Water Resources:

The Corps of Engineers' Dredging Program for Small Business Firms

RCED-92-239BR: Published: Aug 3, 1992. Publicly Released: Aug 19, 1992.

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Pursuant to a congressional request, GAO evaluated whether the U.S. Army Corps of Engineers' program to set aside a portion of its dredging contracts for small businesses results in significantly increased federal costs by decreasing competition.

GAO found that: (1) between fiscal years 1985 and 1990, decreased competition for restricted-bid contracts resulted in increased costs of between $70 million and $115 million; (2) the lowest bids for restricted-bid contracts were lower than the Corps' estimates by a greater percentage than were the lowest bids for unrestricted-bid contracts; (3) for both unrestricted-bid and restricted-bid contracts, winning bids were less than the Corps' estimate of the contract cost, and restricted bids were lower by a greater percentage than were the unrestricted bids; and (4) unrestricted-bid contracts were more competitive than restricted-bid contracts, since they elicited a higher average number of bids per contract, although the number of bids per contract may not be a clear measure of competition.

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