UNITED STATES GENERAL ACCOUNTING OFFICE WASHINGTON, DC 20548 COMMUNITY AND ECONOMIC DEVELOPMENT DIVISION si\$” Lieutenant General J W Morris Chief of Engineers Corps of Engineers Department of the Army "$d- Washlngton, D.C. Dear General Morris We recently completed a survey of the Corps of Englneers' operation and maintenance actlvltles on the lntracoastal waterways (Code 08007) The survey was performed at the Corps' dlstrlct offlces In Norfolk, Vrrglnla, Wllmrngton, North Carolina, and New Orleans, Loulslana We also had dlscusslons with Corps headquarters offlclals In Washington, D.C. We ldentlfled the following three areas In the survey which offer potential savings to the Corps --consolldatlon of small dredging Jobs to obtain less costly contract rates, --more extensive dredging, where feasible, to reduce both long term costs and dredging frequency, and --more efflclent scheduling of Corps-owned sldecastlng dredges These areas are not included in our follow-on review of the operation of Corps facllltles on the Atlantic Intracoastal Waterway (Code 08016) Although we have not attempted to validate the expected savings, this letter summarizes our observations on these matters bringing them to your attention for any actlon or follow-up you feel 1s warranted BACKGROUND In carryrng out rts responslblllty for constructing, operating, and malntalnlng Federal river and harbor proJects, the Corps each year determines the capabllltles of active projects to serve current navlgatlon requlre- ments Following such determlnatlons, requests are made for authorlzatlon and funds to perform maintenance dredging The actual volume of waterway traffic and the avallablllty of funds govern the extent of maintenance work undertaken According to Corps headquarters offlclals, Corps-wide expenditures for maintenance dredging amounted to $167 mllllon for fiscal year 1976 CONSOLIDATION OF SMALL DREDGING JOBS Corps’ pollcles require that dredging be done in the most economical manner One method available to the Corps, which may afford savings, 1s the consolldatlon of small dredging Jobs into larger contracts Corps drstrlct personnel stated that larger dredging contracts usually result In less costly rates per cubic yard The contractors view the larger con- tracts as being more attractive because they can better schedule and plan their work, and can avoid Idle time and expensive set up costs The districts we visited seemed to place different emphases on con- solldatlon of contracts For instance, the Wllmlngton District let only two contracts for under 300,000 cubic yards from June 1968 through 1975, whereas the Norfolk District let 29 contracts under 300,000 cubic yards during the same period We noted that some dlstrlcts are maklng efforts to consolidate small -jobs For example, the Wilmington District recently completed dredging 12 locations along a 43-mile stretch of the Atlantic Intracoastal Waterway under one contract The contract provided for dredging 763,000 cubic yards at a cost of $581,000 The $ 76 per cubic yard rate for this contract 1s substantially less than the per cubic yard rate would have been had the contracts not been combined An example of the cheaper rates obtainable by consolldatrng contracts occurred on a waterway along the coast of Vlrglnla The Norfolk District has dredged or 1s planning to dredge 12 different shoaling areas on the waterway One of these areas, Fisherman’s Inlet, was dredged in October 1976 at a total cost of $63,629 for 23,195 cubic yards or $2 74 per cubic yard Another area 1s Bradford Bay and the dredging contract was let in February 1977 On the basis of the Corps estimated volume of 61,700 cubic yards, the total cost will be $122,930 or $1 99 per cubic yard Finally, the Norfolk District intends to let one contract for the other 10 areas sometime around July 1977 The Corps estimates the total volume to be 450,000 cubic yards and the total cost to be $510,000 for a cost per cubic yard of $1 13 Thus, larger contracts offer a lower cubic yard rate and result in monetary savings We analyzed Norfolk‘s 50 dredging contracts which were let during the 1968 through 1975 period To depict the magnitude of potential savings, we arbitrarily selected as an ideal cubic yard rate the average rate for -2- Norfolk's 21 contracts which exceeded 300,000 cubic yards The analysis, on page 4, illustrates (1) the decreased per cubic yard rate of the larger contracts and (2) the potential for a decrease in costs of $1 3 mllllon for the other 29 contracts Slmllar savings may be possible If contracts are combined In the future Dlstrlct offlclals agreed that the principle of consolldatlon has merit but