Anyone who has worked within the politically charged and complex Washington budgetary environment can attest that Office of Management and Budget (OMB) support is crucial for a project’s success. This fact is especially important now that Congress and the Biden Administration are negotiating a massive infrastructure plan. Regardless of the legislation's final funding levels, OMB's role will be crucial in project and funding approvals.
For non-Federal sponsors such as States, municipal governments, flood control districts, and port authorities, OMB has a powerful voice when evaluating Army Corps of Engineers’ Chief’s Reports, Section 203 and 7001 reports, regulatory guidance, work plans, and budgets.
Still, few non-Federal sponsors have a clear appreciation about from where the requirement for OMB review stems. The answer is in Executive Order 12323, which provides the scope and task that stipulates OMB clearance must occur to ensure agency proposals are aligned with the policy and programs of the President.
Collaboration among OMB, the Office of the Assistant Secretary of the Army (Civil Works), and the US Army Corps of Engineers (Corps) has its roots in a common output of the Corps’ Civil Works planning process –Chief’s Reports. The Corps develops these reports based primarily on cost-shared feasibility studies between non-Federal sponsors and Corps Districts when a water resources project requires Congressional authorization or a change to existing authorization.
Chief’s Reports, as well as the processes and timelines involved, are critically important to project sponsors and the Authorizing Committees of Congress. By focusing on collaboration to achieve construction authorizations, and more importantly, aligning sponsor efforts with the cycle of the biennial Water Resources Development Acts (WRDA), the probability of success increases substantially.
WRDA legislation authorizes Corps studies and projects and refines the Corps’ Congressional policy direction. Getting projects authorized, itself a major accomplishment resulting from years of collaboration and engagement, is only a first step. After authorization, the second and most critical step is for projects to compete for limited construction appropriations. This highly competitive process requires sustained engagement by non-Federal sponsors at both the local and federal level.
Lack of awareness of the rigorous Washington level review process for Corps feasibility reports can be devastating for a project creating significant delays. For Chief’s Reports, missing a WRDA cycle could lead to at least a 2-year delay in securing project authorization while further compounding delays in construction funding, if not authorized.
With all the process’ complexities, it’s not uncommon for sponsors to lose visibility of their particular project within the Washington level review process. As such, the review process at OMB is a common target for project sponsors seeking more transparency to predict when funding will become available.
In our experience, OMB’s challenge is to ensure a proposed project’s merits are clearly demonstrated in the Corps’ report and recommendation by the Assistant Secretary of the Army for Civil Works (ASA(CW)). The OMB examiner needs to determine if the proposal demonstrates a clear Federal interest under EO 12322 and rises to the level of support for Federal investment where limited Federal funds would be required, along with non-Federal cost-share funding. So, for any project proposal, OMB is reviewing to determine three things...whether there is a Federal interest, whether it is in alignment with the Administration’s policy and priorities, and whether the project should be considered eligible for Administration support for future budgeting.
People often ask if there are time limits on the OMB review process. The short answer is, not really. While Congress has put time limits on OMB in the case of Chief’s Reports, delays can occur if information is not clearly presented. In the case of reports, OMB examiners follow EO 12322 and often may be unfamiliar with a project proposal until they receive the report.
It’s incumbent on the ASA(CW) team of experts, with input from the Corps and non-Federal sponsors, to work closely with the examiner and gain OMB’s concurrence that, when compared to other competing demands, the project is in the Nation’s best public interest. Often, collaboration starts from a position of no specific project knowledge and the learning curve can be a steep one.
How important is this process? Simply put, if OMB does not clear the Chief’s Report (or any other Corps report seeking Congressional authorization), the project will not get Administration support for a construction new start designation. The OMB examiner has a dual role to provide clearance of a report for authorization of a project and, once authorized by Congress, to provide the clearance on what can be supported in the President’s budget and potential work plan.
Once the OMB examiner has concluded their review, a memo is prepared through the Chief of the Water and Power Branch to the Deputy Associate Director for Energy, Science and Water and memorialized in a letter to the ASA(CW) that describes OMB’s support or non-support for the project under the provisions of EO 12322. Often, the process can take 60+ days from ASA(CW) submission of the proposal until OMB renders its final position.
This collaboration period is THE key step for the Corps and project co-sponsors to ensure the proposal ultimately qualifies for Federal budgeting and eventual congressional appropriations. Success is enabled by straightforward reports having clear analyses and defensible supporting documentation.
On a related topic, some in Congress are pushing to enact “member-designated projects,” a process similar to the previous practice of “earmarks”, albeit with proposed increased transparency and accountability. Even if this occurs, local governments and nonprofits should not assume an immediate influx of Corps Civil Works federal investment. Projects that become authorized or are approved for new start construction and funded through "earmarks" would still require a report from the Corps of Engineers and a recommendation from the ASA(CW) to OMB to support the activity under EO 12322.
Bottom line, if this new process is implemented by the Congress in the FY22 appropriations bills, OMB will maintain an important role and retain their review and approval of projects in decision documents that demonstrate a Federal interest and that the proposed project is environmentally acceptable, economically justified, and technically sound.
In summary, non-Federal sponsors need an engagement plan to achieve their project goals. Further, they need to have the resources in place to stay engaged with all the various stakeholders and federal entities so critical to receiving necessary funding. Without a thorough understanding of the process, the players, the timelines, and the critical decision points/milestones, non-Federal sponsors may find themselves trying to navigate the complex process by feel instead of with clear vision.
Gen. (ret) Rick Stevens & Mr. Doug Lamont, PE
A member of the Dawson team since 2018, Rick Stevens was Deputy Commanding General of the U.S. Army Corps of Engineers from 2014-2017. Doug Lamont joined the Dawson team in 2019 after a 31-year career with the Army Corps of Engineers and 13 years as Deputy Assistant Secretary of the Army for Project Planning and Review.
The views expressed here are those of the author and do not necessarily reflect the views of Dawson & Associates.