SUMMARY: In May 2006, the U.S. Department of Transportation (the Department) announced its National Strategy to Reduce Congestion on America's Transportation Network (the Congestion Initiative), a bold and comprehensive national program to reduce congestion on the Nation's roads, rails, runways, and waterways. One major component of the Congestion Initiative is the Urban Partnership Agreement (UPA). By separate notice in the Federal Register, the Department has solicited metropolitan areas to enter into UPAs to demonstrate strategies with a combined track record of effectiveness in reducing traffic congestion. See Applications for Urban Partnership Agreements as Part of Congestion Initiative, (71 FR 71231) dated December 8, 2006. To support this national strategy, the Department intends to award cooperative agreements to one or more successful jurisdictions to operationally test, demonstrate, and evaluate region-wide innovative technology based congestion mitigation strategies.
The purpose of this notice is to solicit proposals by metropolitan areas to the Intelligent Transportation Systems Operational Testing to Mitigate Congestion (ITS-OTMC) Program for funding the implementation of innovative congestion-reducing technologies. The Department may provide successful jurisdictions up to $100 million over three years through the ITS-OTMC Program in support of innovative technology-based strategies to reduce congestion.
This notice is one of three solicitations being issued by the Department in connection with the Congestion Initiative. See below "SUPPLEMENTARY INFORMATION: Coordination with Other Congestion Initiative Solicitations."
FOR FURTHER INFORMATION CONTACT: Please address questions concerning this notice to Brian Cronin, Intelligent Transportation Systems Joint Program Office, Research and Innovative Technology Administration, at (202) 366-8841 or via e-mail at firstname.lastname@example.org. Please address questions concerning the required SF 424 form to Sarah Tarpgaard, Office of Acquisition Management, Federal Highway Administration, at (202) 366-5750 or via e-mail at email@example.com. Please address legal questions to Grace Reidy, Esq., Office of the Chief Counsel, Federal Highway Administration, at (202) 366-6226 or via e-mail at firstname.lastname@example.org. RITA and FHWA offices are located at 400 Seventh Street, SW., Washington, DC 20590. Office hours for RITA and the FHWA are from 7:45 a.m. to 4:15 p.m., e.t., Monday through Friday, except on Federal holidays.
A. The Department's Congestion Initiative and Urban Partnership Agreement
Crisis of Congestion. Traffic congestion affects virtually every aspect of peoples' livesâ€”where people live, work, shop, and how much they pay for goods and services. According to 2003 figures, in certain metropolitan areas the average rush hour driver loses as many as 93 hours per year to travel delayâ€”the equivalent of more than two weeks of work, amounting annually to a virtual "congestion tax" as high as $1,598 per traveler in wasted time and fuel.  Nationwide, congestion imposes costs on the economy of over $65 billion per year,  a figure that has more than doubled since 1993, and that would be even higher if it accounted for the significant cost of unreliability to drivers and businesses, the environmental impacts of idle-related auto emissions, or increased gasoline prices.
Traffic congestion also has a substantial negative impact upon the quality of life of many American families. In a 2005 survey, for example, 52 percent of Northern Virginia commuters reported that their travel times to work had increased in the past year,  leading 70 percent of working parents to report having insufficient time to spend with their children and 63 percent of respondents to report having insufficient time to spend with their spouses.  Nationally, in a 2005 survey conducted by the National League of Cities, 35 percent of U.S. citizens reported traffic congestion as the most deteriorated living condition in their city over the past five years; 85 percent responded that traffic congestion was as bad or worse than the previous year.  Similarly, in a 2001 survey conducted by the U.S. Conference of Mayors, 79 percent of Americans from ten metropolitan areas reported that congestion has worsened over the past five years; 50 percent believe it has become "much worse." 
