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United States Government Accountability Office: 
GAO: 

Report to the Ranking Member, Committee on Environment and Public 
Works, U.S. Senate: 

December 2013: 

Army Corps of Engineers: 

Cost Increases in Flood Control Projects and Improving Communication 
with Nonfederal Sponsors: 

GAO-14-35: 

GAO Highlights: 

Highlights of GAO-14-35, a report to the Ranking Member, Committee on 
Environment and Public Works, U.S. Senate. 

Why GAO Did This Study: 

For fiscal year 2012, Congress appropriated almost $1.7 billion to the 
Corps for its Civil Works program to construct a wide range of 
projects, including flood control projects. Flood control projects 
require congressional authorization and appropriations. Nonfederal 
sponsors, such as a state or local government, also provide funds. 
When Congress approves a project for construction, it authorizes a 
total cost for the project based on estimates prepared by the Corps, 
and this authorized cost provides the basis for the project’s maximum 
cost. 

GAO was asked to review issues related to flood control projects. This 
report examines (1) the extent to which cost increases occurred and 
the primary factors that contributed to the differences between 
estimated and actual costs, (2) the extent to which the Corps 
communicated with and provided updated information to nonfederal 
sponsors, and (3) Corps guidance on communication with such sponsors 
and ways, if any, to improve such communication. GAO surveyed Corps 
officials on all 87 flood control projects identified by the Corps as 
budgeted for construction in any fiscal year from 2004 to 2012, 
selected 8 for further review covering each Corps division, reviewed 
project documents and Corps communication guidance, and interviewed 
Corps officials and nonfederal sponsors. 

What GAO Found: 

The majority of the U.S. Army Corps of Engineers’ (Corps) flood 
control projects budgeted for construction from fiscal years 2004 to 
2012 experienced cost increases, including inflation. Specifically, 59 
of 87 flood control projects during this period experienced increases 
from their original authorized cost to their current estimated project 
cost or their total expenditures at closeout, according to information 
provided by Corps officials. However, according to a Corps official, 
as of September 2013, no projects had cost increases that exceeded 
their maximum allowable cost as defined by law. Various factors other 
than inflation contributed to cost increases among the 8 projects GAO 
selected for further review. Factors included design changes, less 
than optimal federal funding, underestimated costs, and contract cost 
changes. For example, 6 of the 8 projects had design changes due to 
unforeseen site conditions and changes in design criteria following 
Hurricane Katrina. According to Corps officials, receiving less than 
optimal federal funding increased the costs of 3 of the 8 projects GAO 
reviewed. Corps officials also said that receiving less than optimal 
federal funding meant that 2 projects had to break up their work into 
smaller segments, and 1 project had to extend its completion schedule. 
The Corps has some efforts under way intended to better manage costs. 

The extent to which the Corps communicated with and provided updated 
information to nonfederal sponsors varied among the 8 projects GAO 
selected for further review. Specifically, Corps officials and 
sponsors told GAO that the Corps usually communicated Corps policy 
changes affecting projects by telephone or e-mail as soon as they 
occurred. In addition, the Corps’ communication with the sponsors on 
project scope and design changes was generally effective among the 
projects, according to Corps officials and nonfederal sponsors with 
whom GAO spoke. However, some sponsors told GAO the Corps was less 
timely in providing updated cost information. For example, a 
representative of one sponsor told GAO that the sponsor had not 
received the required quarterly cost report on a regular basis. 

The Corps has guidance regarding communication between the Corps and 
its nonfederal sponsors. Specifically, Corps guidance directs project 
delivery teams to develop a project management plan that includes a 
communications plan. However, GAO found that 3 of the 8 projects GAO 
reviewed did not have a communications plan as called for by guidance. 
Because the communications plan provides a framework for the Corps and 
nonfederal sponsors to establish a communications strategy and 
determine the needs of the project delivery team, without such a plan, 
the Corps may be missing opportunities to assess their communication 
needs. Developing such a plan may help Corps or sponsor staff 
understand the team’s communications needs when they join the project 
delivery team; for projects where there is significant turnover, 
understanding the team’s needs is especially important. 

What GAO Recommends: 

GAO recommends that the Corps take steps to ensure compliance with its 
guidance calling for communications plans. The Department of Defense 
concurred with the recommendation. 

View [hyperlink, http://www.gao.gov/products/GAO-14-35]. For more 
information, contact Anne-Marie Fennell at (202) 512-3841 or 
fennella@gao.gov. 

[End of section] 

Contents: 

Letter: 

Background: 

A Majority of Projects Experienced Cost Increases Due to Various 
Factors: 

The Extent to Which the Corps Communicated With and Provided Updated 
Information to Nonfederal Sponsors Varied: 

Communications Plans Called for by Guidance Were Not Always Developed, 
and Corps Officials and Nonfederal Sponsors Suggested Ways to Improve 
Communication: 

Conclusions: 

Recommendation for Executive Action: 

Agency Comments: 

Appendix I: Objectives, Scope, and Methodology: 

Appendix II: Flood Control Projects Budgeted for Construction, Fiscal 
Years 2004 to 2012: 

Appendix III: Descriptions of Eight Flood Control Projects Selected 
for Further Review: 

Appendix IV: Comments from the Department of Defense: 

Appendix V: GAO Contact and Staff Acknowledgments: 

Tables: 

Table 1: Projects Selected for Further Review from the Corps' Civil 
Works Divisions: 

Table 2: List of Flood Control Projects Budgeted for Construction in 
Any Fiscal Year from 2004 to 2012, by Division and District: 

Figures: 

Figure 1: Locations of the U.S. Army Corps of Engineers' Civil Works 
Divisions and Districts: 

Figure 2: Major Steps in Developing a Flood Control Project: 

Abbreviations: 

ARRA: American Recovery and Reinvestment Act: 

WRDA: Water Resources Development Act: 

[End of section] 

GAO:
United States Government Accountability Office: 
441 G St. N.W. 
Washington, DC 20548: 

December 20, 2013: 

The Honorable David Vitter: 
Ranking Member: 
Committee on Environment and Public Works: 
United States Senate: 

Dear Senator Vitter: 

For fiscal year 2012, the U.S. Army Corps of Engineers (Corps) 
received an appropriation of almost $1.7 billion for its Civil Works 
program to construct a wide range of water resources projects, 
including flood control projects, such as levees, floodwalls, dams, 
and reservoirs. Flood control projects require congressional 
authorization and appropriations. The Corps also typically receives 
funds from each project's nonfederal sponsor, which may be a state, 
tribal, county, or local government or agency. When Congress approves 
a flood control project for construction, it authorizes a total cost 
for the project based on cost estimates prepared by the Corps, and 
this authorized cost provides the basis for the project's maximum 
allowable cost. The Corps must seek new spending authority from 
Congress before spending more than the maximum allowable cost. In an 
era of budgetary constraints, cost increases in Corps flood control 
projects can delay the completion of the projects. 

You asked us to review issues related to the costs of flood control 
projects and the Corps' communication with its nonfederal sponsors. 
This report examines (1) the extent to which cost increases occurred 
in flood control projects budgeted for construction in any fiscal year 
from 2004 to 2012 and the primary factors that contributed to the 
differences between estimated and actual costs; (2) the extent to 
which the Corps communicated with and provided updated information to 
its nonfederal sponsors on changes to Corps policies, project scope 
and design, and estimated versus actual costs; and (3) Corps guidance 
on communication with nonfederal sponsors and ways, if any, suggested 
by Corps officials and sponsors to improve such communication. For 
purposes of this report, a flood control project refers to a project 
with structural features such as levees, floodwalls, channels, dams, 
and reservoirs that is constructed for the purpose of managing the 
risk of flooding along rivers and coastal areas. 

To determine the extent to which cost increases occurred in flood 
control projects and the primary factors that contributed to 
differences between estimated and actual costs, we reviewed relevant 
provisions of the laws, regulations, policies, and procedures 
governing the Corps' process for developing flood control projects and 
generating cost estimates. We also interviewed officials at Corps 
headquarters and its cost engineering center of expertise. The Corps 
identified 87 new or ongoing flood control projects that were budgeted 
for construction in any fiscal year from 2004 to 2012,[Footnote 1] and 
we surveyed Corps officials associated with the projects to obtain 
project cost estimates at key milestones, the current total project 
cost or total expenditures at project closeout, and the primary 
reasons for cost increases. We received responses from Corps officials 
for all 87 projects, for a 100 percent response rate. From those 87 
projects, we selected a non-probability sample of 8 projects that were 
budgeted for construction in any fiscal year from 2009 to 2012 for 
further review.[Footnote 2] This sample included 1 project randomly 
selected from each of 7 divisions[Footnote 3] and 1 project 
judgmentally selected from the New Orleans District that also met our 
selection criteria.[Footnote 4] The 8 projects were the Brays Bayou 
project in Texas, the Little Calumet River project in Indiana, the 
Larose to Golden Meadow project in Louisiana, the Monarch-Chesterfield 
project in Missouri, the Muddy River project in Massachusetts, the 
Napa River project in California, the Roanoke River Upper Basin 
project in Virginia, and the Turkey Creek Basin project in Kansas and 
Missouri. For these 8 projects, we reviewed project documents and 
interviewed Corps officials and representatives of nonfederal sponsors 
to obtain more detailed information about project cost increases and 
the reasons for those increases. 

To determine the extent to which the Corps communicated with and 
provided updated information to its nonfederal sponsors, we 
interviewed Corps district officials and sponsors of the eight 
projects selected for further review to obtain information on the 
communication that occurred on those projects. To examine Corps 
guidance on communication with nonfederal sponsors and ways, if any, 
suggested by Corps officials and sponsors to improve such 
communication, we reviewed Corps civil works guidance on communication 
with nonfederal sponsors, interviewed Corps headquarters officials and 
district officials and sponsors of the eight projects selected for 
further review, and obtained copies of communications plans, if 
available, for the eight projects. Because this is a non-probability 
sample, the experiences and views of Corps officials and sponsors of 
the eight projects are not representative of, and cannot be 
generalized to, all Corps flood control projects. Appendix I contains 
more detailed information on the objectives, scope, and methodology of 
our review. 

We conducted this performance audit from May 2012 to December 2013 in 
accordance with generally accepted government auditing standards. 
Those standards require that we plan and perform the audit to obtain 
sufficient, appropriate evidence to provide a reasonable basis for our 
findings and conclusions based on our audit objectives. We believe 
that the evidence obtained provides a reasonable basis for our 
findings and conclusions based on our audit objectives. 

Background: 

The Corps is the world's largest public engineering, design, and 
construction management agency. Located within the Department of 
Defense, the Corps has both military and civilian 
responsibilities.[Footnote 5] Through its Civil Works program, the 
Corps plans, designs, constructs, operates, and maintains a wide range 
of water resources projects for purposes such as flood control, 
navigation, and environmental restoration. The Civil Works program is 
organized into 3 tiers: a national headquarters in Washington, D.C.; 8 
regional divisions that were established generally according to 
watershed boundaries; and 38 districts nationwide (see figure 1). 

