oversight

Water Resources: The Corps of Engineers' Revised Review Process for Proposed Civil Works Projects

Published by the Government Accountability Office on 1990-09-13.

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

The Corps of
Engineers’ Revised
Review Process for
Proposed Civil Works
Projects

                 142188
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                                            ._- .._-___   -____




                                                                  Z”   .’   ,,
      United States
GAO   General Accounting Office
      Washington, D.C. 20548

      Resources, Community, and
      Economic Development Division

      B-239976
      September 13,199O

      The Honorable Quentin Burdick
      Chairman, Committee on Environment
        and Public Works
      United States Senate
      The Honorable Daniel Patrick Moynihan
      Chairman, Subcommittee on Water Resources,
        Transportation and Infrastructure
      Committee on Environment and Public Works
      United States Senate
      The Honorable Glenn Anderson
      Chairman, Committee on Public Works
        and Transportation
      Houseof Representatives
      The Honorable Henry J. Nowak
      Chairman, Subcommitteeon Water Resources
      Committee on Public Works and Transportation
      Houseof Representatives

      This is the first in a series of reports addressingthe mandate in Section
      44 of the Water ResourcesDevelopment Act of 1988 that GAO review the
      managementand administration of the U.S. Army Corps of Engineers’
      civil works program. This report describesrecent changesto the Corps’
      review processfor feasibility studies that the Corps usesto recommend
      congressionalauthorization for constructing proposed civil works water
      resource projects. This report also examines the Office of Management
      and Budget’s (OMB) role in the review processunder Executive Order No.
      12322, as amended.
      The Water ResourcesDevelopment Act of 1986 made a major change in
      financing the Corps’ water resourceprojects by generally requiring local
      sponsorsto share in the cost of planning and constructing civil works
      projects. The 1986 act also directed the Corps to study and expedite its
      planning and constructing capabilities while complying with applicable
      law. In responseto the act, the Corps revised its review processfor fea-
      sibility reports on proposed projects to more efficiently review the pro-
      posals and thus be more responsiveto local sponsors.




      Page I                                       GAO/RCRD-90-188Water Resources
                   Beginning in June 1988, the Corps changedits traditional method of
Results in Brief   sequential review and approval of feasibility reports on proposed
                   projects by requiring issue resolution conferences(IRCS) that provide for
                   early input by the Corps’ field and Washington levels on the proposed
                   projects and by conducting the detailed technical and policy reviews by
                   the Washington-levelreview elements concurrently. Designedto consid-
                   erably shorten the Corps’ final reviews, these changesare supported by
                   the newly established Washington Level Review Center (WLRC) which
                   coordinates the concurrent review process.The new processdid not
                   eliminate any review levels but added the concurrent review steps early
                   in the Washington processand mandated the IRCS. The changeswere an
                   attempt to meet an overall 6-month time frame goal for final decisions
                   by the Washington-levelreview elements as opposedto the averageof
                   3.7 years for the old process.
                   Becauseof the relatively short time the new processhas been in effect,
                   no projects had completed the processwhen we completed our field-
                   work. For the first project reviewed under the new process,we deter-
                   mined that the IRC helped to familiarize the Washington-levelreview
                   elements with the project and identified and resolved various issues
                   early on. The detailed concurrent review at the Washington level raised
                   certain technical and policy concernsand resolved them before the
                   Washington-levelreview elements made their final decisionson the pro-
                   posed project. The progress of the proposal did not meet the new goals
                   for each step nor the final 30-day goal for the Assistant Secretary of the
                   Army for Civil Works to review the feasibility report and submit it to
                   the Congressfollowing OMB'S review. As of March 1990, the report had
                   been with OMB for 6 months. The Corps’ proposed fiscal year 1991
                   budget includes funds to complete the pre-construction engineering and
                   design of the project.
                   Executive Order 12322 provides OMB with broad criteria and wide dis-
                   cretion to determine whether a proposed project should be forwarded to
                   the Congresson the basis of technical, economic,environmental, and
                   administration policy. For proposed projects received during a 3-year
                   period ending in October 1989, mostly before the new procedures were
                   implemented, OMB'S review was performed within 30 days for only 4 of
                   26 reports, Of the 26 reports, 17 were sent to the Congressfor authori-
                   zation after OMB reviews ranging from 1 to 15 months. Six reports had
                   been in review from 1 to 18 months, and 2 had been rejected. OMB said
                   that the promptness of these reviews dependsmostly on administration
                   budget priorities and staff work load.



                   Page 2                                        GAOpuXD-2@122   Water ltemowm
  .
                        B-239976




                        The Corps’ $3 billion civil works program is the largest water resources
Background              development and managementprogram of the federal government. The
                        current program concentratesprimarily on planning, constructing, and
                        operating flood control and navigation projects that may also have
                        water supply, recreation, and hydroelectric power benefits.

                        A proposed civil works construction project begins when a citizen or
                        community identifies a water resource problem to the Congresswhich,
                        in turn, refers it to the Corps. If the Corps’ initial report of facts about
                        the problem shows further study is warranted, the Congressmay
                        authorize and fund planning for the proposed project.
                        The first step in the planning processis a federally funded reconnais-
                        sancestudy that results in a preliminary determination that a federal
                        project is a plausible solution given that it meets Corps criteria and
                        there is a local sponsor. With a positive reconnaissancereport and the
                        local sponsor’s agreementto pay 60 percent of estimated costs,the
                        Corps then conducts a feasibility study to develop a specific solution to
                        the problem and an environmental assessmentof the proposed project.
                        The feasibility study addressesthe technical, economic,and environ-
                        mental aspectsof a water resourceneed and results in a feasibility
                        report.

                        Each feasibility report on a proposed project is reviewed at key points
                        as it proceedsthrough the planning processwhich culminates in the
                        Assistant Secretary of the Army for Civil Works recommending to the
                        Congresswhether or not it should be authorized for construction. The
                        organizational levels reviewing each proposed project are the Corps’ dis-
                        tricts and divisions, and at the Washington level-the Board of Engi-
                        neers for Rivers and Harbors (Board), the Chief of Engineers,and the
                        Assistant Secretary. After the Washington-level approval of the project
                        and OMB’S clearance,the Assistant Secretary recommendsit to the Con-
                        gress.(Seeapp. I.)

                        Spurred by the 1986 act that mandated cost sharing by local sponsorsof
Review Process          water resource projects, the Assistant Secretary and the Chief of Engi-
Revised in Responseto   neers started initiatives to create a more efficient review process.The
the 1986 Act            new processinvolves the Washington level early in the processand
                        requires concurrent Washington-level reviews to avoid problems and
             Y
                        delays when processingthe final feasibility report. (Seeapp. II.)




                        Page 3                                          GAO/RCED-9O-lf3t3
                                                                                       Water Resources
                                                                                                     1
                         0229P76




                         The Chief of Engineers also established the WLIZC in 1989 to participate
                         in the IRCS,perform a detailed technical and policy review, and to coor-
                         dinate the new concurrent review processestablished in 1988, Staffed
                         by former employeesof the Board, WLRCis comprised of engineering,
                         economic,environmental, and other experts who participate in the IRC,
                         perform a detailed review of each proposed project for the Washington-
                         level review elements, and coordinate these levels-the Board, the Chief
                         of Engineers, and the Assistant Secretary.

                         As already stated none of the sevenprojects in the processhad been
                         completely reviewed at the end of our field work. Two of the sevenwere
                         under review by the Assistant Secretary, three were in the early stages
                         of Washington-levelreview, and two were on hold for more information
                         or coordination.


Early Input of           Before the 1986 act, the Corps did not mandate an IRC on every proposed
Washington-Level         project, and the IRC, held at the discretion of the field or headquarters
                         management,did not involve all Washington-levelreview elements. An
Reviewers Through IRCs   IRC is now required to be held during the feasibility phase before the
                         Corps’ district and division offices approve the draft feasibility report
                         for Washington-level review. According to the Corps, mandatory IRCS
                         will acceleratethe project development processby ensuring that the
                         proposed project is acceptableto all levels as early as possible in the
                         planning process.
                         The IRC is held in the field before the final feasibility report is prepared
                         in order to provide the district with input from the Washington level on
                         its concernsand problems with the proposed project. The IRC partici-
                         pants try to resolve the problems before the report is submitted for
                         Washington-level review. One important changewith the mandatory
                         IRCS is the added input of the Assistant Secretary’s staff, who can com-
                         ment on whether the proposed project meets the technical and policy
                         criteria of the administration.

                         For the Bayou La Batre, Alabama, proposed project, the first reviewed
                         under the new procedures,the IRC resulted in guidance for the district to
                         resolve several economic,technical, and policy issuesbefore the pro-
                         posed project reached the Washington level. For example, an issue
                         raised was that a cost analysis of bulkhead replacements was lacking.
                         The district later provided the analysis in the final feasibility report.
                         (Seeapp. III.)



