U.S. Army Corps of Engineers: Building Overhead Costs into Projects and Customers' Views on Information Provided

Abstract : The Corps spends billions of dollars annually on projects in its Civil Works program. Part of the cost of doing business with the Corps involves paying for overhead -- costs that do not directly relate to a specific project or activity but more generally support agency operations. Overhead costs are included in the amount that Congress appropriates for specific Corps projects and the amount that customers pay for Corps' services. The Corps provides services to customers including other Department of Defense units, federal agencies, state and local governments, Indian tribes, and foreign governments. The Corps' Civil Works program is organized around its headquarters, 8 divisions, and 38 districts nationwide. Only district overhead is charged to projects; overhead for headquarters and divisions is not. You asked GAO to review the Corps' process for building overhead costs into projects. This report examines the following: (1) how the Corps builds overhead costs into its projects, and (2) customers' views on overhead information. To accomplish this, GAO reviewed the Corps' documentation of its overhead and billing processes; interviewed officials at Corps headquarters, 2 divisions, and 4 districts based on geographic location; and interviewed 16 of the highest paying federal and nonfederal Corps' customers in fiscal year 2012. The results of these interviews cannot be generalized to all customers but provided insights. GAO is not making recommendations in this report. The Department of Defense did not provide comments.