Figure 1: Locations of the U.S. Army Corps of Engineers' Civil Works 
Divisions and Districts: 

[Refer to PDF for image: illustrated U.S. map] 

Depicted on the map: 
Division headquarters location; 
District headquarters location; 
Division boundary; 
District boundary; 
State boundary. 

North Atlantic Division: 
Division headquarters location: New York; 
District headquarters location: Baltimore, Philadelphia, New England, 
New York; Norfolk. 

South Atlantic Division: 
Division headquarters location: Atlanta; 
District headquarters location: Charleston, Jacksonville, Mobile, 
Savannah, Wilmington. 

Great Lakes and Ohio Division: 
Division headquarters location: Cincinnati; 
District headquarters location: Buffalo, Chicago, Detroit, Huntington, 
Louisville, Nashville, Pittsburgh. 

Mississippi Valley Division: 
Division headquarters location: Vicksburg; 
District headquarters location: Memphis, New Orleans, Rock Island, St. 
Louis, St. Paul, Vicksburg. 

Northwestern Division: 
Division headquarters location: Portland; 
District headquarters location: Kansas City, Omaha, Portland, Seattle, 
Walla Walla. 

Southwestern Division: 
Division headquarters location: Dallas; 
District headquarters location: Fort Worth, Galveston, Little Rock, 
Tulsa. 

South Pacific Division: 
Division headquarters location: San Francisco; 
District headquarters location: Albuquerque, Los Angeles, Sacramento, 
San Francisco. 

Pacific Division: 
Division headquarters location: Honolulu; 
District headquarters location: Alaska, Honolulu. 

Sources: GAO representation of U.S. Army Corps of Engineers data; Map 
Resources (map). 

[End of figure] 

Corps headquarters primarily develops policies and provides oversight. 
The Assistant Secretary of the Army for Civil Works, appointed by the 
President, establishes the policy direction for the Civil Works 
program. The Chief of Engineers, a military officer, oversees the 
Corps' civil works operations and reports on civil works matters to 
the Assistant Secretary of the Army for Civil Works. The eight 
divisions, commanded by military officers, coordinate civil works 
projects in the districts within their respective geographic areas. 
Corps districts, also commanded by military officers, are responsible 
for planning, engineering, constructing, and managing projects in 
their districts. Districts are also responsible for coordinating with 
the nonfederal sponsors, which may be state, tribal, county, or local 
governments or agencies. Each project has a project delivery team of 
civilian employees that manages the project over its life cycle. The 
team is led by a project manager and comprises members from the 
planning, engineering, construction, operations, and real estate 
functions. 

In addition, the Civil Works program maintains a number of centers of 
expertise to assist Corps division and district offices.[Footnote 6] 
One of these centers is the Cost Engineering and Agency Technical 
Review Mandatory Center of Expertise located in Walla Walla, 
Washington, which provides technical support and assistance to the 
districts on cost engineering issues, such as developing cost 
estimates and performing mandatory agency technical reviews of cost 
estimates included in all decision documents. 

The Corps' Civil Works program receives funding annually through the 
Energy and Water Development Appropriations Act or an omnibus 
appropriations act. These acts have typically appropriated a sum to 
each civil works appropriation account, including investigations, 
construction, and operation and maintenance, to fund projects related 
to the nation's water resources. The funds appropriated to the Corps 
are "no year" funds, which means that they remain available to the 
Corps until spent. Historically, committee reports accompanying each 
annual appropriations act have specifically listed individual 
investigations, construction, and operation and maintenance projects, 
and the amount of funds designated for each project. 

Continuing Contract Authority: 

Through fiscal year 2005, applicable law and an Army policy allowed 
the Corps to enter into, and commit the federal government for the 
full amount of, contracts that spanned more than one fiscal year 
(called "continuing contracts"), even though the Corps may not have 
received appropriations to cover the full contract amount at the time 
the contracts were awarded. However, beginning with the fiscal year 
2006 Energy and Water Development Appropriations Act, Congress limited 
the use of the Corps' continuing contract authority. In response, the 
Corps developed new continuing contract clauses that limited the 
government's obligations to only the funds available at a specific 
time for the contracts, as opposed to any anticipated future funding, 
and required the contractor to stop work when the available funds were 
exhausted. 

Process for Developing Flood Control Projects: 

The major steps in developing a flood control project are shown in 
figure 2. 

Figure 2: Major Steps in Developing a Flood Control Project: 

[Refer to PDF for image: process illustration] 

Step 1: Local community perceives or experiences a flooding problem. 

Step 2: Local community contacts Corps district office for help: 
* Corps has, or obtains, authorization from Congress to study the 
problem and an appropriation. 

Step 3: Reconnaissance Phase: 
* Corps determines federal interest in a feasibility study and how the 
problem could be addressed; 
* Corps assesses support and interest of nonfederal entities that may 
become sponsors; 
* Federal and local sponsors agree on cost sharing for feasibility 
study; 
* Congress appropriates funds for feasibility study. 

Step 4: Feasibility Phase: 
* Corps further investigates the problem and makes recommendations on 
whether a project is worth pursuing and how the problem should be 
addressed; 
* Corps prepares a total project cost estimate based on the 
recommended plan; 
* Chief of Engineers prepares report recommending project for 
construction. 

Step 5: Preconstruction Engineering and Design Phase (usually overlaps 
with Feasibility Phase): 
* Congress authorizes project for construction; 
* Corps and nonfederal sponsors agree on project implementation and 
cost sharing; 
* Congress appropriates funds for construction. 

Step 6: Construction Phase: 
* Construction is generally managed by the Corps but performed by 
private contractors; 
* Congress may enact scope or cost changes. 

Step 7: Operation and Maintenance Phase: 
* Nonfederal sponsors typically operate and maintain project. 

Source: GAO presentation of U.S. Army Corps of Engineers data. 

[End of figure] 

Usually, the Corps becomes involved in flood control projects when a 
local community perceives or experiences a flooding problem that is 
beyond its ability to solve and contacts the Corps for assistance. If 
the Corps does not have the statutory authority required for studying 
the problem, the Corps must obtain authorization from Congress before 
proceeding.[Footnote 7] Studies have been authorized through 
legislation, typically a Water Resources Development Act (WRDA), 
[Footnote 8] or, in some circumstances, through a committee 
resolution. Next, the Corps must receive an appropriation to study the 
project, which it seeks through its annual budget request to Congress. 

After receiving authorization and an appropriation, studies are 
conducted in two phases: reconnaissance and feasibility. A Corps 
district office conducts a reconnaissance study at full federal 
expense to determine if the problem warrants federal participation in 
a feasibility study and how the problem could be addressed.[Footnote 
9] During this phase, the Corps also assesses the level of interest 
and support from nonfederal entities that may become sponsors. If the 
Corps determines that further study is warranted,[Footnote 10] the 
district office typically seeks agreement from the local sponsor to 
share costs for a feasibility study. The target for completion of the 
reconnaissance phase is 6 to 12 months from initial obligation of 
federal funds to a signed feasibility cost-sharing agreement. 

Cost sharing for feasibility studies for flood control projects is 50 
percent federal and 50 percent nonfederal. The cost of a feasibility 
study is established through negotiation of the project management 
plan, which is an agreement between the Corps and the nonfederal 
sponsor that defines project objectives and project-specific quality 
control procedures. The purpose of the feasibility study is to further 
investigate the problem and make recommendations on whether the 
project is worth pursuing and how the problem should be addressed. 
Corps guidance states that typical feasibility studies should be 
completed in 18 to 36 months. According to the Corps, the district 
office conducts the study and the needed environmental studies and 
documents the results in a feasibility report that includes a total 
project cost estimate based on the recommended plan. The Chief of 
Engineers reviews the report and decides whether to sign a final 
decision document, known as the Chief's Report, recommending the 
project for construction. The Chief of Engineers transmits the Chief's 
Report and the supporting documentation to Congress through the 
Assistant Secretary of the Army for Civil Works and the Office of 
Management and Budget. Congress may authorize the project's 
construction in a WRDA or other legislation.[Footnote 11] When 
Congress approves a flood control project for construction, it 
typically authorizes a total cost for the project based on estimates 
prepared by the Corps. 

Most projects are authorized during the preconstruction engineering 
and design phase. This phase usually overlaps with the feasibility 
phase. The purpose of the preconstruction engineering and design phase 
is to complete any additional planning studies and all of the 
detailed, technical studies and designs needed to begin construction 
of the project. Once the project has been authorized for construction 
and funds have been appropriated, the district enters into a cost-
sharing agreement with the local sponsor. The degree of cost sharing 
required can vary by project but, since the passage of WRDA 1986, 
construction costs of flood control projects can be shared under a 
formula of 65 percent federal and 35 percent nonfederal. The Corps 
seeks funds to construct the project through the annual budget 
process. After Congress appropriates funds, the construction phase can 
begin. Construction is generally managed by the Corps but performed by 
private contractors. During construction, Congress may enact scope or 
cost changes. 

A flood control project can take many years to complete. Once 
construction is completed, the Corps usually turns over operation and 
maintenance of the project to the nonfederal sponsor, which then bears 
the full cost. 

Maximum Project Cost: 

When Congress authorizes a specific amount of money for a project, 
this authorized project cost provides the basis for the project's 
maximum cost. Section 902 of WRDA 1986, as amended,[Footnote 12] 
defines the maximum project cost as the sum of (1) the authorized 
cost, with the costs of unconstructed project features adjusted for 
inflation; (2) the costs of modifications that do not materially alter 
the scope of the project, up to 20 percent of the authorized cost 
(without adjustment for inflation); and (3) the cost of additional 
studies, modifications, and actions authorized by WRDA 1986 or any 
later law or required by changes in federal law. The maximum cost is 
known as the 902 limit. 

As interpreted by the Corps, the 902 limit applies to the following 
types of flood control projects unless the project's authorization 
states otherwise: 

* Projects authorized by WRDA 1986 and any subsequent WRDA or other 
authorizing law. 

* Projects authorized before WRDA 1986 with new construction 
authorized after the act's passage if the project was completely 
reauthorized. If only a project component was authorized after WRDA 
1986, then only that component would be subject to the 902 limit. 

* Projects authorized before WRDA 1986 and modified by any subsequent 
law, unless specified in later legislation. 

Each district with an ongoing construction project is to update the 
902 limit established for the project to account for inflation every 
time a new cost estimate or benefit-to-cost ratio is calculated. If 
the project's estimated costs are approaching the 902 limit, the 
project delivery team may start preparing a post-authorization change 
report to seek an increase in the project's authorized cost.[Footnote 
13] If the project's actual costs reach the 902 limit, construction 
must stop until the project gets a new authorization that increases 
the project's costs and, therefore, its 902 limit. 

A Majority of Projects Experienced Cost Increases Due to Various 
Factors: 

The majority of the Corps flood control projects budgeted for 
construction from fiscal years 2004 to 2012 experienced cost 
increases, including inflation. However, no projects had cost 
increases that exceeded their maximum allowable cost, or 902 limit, as 
defined by law. Various factors other than inflation contributed to 
cost increases among the eight projects we selected for further 
review. The Corps has some efforts under way intended to better manage 
costs. 

