EP 1165-2-1
30 Jul 99
or project specific authority (e.g., Section 211(e)(2)(B) of WRDA
1996). This prohibition applies not only to construction items, but
also to preconstruction engineering and design; engineering and design
during construction; and construction management. The approval
authority for performance of work-in-kind by non-Federal sponsors is
the ASA(CW). Any credit afforded a non-Federal sponsor for approved
work-in-kind is limited to the lesser of the following: (1) actual
costs that are auditable, allowable, and allocable to the project; or
(2) the Government's estimate of the cost of the work; or (3) in the
case of certain 104 credits, the estimated reduction in the cost of
the remaining project construction. Audit requirements of the
following regulations must be followed, as appropriate: ER 1165-2-29;
ER 1165-2-120; ER 1165-2-18; ER 1165-2-131; and, ER 1165-2-124. In
affording credit to non-Federal sponsors for work-in-kind, price
levels shall not be adjusted. This requirement applies whether the
work-in-kind is performed prior to, or after, the award of the initial
Government construction contract. Not only shall actual costs not be
adjusted for price levels, but also any estimated cost or cost
reduction that is the basis for a credit shall be computed using the
same price levels as those in effect at the time the non-Federal work
is performed. Furthermore, any credit approved by the ASA(CW) for
Section 104 work performed prior to 17 November 1986 shall not
subsequently be adjusted for price levels.
j. Provision of Non-Federal Cash for Construction. Non-
Federal sponsor's funds for construction of Civil Works projects and
separable elements should be made available and obligated in a timely
fashion such that Federal funds are not inappropriately substituted
for non-Federal funds. Methods for computing and collecting the non-
Federal sponsors' annual cash contributions are provided in ER 1165-2-
131 (Appendix B) and Project Management Guidance Letter (PMGL) No. 11
(revised 18 Dec 1992). Appendix B (of ER 1165-2-131) procedures are
to be applied to all Civil Works projects and separable elements
except where the Government is already bound to do otherwise by
contractual agreements with non-Federal sponsors. For Appendix B
projects and separable elements, proportional Federal/non-Federal cash
funding of fiscal obligations for construction is required. This
means that the non-Federal sponsor's funds must be made available and
obligated so that, at any point in time, the ratio of cumulative
obligations of non-Federal funds to cumulative obligations of all
funds is the same as the currently estimated ratio of ultimate
obligations of non-Federal funds to ultimate obligations of all funds.
The non-Federal sponsor's cash share in a given fiscal year is derived
from an estimate for the non-Federal sponsor's overall cash share, and
is not affected dollar-for-dollar by changes in the estimated amount
of credits for LERRDs in that fiscal year. However, credits afforded
for work by a non-Federal public entity at a Federal water resources
project authorized under Section 104 (General Credit for Flood
Control) of WRDA 1986 (for the flood control project purpose), under
Section 215 (Reimbursement for non-Federal Expenditures) of the Flood
Control Act of 1968, and under any authorized work-in-kind are applied
dollar for dollar against cash requirements. In the event that a non-
Federal sponsor fails to make available the funds required, the
division commander should immediately notify CECW-B of such failure.
10-2. Real Estate Requirements and Acquisition for Multiple Purpose
Reservoir Projects.
a. Requirements. Real estate requirements are governed by the
Joint Policies of the Departments of the Interior and Army, which is
published in 27 F.R. 1734, 22 February 1962. This policy provides
that fee title is acquired to lands needed for the dam site,
10-6
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