                         Page 4                                         GAO/RCEDfIO-188   Water Reeources
                         B-222276




Concurrent Washington-   The Corps’ prior review processrequired each level to review a pro-
Level Reviews            posed project before the proposal was forwarded to the next review
                         level. To reduce the time consumedby this process,the Corps now
                         requires a concurrent detailed review at the beginning of the Wash-
                         ington-level processto enable the Corps to meet its time frame goals for
                         the consecutivefinal approvals.
                         The new review processadds two steps to the old: the concurrent Wash-
                         ington-level reviews and VVLRC’S briefing of the Washington-level repre-
                         sentatives before they make final decisionson the project. The new
                         processincludes time frame goals for the various steps in the process
                         and a 180-day goal for the entire review process,which starts with the
                         division engineer’stransmittal of the feasibility report for Washington-
                         level review and ends with the Assistant Secretary’s transmittal of the
                         report to the Congress.In contrast to the 180-day goal, a 1988 Corps
                         analysis of proposed projects that were processedunder the traditional
                         procedures calculated an averageelapsedtime of 3.7 years for the
                         Washington-level reviews. Figure 1 comparesthe traditional levels of
                         review with the new process.




                         Page 6                                       GAO/RCED-SO-188   Water Resources
Flgun 1: Tnditionrl vr. Concumnt                                   Rwiew ot Foa#ibillty                        Report8


   TradItional

      Dlvlrbn                                                                                                                                                      Chief’s                Assistant                 OMB                      Aa3tant
     wfw@&a                                                                                                                               Review &                Review &                                         Provides                 secretary
                                                                                                                                           Report                  Report                R~iEitt~                 Comment5                  Transmit5
                                                                                                                                                                                                                                             Regort to
                                                                                                                                                                                          Report to                                         COIIQRISS
                                                                                                                                                                                           OMB
                                                                                                                                                                                              I                                                     I
            Tmdltbns~ review - Cope oabulated averages:
            ( . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 186 days . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . )(.308 days.)(..586    days-.)( . .. .. . .. . .260 days . . .. . . .. .. ...)


  conourrent

       Dtuirbn                          WLRC                                                                                               Board                   Chief’s               Assistant                  OMB                     Assistant
      Wd’                                                                                                                                 Review &                Review &               Secretary                 Provides                 Secretary
                                   :$!z                                                                                                    Report                  Report                Reviews &                Comments                  Transmit5
                                  Wash. Leveb                                                                    WLRC                                                                    Transmit5                                           Report to
                                                                            WLRC Review                         Briefing                                                                 Report to                                          Congress
                                                                                                                of Wash.                                                                   OMB
                                                                                                                 Levels
                                                                                                                 Reps.                                                                            I


            Conourrent review go&:
            ( . . . . . . . . . . . . . . . . ..*...*... 90 days          . . . . . . . . . . . . . . . . . . . . . . . . KS...30 days . . . . .)(.JOdays..)(               . . . . . . . . . . . . . . . . . . . .30 days ....... .....-.......)




                                                                                   The Corps followed the new processfor the Bayou La Batre proposed
                                                                                   project. During concurrent review of this proposal, observations from
                                                                                   the WLRC’S site field trip, additional data and analysesprovided by the
                                                                                   district to answer review comments on the magnitude of shipbuilding
                                                                                   and fishing benefits, and data on the environmental impact of the pro-
                                                                                   ject were considered.~LRCcomments and other issuesraised by the
                                                                                   Washington-level review elements,except the local sponsorship issue,
                                                                                   were resolved before the feasibility report on the proposed project was
                                                                                   sent to the Board, the Chief of Engineers, and the Assistant Secretary
                                                                                   for their final review and approval. Although this proposed project
                                                                                   exceededthe Corps’ review goals by 6 months when it was sent to the
                                                                                   Assistant Secretary, it was a significant improvement on the past
                                                                                   averagetime frame.




                                                                                   Page 6                                                                                                       GAO/lZC~@O-1Bs                     Water ltmounw
                        Executive Order 12322 provides OMB broad authority and criteria to
Ekecutive Order Gives   determine for the administration whether a proposed project is a sup-
OMB Broad Review        portable candidate to include in the federal water resourcesdevelop
Authority               ment program on technical, economic,environmental, and policy bases.
                        OMB'S review occurs after the proposed project is reviewed by the Assis-
                        tant Secretary but before the Assistant Secretary transmits the proposal
                        to the Congress.
                        OMB'S review  may include technical aspectsof the proposed project as
                         well as fundamental policy considerations. The Chief of the OMB Water
                         ResourcesBranch told us, for example, that the executive order allows
                        OMB to make a fairly broad review to ensure that the proposed project
                         complies with the administration’s policies, programs, and published
                        guidance. In addition to such criteria that the review levels use for pro-
                        ject authorizations, OMB applies an additional set of stricter criteria
                        when formulating the budget that aims to ensure that the projects gen-
                        erating the greatest economicreturn are given the highest priority. He
                        said the extent of review each proposed project receivesis not strictly
                        defined but that the review stops when the staff is comfortable that the
                        project is consistent with the administration’s standards.
                        According to the OMB staff, the time between the Assistant Secretary’s
                        transmittal of a proposed project and OMB'S responsecan be lengthy, but
                        they emphasizedthat all feasibility reports submitted by the Corps are
                        eventually reviewed. They said the promptness of this review depends
                        on OMB staff work load and administration budget priorities. They said
                        that OMB had not approved or committed to the 30-day goal for Assistant
                        Secretary review that includes OMB'S review and clearance.The OMB
                        staff said it would be.difficult to complete the review within 30 days as
                        it often takes 30 days to get a question answered.
                        We analyzed the progress of 26 reports the Assistant Secretary sent to
                        OMB between November 1986 and October 1989. Of the 26 reports, 17
                        were sent to the Congressfor authorization after OMB reviews ranging
                        from 1 to 16 months. Six reports had been in review from 1 to 18
                        months, and 2 had been rejected. During this 3-year period, mostly
                        before the new procedures were implemented, OMB accomplishedits
                        review within 30 days in 4 of the 26 cases.The impact of this on the
                        construction authorization processhas been mitigated in somecases
                        becausethe Congresshas not waited for OMB'S review and has included
                        many project proposals in legislation authorizing construction. In fact,
                        10 of the 26 reports were authorized for construction before they were



                        Page 7                                        GAO/RCED-B&188   Water I&mom
                       sent to OMB. In those cases,an OMB review is still conducted, but for
                       another purpose, such as for inclusion in the President’s budget.


Conclusions            The major goal of the Corps’ new review procedures is to improve the
                       timeliness of project proposals by requiring earlier involvement by the
                       Washington levels. Becauseso few projects have been subjectedto the
                       new process,however, it is too early to judge how effective the process
                       will be in meeting this goal.
                       An improved processshould be the result. Becauseof the input of the
                       Assistant Secretary’s staff at the IRC, the administration’s criteria on
                       acceptableprojects will be applied at a much earlier time than before,
                       and projects not meeting the criteria will not proceed further. Further,
                       the new process,if implemented properly, should shorten the review
                       time within the Corps. For example, our casestudy showed that tech-
                       nical and other issueswere resolved much earlier than would have been
                       the caseunder the Corps’ prior process,and this resolution helped the
                       proposed project move more rapidly than under the old procedures
                       through the final Washington-level approvals.
                       However, becauseOMB has wide discretion in its review of proposed
                       water resource projects for the administration and is outside the Corps’
                       or Assistant Secretary’s control in terms of meeting the 30-day goal for
                       review and transmittal of proposed projects to the Congress,it is ques-
                       tionable whether the Corps’ goal will be met in most cases.Further
                       improvement in expediting the submission of proposed projects to the
                       Congressmight be made if the Secretary of the Army and OMB could
                       agree on a specific time frame, perhaps a more realistic goal than 30
                       days, for their review and comment.

                       The Secretary of the Army, through the Assistant Secretary of the
Recommendationto       Army for Civil Works, should work with the Director of OMB to establish
the Secretary of the   a realistic time frame goal for the expedited review of feasibility reports
                       on proposed water resource development projects to be transmitted to
AmY                    the Congressfor construction authorization.

                       The Department of Defense(DOD) agreed with our findings and recom-
Agency Comments and    mendation. According to DOD, it will begin to provide OMB with key
Our Evaluakion         review documents from the Corps early on to alert it to the technical
                       and policy issuesinvolved before it receivesthe feasibility report. DOD


                       Page 8                                        GAO/RCJD40-188   Water ltemurce~
              also stated that it is working with OMB to reduce the averagereview time
              and will provide a progress report by April 1991, (SeeDOD'S commentsin
              am. VJ
              OMB said that  the procedures outlined by DOD should familiarize OMB per-
              sonnel with the proposed projects and help them avoid raising technical
              issuesalready satisfactorily addressed.OMB also stated that eliminating
              the work on technical issuesshould acceleratethe review time and
              increase the number of reports that OMB can process.However, OMB
              stated that becauseof competing priorities in OMB and its Natural
              ResourcesDivision, it did not agreewith the 30-day period for their
              review of feasibility reports and is reluctant to agreeto any period. OMB
              also said that additional staff was not a priority,

              While the new procedures established by DOD and OMB should help accel-
              erate the process,we believe that they must work together to establish a
              more realistic time frame goal for the review of feasibility reports if the
              timeliness of the review processis to be further improved. (SeeOMB'S
              comments and our evaluation in app. VI.)


