CORPS OF ENGINEERS—CIVIL WORKS
AT A GLANCE:
2006 Discretionary Budget Authority: $4.3 billion
(Decrease from 2005: 7 percent)
Major Programs:
• Commercial navigation
• Flood and storm damage reduction
• Aquatic ecosystem restoration
MEETING PRESIDENTIAL GOALS
Making Government More Effective
• Establishing clear, performance-based guidelines for allocating funds among construction
projects in order to increase the net economic and environmental return of the Army Corps of
Engineers’ (Corps) construction program.
Agency-specific Goals
• Prioritizing construction funding for projects with the highest net economic and environmental
return.
• Reducing the large backlog of construction work, by providing $114 million in the Budget to
complete 20 projects by the end of 2006, yielding an average return of $6.64 per dollar invested.
• Using innovative means to strengthen partnerships with local stakeholders to improve the
quality of Corps recreation services through a Recreation Modernization Initiative.
• Restoring aquatic ecosystems, with an emphasis on the Florida Everglades, the Louisiana
coastal area, and the Upper Mississippi River; and assisting recovery efforts for endangered
and threatened fish and wildlife on the Columbia and Missouri Rivers.
• Protecting the Nation’s waters and wetlands.
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274 CORPS OF ENGINEERS—CIVIL WORKS
MAKING GOVERNMENT MORE EFFECTIVE
A Performance Budgeting Initiative for Construction
The 2006 Budget proposes an initiative that improves the performance of the Corps construction
program. The initiative establishes objective, performance-based guidelines for developing the
Corps construction budget, which will maximize the overall net economic and environmental return
from the construction program. These funding guidelines are based on sound financial management
principles similar to those used by private industry to rank and select investments. The initiative
would improve the program’s overall performance and benefit to the Nation by redirecting funds from
low-performing to high-performing construction projects.
The 2006 Budget provides $1.4 billion for the Corps construction program, with an additional $0.2
billion available for the highest performing projects contingent upon congressional adoption of this
initiative. The President’s Budget directs resources to construction projects based on guidelines summarized
below.
The Performance Budgeting Initiative: Guidelines for Making Better, Smarter Construction
Investments
1. Budgeting by mission area. Projects compete for funding in each of the Corps’ three main mission
areas: commercial navigation, flood and storm damage reduction, and aquatic ecosystem restoration.
2. Performance-based project rankings. Projects are ranked based on objective performance criteria.
• In allmission areas except aquatic ecosystemrestoration, projects are ranked based on their remaining
benefits, relative to their remaining costs.
• Aquatic ecosystem restoration projects are ranked based on the extent to which they use resources
effectively to address a significant regional or national ecological problem.
3. Performance-based funding allocations. The performance rankings will determine what level of funding
projects will receive. Projects ranking at, or near, the top will be funded at very high levels, while
low-performing projects will receive reduced funding levels, and in some cases, may be suspended.
• Highest ranking projects will receive at least 80 percent of the amount that the Corps can efficiently
spend.
• Low-ranking projects that do not meet baseline performance thresholds will be considered for deferral.
4. Limitations on multiyear contracts. The Budget proposes appropriations language to repeal the Corps’
continuing contract authorities. The proposal will reduce out-year funding commitments, while allowing the
Corps to issue multiyear contracts where appropriate.
Reducing the Construction Backlog. Between 2000 and 2005, funding for the Corps construction
program increased by 30 percent in nominal terms. Much of this increase was for work on projects
with relatively low benefits or outside of the Corps’ three main mission areas: 1) facilitating commercial
navigation; 2) reducing damages caused by floods and storms; and 3) restoring aquatic ecosystems.
During the same period, the Corps construction workload grew at an unmanageable rate
and more projects faced construction delays, as additional projects were authorized without funding
for timely completion. This growth trend has resulted in a $50 billion cost to complete authorized
THE BUDGET FOR FISCAL YEAR 2006 275
projects, of which only $15 billion is for projects that are both within the Corps’ main mission areas
and meet current economic and environmental performance standards. Funding new projects
further stresses the Corps’ workload as these projects inevitably compete for funding with ongoing
projects that offer much greater benefits, relative to their costs. As a result, some projects cost more
than they need to, and most projects are completed many months—and sometimes years—later than
they could.