At Least Two-thirds of Flood Control Projects Experienced Cost 
Increases: 

At least two-thirds of the 87 flood control projects budgeted for 
construction from fiscal years 2004 to 2012 experienced increases, 
including inflation, from their original authorized cost to their 
current estimated project cost or their total expenditures at 
closeout, according to information provided by Corps officials. 
[Footnote 14] Specifically, 59 projects had cost increases, including 
12 completed projects and 47 that were uncompleted.[Footnote 15] In 
addition, 7 projects had cost decreases, including 3 completed 
projects and 4 uncompleted projects.[Footnote 16] One uncompleted 
project experienced no change from its authorized cost to its current 
total project cost. We were unable to compare costs for 20 projects--3 
completed and 17 uncompleted--because they did not have an authorized 
cost or total expenditures at closeout or were undergoing reevaluation 
and did not have a current total project cost estimate. 

Based on survey responses, of the 59 projects with cost increases, 34 
had maximum allowable cost limits as defined in Section 902 of WRDA 
1986. According to the Corps official responsible for tracking 902 
limits, as of September 2013, none of those 34 projects had cost 
increases that exceeded its 902 limit. In addition, according to 
survey responses, 13 of the 59 projects did not have 902 limits 
because the project (1) was authorized before WRDA 1986, (2) had no 
authorized cost, or (3) had a not-to-exceed limit, to which the 902 
limit does not apply.[Footnote 17] The remaining 12 projects we 
reviewed were completed and, therefore, our survey question regarding 
902 limits did not apply. 

Similarly, survey responses indicated that 29 of the 59 projects with 
cost increases had received at least one additional authorization from 
Congress that increased the project's authorized cost and, therefore, 
its maximum allowable cost if the project was subject to the 902 
limit.[Footnote 18] A Corps flood control project can receive an 
increase in its authorized cost in one of two ways. First, the Corps 
can submit a post-authorization change report with a new total project 
cost estimate to Congress. Based on this report, Congress can then 
reauthorize the project at a higher cost in legislation, such as a 
WRDA. Second, Congress can also reauthorize a project without having 
received a post-authorization change report from the Corps. In either 
case, if the project's actual costs reach its 902 limit before 
congressional action, construction must stop until the project gets a 
new authorization that increases the project's costs. 

Various Factors Contributed to Cost Increases on Eight Projects: 

Corps officials and nonfederal sponsors from the eight projects 
selected for further review identified various factors other than 
inflation that contributed to cost increases on all eight of the 
projects. Some of these projects were impacted by more than one 
factor. Appendix III contains detailed information on the eight 
projects. The factors identified were as follows: 

* Design changes. Design changes due primarily to unforeseen site 
conditions and changes in design criteria following Hurricane Katrina 
contributed to increased costs on six of the projects we reviewed. 
Specifically, on four projects, design changes occurred due to 
unforeseen site conditions. Corps officials on the Turkey Creek 
project said that a tunnel that could not be accessed prior to 
construction was found to be in such poor condition that it had to 
have major rehabilitation work performed. Work to fix the deteriorated 
tunnel cost $10 million more than had originally been estimated. 
[Footnote 19] Corps officials on the Little Calumet project said 
during construction they encountered a former landfill along one 
portion of the river that had not been discovered during the 
preconstruction site investigation. This condition did not provide a 
usable foundation for a levee, so the design had to be changed to 
convert the section from a levee to a sheet pile wall.[Footnote 20] 
These changes increased costs by approximately $645,000, according to 
a post-authorization change report dated March 2012. On the Napa River 
project, after the initial designs were completed in 1997, a vineyard 
was planted next to an area that had previously been identified as a 
flowage easement.[Footnote 21] The Corps had to analyze various 
alternatives and decided to build a levee encircling the vineyard. 
Building this additional levee cost $200,000, but it was able to serve 
as a disposal area for some of the material excavated from the 
project. Finally, on the Roanoke River project, the sponsor said that 
the Corps spent several years redesigning portions of the project 
following the discovery of areas contaminated with hazardous waste. 
Several sections of the project relating to river channels had to be 
dropped as a result of the redesign. 

Other projects we reviewed had to have portions redesigned because the 
Corps changed its design criteria following Hurricane Katrina. 
Specifically, the Corps updated its guidance on the design of I-walls 
used as flood barriers.[Footnote 22] On projects that were either in 
the design stage or under construction, but with unconstructed 
features, officials had to determine whether their designs met the new 
criteria. For example, on two projects we reviewed, portions of the 
project had to be redesigned to comply with the new criteria. Corps 
officials on the Little Calumet project said that costs increased 
significantly because the new criteria required the redesign of three 
sections of the project. However, officials were unable to specify by 
how much costs increased. According to a Corps official, detailed cost 
estimates of the preliminary designs were not prepared. The official 
added that cost estimates used during planning were initial estimates 
and did not provide a reliable basis with which to compare the cost of 
the redesigned sections. Corps officials and nonfederal sponsors of 
the Larose to Golden Meadow project said the changes in design 
criteria could significantly increase the costs to construct elements 
of the project. Corps officials said they are in the process of 
preparing a post-authorization change report and, therefore, could not 
provide an estimate of the increases at the time of our report. Corps 
officials expect the report to be completed in 2014. 

* Less than optimal federal funding. According to Corps guidance, the 
Corps is to include project funding in its budget submission at a 
level that a project can use effectively and efficiently in a given 
fiscal year, which we refer to in this report as optimal federal 
funding. Receiving less than optimal federal funding increased the 
costs of three of the eight projects we reviewed, according to Corps 
officials. Officials for two projects--Napa River and Turkey Creek--
said their projects received less than optimal federal funding, so 
they had to break up the work into smaller segments than initially 
planned. Officials added that doing so was more costly because it 
required contractors to mobilize and demobilize their construction 
equipment and crews more frequently. A Corps official on the Turkey 
Creek project said that the cost of issuing additional contracts could 
be quantified but that the Corps does not specifically track these 
types of costs. The official said that contracts have typically been 
issued in lump sums, so mobilization and demobilization costs have not 
been explicitly broken out. In addition, on the Napa River project, a 
Corps document cited two instances when modifications were required 
for ongoing construction contracts due to a lack of funding, which 
lengthened the construction schedule and increased costs by about $12 
million. Similarly, Corps officials on the Larose to Golden Meadow 
project said that, over the last several years, the project schedule 
had been pushed back because the project had not been receiving 
optimal federal funding. The officials added that over the 41 years 
that the project has been under construction, they had not 
consistently received enough funding, which had resulted in a longer 
completion schedule and increased costs. Although the officials could 
not quantify by how much, they said costs generally increased due to 
inflation and higher material prices. For example, officials said that 
the cost of steel sheet piling increased from $3.25 per square foot in 
1963 to an average $40.00 per square foot from 2006 to 2011. 

* Underestimated costs. Corps officials and nonfederal sponsors of 
four projects said that costs increased on their projects due to 
differences between early Corps cost estimates and those developed 
later during project design. For example, Corps officials on the 
Larose to Golden Meadow project said that on one of the pumping 
plants, they initially estimated a construction cost of $800,000. But 
after additional analysis and geotechnical borings,[Footnote 23] and 
in order to handle the actual site conditions, they redesigned the 
project features, which raised the cost to $10.7 million. On the Muddy 
River project, nonfederal sponsors said that the Corps' early cost 
estimates were too low because the Corps used national averages that 
were lower than what actual costs would be in the New England corridor 
where the project was located. As a result, sponsors said that they 
developed their own estimates for budgeting purposes of $78.5 million. 
However, a Corps official said that the Corps adjusted for regional 
differences for cost estimates prepared during the project. On the 
Brays Bayou project, the nonfederal sponsor said that differences 
between the authorized cost and the cost included in the initial 
project partnership agreement resulted from the Corps' low estimates 
of land acquisition and associated costs, pipeline costs, utilities, 
and bridge adjustments. However, Corps officials attribute all cost 
increases since project authorization to the change from a diversion 
element to a downstream channel structure. Corps officials and 
nonfederal sponsors on the Roanoke River project agreed that the 
project's original cost estimates, which were used for authorization, 
were not realistic. Corps officials said that the feasibility study 
conducted in the mid-1980s was not done to the same level of detail as 
more recent studies. As a result, the cost estimates developed in the 
feasibility study were not as accurate as they could have been. 

Corps officials said they have taken actions to improve cost 
estimates. For example, in 2007, the Corps established a cost 
engineering center of expertise where, according to a Corps official, 
cost estimates in decision documents supporting congressional 
authorization are reviewed for accuracy and, in 2008, the Corps 
updated its cost-estimating guidance. Additional guidance issued in 
draft in 2009 further directs project delivery teams to perform a cost 
and schedule risk analysis for all decision documents for projects 
requiring congressional authorization with a total project cost 
estimate exceeding $40 million, whereby specific cost risk analysis 
methods are to be used to develop contingency. According to a Corps 
official, performing a cost and schedule risk analysis allows the 
project delivery team to identify high-risk areas that could impact a 
project's cost or schedule, as well as areas for early mitigation 
efforts. 

* Changes in contract costs. Corps officials said that differences 
between contract estimates and actual contract awards can lead to cost 
increases. On the Muddy River project, the Corps awarded a contract 
for the first phase of the project that was $8 million higher than the 
Corps' original estimate. A Corps official on the project explained 
that the cost estimates used by contractors in submitting bids for the 
project may have been based on a different set of assumptions 
regarding such factors as the future cost of materials and fuel. The 
Corps official added that this multiyear contract did not have an 
escalation clause for increases in fuel or materials, so the 
contractors likely made different assumptions to reduce their risk. In 
addition, costs could be affected by contract modifications. For 
example, on the Monarch-Chesterfield project, a Corps official said 
that several modifications during construction accounted for increased 
costs of approximately $1.2 million. Some of these modifications 
included additional engineering support for a specialized railroad 
closure structure, further design of a pump station, plan changes to 
locate a fiber optic cable, and design changes to better accommodate 
storm sewers. 

* Natural events. Natural events, including flooding and hurricanes, 
caused damage to two projects--Turkey Creek and Larose to Golden 
Meadow. Repairing the damage added to project costs. For example, a 
Corps official on the Turkey Creek project said that, during the 
construction of the tunnel, the bypass pipe system used to divert the 
flow of Turkey Creek was repeatedly washed out due to flooding and had 
to be replaced, which increased the total project cost by 
approximately $3.5 to $4 million. 

* Continuing contracts. Corps officials said that the policy change 
limiting the use of continuing contracts increased costs on one 
project.[Footnote 24] Corps officials on the Roanoke River project 
said that, as a result of breaking the one contract into smaller 
contracts, costs increased due to the loss of economies of scale. 
However, Corps officials said they could not indicate by how much 
costs increased because costs were not calculated for contracting 
scenarios that did not occur. 

* Additional analysis. The Assistant Secretary of the Army for Civil 
Works required Corps officials on the Monarch-Chesterfield project to 
analyze the probability of the project causing measurable flood 
damages outside the protected area. The additional analysis delayed 
the start of construction for almost 7 years, and the measures to 
address flooding caused by the project added $13 million to the cost 
of the project. 