              To document and compare the former and current review processes,we
Scopeand      interviewed officials at Corps headquarters Directorate of Civil Works,
Methodology   the Corps Office of History, the Directorate of ResourceManagement,
              the Board, the WLRC, the Office of the Chief of Engineers,the South
              Atlantic Division in Atlanta, Georgia, and the Division’s Mobile, Ala-
              bama, District Office. We obtained and analyzed documents,publica-
              tions, internal and external studies, engineering rules and circulars, and
              reviewed files at each of these locations about the levels of review.
              We also reviewed files in headquarters and field planning offices on
              ongoing studies of proposed projects to develop an understanding of the
              review process.We reviewed in detail how the Corps’ new processwas
              implemented for the first proposed project subjected to the new pro-
              cess-Bayou La Batre, Alabama, navigation improvement. We attended
              meetings of the Board and WLRC   to gain insight into the new process.We
              also interviewed the staff of the Assistant Secretary and obtained docu-
              ments on their organization and role in the review process.
              To determine OMB'S role in the review process,we interviewed officials
              in the Water ResourcesBranch of the OMB Natural ResourcesDivision
              concerning their review of Corps proposed projects sent by the Assistant



              Page9                                         GAO/RCED-9%1sBWaterBesource~
B-239970




Secretary for approval. We also obtained data on their review criteria,
authority, and status of reports under review.
We conducted our review from January 1989 through February 1990 in
accordancewith generally acceptedgovernment auditing standards.

We are sending copiesof this report to the appropriate Senateand
HouseCommittees, interested membersof the Congress,the Secretaries
of Defenseand the Army; the Director of the Office of Managementand
Budget; and the Chief, US. Army Corps of Engineers.We will make
copies available to others upon request.
This work was performed under the direction of James Duffus III,
Director, Natural ResourcesManagementIssues,who may be reached at
(202) 276-7766.Major contributors to this report are listed in appendix
VII.




fDifiii!?Q
Assistant Comptroller General




Page 10                                      GAO/RCED-BO-188
                                                           Water Resources
Page 11
Contents


Letter
Appendix I                                                                                    14
The Traditional          Background
                         The Levels of Review
                                                                                              14
                                                                                              14
Review Process
Appendix II                                                                                   18
The Corps’ New           The 1986 Act Mandated Cost Sharing and Spurred
                             Changes
                                                                                              18
Review Process           IRCs Involve Washington Level Early                                  22
                         The Concurrent Washington-LevelReviews                               23

Appendix III                                                                                  27
CaseStudy of the         Background
                         Review Chronology
                                                                                              27
                                                                                              27
Proposed Bayou La
Batre, Alabama,
Project
Appendix IV
OMB’s Review of          Executive Order Gives OMB Broad Authority
                         Status of Feasibility Reports at OMB
Feasibility Reports on
Proposed Projects
Appendix V                                                                                    34
Comments From the
Department of
Defense
Appendix VI                                                                                   36
Comments From the        GAO Comments                                                         40
Office of Management
and Budget


                         Page 12                                     GAO/RCED-BO-188
                                                                                  Water l&sources
Appendix VII                                                                                     41
Major Contributors to   Resources,Community, and Economic Development                            41
                           Division, Washington, D.C.
This Report
Figures                 Figure 1: Traditional vs. Concurrent Review of Feasibility                   6
                            Reports
                        Figure I. 1: The Corps of Engineers Traditional Review                       16
                            Processfor Feasibility Reports
                        Figure II. 1: The Corps of Engineers New Concurrent                      20
                            Review Processfor Feasibility Reports




                        Abbreviations
                        DOD       Department of Defense
                        EPA       Environmental Protection Agency
                        GAO       General Accounting Office
                        IRC       issue resolution conference
                        OMB       Office of Managementand Budget
                        WLRC      Washington Level Review Center


                        Page 13                                      GAO/RCEDMbl88   Water Itemmes
Appendix I

The Traditional Review Process


                           Until 1988, the Corps’ processof bringing a water resource development
                           proposal to the point of being recommendedto the Congressinvolved
                           consecutivereviews by several entities within the Corps, by the Depart-
                           ment of the Army, and by OMB. Becausethe reviews by levels above the
                           Corps district office covered many aspectsof a feasibility report on a
                           proposed project, the reviews often overlapped as a proposal progressed
                           through the levels. In addition, under the traditional process,the feasi-
                           bility study on a proposed project could be underway for several years
                           by Corps field offices and local officials before the Washington-level
                           review elements reacted to it.

                           A proposed civil works construction project begins with the identifica-
Background                 tion of a water resourceproblem to the Congressby a citizen or commu-
                           nity. If the facts that the Corps provides to the Congresswarrant
                           further study, the Congressmay authorize and appropriate funding for
                           planning the proposed project. The first step in the planning processis a
                           federally funded reconnaissancestudy, which results in a preliminary
                           determination whether or not a federal project is a plausible solution.
                           With a positive reconnaissancereport, and the local sponsor’s agreement
                           to pay 60 percent of the study’s estimated costs,the Corps can prepare a
                           feasibility study to develop a specific solution to the problem and an
                           environmental assessmentof the proposed project.
                           The Corps district’s feasibility study addressesthe technical, economic,
                           and environmental aspectsof a water resource need and results in a fea-
                           sibility report on a potential project. As needed,the district held an
                           optional issue resolution conference(IRC) on the draft report to get a
                           consensusamong the field levels on outstanding issuesor problems.


The Levels of Review       The “levels of review” for projects proposed in feasibility reports refers
                           to the following organizations, discussedin the order they traditionally
                           reviewed a report,

                       l The District Engineer, who heads the principal planning and project
                         implementation office of the Corps, begins the process.Each of 36 dis-
                         tricts carries out Corps operations in specified geographic areas within
                         divisions that are usually basedon watershed boundaries.
                       . The 11 Corps Divisions supervise the districts within their area by
                         reviewing and approving major plans and programs, implementing the
                         Chief of Engineers’ policies, and reviewing district operations.



                           Page 14                                       GAO/RCED-90-188Water Resources
                         Appendix I
                         The Traditional Review Process




                     . The Board of Engineers for Rivers and Harbors is a body, comprised of
                       sevenCorps engineer officers, appointed by the Chief of Engineersto
                       conduct independent reviews of planning documents.The Board deter-
                       mines the advisability of authorizing the construction of water resource
                       projects and makes recommendationsto the Chief.
                     l The Chief of Engineers is the U.S. Army officer that commandsthe
                       Corps and reports to the Assistant Secretary of the Army for Civil
                       Works.
                     . The Assistant Secretary of the Army for Civil Works overseesfor the
                       Secretary of the Army all aspectsof the civil works program imple-
                       mented by the Corps of Engineers.This responsibility includes policy
                       formulation and program direction for all water resourcesdevelopment,
                       oversight of regulatory activities, review of legislation and other reports
                       to the Congress,and review of the budget.
                     . The OMB, part of the Executive Office of the President, reviews a pro-
                       posed project recommendedby the Assistant Secretary to determine its
                       relationship to the program of the President.


A Sketch of the          The pre-1988 review processwas sequential with each review level con-
Traditional Review       ducting an independent analysis of a proposed project. Figure I. 1 is a
                         sketch of the traditional levels of review.
Process




                         Page 16                                     GAO/RCED-90-188   Water lhourcea
                                                           Apptmdxl
                                                           The Tradltlonal Review Proeees




Flgure 1.1:The Corps of Englnwrr              Traditional Review Procera tor Feasibility Reports
                                                                                                                                                    Field
                                                               Dlstrlct Completes Report                                                         Offices
                                                                   After Optional Issue
                                                                  Resolution Conference




                                                           Dlvlrlon Reviews District’s Report,
                                                           and Submits Report to the Board


                                                                                                                                                           I
---------~---I---_I--+------;-----~----m..,


                                                           The Board Reviews The Feasibility                  ,
                                                            Study and Issues Its Own Report-                        Proposed Report
                                              186a
                                                     I
                                                     I
                                                                                                                          Sent to
                                                                                                                     State a Federal
                                                                                                                       Agencies for
                                                                                                                    go-day Comment
                                                                              1                                     and ElSb to EPA
                                                                                                                  for 30-day Comment
                                                           Chief of Engineers Considers the
                                                          Comments of the States and Federal
                                              308'         Agencies, Reviews the Feasibility
                                                                Report and Prepares a




                                                         The Asalstant Secretary Reviews the                      OMB Reviews
                                                         Feasibility Study; Requests The Views                    Report, Writes
                                              586a                       of OMB                                   Views in Letter
                                                                                                       +i




                                                     I
                                                         The Assistant Secretary Transmits the
                                                              Feasibility Report Including
                                              2608          OMS Comments to the Congress




                                                          aNumbers indicate Corps-calculated   average times in days for each step. The 4 steps total 3.7 years.
                                                          ‘Environmental   Impact Statement.




