As Corps of Engineers officials begin their pitch on Capitol Hill for a $4.5-billion fiscal 2006 civil works budget–down $50 million from 2005–they will ask lawmakers to buy into a new "performance-based" ranking system for construction projects. It’s unclear how Congress will react. Legislators haven’t been shy about inserting their own priorities into Corps spending bills.

The new yardstick is a response to tight funding and a backlog of unfinished Corps projects estimated at $11 billion, or more. The plan focuses mainly on a multi-year project’s ratio of its remaining benefits to costs. To reach the top category, a project needs at least a 3.0 benefit-cost score, says John Paul Woodley, assistant Army secretary for civil works.

Bush Administration's National Priority Projects 
Fiscal 2006 Request
Everglades restoration program/Fla.
Columbia River Basin fish recovery/Ore., Wash., Idaho
New York-New Jersey Harbor dredging
Olmsted Locks and Dam/ Ill., Ky.
Missouri River fish, wildlife recovery/Iowa, Neb., Kan., Mo.
Oakland Harbor dredging/Calif.
Upper Mississippi River environmental restoration/ Ill., Iowa, Minn., Mo., Wis.
New Orleans West Bank flood control
Sims Bayou flood control/ Houston, Texas
SOURCES: Corps of Engineers, Office of Management
and Budget

The top echelon for 2006 includes 61 projects, each of which could get 80% of the maximum amount it could spend in the fiscal year. Nine of the items are ones the Bush administration deems "national projects" (table). They include dredging, navigation and flood control jobs with high grades, plus environmental projects whose evaluation was "more subjective," Woodley says, adding that they address a priority area, such as the Everglades, or a goal, such as species preservation. Also among the 61 are 14 dam safety projects.

"The goal of this was to try and move the best projects along at efficient or even optimal rates,"says Pete Luisa, the Corps’ chief of civil works program development. He says that will accelerate completion, "and so we realize benefits sooner than under the old approach." In the past, a few priority jobs would get enough "to make substantial progress," Woodley says. Another 100 would get enough to continue but completion dates would be pushed "into the distant future," he adds.

The new scorecard has a downside. For 35 or so low-rated projects, the Corps would finish pending contracts or suspend work, whichever is less costly.

"We’re very supportive of the idea of a performance-based budgeting for the Corps," says one industry source. Adds National Waterways Conference President Worth Hager: "I applaud the Corps for trying

to figure out what the actual value of the project is." But she says, "We would have hoped that...would have led to more funding."

By Tom Ichniowski

Terrorism Insurance: Bill Would Extend Federal ‘Backstop’
Legislation has been proposed in the Senate to extend federal "backstop" coverage for claims stemming from terrorist acts. The bill, introduced Feb. 18 by Christopher Dodd (D-Conn.), would renew the Terrorism Risk Insurance Act for two years. That law, which requires the federal government to cover terrorism-related claims above certain thresholds, lapses Dec. 31. Those pushing for an extension include the American Insurance Association and a coalition of construction, real estate and other groups.

The Senate banking committee had slated a March 3 hearing on the bill, which had 13 co-sponsors. The same measure was introduced last year. Congress made headway on an extension, but didn’t reach a final agreement before adjourning.

Taxes: New Try for Estate Tax Repeal
Construction groups and other foes of the inheritance tax are lining up behind new attempts in Congress to repeal the levy permanently. A 2001 law phases out the tax in 2010, but if Congress doesn’t act by then, the levy would return. Bills introduced Feb. 17 by Rep. Kenny Hulshof (R-Mo.) and Sen. Jon Kyl (R-Ariz.) would end the tax.

In 2003, the House approved permanent repeal, but the Senate did not. Heidi Blumenthal, Associated General Contractors’ congressional relations director for tax and fiscal affairs, is optimistic about repeal’s chances. The Senate will be the battleground and Blumenthal expects a harder fight this year. She claims there are 60 Senate votes for repeal, the minimum to block filibusters. But she says that the small group of pro-repeal Democrats will face pressure to switch sides.

Nuclear: Westing-house Gets Licenses For China Job
Westinghouse Electric Co.’s bid to build nuclear reactors in China has received a boost from the Nuclear Regulatory Commission. NRC on Feb. 25 said it had issued a license to Westinghouse to export reactors and fuel for the project, if the company wins the China contract. The license covers up to two pressurized water reactors at each of two sites. NRC said it determined that "approving these exports to China will not be adverse to the common defense and security."

Compiled by Tom Ichniowski