aid
 Highway Act of 1970 (Public Law 91-605, approved Decem-
 ber 31, 1970) which provides for the elimination                   of all
 grade crossings        along the route of. both demonstrations.,
        The limited      Turbo-Train     demonstration       was scheduled to
end October 22, 1970. On October 12, 1970, the Secretary                       of
Transportation        announced that the demonstration            would be ex-
tended on a month-to-month            basis, pending negotiations          for
further     use of the trains.          In addition,      the Agency autho-
rized the Railroad to extend the insurance coverage on the
Turbo-Trains      through October 2, 1971, at a premium of
$47,520.       As of November 30, 1970, the Agency was negotiat-
ing with the United Aircraft              Corporation     for additional     use
of the Turbo-Trains           and had authorized       the Corporation     to
renew its lease for the maintenance facility                   at Providence,
Rhode Island.

        Because of continuing         technical     problems with the
trains'    gear boxes, which materially             affect    the serviceabil-
ity of the Turbo-Trains,           it appears that any long-term            ex-
tension of the demonstration             without    resolving      these prob-
lems would contribute       little       toward providing        the public
with the degree of improved service which the Agency antici-
pated would be provided by the Turbo-Trains.                     In addition,
unless the Turbo-Trains          can be used to provide further             im-
proved service,    it is questionable            whether an extension         of
the demonstration     will provide the Agency with any further
beneficial    data on public reaction            to the service provided
or on the operating       characteristics          of the Turbo-Trains.




                                        21
                                 CHAPTER3

                            GAO PROPOSALSAND

                            AGENCYCOMMENTS

       We proposed that the Secretary         of Transportation     (1) in
sponsoring future demonstration          projects   involving   new or
novel equipment, encourage the use of prototypes              to deter-
mine the operating      characteristics      of the new equipment and
thereby provide assurance,         to the greatest     extent possible,
that the equipment will be capable of meeting the program's
objectives     on a timely basis and (2) include appropriate            pro-
visions    in future contracts       for the use of equipment to con-
duct demonstrations       that will provide for adjustment        of the
contract    price in the event the equipment does not perform
as anticipated.



       By letter    dated September 28, 1970 (app. I), the Assis-
tant Secretary      for Administration,     Department of Transporta-
tion,    agreed with our findings       and stated that the Agency
would adopt our proposals        in sponsoring future demonstration
projects.       On December 21, 1970, the Agency issued a policy
statement     (FRA 4400.9) which provided for adopting the GAO
proposals     in sponsoring future demonstrations.




                                     22
                                  CHAPTER4

                              SCOPE OF REVIEW

       Our review was conducted at the Agency's headquarters
office     in Washington, D.C.        We directed     our review to the
planning for and administration             of the two high-speed
passenger-train       demonstration      projects.      In reviewing        the
administration      of the projects,        we directed       our attention
to determining       (1) the reasons for the delay in the start
of the demonstrations,        (2) the reasons for the use of only
one train to conduct the Turbo-Train               demonstration,        (3) the
manner in which the projects           are achieving        their    intended
purposes, and (4) the current            status of the demonstration
projects.      Our review included an examination                of the con-
tracts    for the conduct of the demonstration                projects.      We
reviewed also legislation,           correspondence,        and other records
related     to the projects.       In  addition,     we   interviewed       offi-
cials of the Agency responsible             for the conduct of the dem-
onstration     projects.