                                                          Page 16                                                          GAO/RcEDo-If38 Water Resources
The traditional review processbegan with the district’s review. The dis-
trict commander transmitted the feasibility report to the division for a
coordinated review of the planning, engineering, economic,environ-
mental, institutional, real estate, legal and policy aspectsof the report.
After determining that the proposed project met standards for these
aspects,the division engineer issued a public notice announcing the
transmittal of the feasibility report to the Board and the availability of
the report for interested parties to review and comment to the Board
within 30 days.
The Board staff conducted its detailed review for quality and consis-
tency with federal standards in generally the samebroad aspectsas the
division and presented its recommendation to the Board. The Board then
transmitted the report and its recommendation to the Chief of Engineers
as to the advisability of the Corps’ participation in the project. Fol-
lowing Board review, the proposed report of the Chief of Engineers,the
Board report, and the environmental impact statement were sent to the
heads of other federal agenciesand governors of affected states for
comment within 90 days. At the sametime, the environmental impact
statement was also sent to the Environmental Protection Agency (EPA)
and other interested parties for commentswithin 30 days from the date
EPA publishes a notice that the final environmental impact statement
was filed.
The Chief of Engineers consideredthe state and agency comments,the
Board recommendation, and EPA and other commentsreceived on the
final environmental impact statement in preparing his report. Head-
quarters review of the report for the Chief focused on national consis-
tency, adherenceto policy, responsivenessto the comments, as well as
on certain technical aspectsof the recommendedproject. The Chief then
acted on the recommendations and made a final transmittal report to the
Secretary of the Army, in care of the Assistant Secretary.
The Chief’s transmittal of the feasibility report was reviewed by the
Assistant Secretary’s staff for accordancewith administration policy,
guidelines, budget priorities, and certain technical aspects.The Assis-
tant Secretary transmitted the report to OMB for comment. After OMB'S
concurrence,the Assistant Secretary transmitted a final recommenda-
tion to the Congress.




Page 17                                       GAO/RCED-90.188   Water Resources
Appendix II

The Corps’      New l&view Process


                      A 1988 Corps’ estimate showed that the review processthat existed
                      prior to that time required an averageof 3.7 years to review a feasibility
                      report at the Washington level. Spurred by this statistic and the Water
                      ResourcesDevelopment Act of 1986’ that mandated cost sharing by
                      local sponsorsof all water resource projects, the Assistant Secretary
                      directed that this time be shortened to 180 days (6 months) to be more
                      responsiveto the local sponsors.The 1986 act also had required that the
                      Corps study and expedite its planning and construction process.
                      Towards these ends,the Assistant Secretary and the Chief of Engineers
                      have established a new, more efficient review processthat involves
                      early participation by the various organizations at the Washington level
                      and concurrent, rather than sequential, Washington-level detailed
                      reviews. The Chief of Engineers also established the WLRC to participate
                      in the IRCS, to perform a detailed technical and policy review, and to
                      coordinate the new concurrent review process.
                      The new processdid not eliminate any review levels but added the con-
                      current review steps early in the Washington processin an attempt to
                      meet a 6-month time frame goal for final decisionsby the Washington-
                      level review elements.

                      With passageof the 1986 act, the Corps entered into a new era of pro-
The 1986 Act          ject development becausethe act requires an increased commitment to
Mandated Cost         shared responsibility for water resource development by mandating cost
Sharing and Spurred   sharing by all local sponsorsin planning and construction except for
                      inland waterway navigation improvements. The 1986 act also included
Changes               provisions that required the Corps to study and implement ways to
                      expedite its planning and construction process.

                      The changesin the Corps’ traditional approach to civil works projects
                      addressedthe fact that local sponsorswould now have to share any cost
                      and time inefficiencies in the planning and construction process.The
                      traditional processhas involved lengthy project review, approval, and
                      funding procedures taking in somecasesup to 26 years to progress from
                      the start of planning through construction. In particular, the Wash-
                      ington-level portion of the processwas consideredredundant because
                      many of the same aspectsof a feasibility report were reviewed several
                      times in a lengthy, deliberate process,according to the 1988 Corps task
                      force study titled “Consolidating the Review Staffs of the Board of Engi-
                      neers for Rivers and Harbors and the Chief of Engineers.”

                      ‘Public Law 99-662, approved on November 17,1986.



                      Page 18                                             GAO/RCEMtO-lt3f3Water Resources
    The Assistant Secretary wrote on January 4,1988, that the new law
    drastically changesthe way the Corps doesbusinessand that measures
    were neededto enhancehandling of its workload. Among the changesin
    the processof reviewing proposed projects that he said should be imple-
    mented were
. early review by the Assistant Secretary of projects exceeding$10 mil-
  lion in cost, prior to completion of the district engineer’s feasibility
  report; and
l elimination of duplicate reviews of the sameaspectsof the project.
    The Corps first respondedto the 1986 act in March 1987, convening a
    panel that traveled around the country getting local sponsor and Corps
    staff input on project development as a partnership. Another task force
     reported on its study of the Washington-level review processin Feb-
     ruary 1988. These and other efforts in responseto the 1986 act were
    brought together under the “Initiative ‘88” program by the Chief of
     Engineers.The program was to respond to the Assistant Secretary, who
     wanted to create a more effective and efficient model for developing and
     implementing water projects by building on the work of the Corps task
     forces and panels and drawing on private sector techniques such as pro-
    ject management,cost control, and construction productivity.
    Generally, the major thrusts of the post-1986 act review processinitia-
    tives have been to
. involve the Washington level early in the planning processin order to
  avoid problems a,nd delay when processing the final report and
9 establish concurrent Washington-level reviews to increasethe timeliness
  of the review process.
    These changesare supported by the newly established ~LRCwhich per-
    forms a detailed review and coordinates the concurrent review process.
    Figure II. 1 graphically represents the new process.The steps outlined in
    broken lines indicate a revised review step, procedure, or time frame.
    The other steps are unchanged from the traditional process.




    Page 19                                      GAOpXD-9@199   Water l&m-
                                                                                                                                         I
                                             The Cbrp# New Review              Process




Figure 11.1:The Corps of Engineers New Concurrent Review Process for Feasibility Reports




                        Mandatory Issue
                     Resolution Conference

                 .




                                                        x\



                                                              Division Review and
                                                                   Adoption of Report
                                                      r-
                          Washington Level             -\ ,                                          Concurrent
                           Review Begins                                                            Review Begins
                               0 Days                         ------m-m    4
                                                                   Feasibility Report            ~D~i~~E~gi~e~
                                                                                                 I Notice Allowing
                                                                   Submitted to the
                                                                        WLRC                     I 30 Days for Public
                                                                                                 I Comment to WLRC
                                                                                                         on Report
                                                                                                 I- ------.
                                                                                                 I Within 30 Days
                                                                                                 I WLRC Initiates
                                                                     Draft WLRC          ’          90-Day State and
                                                                     Assessment                  1 Federal Agency
                                                               I                                 I         Review
                                                                ‘>


                        Secretary Staffs’
                 iReview and input to WLRC
                  .
                    \
                                 I                             I
                                I                         Y
                                                               1      Final WLRC
                                                                      Assessment             4
                                                               I




                                             Page20                                                            GAO/RCFD4W199Water Reaourcea
                Appendix II
                The Corps’ New Review Process




                                           A
                                          0
+90 Days
                          )----            1
                                           ----.
                                                          Concurrent
                                                          Review Ends
                          1 Briefing of Washington
                          1 Level Designated Senior
                          , Reps. of the Chief of
                          , Engineers, Board, and
                          ,     Assistant Secretary



+120 Days
                          1          Board Meeting
                                       and Report

                          \
                              \


+150 Days
                                  Chief of Engineer’s




  +180 Days
(Review Goal)

                          r-l     Assistant Secretary
                                  Transmits Feasibility
                                  Report to Congress




                Page 21                                                 GAO/RC~SO-188   Water Resources
                      Appendix II
                      The Cmpe’ New Review Proeesa




                      Under the traditional process,the Corps division or headquarters units
IRCs Involve          had the option of using checkpoint or issue conferencesduring the study
Washington Level      to check progress or resolve issueson a project proposal. The IRC is a
Early                 meeting held in the field before the final feasibility report is submitted
                      for Washington-level review that provides the district with early input
                      from the Washington-level review elements on concernsand problems
                      with the study to that point. The participants try to reach a solution
                      (resolution) for the problems that the district can incorporate in the
                      study before a report is submitted for Washington-level review.

                      The Corps issued an engineering circular in June 1988 requiring an IRC
                      to be attended by representatives from the office of the Assistant Secre-
                      tary, the Chief of Engineers,the Board, and the new WLRC, as well as the
                      division and district. The local sponsor is also encouragedto attend. The
                      circular indicated that the procedures for early agency commitment are
                      designedto (1) acceleratethe project development processby getting
                      assurancethat the proposed project is acceptableto all levels as early as
                      possible in the planning processby resolving significant issuesor
                      problems with the proposal before the Washington-level review2 and (2)
                      fulfill a commitment to the local sponsor to expeditiously processthe
                      feasibility report and submit the proposal for congressional
                      authorization.
                      Limited experience exists to evaluate whether the mandatory IRCS had
                      reduced the review time at the Washington level. Only sevenproposed
                      projects had been submitted for Washington-level review after under-
                      going an IRC and none had been submitted to the Congressas of a Sep-
                      tember 391989, report from the WLRC.


Corps Views on IRCs   Corps headquarters and field civil works officials we interviewed in the
                      planning and policy areas were generally positive but were reserving
                      final opinions about the impact the IRCS will have on the progress of
                      project proposals, Similarly, Mobile District and South Atlantic Division
                      planning staff memberstold us that their experience with the Bayou La
                      Batre, Alabama, proposed project indicated that the mandatory IRCS
                      would save time during the Washington-level review process.


