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St. Lawrence Seaway: Estimates for the Asset Renewal Program Will Change, and Implementing Best Practices May Improve the Estimates' Reliability

GAO-10-541R Published: May 13, 2010. Publicly Released: May 13, 2010.
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Highlights

The St. Lawrence Seaway is a 50-year-old binational transportation asset jointly operated by the United States and Canada that is used to move cargo between North America and international markets. In 2009, the U.S. Saint Lawrence Seaway Development Corporation (SLSDC), which is responsible for operating and maintaining the two locks and navigation channels in the U.S. portion of the Seaway, initiated a 10-year Asset Renewal Program (ARP) to address long-term needs of the locks, navigation channels, and related facilities and equipment. In 2009, Congress instructed GAO to examine the ARP. Accordingly, GAO examined (1) how the cost estimates have changed from February 2009 to February 2010, (2) the extent to which the ARP covers all asset renewal needs, and (3) the steps U.S. and Canadian authorities have taken to coordinate their asset renewal programs. To conduct this work, GAO reviewed agency program documents, interviewed SLSDC officials, and analyzed ARP estimates and fiscal year 2009 contract data.

Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of Transportation To improve the reliability of cost estimates of the ARP projects, the Secretary of Transportation should direct the SLSDC Administrator to develop a cost-estimating process that follows best practices to better ensure that its estimates are comprehensive, well documented, accurate, and credible.
Closed – Implemented
Of the 41 Asset Renewal Program (ARP) contracts that the U.S. Saint Lawrence Seaway Development Corporation (SLSDC) awarded in FY 2009, GAO found significant variability between SLSDC's estimated costs and the amounts of some awarded contracts. Also, GAO found that SLSDC's estimating process did not fully meet any of the characteristics defined by the GAO Cost Estimating and Assessment Guide (Cost Guide) for producing high-quality cost estimates. Therefore, GAO recommended that SLSDC improve the reliability of its cost estimates by developing a cost-estimating process that follows best practices to better ensure that the estimates are comprehensive, well documented, accurate, and credible. In response, SLSDC reviewed GAO's Cost Guide to identify best practices and issued written guidance for improving the quality and completeness of project cost estimates to its engineers who are responsible for their development. By applying these best practices, SLSDC enhanced the reliability of cost estimates for ARP project contract awards in FY 2010. As a result of SLSDC's improved cost estimating practice, the agency will be able to provide congressional decision makers, and other stakeholders, with more precise information about the ARP's estimated costs and increase their confidence in SLSDC's annual spending plans.

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Topics

AssetsBest practicesBudgetingCost analysisData integrityFacility maintenanceInland waterwaysInternational agreementsInternational cooperationInternational relationsJoint venturesMarine transportationStrategic planningTransportation planningWater transportationCost estimatesProgram implementation