Corps: Efficient Funding Saving Big Money On Major Projects

The February 28 meeting of the Inland Waterways Users Board (IWUB) in Galveston, Texas, revealed “one of the most favorable outcomes I’ve ever seen in my years on the board,” according to Marty Hettel, vice president for government affairs at American Commercial Barge Line and chairman of the board. Hettel, a longtime veteran of the board, will be chairing his last meeting of the board in May when it meets again in New Orleans.

Hettel was referring to presentations by Corps of Engineers officials that showed drastic downward cost estimates for several major lock and dam projects, amounting to projected savings of more than a billion dollars.

The downward-adjusted cost estimates come as the Office of Management and Budget (OMB) is in the midst of conducting a review of Corps budgeting and spending.

The savings were attributed to “efficient funding” in spending bills last year that allowed projects to speed up and to obligate money more efficiently. Favorable working conditions also resulted in some speed-ups and cost saving, notably in the final stages of work on the Olmsted Locks and Dam.

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The Corps was fully funded last year in three separate spending bills and did not shut down with some other federal agencies in early 2019 when President Donald Trump and Congress were feuding over money for his proposed border wall. The first of them, the “minibus” in September, funded the Corps’ civil works program at $6.99 billion, an increase of 46.08 percent from the administration’s request of $4.79 billion.

It’s not just the amount of funding but its timing that enables cost savings. Stephen Durrett, programs director for the Great Lakes and Ohio River Engineer division, explained to IWUB members in one presentation that, “Funding, if provided in the applicable fiscal year, can be obligated (i.e., reserved at contract award) effectively and efficiently in that fiscal year.” Durrett’s estimates of “efficient” vs. “capability” funding plans for the Lower Mon, Kentucky Lock and Chickamauga Lock were the same, due to the funding boost.

Upper Ohio Savings

The estimated savings for Upper Ohio River projects were the most dramatic, at $1.4 billion less than previous estimates. The  project includes replacing Emsworth, Dashields and Montgomery locks and dams. Montgomery pre-design work is completed, with actual design work beginning.

The authorized total project cost of $2.69 billion has been revised to $1.55 billion, resulting in a potential savings of $1.14 billion under the authorized cost. Some of those savings came from standardizing miter gates used in all three locks, said Hettel. An economic re-evaluation report is currently being prepared.

Chickamauga Moving Faster

Project manager Don Getty of the Nashville Engineer District reported that lock excavation work on the Chickamauga Lock was substantially completed by February 1. The Corps anticipates exercising four additional options in March, said Getty, with work proceeding into the cofferdam area.

Efficient funding has allowed the Corps to move Chickamauga Lock’s operational deadline from November 2027 to September 2023, and its project completion date from May 2028 to December 2024. Planned expenditures through December 31, 2018, were $255 million, while actual expenditures came in at $246.5 million. Actual expenditures were below estimates in four consecutive quarters.

Final Olmsted Work Accelerating

Dewey Rissler, Olmsted project manager for the Louisville Engineer District, showed figures (with an 80 percent certainty) of $2.782 billion total estimated price for Olmsted Locks and Dam, versus estimates that at one time reached $3.1 billion. Rissler said the savings came from a combination of efficient funding and low water extending beyond the normal low water season (June 15 through November 30).

The final completion for Olmsted is now scheduled for 2021, after having been moved ahead from 2026 due to the improved funding.

Brazos River Alternatives

Franchelle Craft, Corps project manager, reported on alternatives for the Brazos River Tentatively Selected Proposal (TSP).

One alternative, labeled 3A.1, would remove existing 75-foot-wide floodgates and replace them with new 125-foot floodgates. They would be set back further from the river and would allow a longer approach channel. New wing walls and guide walls would be built for the east floodgates. A temporary bypass channel to be used during construction would be filled in when the structures are complete.

Authorization for this alternative would depend on the tonnage volume reaching a certain amount, to be agreed upon within the Corps prior to the signing of a Chief’s Report, said Craft. The Chief’s Report will break out separate estimated costs for the Colorado River Locks, currently estimated at $279 million, and for the Brazos floodgates, estimated at $176 million.

This alternative would have a benefit/cost ratio (BCR) of 5.7, meaning 5.7 dollars of benefit for every dollar spent.