                      2The district is required to record the results of the IRCs in a memorandum for the record. On the
                      basis of their review of the memorandum for the record, Corps headquarters writes a guidance mem-
                      orandum, coordinated with the Assistant Secretary, to the district office, to guide their completion of
                      the final report.



                      Page 22                                                         GAO/RCED-90-188      Water Resource8
                   Someof the officials acknowledged that the IRCShave lengthened the
                   front-end of the review processand may need somefine tuning but
                   should increase quality and timeliness in the long run. According to the
                   former headquarters Planning Division Chief for example, the initial
                   experience was that the time involved in documenting the IRCSand pre-
                   paring the feasibility reports was taking much longer than expected as
                   field and headquarters staff work out turf problems and adjusted to the
                   new review staff organization and procedures. Two district planning
                   officials, while positive about the mandatory IRCS,said they would be
                   even more effective if held earlier during the feasibility study to mini-
                   mize resourcesspent on a study that would not be approved at the
                   Washington level. The study manager for the Bayou La Batre proposed
                   project stated that the rigors of the IRCscrutiny of the proposal was a
                   painful experience but he credited it with substantially strengthening
                   the economic analysis of the study as well as addressingengineering and
                   environmental concerns.He expected the IRCto increasethe efficiency
                   of the Washington-level reviews.
                   The IRCon the Bayou La Batre proposal resolved issuesand familiarized
                   the Washington-level review elements with the proposed project. Two or
                   more issueswere identified during the IRCfor the district to addressin
                   each of the following areas: economicanalysis, plan formulation, envi-
                   ronmental, policy/cost sharing, and engineering/dredging. To satisfy
                   each of the issues,the district either revised the draft report or devel-
                   oped additional information or analyses between the April 1988 IRC and
                   district’s submittal of the report to the division in September 1988.

                   The February 1988 Task Force report titled “Consolidating the Wash-
The Concurrent     ington Level Review of Feasibility Reports” found that the old system of
Washington-Level   review at the Washington level had contributed to the lengthy
Reviews            processingtime in Washington. It identified such delay factors as the
                   time neededto resolve issuesand concerns,duplication of review by the
                   Washington-level review elements, duplication of requests for informa-
                   tion by various reviewers, conflict in workloads, and late start and com-
                   pletion of the go-day state and agency review period.
                   The task force recommendedconsolidating the review processand
                   requiring a simultaneous review coordinated by a centralized profes-
                   sional staff. The central staff function would be carried out by the
                   Board staff. Such a consolidated processwould retain the independent
                   prerogatives of each Washington-level review element, however.



                   Page 28                                      GAO/RCFJD-90-188   Water Resource8
                                                                                          ,
                 Appendix II
                 The Corps New Review Process




                 In June 1988 the Chief of Engineers issued an engineering circular that
                 formalized the new concurrent project review and approval procedures.
                 The circular prescribed procedures for the submittal and the concurrent
                 Washington-level review and processingof feasibility reports on pro-
                 posed projects. The circular stated that the central staff would coordi-
                 nate and consolidate the Washington-level reviews, as well as review the
                 proposal to make an assessmentfor the decision-makers.

                 After the Washington-level reviews are performed concurrently, the
                 WLRC briefs the senior representatives of the Board, Chief of Engineers,
                 and the Assistant Secretary simultaneously on the results of the
                 reviews. Following the briefing, each Washington-level review element
                 decideswhether to approve the proposal. The expectation is that
                 becausethe staffs of the Washington-level review elements had worked
                 out problems and concernsat an earlier time, the proposal would be
                 acted on quickly.


Review Staff     In January 1988 the Chief of Engineers reported that 36 separate
Reorganization   aspectsof a project proposal in the areas of planning, engineering, eco-
                 nomic, environmental, social/institutional, real estate, legal, and policy
                 received more than one review considering both the division and Wash-
                 ington-level review elements. The January 1988 report’s proposals to
                 address duplication at the Washington level were to create a central
                 reviewing and coordinating unit and obtain concurrent review of its
                 results. The report proposed to allow each Washington-level review ele-
                 ment to act on the proposed projects independently within 30 days and
                 in the traditional sequenceafter they were briefed by the coordinating
                 unit.
                 Another Corps task force-the “Review Staff Consolidation Study
                 Group” -produced a July 1988 report to respond to the Assistant Secre-
                 tary’s request for recommendationson consolidating the Board and
                 headquarters review staffs to support both groups. The report’s recom-
                 mendation was generally adopted by the Chief of Engineers with the
                 consent of the Assistant Secretary in December1988 to designate the
                 existing Board staff, except for four advisors, as the new WLRC unit of
                 the Water ResourcesSupport Center, which reports to the Chief of Engi-
                 neers. The WLRC absorbedplanning and policy detailed review functions
                 from headquarters and becamethe central office for all Washington-
                 level reviews. The independenceof the Board is preserved by retaining
                 the four advisors to participate in the review processto develop recom-
                 mended actions for the Board.


                 Page 24                                       GAO/JCJiD-9@lf3tlWater Eenonrcee
                      AppemUx II
                      The Corps’ New Revlew Proam




                      Two goals of the reorganization were to reduce the duplication of
                      reviews by the former Board staff and the Corps headquarters staff and
                      to consolidate the review staffs of the Board and the Chief of Engineers
                      so that one staff would support both as well as the concurrent review
                      process.
                      The mandatory IRC and the concurrent review processattempted to
                      addressthe sequential review processwhich required that each review
                      level conduct an independent analysis of the samefacts. This process
                      was duplicative becausemany of the sameaspectsof a proposal were
                      independently reviewed several times as it moved from the district
                      office through the review chain.
                      The Corps followed the new processfor the Bayou La Batre proposed
                      project. During concurrent review of this proposal, observations from
                      the WLRC'S site field trip, additional data and analysis provided by the
                      district to answer review comments on the magnitude of shipbuilding
                      and fishing benefits, and data on environmental impact of the project
                      were considered.WLRCreview comments and other technical and policy
                      concernsraised by the Washington level, excepting the local sponsorship
                      issue, were resolved before the feasibility report on the proposed project
                      was sent to the Board, the Chief of Engineers, and the Assistant Secre-
                      tary for their final review and approval. Although the first proposed
                      project processeddid not meet the Corps’ goals for completion of con-
                      current review in 90 days or each Washington-level approval within 30
                      days, it did improve on the past averagetime frames up to the point the
                      Assistant Secretary transmitted it to OMB. It took 12 months to that point
                      versus an averageof 36 months, according to the Corps’ 1988 estimate.


Corps Views on the    Planning division officials we interviewed at Corps headquarters, divi-
Concurrent Rev,iews   sion, and district offices were generally positive about the impact of the
                      new procedures on the processingof proposed projects. Most were cau-
                      tious, however, becausethere had been little or no experience with the
                      new concurrent review procedures or WLRC during our work in that no
                      proposal had gone through the WLRC and all the levels of review at that
                      point.
                      As of September30,1989, seven feasibility reports had been submitted
                      to the WLRCand two of these had completed concurrent review and
                      progressedas far as final review by the Assistant Secretary. The two
                      proposals that had been sent to the Assistant Secretary had exceeded
                      the S-month target time frame for progress to that point by about 4 and


                      Page 25                                       GAO/WED-Wl88 Water Resources
2 months. The progress of two others through the Washington-level
reviews was delayed becauseof requests by the Chief of Engineers or
the WLRC for more information and coordination. The three other reports
were in the early stagesof assessmentby the WLRCstaff and concurrent
review by the Washington level. According to the former headquarters
Civil Works Planning Division Chief, the limited initial experience with
the new concurrent review processwas that target time frames had
been significantly exceeded,but fine tuning of the processmay improve
this. At the South Atlantic Division and Mobile District, Planning Divi-
sion and Project Managementofficials we visited were generally positive
about the impact of the new concurrent review processon the basis of
their experience with the first proposal through it.




Page 26                                      GAO/lKJD9@188   Water ltmourcea
Appendix III

CaseStudy of the ProposedBayou La Batre,
Alabama, Project

                        To understand how the Corps implemented its new procedures for
                        Washington-levelreviews, we reviewed the first proposed project sub-
                        jected to the new process-the Bayou La Batre, Alabama, navigation
                        improvement. For this project, we determined that the IRC helped to
                        familiarize the Washington-level review elements with the project and
                        identified and resolved various issuesearly in the process.The detailed
                        concurrent review at the Washington level raised certain technical and
                        policy concernsand resolved them before the various Washington-level
                        reviewers were to make their final decisionson the proposed project.
                        However, the Corps’ 30-day goal for the Assistant Secretary to review
                        the proposal and submit the report to the Congressafter OMB’S input was
                        not met. The report had been under OMB review for 6 months as of
                        March 1990.