The Administration’s performance budgeting initiative will reduce the construction backlog over
time by placing a higher priority on completing high-return projects and limiting the start of new
projects to the highest performing projects that are consistent with long-term fiscal management
goals. In addition, the Administration’s principles for improving program performance, which were
in the President’s 2004 Budget, will contribute significantly to achieving this objective. Those principles
emphasize the need for using sound economic analysis in the formulation and design of proposed
projects, funding only those new projects that have a very high net economic and environmental return
and developing a process for de-authorizing projects that are inactive, have low return, or fall
outside the Corps’ mission areas.
Priority Funding for High-Ranking National Projects. Based upon the performance rankings
within each mission area, the Budget focuses funding on the highest-performing projects, including
nine projects that are national priorities.
Priority Projects
2006 Budget
Authority
(in millions
of dollars)
Project Purpose
Sims Bayou, Houston (TX).................................................................... 18 Flood Damage Reduction
West Bank, New Orleans (LA)............................................................. 28 Flood/Storm Damage Reduction
New York/New Jersey Harbor (NY, NJ)............................................. 101 Commercial Navigation
Oakland Harbor (CA)............................................................................... 48 Commercial Navigation
Olmsted Locks and Dam, Ohio River (IL, KY)................................ 90 Commercial Navigation
Missouri River Fish and Wildlife Recovery (IA, NE, KS, MO) . 83 Hydropower, Flood Damage
Reduction, Commercial
Navigation/Mitigation
Upper Mississippi River Restoration (IL, IA, MN, MO, WI) ........ 34 Commercial Navigation/
Mitigation
Columbia River Fish Recovery (OR, WA, ID)................................. 102 Hydropower, Commercial
Navigation/ Mitigation
Everglades (FL)......................................................................................... 137 Aquatic Ecosystem Restoration
A Five-Year Plan for Corps Investments
The Corps is developing a comprehensive five-year budget plan for future spending that meets the
goals set by the Administration’s performance budgeting initiative. This effort will encourage greater
fiscal discipline by requiring current budget decisions to be made in light of their long-term funding
implications. It also will establish an important link between Corps spending projections and the
agency’s annual and long-term performance targets. The plan will include a summary of projected
civil works funding by both appropriation and program area, disaggregated to the individual project
level.
276 CORPS OF ENGINEERS—CIVIL WORKS
MAKING GOVERNMENT MORE EFFECTIVE—Continued
Program Performance
Several Corps programs were assessed this year using the Program Assessment Rating Tool
(PART). The PART analyses helped shape the Budget by reviewing the programs’ design, purpose,
and strategic planning efforts; how well they are managed; and whether they are generating positive
returns for taxpayers. The PART analysis of the storm damage reduction program, for example,
concluded that the Budget should continue to limit funding for long-term beach re-nourishment,
and the Corps should better coordinate its beach nourishment activities with Federal, State and
local plans for hazard mitigation, to reduce overall storm damages more cost-effectively. In addition,
the reassessment of the Corps hydropower program concluded that in response to deficiencies cited
in the initial PART, the Corps has since developed an overall asset management plan for plant
and program managers to use in making risk-based hydropower investment decisions and setting
regional and national hydropower investment priorities.
Update on the President’s Management Agenda
The table below provides an update on the Corps’ implementation of the President’s Management
Agenda as of December 31, 2004.
Human Capital
Competitive
Sourcing
Financial
Performance E-Government
Budget and
Performance
Integration
Status
Progress
The Corps is assessing implementation of its 2012 Reorganization Plan to determine whether organizational
changes are achieving intended results. The Corps also developed a leadership guide to focus leadership
training and development efforts. The Corps has ensured the security of 87 percent of its Information Technology
(IT) systems and expects to be fully accredited by 2005. The Corps has two ongoing competitions for IT and
Facilities Management and has completed plans for three more. To address problems identified in its financial
audit, the Corps is aggressively working to correct past audit deficiencies. To advance Budget and Performance
Integration, the Corps revised the Civil Works strategic plan and is using performance measurement to guide
budget and management decisions, such as in the wetlands permitting program.
Initiative Status Progress
Real Property Asset Management
The Corps has completed its initial assessment of its Real Estate Management Systems and has made
important progress in developing its real property inventory analysis and asset management plan.
THE BUDGET FOR FISCAL YEAR 2006 277
AGENCY-SPECIFIC GOALS
Facilitating Commercial Navigation
The Corps manages nearly 11,000 miles of commercial waterways and about 300 ports and harbors,
typically through lock and dam operations and dredging. In allocating operation and maintenance
funds, priority is given to maintaining key infrastructure, which yields the highest economic returns.