stated It 1s not always feasible because of emergencies or fundlng constraints Moreover, it 1s not always economical to combine dredging contracts at sites which require different types of dredging equipment or which are not In close proxlmlty These offlclals also told us that consolldatlng contracts would not exclude any contractor because of size and that the contractors prefer the larger contracts Although we do not advocate any particular volume as ideal and we realize that some dredging contracts may not be feasibly combined, our survey indicates that the practice of comblnlng dredging contracts, whenever possible, could be cost-beneficial to the Government and should be considered In preparing contract bid packages MORE EXTENSIVE DREDGING While Corps' policy provides for "advance maintenance" dredging, particularly in fast shoaling areas, our survey lndlcated that some dlstrlcts might not be optlmlzlng this practice to achieve savings The principle of more extensive dredging (deeper, wider, and for longer distances) in some areas requlrlng repetitive dredging could increase the time intervals between dredgings We realize, however, that some areas refill quickly regardless of the extensiveness of the dredging Nevertheless, Corps district offlclals stated that, where feasible, "advance maintenance" dredging offers the following types of benefits and savings --reduce moblllzatlon and demoblllzatlon costs for dredges, --encourage better contract prices because of larger dredging volume, as discussed previously, and --decrease Corps' efforts nn locating and acquiring disposal sites, and costs for studies associated with dredging and disposing of dredged materials Equipment moblllzatlon and demobllrzatron costs may be quite extensive These expenses included moving, setting up, and dlsmantllng equipment Between 1968 and 1976, the Norfolk District admlnlstered 51 -3- Actual Ideal cost cu yds Potential Cubic yards Con- Volume Contract per rate Ideal decrease dredged tracts (cu yds > costs cu yd (note a) cost in costs 50,000 or less 9 247,361 $ 405,526 $1 60 $ 63 $ 155, 837 $ 249,689 50,001 - 100,000 7 558,306 715,219 1 41 63 351,733 363,486 100,001 - 150,000 6 700,934 601,206 92 63 441,588 159,618 I c 150,001 - I 300,000 L 1,477,902 1,499,954 86 63 931,078 568,876 Totals =29 2,984,503 $3,221,905 $1 08 $ 63 $1,880,236 $1,341,669 a/Based on average cost of Norfolk's 21 contracts which exceeded 300,000 cubic yards during the period ‘ n contracts with equipment moblllzatlon and demoblllzatlon costs totaling $1,283,000 Theoretically each dredging Interval which could be avolded could result in savrngs of about $25,000 (based on Norfolk's average cost for moblllzatlon and demoblllzatlon) Environmental costs associated with dredging 1s another area In which savings may be realized In the past, the Corps has frequently dredged many waterway sections to the required depth wlthout extensive advance maintenance dredging This practice mlnlmlzed the quantity of material requiring disposal and llmlted the amount of research efforts needed to satisfy envlronmental requirements Corps district offlclals told us that the costs for research to comply with envlronmental requlre- ments are currently about the same for small as well as large dredging Jobs Increasing the interval between dredging Jobs through more ex- tensive dredging may reduce some of the costs The environmental costs for the Corps' South Atlantic Dlvlslon totaled about $3 mllllon for fiscal years 1974-76 for operation and maintenance proJects The Norfolk Dlstrlct currently has a proJect underway which may serve as an example of this prlnclple 'Ihis prolect involves extensive advance maintenance dredging for several shoaling areas on the Rappahannock River The river has many isolated shoaling areas along Its length which have different fill rates. Some of these areas have required dredging about once every 3 years In the current proJect Norfolk 1s studying whether the more extensive dredging could prolong the dredging Interval to 6 or 7 years and thus result In long-term savings We noted many areas that require frequent repetltlve dredging Within the Norfolk Dlstrlct, there are 12 areas which are dredged every 1 to 5 years The following table summarizes the number of frequently dredged areas on the lntracoastal waterway for the Wllmlngton Dlstrlct Areas requiring Dredging intervals repetitive dredging (months) 4 6 9 12 10 24 11 36 10 48 -1 60 --45 -5- In addltlon, the Wllmlngton Dlstrlct dredges 28 other areas not on the lntracoastal wfiterway as frequently as every 6 months If the Wllmlngton Dlstrlct were able to perform advance maintenance dredging