Background              The Bayou La Batre feasibility study of proposed navigation improve-
                        ments was conducted under the authority of the House Committee on
                        Public Works resolution adopted October 10,1974, and was funded and
                        begun in 1986. The study’s objective was to investigate the potential for
                        deepening,widening, and extending the federal channel at the city of
                        Bayou La Batre, Alabama, located on the Gulf of Mexico about 30 miles
                        southwest of Mobile. The channel servesthe two major industries and
                        employers in the area-commercial fishing and boat building firms. The
                        geographic area of the study included the existing bayou and channel as
                        well as the adjacent Mississippi Sound and the Gulf. The feasibility
                        report estimated that the total cost of the proposed project would be
                        more than $16 million in October 1988 dollars.

                        The Bayou La Batre’s proposal was the first Corps project processed
Review Chronology       under the new procedures.A chronology of events as the Bayou La
                        Batre’s proposal advancedthrough the processfollows.


The IRC Process     l   April 21-22,1988 - The IRC was held in the Corps Mobile District and
                        was attended by various district, division, Board, and HQ personnel
                        along with state, county, and city officials and representatives of sea-
                        food and boat building companies.Under the new process,the IRC is to
                        provide the district with early input from the Washington level on con-
                        cerns and problems with the study to that point. Specifically, for the
                        Bayou La Batre the IRC was held for three purposes:(1) to involve Wash-
                        ington-level review elements in the feasibility study before releasing the
                        draft report, (2) to identify and resolve major issuesand concerns


                        Page 27                                      GAO/RCEJJ-S&188
                                                                                   Water Resources
    Apw*     Jn
    CaseStudy of the Ropoeed Bayou La Batre,
    Alsbamr, project




    before releasing a draft report to the public, and (3) to help establish the
    scopeof the involvement by Washington level in future IRCS. During the
    meeting two or more issuesunder each of the following topics were iden-
    tified: economic analysis, plan formulation, environmental, policy/cost
    sharing, and engineering or dredging.
l   May 3, 1988 - To follow up on the IRC, the Mobile District drafted a mem-
    orandum on the various issuesidentified during the conference.To
    resolve the issues,the Mobile District proposed either to revise the draft
    report or to develop additional information or analyses. For example,
    under the plan formulation topic, the confereessaid that a cost analysis
    of bulkhead replacements was needed.The Mobile District responded
    that such an analysis would be contained in the feasibility report at the
    next step in the process.
l   May 6, 1988 - The district’s draft memorandum listing IRC issueswas
    sent to the South Atlantic Division which forwarded it to Corps head-
    quarters Planning Division.
l   July 8, 1988 - The Chief of Engineer’s Planning Division Chief responded
    to the district’s memorandum stating that he acceptedmany of the
    issuesas listed and made someslight modifications in others.
l   September7,1988 - To respond to questions about local sponsorship
    raised at the IRC, the city of Bayou La Batre submitted a letter to the
    district stating the city’s intent to sponsor the project and do what it
    could to provide, within its capability, the financial and other assistance
    required to successfully complete the project. The District Engineer, the
    Assistant Secretary, and the Board review team did not consider the
    letter as sufficient commitment to sponsor the project becausethe city
    was still seeking state financing. Consequently, the local sponsor issue
    remained unresolved despite the IRC effort. The IRC did resolve many
    other economic,technical, and policy issuesbefore the proposal reached
    the Washington level.
l   September l&l988 - The district forwarded the revised feasibility
    report and environmental impact statement to the Division after incor-
    porating the headquarter’s responseto the district’s memorandum on
    the IRC and the public comments obtained in January 1986 and August
    1988 hearings into the final report.

    In summary, the Corps followed the new procedures for mandatory IRCS.
    Issuesthat could have causeddelays were raised, documented, and
    resolved by the time the WLRCwas ready to brief the Washington-level
    review elements on its final assessment.




    Page 28                                       GAO/RCED-SO-188
                                                                Water Resoutves
                                Cam Study of the Pro&   Bayou La Bdre,
                                -una,     WJm




The Concurrent Review     September30, 1988 - After reviewing the district’s feasibility report, the
                            l



Process                   Division Engineer issued a public notice to interested parties that the
                          proposal was available for comment and ransmitted the report for the
                          Washington-levelreview. Upon receipt os the report, the Board staff
                          (shortly thereafter reorganized as the WLRC) transmitted copies to the
                          Assistant Secretary, Chief of Engineers,and the Board for their concur-
                          rent review and comment. The report was also sent out by the Board
                          staff for the QO-dayreview by states and other federal agencies.
                        l January Q-13,1989 - As part of their detailed review, the new WLRC vis-
                          ited the Bayou La Batre project site to obtain information from the field
                          staff and resolve review comments.The WLRCconducted meetings with
                          the local sponsor and the Mobile District during this visit.
                        l February 24,1989 - The WLRC transmitted its final assessmentof the
                          proposed project to the division engineer. The document (1) consolidated
                          the report review comments from the Washington level; (2) reflected the
                          observations and conclusionsfrom the WLRC’S     site trip that included a
                          meeting with the local sponsor and field office staff; and (3) identified
                          additional data and analyses required from the district office on such
                          issuesas the magnitude of shipbuilding, fishing, and other benefits of
                          the project, as well as environmental impact and mitigation. The assess-
                          ment also enumerated the disposition of issuesfrom the IRC. The WLRC
                          cited the lack of a willing and able local sponsor as the primary
                          unresolved issue and said it would not support favorable processingof
                          the report at the briefing if this was not corrected.
                        . May 11, 1989 - The WLRC acting director transmitted the final assess-
                          ment and the field’s responseto the senior representatives of the Wash-
                          ington level in preparation for briefing them later in the month. The
                          transmittal stated that the district and division responsessatisfied all
                          the concernsraised in the IRC memorandum, the WLFIC      field visit, and in
                          the final assessment,with the exception that the WLRCdid not receive a
                          satisfactory responseon the local sponsor issue. The WLRC staff did not
                          believe that the city of Bayou La Batre had the financial capability to
                          sponsor the project and wanted the state of Alabama’s confirmation of
                          intent to serve as the local sponsor.
                        l May 26, 1989 - The WLRC briefed the senior representatives of the Board,
                          Corps Headquarters, and the Assistant Secretary on the Bayou La Batre
                          study to initiate the final decision-making process.The local cost-
                          sharing arrangements for the project generated extensive discussion
                          among the participants. The WLRCreview manager recommendedthat
                          the project not be sent to the Congressuntil the local sponsor’scommit-
                          ment had been adequately demonstrated.




                                Page 29                                  GAO/RCED-90-188Water Resources
                             Caw Study of the PropoeedBayou La Batm,
                             -         Rrojm




                             In summary, the concurrent review processthat concluded with the
                             briefing of the senior representatives had resolved many issuesbefore
                             the proposal was sent to the Board, the Chief of Engineers,and the
                             Assistant Secretary for their final approval. Although the proposed pro-
                             ject did not meet the QO-daygoal for the concurrent review procedure or
                             the 30-day goals for Washington-level approvals, it did make steady pro-
                             gressthroughout the process,improving on averagetime frames under
                             the traditional processup to the point it was sent to OMB. It took 12
                             months to that point versus an averageof 36 months, according to the
                             Corps’ 1988 estimate.


Final Approval Process   . June 13,1989 - The Board’s advisors briefed them on the proposed pro-
                           ject and discussedthe local sponsor issue. The advisors recommended
                           that the project be approved with the condition that the local sponsor
                           provide evidenceof their ability to meet their financial responsibilities
                           for the project. The Board consideredthe recommendation but, on the
                           basis of their interpretation of the existing cost-sharing commitment,
                           voted unanimously to accept the city’s letter of intent as adequate evi-
                           denceof their commitment.
                         l June 16,1989 - The Board sent its recommendation to the Chief of Engi-
                           neers that the project be constructed generally in accordancewith the
                           district engineer’s feasibility study plan.
                         l August 3,1989 - The Chief of Engineers recommendedthe project to the
                           Secretary of the Army. The Chief concurred with the Board that the
                           project be authorized generally in accordancewith the district engi-
                           neer’s recommendedplan.
                         l September 27,1989 - The Assistant Secretary forwarded the Bayou La
                           Batre feasibility report to OMB recommendingthat the report be sent to
                           the Congressfor construction authorization. As of March 1990, OMB had
                           not responded,according to the Assistant Secretary’s deputy.




                             Page a0                                     GAO/~ml86      Water Reao-
Appendix IV

OMB’sReview of Feasibility Reportson
ProposedProjects

                           Before feasibility reports on proposed projects are sent to the Congress
                           for construction authorization, they are reviewed by OMBfor consistency
                           with the policies and programs of the President and with federal guide-
                           lines for water resource projects. OMB'Sviews on a proposed project are
                           reported in the Secretary of the Army’s transmittal to the Congress.
                           Executive Order 123221gives OMBa key review role on behalf of the
                           administration.

                           The executive order provides OMBwith broad criteria and wide discre-
                           tion to determine whether a proposed project should be forwarded to
                           the Congresson the basis of technical, economic,environmental, and
                           administration policy. The Corps’ 30-day goal for the Assistant Secre-
                           tary of the Army to review a proposed project and submit it to the Con-
                           gress following OMB'Sreview has not beenmet often. During a 3lyear
                           period ending in October 1989 OMB'Sreview was performed within 30
                           days in only 4 of 26 cases.