The Urban Partnership Agreement. In May 2006, the Department announced its Congestion Initiative, a bold and comprehensive national program to reduce congestion on the Nation's roads, rails, runways, and waterways. One major component of the Congestion Initiative is the UPA. Through UPAs, the Department plans to partner with certain metropolitan areas or "Urban Partners" to demonstrate four strategies with a combined track record of effectiveness in reducing traffic congestion. The four strategies are known as the "Four Ts", which are:
1. Tolling: Implementing a broad congestion pricing or variable toll demonstration;
2. Tansit: Creating or expanding express bus services, bus rapid transit (BRT) or other innovative commuter transit services, which would benefit from the free-flow traffic conditions generated by pricing;
3. Telecommuting: Securing agreements from major area employers to establish or expand telecommuting and flex scheduling programs; and
4. Technology Operations: Using cutting edge technological and operational approaches to improve transportation system performance.
In return for their commitment to adopt innovative, system-wide solutions to traffic congestion, the Department, to the maximum extent possible, would support its Urban Partners with the Department's financial resources (including a combination of grants, loans, and borrowing authority), regulatory flexibility and dedicated expertise and personnel.
Congestion Pricing. The most innovativeâ€”and often misunderstoodâ€”component of the UPA is congestion pricing. Congestion pricing leverages the principles of supply and demand to manage traffic. It does this by charging drivers a user fee that varies by traffic volumes or time of day, thus managing highway resources in a manner that promotes free-flow traffic conditions on highways at all times. Congestion pricing achieves free-flow conditions by shifting purely discretionary rush hour highway travel to other transportation modes or to off-peak periods, taking advantage of the fact that many rush hour drivers on a typical urban highwayare not commuters. By removing a fraction of the vehicles from a congested rush hour roadway, congestion pricing enables the system to flow much more efficiently, allowing more cars to move through the same physical space. Similar variable charges have been successfully utilized in other industries (airline tickets, cell phone rates, and electricity, for example), and there is a consensus among economists that congestion pricing represents the single most viable approach to reducing traffic congestion.
Congestion pricing benefits drivers and businesses by reducing delays and stress, increasing the predictability of trip times, and allowing for more deliveries per hour. It benefits mass transit by improving transit speeds and the reliability of transit service, increasing transit ridership, and lowering costs for transit providers. It benefits State and local governments by improving the quality of transportation services without tax increases or large capital expenditures, providing additional revenues for funding transportation, retaining businesses and expanding the tax base. It saves lives by shortening incident response times for emergency responders. And it benefits society as a whole by reducing fuel consumption and vehicle emissions, allowing for more efficient land use decisions, reducing housing market distortions, and expanding opportunities for civic participation.
Congestion pricing is no longer simply a theory; it has demonstrated positive results both in the U.S. and around the world. Successful American applications of congestion pricing include California's SR-91 between Anaheim and Riverside, portions of I-15 outside of San Diego, and Express Lanes on I-394 between downtown Minneapolis and the western suburbs, all of which have enabled congestion-free rush hour commuting and proven popular with drivers of all income levels. Internationally, congestion pricing has yielded dramatic reductions in traffic congestion and increases in travel speeds in Singapore, London, and Stockholm. Notably, a small reduction in vehicles can yield dramatic improvements in traffic, as demonstrated by a British study, which projected that a 9 percent drop in traffic could yield a 52 percent drop in congestion delay.  This same dynamic plays out in metropolitan areas every August, as family vacations lead to a minor decrease in rush hour drivers, which substantially reduces area traffic congestion.
Transit. Another critical congestion-reducing strategy to be incorporated into UPAs is increasing the quality and capacity of peak-period transit service in order to offer a more attractive alternative to automobile travel and to accommodate peak-period commuters who elect to switch to transit in response to the adoption of congestion pricing. Congestion pricing and public transportation convey mutual benefits-road pricing benefits public transportation by improving transit speeds and the reliability of transit service, increasing transit ridership, lowering costs for transit providers, and expanding the source of revenue that may be used for transit, while public transportation benefits road pricing by absorbing commuters who shift their travel from automobile to bus or rail. By replacing congested traffic with free-flowing conditions on major routes, congestion pricing will improve the speed and productivity of current express bus services, making them more attractive to commuters while reducing their operating costs. Reducing congestion will also facilitate rapid deployment of innovative, high-performance BRT operations in major corridors, which require only modest investments in new vehicles and passenger facilities that may be eligible for financial support through the Department's various funding mechanisms. Improving the performance and variety of peak-period transit commuting options through a combination of congestion pricing and limited capital investment will provide significant benefits to current transit riders, while improving transit's effectiveness in reducing peak-period auto travel and providing the expanded passenger-carrying capacity necessary to accommodate shifts to transit commuting induced by the imposition of congestion pricing.