The average return on investment from completing the construction of ongoing commercial navigation
projects included in the 2006 Budget is 6.4 to one.
The Port of Oakland in California is a priority navigation project in the
2006 Budget.
Ports and Harbors. The Budget provides
$921 million for ports and harbors, including
$588 million for maintaining existing channels
and $260 million for continuing construction.
The Budget also includes funding for high-return
harbor deepening projects, such as New
York/New Jersey Harbor and Oakland Harbor.
Inland Waterways. The Budget provides
$932 million for inland waterway navigation,
including $369 million to continue progress on
high performing inland projects such as Olmsted
Locks and Dam, Illinois and Kentucky;
Marmet Lock, West Virginia; and McAlpine
Locks and Dam, Illinois and Kentucky.
Flood and Storm Damage Reduction
Flood Damage Reduction. The 2006 Budget provides $390 million to continue construction on
highly cost-effective flood damage reduction projects, such as Sims Bayou, Texas and West Bank,
Louisiana. Upon completion, both ownership and maintenance responsibility for such projects will
be turned over to local sponsors. In addition, the Budget proposes a new flood damage reduction
project in Washington, D.C., for which the estimated benefits are 4.1 times greater than the costs.
Storm Damage Reduction. The Budget also provides $54 million to continue progress on beach
nourishment projects based on the degree to which they will reduce storm damage. Similar to the
President’s 2005 proposal, the Budget funds the initial construction phase of those projects, while
local sponsors will have the responsibility for financing long-term follow-up re-nourishment. The
Budget includes $14 million for beach nourishment and re-nourishment to mitigate the impacts of
Federal navigation projects.
Aquatic Ecosystem Restoration
The 2006 Budget provides $510 million for aquatic ecosystem restoration work, focusing resources
on nationally significant projects such as the Florida Everglades and Coastal Louisiana.
278 CORPS OF ENGINEERS—CIVIL WORKS
AGENCY-SPECIFIC GOALS—Continued
A Budgetary Priority: Implementing the Missouri River
Master Manual
The Budget provides funds to create sand bar habitat along the Missouri
River.
In theMissouri River basin, a series of Corps actions overmore
than a century contributed to the economic growth of the region,
but also dramatically altered the natural ecosystem.
Three Missouri River species are of particular concern: two
birds, the interior least tern and the piping plover, which nest
along the river; and a large fish called the pallid sturgeon. The
2006 Budget requests $83 million—an increase of $64 million
above 2005—to enable the Corps to manage the flow of
the river as provided in recent revisions to the Missouri River
Master Manual, without jeopardizing the continued existence
of these species. The Administration is committed to invest
these funds to improve the environment in a manner that will
reflect the best available science, consistent with commercial
navigation and other needs. These investments include:
• Creating side channels that provide shallow water habitat
under a range of river conditions and support healthy
forage fish and insect populations;
• Purchasing low-lying land from willing sellers to re-establish
a hydrologic connection between the river and its
floodplain and improve the biological productivity of the
side channels;
• Assisting pallid sturgeon recovery below Fort Peck Dam
and on the Yellowstone River;
• Establishing sand bar habitat for the nesting birds; and
• Collecting baseline and annual biological data.
Everglades. The Administration
continues its commitment to restore
the fragile Florida Everglades
ecosystem in partnership with
the State of Florida. Specifically,
the Budget provides $137 million
for restoration of the Everglades,
including $68 million for the Comprehensive
Everglades Restoration
Plan (CERP). Under CERP, the
Corps will support the State’s
decision to use its own funds to
accelerate certain work on the
restoration project. In addition,
the Corps will broaden its role
in the Modified Water Delivery
Project, which will make more
water available for the Everglades
National Park and is a prerequisite
for CERP. The Corps will share
funding responsibilities with the
Department of the Interior while
continuing to manage construction
efforts.
Louisiana Coast. Over the past
75 years, more than one million
acres of the Louisiana coastal
plain have submerged into the
Gulf of Mexico. Another third of
a million acres could be lost by
2050. The affected area supports a
coastal wetlands and barrier island
ecosystem that is an environmental
resource of national significance.