                           Executive Order 12322 provides OMBwith broad authority and criteria
Executive Order Gives      for its water resourcesbranch under the Deputy Associate Director for
OMB    Broad   Authority   Natural Resourcesto review all proposed projects to be sent to the Con-
                           gress for authorization or appropriations. Their review is to determine
                           whether the proposed project is a supportable candidate for inclusion in
                           the federal water resourcesdevelopment program on the basis of
                           various technical, economic,environmental, and administration policies.
                           The executive order requires OMBto review these factors before a pro-
                           posal may be sent to the Congress.
                           According to the OMB'SChief of Water ResourcesBranch, the order pro-
                           vides for a fairly broad policy and technical review to make sure that
                           the policies, programs, and guidance of the administration are complied
                           with in the proposed project. He said the branch’s review stops when
                           the staff is comfortable that the project is in compliance. First, sum-
                           mary-level information is reviewed and more details are consulted as
                           needed.The branch chief said that many reports are found satisfactory
                           quickly but on others, more information, meetings or field trips are nec-
                           essary to complete a review. He said that it was hard to state precisely
                           where OMB'Sreview stops, only that it must continue until OMBdeter-
                           mines whether a project meets administration standards.



                           ‘Issued September 17,1981, and amended on September 9,1987, by Executive Order 12608.



                           Page 31                                                   GAO/RCED-90-188Water Resources
OMB’r Review of Feasibility Reporta on
PropoeeaProJ-




The branch chief said that OMB tries to carry out the spirit of the order
and doesnot have a policy of stopping projects. He said if OMB does not
have a substantive problem, then it would clear the project for the
Assistant Secretary to forward to the Congress.He said that if substan-
tive problems are found, the Assistant Secretary is notified. According
to the branch chief, somereports may be held until OMBgets an answer
to questions, but inaction is not a strategy for dealing with reports sub-
mitted for review. Projects with higher budget priority do get first
attention, he said, and external factors, like congressionalinterest and
external information received by the OMB staff contribute most to deter-
mining priorities among the rest.
Regarding the extent of OMB’S review, the Deputy for Planning Policy
and Legislative Affairs in the Assistant Secretary’s office, whose office
reviews the proposed projects and coordinates with OMB, said OMB does
not use its very broad review authority to its full extent very often. He
said that becausethe system is designedto have all technical reviews
completed at the district, division, and the WLRC, OMB normally doesnot
go into technical detail.
The OMB Branch Chief said that the promptness of OMB reviews of Corps
proposals dependsmostly on budget priorities and staff workload. He
emphasizedthat OMB’S intention is to review all reports-good, bad, or
indifferent-with the only question being the order of review.
According to the branch chief, the Corps can produce many more pro-
posals than the present OMB branch staff can handle. He said the branch
would quickly processall proposals received to make an authorization
recommendation to the Congressif it had the staff, and OMB wants an
administration position on every project even if a project meeting
administration policies and guidance has a low budget priority. In a
report on the managementof OMB, we indicated that major factors influ-
encing OMB’S performance were the resource and time constraints. The
report stated that since 1970 the number of OMB staff had actually
declined even with an increasing workload. The report recommended
that the Director of OMB take steps to either increaseor supplement staff
resources.2
As for the Corps’ initiative to get the Washington-level review elements
involved early in projects, the water branch chief said that OMB decided
not to becomeinvolved becauseit was concernedabout retaining its

            e Government: Revised Approach Could Improve OMB’s Effectiveness (GAO/
          , May 4,1989), chapter 6.



Page a2                                                  GAO/RCED-B0-188
                                                                       Water Resources
                        Appendix IV
                        OMB’s Review of Feasibility   Repoti   on
                        ~Po@edproj-




                        final review prerogative, and becausethe staff was too small to attend
                        all of the IRCS. Regarding the Corps’ 30-day goal for final reviews, the
                        branch chief said that it would be difficult to complete the review in 30
                        days, stating that it often takes 30 days to get a question answered.
                        Both the Assistant Secretary’s staff and the OMB branch chief said that
                        OMB had not approved or committed to the 30-day goal for the Assistant
                        Secretary’s review, review and clearanceby OMB, and transmittal of pro-
                        posals to the Congress.

                        Although the OMB staff states that all reports submitted are reviewed,
Status of Feasibility   the time the feasibility reports spend at their level can be lengthy, and
Reports at OMB          for the recent past, exceedsthe 30-day goal set under the new concur-
                        rent review process.The Assistant Secretary must send reports for
                        review at OMB before they can be transmitted to the Congressfor author-
                        ization consideration. Using data from the Assistant Secretary and OMB
                        reports, we reviewed OMB'S review time and the status of the reports
                        handled.
                        According to the Assistant Secretary’s staff log, 26 of 41 feasibility
                        reports they received from November 1986 when the 1986 act was
                        enacted through October 1989 were sent to OMB with a positive recom-
                        mendation. Of the 26 reports, 17 were sent to the Congressfor authori-
                        zation after OMB reviews ranging from 1 to 16 months, Six reports had
                        been in review at OMB from 1 to 18 months as of November 1989, and 2
                        had been rejected.

                        The Deputy for Planning Policy and Legislative Affairs acknowledged
                        that the Corps or the Assistant Secretary have no control over whether
                        OMB meets the 30-day time frame. To avoid delays, the deputy said OMB
                        will be consulted as soon as an issue needing resolution is identified. As
                        of the 3-year period ending in October 1989, mostly before the new pro-
                        cedureswere implemented, OMB met this time frame in 4 of 26 cases.It
                        should be noted that the lack of an OMB review has not prevented the
                        Congressfrom including many project proposals in legislation author-
                        izing construction and in somecasesin appropriations bills. In fact 10 of
                        the 26 proposed projects were already authorized for construction
                        before the reports were sent to OMB. While a proposed project waits for
                        reviews at the Washington level, the Corps often proceedsinto pre-con-
                        struction engineering and design of a project using federal funding from
                        the general investigations appropriations.




                        Page 33                                       GAO/RCEDQO-188   Water Resources
Appendix V

CommentsF’romthe Department of Defense



                                    DEPARTMENT      OF THE ARMY
                                   OWCE Or THE AlSlSTANT 8ECReTARY
                                      WASHINOTON, OC 1#110-0103




                                                                       X AU0 I@0



             Mr.   J. Dexter   Peach
             Assistant     Comptroller  General
             Resources, Community, and Economic
                 Development Division
             Washington,     D. c. 20548
             Dear Mr. Peach:
                  This    is the Department of Defense (DOD) response
             to the General       Accounting  Office     (GAO) draft report,
             "WATER RESOURCES:        The Corps of Engineers*         Revised
             Review Process     for   Proposed     Civil    Works Projects,10
             dated    June 20, 1990 (GAO Code 140839/OSD case 8386).
             The Department fully     concurs with the GAO findings         and
             recommendation.       Specific   DOD comments on the recom-
             mendation are provided     in the enclosure.
                The    Department       appreciates        the   opportunity   to
             Comment on the draft     report.
                                              Sincerely,




             Enclosure
                                             ‘-       QEamaWq
                                         actiI#Phipi4 Deputyksistantsemtaq
                                                      (CivilWorks)




               Page34                                                 GAO/RCELb~188WaterRea0ercea
         Appendix V
         Cmmmemti From the Department          of   Defenee




                       GAO DRAFT REPORT - DATED JUNE 20, 1990
                     (GAO CODE 140839/OSD CASE 8386)
             "WATER RESOURCES: THE CORPSOF ENGINEERS' REVISED
              REVIEW PROCESSFOR PROPOSEDCIVIL WORKSPROJECTS"
                             DEPARTMENTOF DEFENSE COMMENTS
                                       * * * *        * * * *

                          ON 1.. The GAO recommended that the Secretary                            of
     the Army, through                  the Assistant          Secretary     of the Army for
     Civil     Works, should               work with         the Director,           Office        of
     Management and Budget,                    to establish        a realistic       time frame
     goal     for       the expedited            review      of feasibility          reports       on
     proposed           water        resource        development          projects         to be
     transmitted           to the Congress for construction                    authorization.
      (p.lO/GAO Draft Report)
     w                      .     Concur.      The Army will        provide the Office of
    Management and Budget several documents sufficiently                                   far in
     advance of the Army official                          transmittal         of any project
     report      to alert           the Office of Management and Budget to the
     technical          and policy          issues      involved.        Thus, the historic
     review      time         at the Office of Management and Budget can be
     reduced.              The first          document       is the Project             Guidance
    Memorandum.               Thie document is prepared after the Feasibility
    Review       Conference           and is available              prior to the District
    Engineer          completing         the Feasibility            Report.        It provides
    guidance          on how the information               reviewed at the Feasibility
    Review      Conference            must be modified          or supplemented in order
    to produce             a sufficient        report.       The second document is the
    Washington           Level      Review Center            assessment        of the        final
    report.            The assessment             analyzes the technical             and policy
    issues      in the report and provides                   a basis for the concurrent
    Washington           level review and decision               process.       Therefore,        by
    the time           the Office           of Management and Budget receives                       a
    report,        it      will     know the issues              and the extent of the
    review.            The Army is working with the Office of Management
    and Budget           to reduce the average review time.                     The Army will
    provide a progress report by April                       1991.