                                      23
APPENDIXES




25
                                                                                APPENDIXI
                                                                                   Page 1

                      OFFICE OF THE SECRETARY OF TRANSPORTATION
                                 WASHINGTON,        D.C.     20590



ASSISTANT SECRETARY
 FOR ADMINISTRATION


                                               September             28, 1970


      Mr. Bernard Sacks
      Assistant   Director
      Civil Division
      U.S. General Accounting Office
      441 G Street, N. W.
      Washington, D. C. 20548

      Dear Mr. Sacks:
       This is in reply to your letter    of June 11, 1970, requesting our
       comments on a draft of a proposed report to the Congress entitled,
       "Review of Administration    of Contracts for the High-Speed Ground
       Transportation  Demonstration Projects."    We are providing our
       comments by reference to each of the [see GAO note, p. 281
       recommendations of the report.
      The report recommends that in future demonstrations FRA encourage
      the development of a prototype of the equipment to be used, and
      that future demonstration contracts include appropriate provis$ons
      for the adjustment of the contract price if the equipment cannot
      be used to the degree anticipated  when the program began.
                               [See GAOnote,               p. 281




       In answer to the [see GAO note, p. 281 recommendations, the FRA will
       encourage where appropriate,   the testing of prototype equipment prior              to
       sponsoring future demonstrations   that involve new or novel equipment.

      Secondly, the FRA will include in future demonstration contracts
      appropriate provisions   for the adjustment of the contract price if
      the equipment cannot be used to the degree anticipated    when the
      program began. We have negotiated a $500,000.00 reduction in price
      with the Penn Central Transportation    Company for changed conditions
      under the Metroliner   Demonstration contract.




                                               27
APPENDIX   I
    Page   2



                                    [See GAO note.]




  We appreciate   the opportunity      afforded      us to comment on your draft
  report.

                                               Sincerely,

                                              *d%*
                                              Alan L, Dean




GAOnote:   The deleted comments relate to matters which were discussed
           in the draft report but omitted from this final report.




                                         28
                                                      APPENDIX II
                                                          Page 1
                    PRINCIPAL OFFICIALS

            OF THE DEPARTMENTOF TRANSPORTATION

              AND THE DEPARTMENTOF COMMERCE

            RESPONSIBLE FOR THE ADMINISTRATION

        OF THE ACTIVITIES   DISCUSSED IN THIS REPORT


                                            Tenure of office
                                            From             To

SECRETARYOF TRANSPORTATION
  (note a>:
    John A. Volpe                    Jan.      1969    Present
    Alan S. Boyd                     Jan.      1967    Jan.    1969

SECRETARYOF COMMERCE(note    b):
   Alexander B. Trowbridge
      (acting)                       Jan.      1967    Mar.       1967
   John T. Conner                    Jan.      1965    Jan.       1967

UNDER SECRETARYOF COMMERCEFOR
  TRANSPORTATION:
    Alan S. Boyd                     June      1965    Jan.       1967

ADMINISTRATOR, FEDERAL RAILROAD
  ADMINISTRATION:
    Carl V. Lyon (acting>            July      1970    Present
    Reginald N. Whitman              Feb.      1969    June 1970
    A, Scheffer Lang                 May       1967    Jan.    1969

DIRECTOR, OFFICE OF HIGH-SPEED
  GROUNDTRANSPORTATION:
    Myles B. Mitchell   (acting>     Dec.      1969     Present
    Edward J. Ward (acting)          Oct.      1969     Dec. 1969
    Robert A. Nelson                 Oct.      1965     Oct.    1969




                               29
APPENDIX II
    Page 2

                           PRINCIPAL OFFICIALS

                 OF THE DEPARIIMENTOF TRANSPORTATION

                   AND THE DEPARTMENTOF COMMERCE

                 RESPONSIBLE FOR THE ADMINISTRATION

            OF THE ACTIVITIES     DISCUSSED IN THIS REPORT
                                               (continued)

aPosition     created by Department of Transportation                 Act
 (Public     Law 89-6701, dated October 15, 1966.
b
    All functions,    powers, and duties of the          Secretary  of Com-
    merce under certain      laws and provisions       of law relating
    generally   to railroads    were transferred       to and vested in
    the Secretary    of Transportation      on April     1, 1967, by the
    Department of Transportation       Act.




                                                               U.S.   GAO   Wash.,   D.C.

                                     30