The Corps is continuing to work
closely with the State of Louisiana
to address its coastal problems. The
2006 Budget provides $20 million,
an increase of $11.5million over the
2005 level, with emphasis on the
science and technology program; a
long-term hydrodynamic study of
the Mississippi River; and studies
and design work on one or more
significant restoration projects.
THE BUDGET FOR FISCAL YEAR 2006 279
Regulating Development that Affects Wetlands
The Corps manages a permitting programthat plays an important role in the status of our Nation’s
wetlands. It requires real estate developers and builders of roads, bridges, and shopping centers to
avoid, minimize or mitigate any damage they cause to aquatic resources, including wetlands. The
agency processes some 80,000 permits annually. In 2003, developers received permits for projects
that will adversely affect 21,300 acres of wetlands nationwide, in return for which they were required
to create or restore 43,400 acres (roughly the size of the District of Columbia) of wetlands. The 2006
Budget proposes $160 million for the agency’s regulatory program, an increase of 11 percent over
the 2005 level, which will help improve the speed and quality of permit processing and increase the
Corps’ mitigation and compliance activities.
The Corpsmaintains navigation infrastructure
in Illinois.
Maintaining Key Infrastructure
The 2006 Budget provides $2.0 billion for the operation and
maintenance of existing Corps projects, including funding for
continued security improvements at Corps facilities to reduce
their vulnerability to terrorist threats. In order to allow more
timely maintenance at Corps hydropower facilities, the Budget
proposes that the Corps’ hydropower-related operation and
maintenance expenses be directly financed by the Department
of Energy’s Power Marketing Administration receipts, which
are generated by the sale of power from these Corps facilities.
This will enable the Corps to reduce downtime and increase
the reliability of power generation. In addition, the 2006
Budget proposes to create an emergency maintenance reserve
fund—managed directly by the Assistant Secretary of the Army
for Civil Works—to meet high-priority, unexpected, and urgent
maintenance needs at key Corps facilities each year. Under the
proposed arrangement, the Assistant Secretary for Civil Works
will be able to respond to these emergency situations promptly,
without interfering with other program commitments.
Recreation Management that Draws on Local Resources and Local Leadership
The Corps is one of the largest Federal providers of outdoor recreation services, managing 4,300
recreation areas at 465 projects in 43 States. The Corps spends about $268 million each year to
support this popular program.
The 2006 Budget proposes a Corps recreationmodernization initiative, based on a promising model
now used by other major Federal recreation providers such as the National Park Service and the
Forest Service. The agency would use a portion of the recreation fees that it collects (such as entrance
fees) to upgrade the site where the fees are collected. In addition, the Corps will seek legislative
authority to conduct a limited number of demonstration projects such as lake improvement districts.
These public/private partnerships encourage local community leaders and property owners to work
with the Corps to maintain and upgrade Corps recreation facilities. The work would be performed
in a collaborative manner, similar to the approach taken in the President’s cooperative conservation
efforts. The demonstration projects could be expanded subsequently if they prove to be an effective
way to pay for and improve the program.
280 CORPS OF ENGINEERS—CIVIL WORKS
Corps of Engineers—-Civil Works
(In millions of dollars)
Estimate 2004
Actual 2005 2006
Spending
Discretionary Budget Authority by Program:
Construction................................................................................................................ 1,730 1,782 1,637
Operation and Maintenance.................................................................................. 1,955 1,943 1,979
Flood Control, Mississippi River and Tributaries............................................ 322 322 270
Flood Control and Coastal Emergencies ......................................................... 3 — 70
General Investigations............................................................................................. 116 143 95
Regulatory Program................................................................................................. 139 144 160
Formerly Utilized Sites Remedial Action Program........................................ 139 164 140
General Expenses .................................................................................................... 159 166 162
Office of Assistant Secretary (Civil Works)...................................................... — 4 —
Subtotal, Discretionary budget authority .......................................................... 4,563 4,668 4,513
Reclassification of PMA Receipts, Operation and Maintenance ............. — — 181
Total, Discretionary budget authority ................................................................. 4,563 4,668 4,332
Memorandum: Budget authority from enacted supplementals ............... — 372 —
Total, Discretionary outlays ................................................................................... 4,696 4,909 4,625
Mandatory Outlays:
Existing law............................................................................................................. 142 18 27
Legislative Proposal, Recreation Program User Fee .............................. — — 9
Total, Mandatory outlays ........................................................................................ 142 18 18
Total, Outlays.............................................................................................................. 4,838 4,891 4,643