Telecommuting. The third critical congestion-reducing strategy for Urban Partners to adopt is promoting increased use of telecommuting and flexible work scheduling, in order to reduce peak-period commuting and shift some commuting travel to "shoulder" or off-peak hours. Telecommuting can eliminate some peak-period commuting travel by using computer and electronic communications technology to enable certain employees to work from their homes or nearby telecommuting centers on predetermined (often regularly scheduled) workdays, or in some cases on a full-time basis. Flexible work schedules allow employees to shift their commute trips from the peak period to less congested hours. The most promising means to achieve these objectives is for public officials representing Urban Partners to secure agreements from major employers in their metropolitan areas to establish or expand telecommuting programs, and to offer flexible work schedules to the maximum number of their employees. The Department and local transportation planning agencies can offer technical and logistical support to employers for designing, implementing, and monitoring the effectiveness of telecommuting programs and flexible work scheduling.
Technology. Technology makes possible congestion pricing, which differs from traditional tolling in two material respects: (1) Instead of charging a fixed fee, congestion pricing manages traffic by charging drivers a user fee that varies by traffic volumes or time of day, thus balancing supply and demand; and (2) unlike traditional tolling, congestion fees are collected electronically at highway speeds. With variable pricing, technology affords highway managers the flexibility of setting user fees by time of day or "dynamically"â€”by increasing or decreasing fees depending on traffic volumes to maximize throughput and the free flow of traffic. Technology facilitates this variability by enabling the collection of user fees at highway speeds through the use of transponders, Global Positioning Systems (GPS), or cameras. With transponders, or "tags," tolls may be collected as vehicles pass under overhead antennae. With GPS technology, like that used on Germany's autobahns, an in-vehicle device records charges based on the vehicle's location, and periodically uploads a summary of charges to a processing center along with payments. Technology can also provide options for occasional users of these roads to prepay for their trip via kiosks or the internet.
In addition, technological advancements may enhance the quality of transit service deployed to reduce urban congestion. These technology-based improvements may include lane-keeping devices or longitudinal control designed to enhance spatial efficiency on existing highways, precision docking, signal priority systems for buses, contactless fare collection, real-time travel information (bus arrival times, schedules, etc.), advanced traveler information systems, parking alerts and automatic vehicle locator systems.
B. Coordination With Other Congestion Initiative Solicitations
This solicitation is one of three solicitations being issued by the Department in connection with this component of the Congestion Initiative. Published separately in the Federal Register, the other two solicitations are:
1. Solicitation of Applications for Urban Partnerships as Part of the Congestion Initiative. See Applications for Urban Partnership Agreements as Part of Congestion Initiative (71 FR 71231), dated December 8, 2006. Through UPAs, the Department plans to partner with certain metropolitan areas or "Urban Partners" in order to demonstrate strategies with proven effectiveness in reducing traffic congestion.
2. Solicitation of Applications to the Value Pricing Pilot (VPP) Program. See Solicitation of Applications to the VPP Program to be published by the Department later this month in the Federal Register. The VPP Program, as reauthorized by the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU) (Pub. L. 109-59, Aug. 10, 2005, Section 1604 (a)), supports implementation of a variety of pricing-based approaches for managing congestion on highways. The solicitation for the VPP Program will align the program with the Congestion Initiative to support metropolitan areas in implementing broad congestion pricing strategies in the near term.
Please note: Applicants for funding under the ITS-OTMC and/or VPP Programs that also wish to become an Urban Partner must respond to each solicitation separately. However, the Department will accept identical copies of a single application as long as it satisfies the requirements of each relevant solicitation.