on some of the above areas requlrlng repetitive dredging, long-term savings may result Corps offrclals at the drstrlcts we visited agreed that more exten- sive dredging should prolong the dredging interval and would result in reduced maintenance costs However, they polnted out that further lmple- mentatlon of this prlnclple would necessitate a higher lnltlal outlay of funds This Initial outlay should be compared to the long-term savings possible when considering more extensive dredging UTILIZATION OF CORPSDREDGES We reported to the Congress In May 1972 on selected aspects of the Corps' dredging actlvltles and problems One issue In the report was the low utlllzatlon of nonhopper dredges owned and operated by the Corps The report noted that the sldecastlng dredge Schwelzer was transferred to the Wllmlngton Dlstrlct from New Orleans to Improve its utlllzatlon Our survey at Wllmlngton showed that this dredge 1s still not being used extensively The Wllmlngton Dlstrlct operates another sldecastlng dredge, the Merritt Both dredges are generally operated on a one-shift, 40-hour week basis and cost over $700,000 annually The followrng summarizes their productive use Percentage of time used Fiscal year productively for dredging (note a) Schwelzer Merritt 1973 14 0 1974 88 17.2 1975 76 14 6 &/Based on 24-hour day, 365 days per year Non-productive time for the dredges consists prlmarlly of lay time (non- work hours), loss due to natural elements, transferring between Jobs, traveling to and from wharf or anchorage, and minor operating repalrs During fiscal years 1973-75, the Merritt spent about 1,100 hours traveling between North Carolina, Florida, South Carolina and New Jersey While the Merritt spends some time dredging emergency shoals, Improved scheduling might reduce transit time if areas could be dredged in geo- graphical sequence. A typical dredging operational pattern for the Merritt 1s shown below. -6- Approximate Dredging period Location distance traveled Sept 3-30, 1972 New River Inlet, N.C. Start Oct. 1-29 Barden Inlet, N.C. North-65 mrles Oct. 30 - Nov 4 Wllmlngton, N.C. South-120 miles Nov. 5 - Dee 12 St Lucre Inlet, Fla South-625 miles Dee 13 - Jan 6 Core Creek, N C. North-715 miles Jan 7 - Feb 1 Oregon Inlet, N.C. North-125 miles Feb 2 - Mar 10 New River Inlet, N.C. South-175 miles Mar 11-27 Ponce de Leon Inlet, Fla South-525 miles Mar 28 - May 12 Murrells Inlet, S.C. North-400 mxles May 13 - June 10, 1973 New Bern, N.C. North-215 miles TOTAL MILES 2,965 From the above table, It appears that opportunltles may exist to plan dredging patterns more systematically Although these sites and others have a predictable need for dredging, we recognize that some sites have to be dredged at different times than scheduled because of emergencies A Corps offlclal stated that the Schwelzer 1s primarily used to dredge only two areas annually because its deeper draft restricts its efficient usage to fewer areas This contributes to the Schwelzer's lower utilization lhe areas the Schwelzer dredges are more subJect to storms which also causes lower utlllzatlon. Despite the apparent low productlvlty of these dredges, we were told that they are required for sites which can only be dredged by sidecasters, and that private contractors do not have this type of dredge Nevertheless, more efflcrent dredging patterns might increase the productive time of these dredges Increased operating hours (beyond 40 hours a week) offers another posslblllty for lncreaslng the productive time - 7- In summary, we belleve that potentral may exist for reducing operation and maintenance costs through consolldatlng dredging Jobs Into fewer and larger contracts, maklng more extensive use of advance maintenance dredging, and improving utllzzatlon of Corps-owned dredges We would appreciate any comments you may have on these areas In partl- cular regard to (1) whether you believe they offer potential for savings, (2) an estimate of the amount of Corps-wide savings, if any, and (3) any actions or plans you may have to pursue these matters further. We are sending copies of this report to the Secretary of Defense, Secretary of the Army, and the Chief, ll.S Army Audit Agency We appreciate the cooperation received during our survey and we wrll be glad to meet wrth you or your representatives to discuss these matters If you have any questlons, p lease call Mr Carl Bannerman of my offlce at 693-8287 Sincerely yours, Assrstant Director -8-
Maintenance Costs on the Atlantic Intracoastal Waterway Can Be Reduced
Published by the Government Accountability Office on 1977-03-18.
Below is a raw (and likely hideous) rendition of the original report. (PDF)