The Corps Has Some Efforts Under Way Intended to Better Manage Project 
Costs: 

In a memorandum dated February 20, 2013, the Assistant Secretary of 
the Army for Civil Works expressed concerns that civil works projects, 
once authorized, did not appear to be managed for completion within 
approved cost estimates and also identified a need for a systematic 
approach to monitor and manage project cost increases, given continued 
fiscal constraints. The memorandum stated that, without controls to 
closely track and minimize cost increases on a year-to-year basis, 
more projects would be in jeopardy of needing statutory increases in 
their 902 limits. Because of these and other concerns, the Assistant 
Secretary of the Army for Civil Works requested information from the 
Corps that included a proposed plan to manage and control costs in the 
future. In response, in 2013, the Corps formed the Project Cost 
Management Working Group, which identified several actions intended to 
better manage costs, such as requiring formal high-level approval of 
changes above appropriate thresholds and using formal processes and 
industry best practices to reduce overall cost and project duration. A 
Corps official said that the Corps developed an interim measure to 
identify projects that have exceeded their authorized project cost and 
reasons for the cost increase. However, the official said that this 
interim measure focuses on those projects eligible for inclusion in 
the fiscal year 2015 budget submission and projects in the fiscal year 
2013 work plan. The official said that determining how to integrate 
the interim measure into the existing budget and execution processes 
is planned for fiscal year 2014. 

The Extent to Which the Corps Communicated With and Provided Updated 
Information to Nonfederal Sponsors Varied: 

For the eight projects we selected for further review, the extent to 
which the Corps communicated with and provided updated information to 
nonfederal sponsors varied. Specifically, Corps officials and 
nonfederal sponsors told us that the Corps usually communicated 
changes in Corps policy as soon as they occurred. The Corps' 
communication with the nonfederal sponsors on project scope and design 
changes was generally effective among the projects, according to Corps 
officials and nonfederal sponsors we spoke with. However, some 
sponsors told us the Corps was less timely in providing updated cost 
information. The Corps communicated changes to sponsors as follows: 

* Corps policy changes. Seven of the eight projects we reviewed were 
affected by at least one policy change. Corps officials and nonfederal 
sponsors for these projects told us that Corps district officials 
usually notified the sponsors by telephone or e-mail as soon as the 
policy changes were issued. In some instances, Corps officials also 
held meetings to discuss the policy changes with the sponsors. For 
example, Corps officials from one project told us they contacted the 
sponsor directly to communicate the discontinuation of the use of 
continuing contracts. The Corps was ready to award the continuing 
contract but instead had to issue smaller contracts, resulting in time 
delays and increased costs. A representative of one sponsor also 
described instances when he learned about a policy change 
unexpectedly. For example, the sponsor told us that the Corps notified 
him by telephone about a policy change regarding the use of American 
Recovery and Reinvestment Act (ARRA) funds to construct the project's 
recreational features.[Footnote 25] Initially, Corps district 
officials and the sponsor expected to receive ARRA funding for the 
construction of the recreational features. Subsequently, Corps 
headquarters decided to not allow the use of ARRA funds for these 
features. However, based on the expectation that they would receive 
ARRA funding, the Corps district office had already started the 
competitive bidding process for construction of the recreational 
features when the sponsor learned of the decision made by Corps 
headquarters. As a result, the Corps district office had to delay the 
bidding process, and the sponsor had to find alternative funding 
sources for the recreational features. 

* Scope and design changes. Corps officials and nonfederal sponsors 
from six of the eight projects told us they had experienced scope or 
design changes on their projects. According to Corps officials and 
sponsors of these projects, communication regarding project scope or 
design changes was generally effective. For example, Corps officials 
from one project told us they conferred with the sponsor on design 
changes and regularly communicated with the sponsor through meetings 
and telephone calls. The sponsor for this project told us that Corps 
officials had quickly communicated any design changes. In another 
example, Corps officials on the project stated that design changes 
were continually communicated to the sponsor at weekly meetings. When 
there were design disagreements between the Corps and the sponsor, the 
officials said that Corps engineering staff met with the sponsor to 
reach an acceptable solution. 

* Cost changes. Under Corps guidance, the project partnership 
agreement between the Corps and the nonfederal sponsor is to require 
the Corps to provide a quarterly cost report to the sponsor.[Footnote 
26] The report is to include such items as updated projections of 
project costs, the amount of the sponsor's required contribution for 
the next fiscal year, and the total financial obligations of the Corps 
and the sponsor for any additional work incurred. However, sponsors 
for two projects told us the Corps was less timely in providing 
updated cost information. Specifically, a representative of a sponsor 
of one project told us that the sponsor had not received these reports 
on a regular basis and, at times, the Corps provided the report 
several months after the fiscal reporting period had closed. And 
another sponsor told us, in many instances, the Corps gave the sponsor 
a week to provide their share of the funding for cost increases, but 
the sponsor wanted the Corps to notify them of cost changes as soon as 
they occurred. 

Corps officials from two projects told us they also used informal 
methods to communicate cost changes to sponsors. For example, Corps 
officials from one project told us they immediately notified the 
sponsor by telephone or in writing if there were new costs during the 
design and construction of the project. Officials from another project 
said if the sponsor had questions regarding cost changes, the sponsor 
would request a meeting. Sponsors from two projects also described 
informal means of receiving information from the Corps regarding cost 
changes. Specifically, a sponsor from one project told us the Corps 
immediately notified the sponsor about potential cost changes via 
telephone or e-mail, and the changes were discussed at weekly 
meetings. The sponsor of the other project requested to receive cost 
change reports before they were officially approved by the Corps. 

Communications Plans Called for by Guidance Were Not Always Developed, 
and Corps Officials and Nonfederal Sponsors Suggested Ways to Improve 
Communication: 

Corps guidance directs project delivery teams to develop a 
communications plan for their projects, but three of the eight 
projects we selected for further review did not have a communications 
plan. Further, the Corps does not have an effective means for ensuring 
that project delivery teams have, in fact, developed a communications 
plan. Corps officials and nonfederal sponsors we spoke with suggested 
a variety of ways to improve their communication. 

Corps Guidance Calls for Developing Communications Plans, but Some 
Project Delivery Teams Did Not Always Do So: 

Corps guidance, issued in 2009, directs project delivery teams to 
develop a project management plan that includes a communications plan 
for each project phase over the life of a project.[Footnote 27] 
Communications plans should be updated when new stakeholders join a 
project, or whenever deemed necessary, according to a headquarters 
official. The communications plan provides a framework for the Corps 
and nonfederal sponsors to establish a communications strategy and 
determine the needs of the project delivery team--specifically, who 
needs what information, when they will need it, how it will be given 
to them, and by whom. According to Corps guidance, the communications 
plan may include such items as methods for (1) evaluating the 
effectiveness of the project's communication strategy and (2) 
accessing information between scheduled communications. Communications 
plan templates are available on the agency's internal website for use 
by the project delivery teams, according to Corps headquarters 
officials. Each project delivery team also has the flexibility to 
develop a communications plan that meets the specific needs of the 
individual project and its sponsors. 

We found that three of the eight projects we selected for further 
review had not developed a communications plan. A Corps official from 
one of the projects told us a plan was not developed as the district 
office and nonfederal sponsors handled their communications through an 
ad hoc communications group operating during the project's 
construction phase. A Corps official from the second project told us 
the project management plan was drafted in 1990, and the agency did 
not call for a communications plan at the time. However, according to 
a headquarters official, ongoing projects should have developed a 
communications plan after the Corps' guidance regarding communications 
plans was issued in 2009. The project manager for the third project 
was unsure why a plan had not been developed since he had only 
recently been assigned to the project. The sponsors of the three 
projects without a communications plan agreed that a communications 
plan would be beneficial. Specifically, one sponsor noted that 
communication with the Corps was "excellent," but added that 
communication responsibilities are substantial and should be formally 
acknowledged, and another sponsor indicated a communications plan 
would have been helpful when a new project manager was assigned. 

The Corps' regulation on managing its business processes recognizes 
the importance of project management plans in facilitating and 
maintaining effective communication with nonfederal sponsors 
throughout a project's duration.[Footnote 28] Additionally, a Corps 
regulation issued in fiscal year 2000 states that district officials 
are responsible for approving project management plans, and guidance 
states that these should include a communications plan.[Footnote 29] 
However, as stated previously, we found that three of the eight 
projects we selected for further review had not developed a 
communications plan. Because the communications plan provides a 
framework for the Corps and nonfederal sponsors to establish a 
communications strategy and determine the needs of the project 
delivery team, without such a plan, the Corps may be missing 
opportunities to assess their communication needs. For example, a 
communications plan may help Corps or sponsor staff understand the 
team's communications needs when they join the project delivery team; 
for projects where there is significant turnover, understanding the 
team's needs is especially important. 

Corps Officials and Sponsors Offered Suggestions to Improve 
Communication: 

Corps officials and sponsors we spoke with generally acknowledged 
their communication was adequate but offered suggestions on how 
communication could be improved. These suggestions apply to all flood 
control projects and fall into the following three categories: 

* Understand the sponsors' needs. Most of the Corps officials we spoke 
with recognized that sponsors' needs vary. For example, Corps 
officials told us some sponsors had worked with the Corps before and 
had a better understanding of the Corps' processes. Other sponsors had 
not partnered with the Corps previously and were unfamiliar with the 
federal appropriations process and budget cycle, among other things. 
In these cases, Corps officials told us they had to spend more time 
educating the sponsor about the agency and its processes. In addition, 
Corps officials and sponsors told us the high turnover of project 
managers during the life of a project presents a challenge in terms of 
communication. For example, one project we reviewed has had 12 
different project managers since 2004. One sponsor from another 
project told us that communications with the Corps became less 
frequent after a new project manager started. Corps officials from one 
project told us the terms of communication with sponsors are set out 
in the project's communications plan, and it is useful to have this 
information in writing when project managers change. In addition, 
another sponsor suggested face-to-face meetings between the Corps and 
sponsors prior to the start of a project and whenever new officials 
join the project. 

* Communicate more frequently. Some Corps officials and nonfederal 
sponsors told us that more frequent communication would enhance 
overall communication. For example, one sponsor stated that more 
proactive communication by the Corps would have helped the sponsor 
learn sooner that the Corps had overspent on the project's design. The 
sponsor became aware of the Corps' overspending when reviewing a 
financial report from the agency. Another sponsor stated that, with 
more frequent communication, they would expect their input on project 
decisions to increase and that more frequent communication would help 
the Corps' understanding of the project area. Corps officials from 
another project said that more frequent communication with sponsors 
would prevent "surprises." Further, a Corps official and sponsors we 
spoke with said projects benefit from frequent, face-to-face 
communication at the start of a project and throughout the project. 

* Provide more information. Nonfederal sponsors and Corps officials 
suggested communication could improve if the Corps provided more 
information about the project. For example, Corps officials and a 
sponsor from one project said that, in addition to the quarterly cost 
reports, the Corps sends letters to the sponsors explaining the 
reasons for any cost increases. Corps officials from another project 
said that sponsors liked to periodically receive by e-mail a one-page 
summary that includes updates on the project's status and costs. A 
sponsor told us the Corps should respond when sponsors provide input 
or ask for information. For example, the sponsor told us the Corps 
sent a letter asking the sponsor to pay its share of a cost but did 
not provide a description of the cost. However, the sponsor said it 
cannot just pay what the Corps asks. Instead, it needs documentation 
of how local money is spent. 