C. The Department's ITS Program
Since enactment of the Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA) (102, Dec. 18, 1991), the Department has been administering the ITS Program. A primary objective of the ITS Program is the research, development and operational testing of systems and strategies to reduce congestion in urban areas (SAFETEA-LU, Section 5305). As a result, the program has focused considerable attention on the development of various products oriented towards congestion mitigation, such as electronic toll collection, advanced real-time adaptive traffic signals, transit signal priority systems, innovative surveillance systems, improved incident detection and response systems, advanced transit management systems, and multi-modal traveler information systems. These and other congestion-mitigation strategies have been shown to be very effective in improving overall traffic operations and reducing congestion. In reauthorizing the ITS Program, SAFETEA-LU, section 5306, requires the Secretary to continue to invest in technologies and systems that can aid in reducing metropolitan congestion by not less than five percent by 2010. Given the increasing demand on the Nation's surface transportation system, this ambitious goal will require bold, innovative approaches.
D. The ITS-OTMC Program
Objective. The overall objective of the ITS-OTMC Program is to facilitate, in connection with the Congestion Initiative, the operational testing of innovative and aggressive congestion reduction strategies incorporating ITS systems that can demonstrate measurable reductions in congestion levels in the testing areas. In its discretion, the Department may provide up to $100 million over three years through the ITS-OTMC Program which the Department established as part of the ITS Program. In order to support the objectives of the Congestion Initiative, the Department is seeking applications for the operational testing and evaluation of innovative uses of technology to address congestion on a specific facility or facilities, such as a corridor, an urban area or region. Accordingly, qualifying projects must be expected to directly result in significant, broad, and near-term congestion relief. Projects that the Department will consider may include demand management pricing strategies, advanced traffic signal control, innovative incident detection and management strategies, integrated corridor management, parking management tied to transit service, high occupancy/toll (HOT) lanes, managed lanes, ramp control, lane-keeping devices or longitudinal control designed to enhance spatial efficiency on existing highways, precision docking, signal priority systems for buses, contactless fare collection, real-time travel information (bus arrival times, schedules, emergency information to first-responders, etc.), advanced traveler information systems,  parking alerts or automatic vehicle locator systems.
The Department encourages the submission of project proposals that contain technologies which support pricing strategies. Projects that use technology to support and combine congestion mitigation strategies (such as congestion pricing, expansion of transit capacity, and telecommuting) are encouraged. Project applications should demonstrate that proposed strategies will be implemented in a relatively short time frame (e.g., within 12 to 18 months from the date of procurement).
Project Costs Eligible for Grant Funding. The Department will provide up to the statutorily allowable 80 percent share of the estimated costs of an approved project. Funds available for the ITS-OTMC Program are intended to support the implementation costs of the proposed operational testing. Costs of planning, testing, managing, operating, demonstrating, monitoring, evaluating, and reporting are eligible for reimbursement. The Department will evaluate the allowability of proposed costs in accordance with OMB Circular A-87 Cost Principles for State and Local Governments.
1. Pre-Implementation Planning and Design Costs. Eligible pre-implementation costs include: planning, public participation, consensus building, marketing, impact assessment, modeling, financial planning, development of concepts of operations, technology assessments and specifications, and environmental work and other pre-implementation work that relates to the establishment of a project participating in the ITS-OTMC Program. 
2. Implementation Costs. Eligible costs include those for equipment, installation, managing, operating, demonstrating evaluating, and reporting on the ITS-OTMC Program, including administrative and operational costs, enforcement costs, costs of monitoring and evaluating project operations, and costs of continuing public relations activities during the period of implementation.
Who is Eligible to Apply? Competition is limited to State or local governments or public authorities, such as State departments of transportation, transit authorities and tolling agencies. Although project agreements must be with the aforementioned public entities, those entities may partner with privatetolling authorities, for-profit companies, and non-profit organizations.
