Corps of Engineers: Effects of Restrictions on Corps' Hopper Dredges Should Be Comprehensively Analyzed
GAO-03-382
Published: Mar 31, 2003. Publicly Released: Mar 31, 2003.
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Highlights
The fiscal year 2002 Conference Report for the Energy and Water Development Appropriations Act directed GAO to study the benefits and effects of the U.S. Army Corps of Engineers' (Corps) dredge fleet. GAO examined the characteristics and changing roles of the Corps and industry in hopper dredging; the effect of current restrictions on the Corps' hopper dredge fleet; and whether existing and proposed restrictions on the fleet, including the proposal to place the McFarland in ready reserve, are justified. In addition, GAO identified concerns related to the government cost estimates the Corps prepares to determine the reasonableness of industry bids.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of the Army | In an effort to discern the most economical and advantageous manner in which to operate its hopper dredge fleet, and because the Corps has been unable to support, through analysis and documentation, the costs and benefits of placing its hopper dredges in ready reserve, the Secretary of the Army should direct the Corps of Engineers to obtain and analyze the baseline data needed to determine the appropriate use of the Corps' hopper dredge fleet including, among other things, data on the frequency, type, and cost of emergency work performed by the Corps and the private hopper dredging industry; contract type; and solicitations that receive no bids or where all the bids received exceeded the Corps' estimate by more than 25 percent. |
Closed – Not Implemented
The Corps stated that it addressed our recommendation in its June 2005 Report to Congress on hopper dredges. However, we disagree. In the report, the Corps presented data on its hopper dredging contracts that included the average number of bids and the percent of the government estimate for the total winning bid amount. The Corps did not include any data on the frequency, type and cost of emergency work performed by the Corps and private industry; information on contract type; information on the number of solicitations that received no bids; and on the cases where all the bids received exceeded the Corps' estimate by more than 25 percent. Since the Corps' analysis did not include the specific factors included in our recommendation, the recommendation is closed, not implemented.
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| Department of the Army | In an effort to discern the most economical and advantageous manner in which to operate its hopper dredge fleet, and because the Corps has been unable to support, through analysis and documentation, the costs and benefits of placing its hopper dredges in ready reserve, the Secretary of the Army should direct the Corps of Engineers to prepare a comprehensive analysis of the costs and benefits of existing and proposed restrictions on the use of the Corps' hopper dredge fleet--including limiting the Corps' dredges to 180 days of work per year, placing the Wheeler into ready reserve, limiting the McFarland to its historic work in the Delaware River, and placing the McFarland into ready reserve status. |
Closed – Implemented
The Corps addressed this recommendation in its June 2005 hopper dredge report to Congress. In the report, the Corps presented the costs and benefits of 12 different options for operating the Corps' hopper dredges that included existing and proposed restrictions. The Corps presented the government's costs for operating its hopper dredges as well as the contract costs. The Corps determined the benefits of each option by assessing the level of risk to navigation and industry. The Corps also noted some general benefits provided by its dredges, such as responding to emergency dredging needs.
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| Department of the Army | In an effort to discern the most economical and advantageous manner in which to operate its hopper dredge fleet, and because the Corps has been unable to support, through analysis and documentation, the costs and benefits of placing its hopper dredges in ready reserve, the Secretary of the Army should direct the Corps of Engineers to assess the data and procedures used to perform the government cost estimate when contracting dredging work to the private hopper dredging industry, including, among other things, (1) updating the cost information for private industry hopper dredges and (2) examining the policies related to calculating transit costs. |
Closed – Implemented
The Corps stated that it addressed our recommendation in its June 2005 Report to Congress on hopper dredges. In the report, the Corps stated that it has updated and corrected data in its Dredging Information System. The report does not directly address the issue of examining the policies related to calculating transit costs. Nonetheless, we believe that the action the Corps has taken substantially addresses the intent of our recommendation.
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Topics
Cost analysisDefense cost controlDepartment of Defense contractorsFinancial managementInventory controlMilitary vesselsDredgingCost estimatesHarborsU.S. Army