Y




         Page 36                                                            GAO/RCED-90-133       Water Resourcee
Appendix     VI

CommentsFrom the Office of Management *
and Budget

Note: GAO comments
supplementing those in the
report text appear at the
end of this appendix.
                                                EXECUTIVE OFFICE OF THE PRESIDENT
                                                  OFFICE OF MANAQEMENT     AND BIJDQET
                                                          WASUINGTON, DC. 20603




                                                           JUL 20      1990


                             Mr.  James Duffus III
                             Director,  Natural Resources
                               Management Issues
                             U.S. General Accounting Office
                             Washington, D.C. 20548
                             Dear Mr. Duffus:
                             The staff of the Natural Resources Division of the Office of
                             Management and Budget appreciates the opportunity   to review the
                             draft General Accounting Office Report entitled   "Water Resources:
                             The Corps of Engineers Revised Review Process for Proposed Civil
                             Works Projects,"  (GAO/RCED90-188, CODE 140839) dated
                             June 20, 1990. Our response is enclosed.



                                                                   Da&d M. Gibbons
                                                                   Deputy ASSOCiate Director
                                                                     for Natural Resources
                             Enclosure




                     Y




                                    Page86
                         Appendix VI
                         timmentr   From the OIilce   of bnagement
                         and Budget




                                                          ENCLOSURE

                 OMBResponse to "WATERRESOURCES: The Corps of Engineers
                 Revised Review Process for Proposed Civil Works Projects,"                 dated
                 June 20, 1990.
                 QAO RBCOMMEWDATIOW
                 GAO recommends that OMB and the Assistant Secretary                of the Army
                 agree on a more realistic goal than 30 days. Also,                 GAO cited a
                 1989 recommendation that OMBshould either increase                 or supplement
                 its resources.
                 OMB REISPONSB
See comment 1I   Executive     Order    12322.        A copy should be included   in the report.
See comment 2.   OMB review schedule.    Because of competing priorities    in OMBand
                 in the Natural Resources Division,    we do not agree with the
                 300day period and are reluctant    to agree to any period.
                 Additional  staff for the Water Resources Branch is not an OMB
                 priority.
See comment 3.   Elaboration   of OMB's orocess.     As GAO indicates,       we do not
                 approve a report until we are "comfortable"            with it, but our
                 procass is not as subjective     or arbitrary      as it sounds. Because
                 the results of OMB's review can have National implications            by
                 establishing   precedents for the Corps of Engineers, the
                 Department of the Interior's     Bureau of Reclamation, and the
                 Department of Agriculture's     soil Conservation Service whose
                 projects OMB also reviews under Executive Order 12322, OMB's
                 clearance of reports involves a very thorough peer review based
                 on the following    policy and technical     criteria:
                     0    Policy criteria   emphasize delimiting Federal and non-
                          Federal responsibilities   according to Administration
                          priorities:
                          -    Ensure that project outputs represent established
                               Federal interests   (e.g., urban flood control in lieu of
                               drainage and erosion control,    commercial navigation in
                               lieu of land developments), or any new Administration
                               priorities   (e.g., mitigation  of environmental effects
                               of existing projects).
                          -    Ensure that justifications      of projects with priority
                               output8 are based on National needs (projects are
                               justified   in terms of damages avoided or decreases in
                               cost and are not merely regional transfers:        priority
                               purposes are justified     incrementally   and not
                               predominately    on the basis of benefits from non-
                               priority  purposes -- i.e., recreation).




                         Page37                                            GAO/~188WaterReaources
                            Appendix VI
                            CanmentaF'romtheOfflceofManagement
                            andBudget




                            -   Ensure that cost sharing is consistent                    with P.L. 99-662
                                and other applicable  legislation.
                            -   Ensure that         cost-ceilings        are not violated.
                            -   Avoidance of windfall               benefits   accruing    to single
                                beneficiaries.
                            -   Emphasize protection  of existing                property and
                                activities rather than promoting                 land development.
                            -   Ensure that         environmental        issues are satisfactorily
                                addressed.
                        o Technical criteria              primarily      based on the Principles        and
                          Guidelines:
                            -   Ensure that projects are formulated in accordance with
                                established  planning and design criteria (e.g., broad
                                range of alternatives  are considered and separable
                                elements are incrementally  justified).
                            -   Ensure that projects              to be cost shared are in fact the
                                most cost effective              (National Economic Development
                                maximizing plan).
                            -   Ensure that proposals are evaluated                  in terms of current
                                and appropriate data (e.g., economic                   and demographic
                                projections).
                            -   Ensure that benefits are derived by appropriate
                                methodology and appropriately  measured and accounted.
                            -   Ensure that plans have been developed in accordance
                                with NEPA and other appropriate  legislation (e.g., Fish
                                and Wildlife Coordination  and Endangered Species Acts).
                     General Comments on the OMBReview Process:
See comment 4.           0 GAO indicates that OMBnormally does not go into technical
                           detail.    Sometimes, application   of technical   criteria
                           does, in fact, catch problems which take time to be
                           resolved.    Often, OMB's technical   check has encouraged the
                           Corps to be more careful in preparation      of other reports.
See comment 5.           o The number of rejected projects is not a measure of the
                           quality control provided by our review process.  Often, we
                           defer formal judgment until our informally  communicated
                           concerns  are satisfactorily  addressed.
See comment 5.           o The time taken on a particular project may reflect an
                 Y
                           examination of a policy issue that may relate to an entire
                           class of projects.




                            Page30                                                  GAO/RCED-90488     WsterReeom
                          Appendix VI
                          Commenta From the Of!lce of Management
                          and Budget




See comment 5.   OMBhas contributed       to acceleration     of review nrocess.   Army’s
                 acceleration     of the review process is a net gain independent of
                 the time it takes for OMB to discharge its responsibilities.
                 Moreover, the President's        budget supports the policy of seamless
                 funding.     Seamless funding is the automatic initiation        of the
                 preconstruction,      engineering,   and design phase prior to
                 transmission     of the feasibility     report to Congress for
                 authorization.      This seamless funding responds to project
                 sponsors~ concerns for the timeliness          of the review process by
                 eliminating     a sometimes lengthy gap caused by a delay in
                 appropriations.
See comment 6.   Recent OMBtrack record.    Within manpower constraints,       we have
                 accelerated reviews and put our review priority    on projects being
                 proposed for authorization  or as new construction    starts.
                     0   Between July of 1988 and July 1989, OMB received 24
                         reports from Army. The average time to review 18 reports
                         was 8 months. No reports were reviewed within 30 days.
                     o   Between July 1989 and July 1990, OMBused an average time
                         of 4 months to review 13 of the 25 reports it received
                         from Army. One report was reviewed within 30 days.
                     o   The improvement in average report review time reflects
                         increased responsiveness on priority   projects.  The
                         decrease in reviews completed reflects   competing demands
                         on staff.
See comment 7    Potential   for future improvements. OMBWill continue its             effort
                 to accelerate reviews and be responsive to Army priorities.
                     o   For each proposed project,     Army will provide OMBwith the
                         Project Guidance Memorandum (prepared after the
                         feasibility  Review Conference) and the final Washington
                         bevel Review Center Assessment (prepared at the end of the
                         concurrent Washington Review).       This should familiarize
                         OMBpersonnel with proposed projects and help to avoid
                         raising technical    issues already satisfactorily    addressed.
                         As we gain experience and become more confident of the
                         results of the new review process, OMBwill be able to
                         devote less time to technical     issues and concentrate on
                         policy issues.    Elimination   of the work on technical
                         issues should accelerate the review time and increase the
                         number of reports that OMBcan process.




                          Page 39                                    GAO/RCED-90-183   Water Resources
                                                                                        L

               Appendix VI
               Commenti From the Of&e   of Management
               and Budget




               The following are GAO'S comments on the OMB letter dated July 20, 1990.


GAO Comments
               2. This comment and our responseare summarized in the letter on pages
               8-9.
               3. In this section, OMB elaborates on information provided to us during
               our review as presented in app. IV. While OMB reiterates and supple-
               ments information we reported, we believe our appendix as written
               accurately represents OMB'S processand criteria.
               4. The view that OMB normally doesnot apply technical criteria in its
               review was expressedby a DOD official as reported on page 32 of app.
               IV. On page 31 of app. IV, we report that technical criteria are among
               the standards that OMB may use.
               6. We do not take issue with these OMB statements in our report and
               consider them a further elaboration of OMB views that doesnot require a
               revision of the report.

               6. Our analysis of the timeliness of OMB reviews was basedon a 3-year
               period ending in October 1989. OMB used a 2-year period ending in July
               1990 that involves a different set of reports. Rather than calculating
               averages,we reported the range of review times and the number of
               reports OMB reviewed within 30 days.

               7. This new procedure is summarized on page 8 of the letter.




               Page 40                                       GAO/RCEDBO-188   Water Besuurcee
Appendix VII

Major Contributors to This Report


                        Leo E. Ganster, Assistant Director
Resources,              John P. Murphy, Assignment Manager
Community, and          John P. Scott, Evaluator-in-Charge
Economic                Gerald C. Allen, Evaluator
Development Division,   Anu K. Mittal, Evaluator

Washington, DC.




               Y




(140@8@)                Page 41                              GAO/RCED-BO-1@3 Water ltetm-