E. Contents of Application for ITS-OTMC Program
Below is the minimum set of application requirements. The full set of application requirements will be detailed in the full announcement which will be available by January 15, 2007, on http://www.grants.gov under Funding Opportunity Number DTFH61-07-RA-00111. An application shall consist of the following materials:
Part I: Background, Problem and Technical Approach. This section should include the following information:
1. The name, title, e-mail address and phone number of the person who will act as the point of contact on behalf of the applicant;
2. A description of the partner agency, authority, or authorities requesting funding;
3. The Congressional District or Districts in which the project will be implemented;
4. Identification of the lead agency and a description of the roles for each public agency or agencies that will be responsible for operating, maintaining, and enforcing the operational testing project, if applicable;
5. A management and staffing plan for all partner agencies;
6. A description of the ITS congestion mitigation technologies to be operationally tested;
7. Identification of the facilities that will be covered by the operational test;
8. A plan, including timeline broken down by phases, for implementing ITS congestion mitigation technologies;
9. A description of the anticipated effects of the ITS congestion mitigation technologies on reducing congestion, altering travel behavior, and encouraging the use of multiple transportation modes;
10. Plans for monitoring and evaluating operational testing projects, including plans for collection and analysis, before and after assessment, and long term monitoring and documenting of project effects; 
11. Plans for meeting all Federal, State, and local legal and administrative requirements for project implementation, including relevant Federal-aid planning and environmental requirements;
12. A discussion of previous public involvement, including public meetings, in the demonstration of the proposed ITS operational test to mitigate congestion. Any expressions or declarations of support from public officials, industry, or the public. Future plans for involving key affected parties, coalition building, and media relations, and more broadly for ensuring adequate public and private sector involvement prior to implementation (applicants are encouraged to provide more than just letters of support, but instead reference any implemented policies and/or legislation that will enable successful implementation); and
13. A description of private entities, if any, involved in the project and the applicants arrangements therewith, including any cost sharing or debt retirement arrangements associated with revenues.
Part II: Operational Testing Value. This section should describe the "Operational Testing value" of the proposed project. Operational Testing value is the extent to which the project demonstrates to other states, metropolitan areas, and other jurisdictions the potential of ITS technology to solve congestion problems. Operational Testing value is enhanced by taking advantage of the complementarities among different congestion mitigation strategies (such as congestion pricing, expansion of transit capacity, and telecommuting).
The application should describe how the various parts of the overall congestion reduction strategy interact to enhance their overall effectiveness in reducing congestion. The application should also discuss what elements of the applicant's strategy are novel, and how the applicant believes these elements hold promise to reduce congestion in other metropolitan areas.
Part III: Budget. This section should contain the following information: 
1. A budget itemized by task, phase and funding year;
2. A finance and revenue plan, including a budget for capital and operating costs; a description of all funding sources, planned expenditures, and proposed uses of revenues; and a clear tabulation of Federal funds requested and proposed match. 
F. ITS-OTMC Program Selection Criteria
Proposals will be evaluated based on (i) the project's operational testing value, (ii) the project's estimated impact on congestion, (iii) the project's technical merit, and (iv) the project's management approach and schedule, and (v) whether the jurisdiction in which the project is located has been designated an Urban Partner. The overall budget, as well as the level of funding match being proposed, will also be considered in the evaluation. Priority will be given to acceptable proposals submitted by Urban Partners.
G. Number of Awards and Funding
A maximum total amount of $100 million in Federal funds may be obligated over three years to the selected ITS-OTMC projects. Final budgets will be negotiated upon selection.
Successful applicants will enter into a cooperative agreement with the Department. The cooperative agreement will define the project scope, schedule and budget. Cooperative agreements between the Department and successful applicants will be subject to the Department's regulations at 49 CFR Part 18, Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments, metropolitan and statewide planning requirements located at 23 U.S.C. 135(c)(1), (e)(2)(B), (f)(1)(B)(ii)(I) and (II), (f)(3)(A) and (B), and 49 U.S.C. 5323(1).
(Authority: Pub. L. 109-59).
Issued on: December 12, 2006.
John A. Bobo, Jr.,
Administrator, Research and Innovative Technology Administration.
[FR Doc. E6-21460 Filed 12-15-06; 8:45 am]