Corps guidance on communications plans includes many of the 
suggestions made by Corps officials and sponsors. For example, the 
guidance directs Corps officials to talk with sponsors to understand 
their information needs and expectations when developing the project's 
communications plan. 

Conclusions: 

The Corps recognizes the importance of having good communication with 
nonfederal sponsors of civil works projects. Guidance calling for 
project delivery teams to develop a communications plan as part of 
their project management plan, and then updating it as needed, 
provides an opportunity for the Corps and the sponsors to assess 
communication needs throughout the project. However, some project 
delivery teams have not developed a communications plan for their 
projects as called for by guidance. Without such plans, the Corps may 
be missing opportunities to assess and improve communication with its 
nonfederal sponsors, especially on projects where there is significant 
turnover of project managers. 

Recommendation for Executive Action: 

To improve communication between the Corps and nonfederal sponsors of 
flood control projects, we recommend that the Secretary of Defense 
direct the Chief of Engineers and Commanding General of the U.S. Army 
Corps of Engineers take steps to ensure that flood control project 
delivery teams comply with agency guidance to develop communications 
plans for flood control projects. 

Agency Comments: 

We provided a draft of this report to the Department of Defense for 
review and comment. In its written comments, reprinted in appendix IV, 
the department concurred with our recommendation. The department 
stated that the Corps recognizes the importance of planning and 
executing communications for flood control projects and will be taking 
steps to address the recommendation. The Corps also provided technical 
comments, which we incorporated as appropriate. 

As agreed with your office, unless you publicly announce the contents 
of this report earlier, we plan no further distribution until 30 days 
from the report date. At that time, we will send copies of this report 
to the Secretary of Defense, the Chief of Engineers and Commanding 
General of the U.S. Army Corps of Engineers, the appropriate 
congressional committees, and other interested parties. In addition, 
the report will be available at no charge on the GAO website at 
[hyperlink, http://www.gao.gov]. 

If you or your staff members have any questions about this report, 
please contact me at (202) 512-3841 or fennella@gao.gov. Contact 
points for our Offices of Congressional Relations and Public Affairs 
may be found on the last page of this report. GAO staff who made key 
contributions to this report are listed in appendix V. 

Sincerely yours, 

Signed by: 

Anne-Marie Fennell: 
Director, Natural Resources and Environment: 

[End of section] 

Appendix I: Objectives, Scope, and Methodology: 

This report examines (1) the extent to which cost increases occurred 
in flood control projects and the primary factors that contributed to 
the differences between estimated and actual costs; (2) the extent to 
which the Corps communicated with and provided updated information to 
its nonfederal sponsors on changes to Corps policies, project scope 
and design, and estimated versus actual costs; and (3) Corps guidance 
on communication with nonfederal sponsors and ways, if any, suggested 
by Corps officials and sponsors to improve such communication. For 
purposes of this report, a flood control project refers to a project 
with structural features such as levees, floodwalls, channels, dams, 
and reservoirs that is constructed for the purpose of managing the 
risk of flooding along rivers and coastal areas. Our work focused on 
flood control projects budgeted for construction in any fiscal year 
from 2004 to 2012 because these projects had gone through the Corps' 
project development processes and had project cost estimates developed 
by the Corps at key milestones. 

To determine the extent to which cost increases occurred and the 
primary factors that contributed to differences between estimated and 
actual costs, we reviewed relevant provisions of the laws, 
regulations, policies, and procedures governing the Corps' process for 
developing flood control projects and generating cost estimates. We 
also interviewed officials at Corps headquarters and its cost 
engineering center of expertise located in Walla Walla, Washington. 
The Corps identified 87 new or ongoing flood control projects that 
were budgeted for construction in any fiscal year from 2004 to 2012. 
We surveyed Corps officials associated with the projects to obtain 
project cost estimates at key milestones, the current total project 
cost or total expenditures at project closeout, if applicable, and the 
primary factors that contributed to cost increases, among other 
things. Because this was not a sample survey, it has no sampling 
errors. However, the practical difficulties of conducting any survey 
may introduce errors, commonly referred to as nonsampling errors. For 
example, difficulties in interpreting a particular question, sources 
of information available to respondents, or entering data into a 
database or analyzing them can introduce unwanted variability into the 
survey results. We took steps in developing the questionnaire and 
collecting and analyzing the data to minimize such nonsampling errors. 
For example, social science survey specialists designed the 
questionnaire in collaboration with GAO staff who had subject matter 
expertise. Then, we pretested the draft questionnaire with a number of 
Corps officials to ensure that the questions were relevant, clearly 
stated, and easy to understand. We received responses from Corps 
officials for all 87 projects, for a 100 percent response rate. For 
the 87 projects, we compared the project's original authorized cost 
and its current total project cost or total expenditures at project 
closeout, if applicable. Twenty projects did not have an authorized 
cost or total expenditures at project closeout, or they were 
undergoing reevaluation and did not have a current total project cost, 
so we could not compare costs for those projects. We were unable to 
quantify the difference between the original authorized cost and the 
current total project cost or total expenditures at project closeout 
for each of the 67 projects we could compare because we determined 
that the survey data were not reliable for that purpose. Specifically, 
Corps guidance provided differing definitions of total project cost, 
and it was unclear from the survey data whether all respondents had 
used the same definition.[Footnote 30] 

From the 87 projects, we selected a non-probability sample of 8 
projects that were budgeted for construction in any fiscal year from 
2009 to 2012 for further review, including 1 project randomly selected 
from each of 7 divisions[Footnote 31] and 1 project judgmentally 
selected from the New Orleans District that met our selection criteria 
of projects budgeted for construction in any fiscal year from 2009 to 
2012.[Footnote 32] We narrowed our selection to projects that were 
budgeted for construction during this period to enhance our ability to 
speak with people who had worked on the projects and were 
knowledgeable about the reasons for cost increases. Table 1 lists the 
8 projects selected for further review. 

Table 1: Projects Selected for Further Review from the Corps' Civil 
Works Divisions: 

Project and location: Brays Bayou, TX; 
Division: Southwestern. 

Project and location: Little Calumet River, IN; 
Division: Great Lakes and Ohio River. 

Project and location: Larose to Golden Meadow, LA[A]; 
Division: Mississippi Valley. 

Project and location: Monarch-Chesterfield, MO; 
Division: Mississippi Valley. 

Project and location: Muddy River, MA; 
Division: North Atlantic. 

Project and location: Napa River, CA; 
Division: South Pacific. 

Project and location: Roanoke River Upper Basin, VA; 
Division: South Atlantic. 

Project and location: Turkey Creek Basin, KS; 
Division: Northwestern. 

Source: GAO analysis of Corps data. 

Note: Because the Pacific Ocean Division had no flood control project 
that was budgeted for construction in any fiscal year from 2009 to 
2012, we did not include it in our review. 

[A] This project is from the New Orleans District, making two projects 
selected for further review from the Mississippi Valley Division. 

[End of table] 

For each project, we interviewed Corps officials and nonfederal 
sponsors, reviewed project documents, and prepared a descriptive 
summary of the project and the reasons for any cost increases. 

To determine the extent to which the Corps communicated with and 
provided updated information to nonfederal sponsors, we interviewed 
Corps district officials and representatives of the sponsors of the 
eight projects selected for further review to obtain information on 
the Corps' communication with, and provision of updated information 
to, the sponsors regarding changes to Corps policies, project scope 
and design, and estimated and actual costs, and analyzed the 
supporting documents they provided. 

To examine Corps guidance on communication with nonfederal sponsors 
and ways, if any, suggested by Corps officials and sponsors to improve 
such communication, we reviewed Corps civil works guidance on 
communicating with its sponsors and interviewed Corps headquarters and 
district officials and representatives of the sponsors of the eight 
projects selected for further review. We also obtained copies of 
communications plans, if available, for the eight projects. Because 
this is a non-probability sample, the experiences and views of the 
Corps officials and sponsors of the eight projects are not 
representative of, and cannot be generalized to, all Corps flood 
control projects. 

We conducted this performance audit from May 2012 to December 2013 in 
accordance with generally accepted government auditing standards. 
Those standards require that we plan and perform the audit to obtain 
sufficient, appropriate evidence to provide a reasonable basis for our 
findings and conclusions based on our audit objectives. We believe 
that the evidence obtained provides a reasonable basis for our 
findings and conclusions based on our audit objectives. 

[End of section] 

Appendix II: Flood Control Projects Budgeted for Construction, Fiscal 
Years 2004 to 2012: 

Table 2 lists the 87 flood control projects in the eight divisions of 
the U.S. Army Corps of Engineers that the agency identified as 
budgeted for construction in any fiscal year from 2004 to 2012. 

Table 2: List of Flood Control Projects Budgeted for Construction in 
Any Fiscal Year from 2004 to 2012, by Division and District: 

Division: Great Lakes; 
District: Chicago; 
Project Name and Location: Des Plaines River, IL. 

Division: Great Lakes; 
District: Chicago; 
Project Name and Location: Little Calumet River, IN. 

Division: Great Lakes; 
District: Chicago; 
Project Name and Location: McCook and Thornton Reservoirs, IL. 

Division: Great Lakes; 
District: Huntington; 
Project Name and Location: Buchanan County, VA. 

Division: Great Lakes; 
District: Huntington; 
Project Name and Location: Dickenson County, VA. 

Division: Great Lakes; 
District: Huntington; 
Project Name and Location: Grundy, VA. 

Division: Great Lakes; 
District: Huntington; 
Project Name and Location: West Columbus, OH. 

Division: Great Lakes; 
District: Louisville; 
Project Name and Location: Indianapolis, White River (North), IN. 

Division: Great Lakes; 
District: Louisville; 
Project Name and Location: Metropolitan Louisville, Beargrass Creek, 
KY. 

Division: Great Lakes; 
District: Louisville; 
Project Name and Location: Metropolitan Louisville, Pond Creek, KY. 

Division: Great Lakes; 
District: Louisville; 
Project Name and Location: Metropolitan Region of Cincinnati, Duck 
Creek, OH. 

Division: Great Lakes; 
District: Louisville; 
Project Name and Location: Mill Creek, OH. 

Division: Great Lakes; 
District: Louisville; 
Project Name and Location: Ohio River Greenway Public Access, IN. 

Division: Great Lakes; 
District: Pittsburgh; 
Project Name and Location: Saw Mill Run, Pittsburgh, PA. 

Division: Mississippi Valley; 
District: Nashville; 
Project Name and Location: Comite River, LA. 

Division: Mississippi Valley; 
District: New Orleans; 
Project Name and Location: Lake Pontchartrain and Vicinity, LA. 

Division: Mississippi Valley; 
District: New Orleans; 
Project Name and Location: Larose to Golden Meadow, LA. 

Division: Mississippi Valley; 
District: New Orleans; 
Project Name and Location: New Orleans to Venice, LA. 

