Since 1824, the Corps has been responsible for maintaining a safe, reliable, and economically efficient navigation system in the United States. This system currently comprises more than 12,000 miles of inland and intracoastal waterways and about 180 ports handling at least 250,000 tons of cargo per year. The accumulation of sediment in waterways— known as shoaling—reduces their navigable depth and, without dredging, may result in restrictions on vessels passing through the waterways. These restrictions often apply to the vessels’ draft—the distance between the surface of the water and the bottom of the hull—which determine, in part, the minimum depth of water in which a vessel can safely navigate. Draft restrictions may result in delays and added costs as ships may need to off-load some of their cargo to reduce their draft, wait until high tide or until waterways are dredged, or sail into another port. For example, according to a 2011 Corps study, 1 foot of shoaling in the lower Mississippi River could result in $2.8 billion worth of cargo being disrupted annually. To minimize such risks to navigation, the Corps removed an annual average of about 229 million cubic yards of material from U.S. waterways from fiscal year 2003 through fiscal year 2012, at an average annual cost of about $1.1 billion, according to the Corps. Even with these efforts, draft restrictions have regularly been in place on major waterways throughout the United States in the past several years, according to Corps documents and officials. The Corps contracts with industry to perform most dredging, including work done by hopper dredges. According to the Corps, of the approximately $11 billion it spent for dredging from fiscal year 2003 through fiscal year 2012, about $2.37 billion was for hopper dredging. Of that, industry hopper dredges accounted for about $1.8 billion, and Corps hopper dredges accounted for about $570 million. Corps spending on hopper dredging has more than doubled since fiscal year 2003, while the amount of material removed by hopper dredges has increased only slightly over that period, according to Corps data. Specifically, as shown in figure 2, the Corps spent nearly $170 million for Corps and industry hopper dredges to remove around 66 million cubic yards of material in fiscal year 2003. By fiscal year 2012, Corps spending on Corps and industry hopper dredging had increased to about $370 million, while the amount of material removed increased to nearly 72 million cubic yards. This growth in spending reflects costs for hopper dredging that, according to Corps documents, have increased because of rising costs for fuel and steel, among other factors. Hopper dredging today is generally performed in three regions of the United States—the East Coast, Gulf Coast, and West Coast—and each region has at least one Corps hopper dredge that typically operates in it: the McFarland on the East Coast, the Wheeler on the Gulf Coast, and the Essayons and Yaquina on the West Coast. On the East and Gulf Coasts, the majority of the hopper dredging workload is carried out by industry dredges, while on the West Coast, Corps dredges remove more than half of the dredged material. Various factors can influence and complicate hopper dredging in each region. For example, on the East Coast, much of the hopper dredging must be performed during certain months of the year because environmental restrictions related to endangered sea turtles and other species prohibit dredging while those species are present. On the West Coast, the Corps must factor in the time and expense of moving industry dredges through the Panama Canal if the only available industry hopper dredges are on the East or Gulf Coasts. The sizes and capabilities of specific hopper dredges—and, therefore, the projects for which they are suited—vary. For instance, shallow ports and harbors cannot be dredged by vessels with deep drafts in many cases. The Corps uses the Yaquina, which is a small dredge with a draft of around 15 feet when its hopper is fully loaded, for dredging small and shallow ports along the California, Oregon, and Washington coasts. In contrast, the Corps uses the Wheeler, which is a large dredge with a draft of nearly 30 feet when its hopper is fully loaded, for deeper navigation channels such as those in the lower Mississippi River. See appendix II for a list of Corps and industry hopper dredges and their characteristics. As noted, several pieces of legislation were enacted that sought to increase the role of industry in hopper dredging by placing restrictions on the use of the Corps’ hopper dredges. More specifically, in 1978, legislation directed the Corps to contract out much of its hopper dredging work to industry and reduce the Corps’ fleet to the minimum necessary to insure the capability of the federal government and industry together to carry out projects for the improvement of rivers and harbors. The Energy and Water Development Appropriations Act for fiscal year 1993, and subsequent appropriations acts in the early 1990s, required the Corps to offer for competitive bidding at least 7.5 million cubic yards of hopper dredging work previously performed by the federal fleet. The Corps addressed this requirement by reducing the use of each of its four dredges from about 230 workdays per year to about 180 workdays per year. The Water Resources Development Act of 1996 then required the Corps to take the Wheeler out of active status and place it into ready reserve. The Corps implemented this requirement beginning in fiscal year 1998 by generally limiting the Wheeler to working 55 days a year plus any urgent or emergency work. More recently, the Water Resources Development Act of 2007 required that the Corps place the McFarland in ready reserve and limited the use of the vessel to 70 working days per year in the Delaware River and Bay, plus any urgent and emergency work. See table 1 for the statutory restrictions in place on the use of the Corps’ hopper dredges and how they have changed since fiscal year 2003. The Corps follows a process—known as the raise the flag procedure—for activating its ready reserve dredges to respond to urgent or emergency dredging needs. The Corps defines an urgent need for dredging as a time-sensitive situation that may require prompt action for providing a safe navigation channel, and an emergency as a situation that would result in an unacceptable hazard to life, a significant loss of property, or an immediate, unforeseen, and significant economic hardship if corrective action is not undertaken within a time period less than the normal contract procurement process. The raise the flag procedure includes a series of steps intended to allow industry the opportunity to respond to urgent or emergency dredging needs before the Corps uses its own dredges. The Corps district office with an urgent or emergency dredging need notifies the Corps division office overseeing it of the dredging need, and district and division staff review ongoing hopper dredging work under existing Corps contracts to see if any industry hopper dredges could be made available. If no industry hopper dredges could be made available, the offices notify Corps headquarters. The Corps’ Director of Civil Works may then decide whether to use one of the Corps’ ready reserve hopper dredges or make additional efforts to procure an industry dredge, such as by releasing a dredge from an existing contract. The Corps contracts for most of the hopper dredging work by soliciting competitive bids from industry. To determine the reasonableness of contractor bids, the Corps develops a government cost estimate for its hopper dredging solicitations. Government cost estimates are developed using information on the costs of owning and operating hopper dredges— including acquisition, fuel, and shipyard costs—along with information on the project for which the dredging is needed—including the amount and type of material to be removed, and the distance from the dredging site to the placement site. In soliciting bids from contractors, the Corps most commonly uses a sealed-bid process, through which it generally awards the contract to the lowest bidder with a bid that is no more than 25 percent above the government cost estimate.receive any bids or if all bids exceed the government cost estimate by more than 25 percent, the Corps may pursue a number of options, including (1) negotiating with bidders to get the bid within an awardable range of the cost estimate; (2) reviewing the cost estimate and revising it based on additional information, as appropriate, or (3) performing the work itself such as through its raise the flag procedure. If the Corps does not The costs to own and operate hopper dredges include costs such as payroll for the crews, fuel, repairs, and depreciation. Hopper dredging requires large capital outlays—a modern hopper dredge comparable in size to the Wheeler, for instance, would cost around $100 million to build, according to Corps and industry estimates—and related costs such as depreciation and replacement of engines or other major equipment can represent a relatively large portion of the dredges’ total costs. The Corps and industry incur much of the costs for their hopper dredges—such as paying a crew and keeping engines and other systems in ready working condition—regardless of how much the dredges are used. The Corps uses two funding sources from its annual civil works appropriation to pay for its hopper dredges. First, for the ready reserve vessels McFarland and Wheeler, funds are provided for each dredge to cover their costs while they are idle in ready reserve. Second, the Corps pays for the use of its dredges with project funds based on a daily rate it establishes for its dredges.