Division: Mississippi Valley; 
District: New Orleans; 
Project Name and Location: Southeast Louisiana, LA. 

Division: Mississippi Valley; 
District: New Orleans; 
Project Name and Location: West Bank and Vicinity, New Orleans, LA. 

Division: Mississippi Valley; 
District: Rock Island; 
Project Name and Location: Loves Park, IL. 

Division: Mississippi Valley; 
District: St. Louis; 
Project Name and 
Location: Alton to Gale Organized Levee Districts, IL & MO. 

Division: Mississippi Valley; 
District: St. Louis; 
Project Name and Location: East St. Louis, IL. 

Division: Mississippi Valley; 
District: St. Louis; 
Project Name and Location: Meramec River Basin, Valley Park Levee, MO. 

Division: Mississippi Valley; 
District: St. Louis; 
Project Name and Location: Monarch-Chesterfield, MO. 

Division: Mississippi Valley; 
District: St. Louis; 
Project Name and Location: St. Louis Flood Protection, MO. 

Division: Mississippi Valley; 
District: St. Louis; 
Project Name and Location: Ste. Genevieve, MO. 

Division: Mississippi Valley; 
District: St. Louis; 
Project Name and Location: Wood River Levee, IL. 

Division: Mississippi Valley; 
District: St. Paul; 
Project Name and Location: Crookston, MN. 

Division: Mississippi Valley; 
District: St. Paul; 
Project Name and Location: Grand Forks, ND - East Grand Forks, MN. 

Division: Mississippi Valley; 
District: St. Paul; 
Project Name and Location: Sheyenne River, ND. 

Division: North Atlantic; 
District: Baltimore; 
Project Name and Location: Lackawanna River, Olyphant, PA. 

Division: North Atlantic; 
District: Baltimore; 
Project Name and Location: Washington, D.C. & Vicinity. 

Division: North Atlantic; 
District: Baltimore; 
Project Name and Location: Wyoming Valley, PA. 

Division: North Atlantic; 
District: New England; 
Project Name and Location: Muddy River, MA. 

Division: North Atlantic; 
District: New York; 
Project Name and Location: Passaic River Preservation of Natural 
Storage Areas, NJ. 

Division: North Atlantic; 
District: New York; 
Project Name and Location: Ramapo River at Oakland, NJ. 

Division: North Atlantic; 
District: New York; 
Project Name and Location: Raritan River Basin, Green Brook Sub-Basin, 
NJ. 

Division: North Atlantic; 
District: Philadelphia; 
Project Name and Location: Molly Ann's Brook at Haledon, Prospect Park 
and Paterson, NJ. 

Division: Northwestern; 
District: Kansas City; 
Project Name and Location: Blue River Basin, Kansas City, MO. 

Division: Northwestern; 
District: Kansas City; 
Project Name and Location: Blue River Channel, Kansas City, MO. 

Division: Northwestern; 
District: Kansas City; 
Project Name and Location: Kansas Citys, MO & KS. 

Division: Northwestern; 
District: Kansas City; 
Project Name and Location: Missouri River Levee System, IA, NE, KS, & 
MO. 

Division: Northwestern; 
District: Kansas City; 
Project Name and Location: Turkey Creek Basin, KS & MO. 

Division: Northwestern; 
District: Omaha; 
Project Name and Location: Antelope Creek, NE. 

Division: Northwestern; 
District: Omaha; 
Project Name and Location: Big Sioux River, Sioux Falls, SD. 

Division: Northwestern; 
District: Omaha; 
Project Name and Location: Missouri National Recreational River, NE & 
SD. 

Division: Northwestern; 
District: Omaha; 
Project Name and Location: Perry Creek, IA. 

Division: Northwestern; 
District: Omaha; 
Project Name and Location: Wood River, Grand Island, NE. 

Division: Northwestern; 
District: Portland; 
Project Name and Location: Mount Saint Helens Sediment Control, WA. 

Division: Pacific Ocean; 
District: Honolulu; 
Project Name and Location: Iao Stream Flood Control, Maui, HI. 

Division: South Atlantic; 
District: Jacksonville; 
Project Name and Location: Arecibo River, PR. 

Division: South Atlantic; 
District: Jacksonville; 
Project Name and 
Location: Cedar Hammock, Wares Creek, FL. 

Division: South Atlantic; 
District: Jacksonville; 
Project Name and Location: Portugues and Bucana Rivers, PR. 

Division: South Atlantic; 
District: Jacksonville; 
Project Name and Location: Rio de la Plata, PR. 

Division: South Atlantic; 
District: Jacksonville; 
Project Name and Location: Rio Guanajibo, PR. 

Division: South Atlantic; 
District: Jacksonville; 
Project Name and Location: Rio Puerto Nuevo, PR. 

Division: South Atlantic; 
District: Savannah; 
Project Name and Location: Oates Creek, Richmond County, GA. 

Division: South Atlantic; 
District: Wilmington; 
Project Name and Location: Roanoke River Upper Basin, Headwaters Area, 
VA. 

Division: South Pacific; 
District: Albuquerque; 
Project Name and Location: Alamogordo, NM. 

Division: South Pacific; 
District: Albuquerque; 
Project Name and Location: El Paso, TX. 

Division: South Pacific; 
District: Albuquerque; 
Project Name and Location: Rio Grande Floodway, San Acacia to Bosque 
Del Apache, NM. 

Division: South Pacific; 
District: Los Angeles; 
Project Name and Location: Los Angeles County Drainage Area, CA. 

Division: South Pacific; 
District: Los Angeles; 
Project Name and Location: Santa Ana River Mainstem, CA. 

Division: South Pacific; 
District: Los Angeles; 
Project Name and Location: Tropicana And Flamingo Washes, NV. 

Division: South Pacific; 
District: Sacramento; 
Project Name and Location: American River Watershed (Common Features), 
CA. 

Division: South Pacific; 
District: Sacramento; 
Project Name and Location: American River Watershed (Folsom Dam 
Modifications), CA. 

Division: South Pacific; 
District: Sacramento; 
Project Name and Location: American River Watershed (Folsom Dam 
Raise), CA. 

Division: South Pacific; 
District: Sacramento; 
Project Name and Location: Guadalupe River, CA. 

Division: South Pacific; 
District: Sacramento; 
Project Name and Location: Kaweah River, CA. 

Division: South Pacific; 
District: Sacramento; 
Project Name and Location: Marysville/Yuba City Levee Reconstruction, 
CA. 

Division: South Pacific; 
District: Sacramento; 
Project Name and Location: Mid-Valley Area Levee Reconstruction, CA. 

Division: South Pacific; 
District: Sacramento; 
Project Name and Location: Napa River, CA. 

Division: South Pacific; 
District: Sacramento; 
Project Name and Location: Sacramento River Bank Protection Project, 
CA. 

Division: South Pacific; 
District: Sacramento; 
Project Name and Location: Sacramento River, Glenn-Colusa Irrigation 
District, CA. 

Division: South Pacific; 
District: Sacramento; 
Project Name and Location: South Sacramento County Streams, CA. 

Division: South Pacific; 
District: Sacramento; 
Project Name and Location: Stockton Metropolitan Flood Control 
Reimbursement, CA. 

Division: South Pacific; 
District: Sacramento; 
Project Name and Location: Tule River, CA. 

Division: South Pacific; 
District: Sacramento; 
Project Name and Location: Upper Sacramento Area Levee Reconstruction, 
CA. 

Division: South Pacific; 
District: Sacramento; 
Project Name and Location: West Sacramento, CA. 

Division: South Pacific; 
District: Sacramento; 
Project Name and Location: Yuba River Basin, CA. 

Division: South Pacific; 
District: San Francisco; 
Project Name and Location: Petaluma River, CA. 

Division: Southwestern; 
District: Ft. Worth; 
Project Name and Location: Johnson Creek, Upper Trinity Basin, 
Arlington, TX. 

Division: Southwestern; 
District: Ft. Worth; 
Project Name and Location: Lower Colorado River Basin (Wharton/Onion), 
TX. 

Division: Southwestern; 
District: Galveston; 
Project Name and Location: Brays Bayou, Houston, TX. 

Division: Southwestern; 
District: Galveston; 
Project Name and Location: Sims Bayou, Houston, TX. 

Division: Southwestern; 
District: Tulsa; 
Project Name and Location: Arkansas City, KS. 

Source: U.S. Army Corps of Engineers. 

[End of table] 

[End of section] 

Appendix III: Descriptions of Eight Flood Control Projects Selected 
for Further Review: 

This appendix presents information provided by the U.S. Army Corps of 
Engineers on the eight flood control projects we selected for further 
review. Dollars have not been adjusted for inflation. 

Brays Bayou, Houston, Texas: 

The Brays Bayou project is located in the metropolitan area of 
Houston, in Harris County, Texas. The project consists of channel 
improvements and storm water detention basins on upper Brays Bayou and 
a diversion channel in the lower portion of Brays Bayou. The 
nonfederal sponsor is the Harris County Flood Control District. 

Brays Bayou is part of the Buffalo Bayou Watershed. The feasibility 
report for Buffalo Bayou and Tributaries was completed in 1988, and 
the Chief of Engineers' report was signed in 1990. The Chief's Report 
gave a total cost for the Buffalo Bayou and Tributaries project of 
$727,364,000 and also broke out the costs for each of the six 
tributary plans within the project. The estimated total project cost 
for Brays Bayou was $299,133,000. The Water Resources Development Act 
(WRDA) of 1990 authorized the Buffalo Bayou and Tributaries project 
for construction at a total cost of $727,364,000, but it did not 
specify an amount for Brays Bayou. 

Funds to initiate preconstruction engineering and design were 
appropriated in fiscal year 1990. In 1995, the project was divided 
into two separable elements--a detention (upstream) element and a 
diversion (downstream) element. Subsequently, section 211(f) of WRDA 
1996 authorized Brays Bayou as a demonstration project, which gave the 
nonfederal sponsor the lead in designing and constructing the project 
and let it be reimbursed for the federal share of the completed 
discrete segments approved by the Corps. In 1996, the nonfederal 
sponsor obtained approval from the Corps to do a general reevaluation 
of the diversion element in the lower portion of Brays Bayou because 
of regulatory restrictions on diversions to other watersheds. In the 
meantime, the sponsor proceeded with the detention element in the 
upstream portion. Funds to initiate construction were appropriated in 
fiscal year 1998. The project cooperation agreement for the design and 
construction of the detention element was signed in March 2000, and 
construction began in June 2000. The sponsor's general reevaluation 
report of an alternative to the diversion separable element was 
approved in April 2009. The project cooperation agreement was amended 
in March 2010 to combine the detention element and an alternative to 
the diversion element into one project. The total estimated project 
cost presented to Congress for fiscal year 2012 was $571,660,000. 

Larose to Golden Meadow, Louisiana: 

The Larose to Golden Meadow project is located in Lafourche Parish, 
Louisiana, about 28 miles southwest of New Orleans and about 25 miles 
inland from the Gulf of Mexico along Bayou Lafourche. The project 
consists of a ring levee approximately 48 miles in length along both 
banks of Bayou Lafourche, enlargement of about 3 miles of an existing 
levee, and construction of two floodgates that will be used for 
navigation and hurricane protection purposes. The nonfederal sponsor 
is the South Lafourche Levee District. 

Larose to Golden Meadow was originally called the Grand Isle and 
Vicinity project. The Chief's Report for Grand Isle and Vicinity 
estimated the total cost of Larose to Golden Meadow at $7,857,000.The 
Flood Control Act of 1965 authorized the Grand Isle and Vicinity 
project for construction at a federal cost of $5.5 million, but it did 
not specify the name Larose to Golden Meadow. Funds to initiate 
preconstruction engineering and design were appropriated in fiscal 
year 1967. The first general design memorandum was issued in 1972, and 
funds to initiate construction were appropriated in fiscal year 1972. 
A local cooperation agreement was provided by the South Lafourche 
Levee District and accepted on behalf of the United States in 1973, 
and construction started in 1976. The project did not have any 
modifications until WRDA 1999 authorized the conversion of the Leon 
Theriot floodgate into a lock, conditional on a determination that the 
conversion was technically feasible, environmentally acceptable, and 
economically justified; such a determination was documented in an 
evaluation report approved in 2005. 

Section 7015 of WRDA 2007 required the Corps to do a 120-day study to 
see what modification would be required to provide the level of 
protection necessary to achieve the certification required for a 100-
year level of flood protection in accordance with the National Flood 
Insurance Program. The study, which was completed in May 2009, 
estimated that the project was as much as 10 feet below the new 100-
year level of risk reduction, and it would cost $681 million to bring 
the project to the authorized elevations described in the 1972 general 
design memorandum. A post-authorization study, which was started in 
May 2009, is to determine the cost to complete the project, including 
bringing the project into compliance with the new design criteria 
issued following Hurricane Katrina and other updated requirements. 
Since the Larose to Golden Meadow project was authorized before WRDA 
1986, the Section 902 cost limit of WRDA 1986 does not apply. However, 
the project delivery team, under its own initiative, was conducting a 
902 review as well. The total estimated project cost presented to 
Congress for fiscal year 2012 was $474 million. 

Little Calumet River, Indiana: 

The Little Calumet River project is located in a primarily urban area 
in northwest Indiana, stretching westward to the Indiana-Illinois 
state line. The project includes the construction of levees, 
floodwalls, and closure and appurtenant structures. The nonfederal 
sponsor is the Little Calumet River Basin Development Commission. 

A design study of the area was authorized by WRDA 1976. A general 
design memorandum for phase 1 was prepared in 1982 that included a 
number of preliminary designs to address flooding in the area. A 
feature design memorandum detailing the design recommended by the 
district engineer was completed in 1983. The July 1984 Chief's Report 
sent to Congress recommended the district engineer's design. However, 
WRDA 1986 authorized a design that was referenced in the 1982 Phase I 
General Design Memorandum, but not recommended in the Chief's Report, 
at a total project cost of $87.1 million. There was no feasibility 
study because the requirement to conduct a feasibility study started 
in the 1990s. A general design memorandum was signed in April 1989, 
the local cooperation agreement was signed in August 1990, funds to 
initiate construction were appropriated in fiscal year 1990, and 
construction started in September 1990. 

In May 1999, Corps headquarters approved a post-authorization change 
report to extend the eastern end of the project area, and the project 
cooperation agreement was amended to include the scope change. In 
2000, the district prepared a post-authorization change report to 
modify the project and increase the authorized project cost to $198 
million, and the project cooperation agreement was amended again. 
Congress reauthorized the project at $198 million in the Energy and 
Water Development Appropriations Act of 2006. Another post-
authorization change report to increase the authorized cost was 
prepared in March 2012. The report had been approved by the Assistant 
Secretary of the Army for Civil Works and was awaiting congressional 
action in September 2013. In January 2013, the project's cost to date 
was $248 million. 

Monarch-Chesterfield, Missouri: 

The Monarch-Chesterfield project is located along the right bank of 
the Missouri River in the vicinity of Chesterfield, Missouri. The 
project consists of raising the existing levees on the Missouri River 
and Bonhomme Creek along with relief wells, a sheet pile cutoff, and 
berms to control underseepage. Other features include roadways, 
railroad and roadway closure structures, retaining walls, relocations, 
pumping stations with gravity structures, and environmental mitigation 
features. The nonfederal sponsor is the Monarch-Chesterfield Levee 
District. 

The feasibility report, which was approved in December 2000, estimated 
the total project cost to be $58,090,000. The project was authorized 
for construction in WRDA 2000 at a total cost of $58,090,000, subject 
to the completion of a favorable Chief's Report by December 31, 2000. 
The Chief's Report was signed on December 29, 2000. Funds to initiate 
preconstruction engineering and design were appropriated in fiscal 
year 2001, and funds to initiate construction were appropriated in 
fiscal year 2004. The project cooperation agreement was signed in 
February 2008, and construction began the same year. The total 
estimated project cost presented to Congress for fiscal year 2012 was 
$68,688,000. 

Muddy River, Massachusetts: 

The Muddy River is a 3.5 mile urban waterway located in eastern 
Massachusetts in the communities of Boston, Brookline and Newton. The 
flood control portion of the project primarily involves dredging 
sediment to increase conveyance, removal and replacement of undersized 
culverts, and restoration of streambanks. It also has an environmental 
component. Phase I involves installing larger box culverts, day-
lighting two sections of the river, and modifying a bridge and culvert 
headwall for flood risk management. Phase II involves dredging of the 
river for both flood risk management and ecosystem restoration. The 
nonfederal sponsors are the Commonwealth of Massachusetts, the city of 
Boston, and the town of Brookline. 

After severe flooding in 1996, the city of Boston, the town of 
Brookline, the Commonwealth of Massachusetts, the Federal Emergency 
Management Agency, and nonprofit community groups developed a 
comprehensive plan to identify and address issues affecting the river, 
which was issued in January 1999. Local interests went to their 
congressional delegation and convinced them of the need for a project. 
WRDA 1999 directed the Corps to evaluate the study prepared by local 
interests to determine whether the plans were in the federal interest, 
among other things, and report back to Congress no later than June 30, 
2000. The Corp's draft evaluation report, dated June 2000, determined 
that the plan met some of the requirements of a federal project. 
However, continued Corps involvement would require preparation of a 
decision document that evaluated alternatives and met other 
requirements. Based on the Corps' draft evaluation report, the project 
was authorized for construction in WRDA 2000. Once the project was 
authorized, the Corps had to prepare the required decision documents. 
The final report with an estimated total project cost of $62,830,000 
was submitted to Corps headquarters for approval in September 2003. 
Corps headquarters prepared a Chief's Report, which it forwarded to 
the Assistant Secretary of the Army for Civil Works in December 2003. 
In July 2004, the Assistant Secretary of the Army for Civil Works 
expressed support for the flood control component of the project but 
determined that the ecosystem restoration elements had a unit cost 
that was too high to support as a federally implementable plan and 
therefore were not justified. However, the Assistant Secretary of the 
Army for Civil Works later agreed that the Corps would build the 
environmental restoration portion of the project if Congress provided 
funding for that purpose. 

Funds to initiate preconstruction engineering and design were 
appropriated in fiscal year 2001. Funds to initiate construction were 
first appropriated in fiscal year 2003, and the project partnership 
agreement was signed in 2011. The first construction contract was 
awarded on August 10, 2012. However, there was a bid protest, so 
construction did not begin until 2013. The total estimated project 
cost presented to Congress for fiscal year 2012 was $79,800,000. 

Napa River, California: 

The Napa River project is located in the city and county of Napa, 
California. The Napa River drainage basin is just north of San Pablo 
Bay and approximately 40 miles northeast of San Francisco, California. 
The project consists of channel modifications to provide the project 
area with 100-year level of flood protection from Napa River and Napa 
Creek. Channel modifications include overbank excavation, vertical 
walls, floodwalls, levees, bridges, pumping stations, and flowage 
easements. The project also includes recreation trails and major 
ecosystem restoration. The nonfederal sponsor is the Napa County Flood 
Control and Water Conservation District. 

The Napa River Flood Control Project was authorized by the Flood 
Control Act of 1965 substantially in accordance with the Chief's 
Report at an estimated cost of $14,950,000. The project received an 
additional authorization in WRDA 1976 to modify the scope of the 
project to include Napa Creek. The project has no 902 limit because it 
was authorized before WRDA 1986. 

Funds to resume preconstruction engineering and design were 
appropriated in fiscal year 1989. A general reevaluation report was 
prepared in 1995. The Final Supplemental General Design Memorandum, 
dated October 1998, was approved May 1999. Funds to initiate 
construction were appropriated in fiscal year 2000, the project 
cooperation agreement was signed in February 2000, and construction 
began in December 2000. A Section 215 agreement for construction of a 
portion of the project by the nonfederal sponsor was signed in January 
2002, and the sponsor completed construction in fiscal year 2002. A 
limited reevaluation report, which was approved in August 2005, 
determined that, based on the benefit-cost ratio, the project still 
had a federal interest. The project cooperation agreement was amended 
in 2007, which provided the acceleration of the sponsor's required 
cash contribution to the government. The total estimated project cost 
presented to Congress for fiscal year 2010--the last year the project 
was budgeted for construction--was $402,770,000. 

Roanoke River Upper Basin, Virginia: 

The Roanoke River Upper Basin project is located on the Roanoke River 
in the city of Roanoke, Virginia. The project includes about 6.2 miles 
of channel widening, flood proofing at two locations, training walls 
to prevent floodwater intrusion into low areas along the river, and a 
flood warning system. Recreation facilities consist of a 9.5-mile 
recreation trail along the project reach, trail access, and parking 
areas. The nonfederal sponsor is the city of Roanoke. 

The Chief's Report was finalized in 1985, and the project was 
authorized by WRDA 1986 at a total project cost of $21 million. Funds 
to initiate preconstruction engineering and design were appropriated 
in fiscal year 1986. A general design memorandum, dated May 1989 and 
approved in January 1990, was the basis for design and construction of 
the project. The Energy and Water Development Appropriations Act, 
1990, reauthorized the project for $29 million. The project started 
receiving construction funds in 1990, and a local cooperation 
agreement was signed in June 1990. A supplement to the local 
cooperation agreement was signed in January 1993 to reimburse the 
sponsor for flood proofing the hospital. The Energy and Water 
Development Appropriations Act, 2004, increased the authorized total 
cost to $61.7 million. In 2005, the first construction contract was 
awarded for work on the flood control features. The project was 
physically completed in October 2011. The Roanoke Logperch, which is 
located in the project area, was listed as an endangered species in 
1989 and will be monitored until at least 2015. Once the monitoring is 
completed, the project will be fiscally closed out. 

Turkey Creek Basin, Kansas and Missouri: 

Turkey Creek Basin drains Johnson and Wyandotte Counties in Kansas, as 
well as a portion of Kansas City, Missouri. Turkey Creek parallels 
Interstate Highway 35 for much of its length and flows through a 
tunnel into the Kansas River approximately 3 miles upstream of the 
Missouri River. The project consists of approximately 10,000 feet of 
urban channel modification, a levee section, the raising of two 
railroad bridges, 12.7 acres of riparian planting, and four large 
drainage interceptor pipelines. The nonfederal sponsors are the city 
of Kansas City, Missouri, and the Unified Government of Wyandotte 
County and Kansas City, Kansas. 

Major flooding occurred in the Turkey Creek Basin in 1977 and 1993. 
The feasibility study was completed in December 1998, and the project 
received its first funding for preconstruction engineering and design 
in 1998. The Chief's Report was finalized in 1999, and the project was 
authorized by WRDA 1999 at a total project cost of $42,875,000. Major 
flooding occurred again in 1998, so the Corps conducted a general 
reevaluation from 1999 to 2003 to determine whether any modifications 
needed to be made based on information from the 1998 flood. Based on 
the findings of the general reevaluation, the project expanded 
significantly, and costs increased to $73 million. The Consolidated 
Appropriations Resolution, 2003, modified the project to authorize 
construction substantially in accordance with recommendations in a 
final Chief's Report if a favorable report was completed by December 
31, 2003, at a total project cost of $73,380,000. The act also gave 
the Corps the authority to give the sponsor credit for its share of 
the costs of construction work completed before the project 
cooperation agreement was signed if the work was integral to the 
project. A final Chief's Report was completed in December 2003. 
Preconstruction engineering and design was completed in September 
2004. Funds to initiate construction were first appropriated in fiscal 
year 2004, and a project cooperation agreement was signed in July 2006 
following completion of tunnel work by the sponsor. In 2009, the Corps 
finished the tunnel construction started by the sponsor. The total 
estimated project cost presented to Congress for fiscal year 2012 was 
$108 million. 

[End of section] 

Appendix IV: Comments from the Department of Defense: 

Department of The Army: 
Office of The Assistant Secretary: 
Civil Works: 
108 Army Pentagon: 
Washington, DC 20310-0108: 

October 30, 2013: 

Ms. Anne-Marie Fennell: 
Director: 
Natural Resources and Environment: 
U.S. Government Accountability Office: 
441 G Street, NW: 
Washington, DC 20548: 

Dear Ms. Fennell: 

This is the Department of Defense (DoD) response to the GAO Draft 
Report, GAO-14-35, "Army Corps of Engineers: Cost Increases in Flood 
Control Projects and Improving Communication with Nonfederal 
Sponsors," dated October 2013 (GAO Code 361407). 

DoD concurs with the recommendation of the GAO report, and will be 
taking steps to address the recommendation. Specifics regarding this 
initiative are enclosed. DoD appreciates this opportunity to address 
the GAO recommendation for improving communication between the Corps 
of Engineers and its nonfederal sponsors. 

Very truly yours, 

Signed by: 

Jo-Ellen Darcy: 
Assistant Secretary of the Army (Civil Works): 

Enclosure: 

GAO Draft Report Dated October 2013: 
GAO-13-35 (GAO Code 361407): 

"Cost Increases In Flood Control Projects And Improving Communication 
With Nonfederal Sponsors" 

Department Of Defense Comments To The GAO Recommendation: 

Recommendation 1:. To improve the communication between the Corps
and nonfederal sponsors of flood control projects, we recommend that the
Secretary of the Defense direct the Chief of Engineers and Commanding 
General of the U.S. Army Corps of Engineers take steps to ensure that 
flood control project delivery teams comply with agency guidance to 
develop communication plans for flood control projects. 

DoD Response: Concur. The U.S. Army Corps of Engineers (USACE)
recognizes the importance of planning and executing communications for 
flood control projects. Effective communications is integrated into 
our policies, regUlations, internal controls, and project management 
business processes. The framework and requirements within our business 
processes have already been established for effective communications. 
USACE will re-evaluate the effectiveness of its policies, regulations, 
and project management business processes seeking opportunities to 
improve them. In addition, the USACE will ensure each project is 
compliant with its primary regulation, ER 5-1-11 (USACE Business 
Process) through the USACE Managers' Internal Control Program,
which is part of the Annual Statement of Assurance requirement to the 
Congress. ER 5-1-11 outlines five operating principles governing all 
work performed by USACE: 

* Plan for success and keep commitments; 

* Measure quality with the goals and expectations of the customer in 
mind; 

* Build effective communications into all activities and processes; 

* Use best practices and seek continual improvement; and 

* Use corporate automated information systems consistently and 
accurately. 

[End of section] 

Appendix V: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

Anne-Marie Fennell, (202) 512-3841 or fennella@gao.gov. 

Staff Acknowledgments: 

In addition to the individual named above, Vondalee R. Hunt (Assistant 
Director), Elizabeth Beardsley, Heather Dowey, Cindy Gilbert, Susan 
Malone, and Kyle Stetler made key contributions to this report. 
Important contributions were also made by Cheryl Arvidson, Dan Royer, 
and Kiki Theodoropoulos. 

[End of section] 

Footnotes: 

[1] Our work focused on flood control projects budgeted for 
construction in any fiscal year from 2004 to 2012 because these 
projects had gone through the Corps' project development processes and 
had project cost estimates developed by the Corps at key milestones. 

[2] We selected projects that were budgeted for construction from 
fiscal years 2009 to 2012 to enhance our ability to speak with Corps 
officials and nonfederal sponsors who had worked on the projects and 
were knowledgeable about the reasons for cost increases. 

[3] The Corps' Civil Works program has eight divisions. However, the 
Pacific Ocean Division had no flood control project that was budgeted 
for construction in any fiscal year from 2009 to 2012. 

[4] The congressional requester expressed interest that we include one 
of the projects in the New Orleans District in our sample. We included 
a project that met our selection criteria. 

[5] The Corps' Military program provides, among other things, 
engineering and construction services to other U.S. government 
agencies and foreign governments. This report only discusses the Civil 
Works program. 

[6] The centers of expertise assist the Corps divisions and districts 
in the planning, design, and technical review of civil works projects. 
The Corps established the centers to consolidate expertise, improve 
consistency, reduce redundancy, and enhance institutional knowledge, 
among other things. For a full list of the Corps' centers of 
expertise, see [hyperlink, 
http://www.usace.army.mil/about/centersofexpertise.aspx]. 

[7] If the Corps has previously performed a study in the geographic 
area for a similar purpose, a new study can be authorized by a 
resolution. If the Corps has not previously investigated the area, the 
study needs to be authorized through legislation. 

[8] Congress enacted WRDAs in 1974, 1976, 1986, 1988, 1990, 1992, 
1996, 1999, 2000, and 2007. Each WRDA authorized numerous projects and 
programs. 

[9] The cost of a reconnaissance study generally is limited to 
$100,000. 

[10] The Corps estimated that about 20 percent of all reconnaissance 
studies result in a recommendation to conduct a feasibility study. 

[11] The Corps estimated that about 75 percent of all feasibility 
studies result in a project authorized for construction. 

[12] Pub. L. No. 99-662 § 902, 100 Stat. 4183 (1986), codified as 
amended at 33 U.S.C. § 2280 (2013). For purposes of this report, we 
use "section 902 of WRDA 1986" to refer to this provision as amended. 

[13] A post-authorization change report is a decision document that 
may be required when project features have changed significantly or if 
the estimated costs have changed substantially after authorization. 

[14] We were unable to quantify the difference between the original 
authorized cost and the current total project cost or total 
expenditures at project closeout because we determined that the survey 
data were not reliable for that purpose. For more information, see 
appendix I. 

[15] An uncompleted project refers to a project that was authorized 
for construction but not yet completed at the end of fiscal year 2012. 

[16] Costs decreased because certain features had been eliminated due 
to project changes or design improvements, project scope had been 
reduced, or construction schedules had been accelerated. 

[17] In some instances, Congress authorized projects for construction 
at a total cost not to exceed a specified amount, meaning that the 
cost was capped and could not be adjusted for inflation or other 
reasons. 

[18] We also identified three flood control projects for which, as of 
fiscal year 2012, the Corps was in the process of developing post-
authorization change reports to seek an increased authorized cost for 
the project. 

[19] In this report, cost increases are presented in the dollar values 
for the years in which they were determined, not in constant dollars. 

[20] A sheet pile wall is a row of piles made from timber, steel, or 
prestressed concrete that are driven into the ground to retain earth 
or prevent water seepage. 

[21] According to the Corps, a flowage easement is privately owned 
land on which the Corps has acquired the perpetual right, power, 
privilege, and easement permanently or occasionally to overflow, 
flood, and submerge land in connection with the operation and 
maintenance of a water resources development project. 

[22] U.S. Army Corps of Engineers, Engineer Circular 1110-2-6066, 
Engineering and Design: Design of I-Walls, April 1, 2011. The circular 
defines an I-wall as "a slender cantilever wall, embedded in the 
ground or in an embankment that rotates when loaded and is thereby 
stabilized by reactive lateral earth pressures." 

[23] Geotechnical boring refers to drilling holes in the ground to 
obtain information on soil conditions. 

[24] The Corps modified its policy to conform with a change in law 
prohibiting the agency from entering into a contract that commits an 
amount in excess of the amount appropriated for that project, plus any 
amounts available from carryover or reprogramming; the policy's effect 
is that the Corps can no longer commit the federal government for the 
full amount of contracts that span more than 1 fiscal year. The Corps 
may still enter into continuing contracts, but in doing so, it only 
commits to contractor earnings for the first fiscal year. 

[25] ARRA provided funds to states and localities, among other things. 
ARRA's stated purposes include to preserve and create jobs and promote 
economic recovery; assist those most impacted by the recession; 
provide investments needed to increase economic efficiency by spurring 
technological advances in science and health; invest in 
transportation, environmental protection, and other infrastructure 
that will provide long-term economic benefits; and stabilize state and 
local government budgets. Pub. L. No. 111-5, 123 Stat. 115 (2009). 

[26] For example, the 2009 model agreement includes a provision 
stating that the Corps will provide a quarterly cost report to the 
nonfederal sponsors. According to a Corps headquarters official, this 
provision was added to the model agreement following WRDA 1988. 

[27] U.S. Army Corps of Engineers, PROC 2000, PMP Development, May 
2009; U.S. Army Corps of Engineers, REF 8005G, PMP Content, May 2009; 
and U.S. Army Corps of Engineers, REF 8006G, Communications Plan, May 
2009. This guidance applies to all Corps projects, including flood 
control projects. 

[28] U.S. Army Corps of Engineers, Engineer Regulation 5-1-11, U.S. 
Army Corps of Engineers Business Process, rev. Nov. 1, 2006. 

[29] U.S. Army Corps of Engineers, Engineer Regulation 1105-2-100, 
Planning Guidance Notebook, Apr. 22, 2000; U.S. Army Corps of 
Engineers, REF 8006G, Communications Plan, May 2009. 

[30] The Corps planned to issue updated guidance on cost definitions 
in September 2013. 

[31] The Corps' Civil Works program has eight divisions. However, the 
Pacific Ocean Division had no flood control project that was budgeted 
for construction in any fiscal year from 2009 to 2012. 

[32] The congressional requester expressed interest that we include 
one of the projects in the New Orleans District in our sample. We 
included a project that met our selection criteria. 

[End of section] 

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