DEPARTMENT OF THE ARMY ER 1165-2- 208
U. S. Army Corps of Engineers
CECW-P Washington, DC 20314-1000
Engineer Regulation
No. 1165-2-208 16 December 2015
Water Resources Policies and Authorities
IN-KIND CONTRIBUTION CREDIT PROVISIONS
OF SECTION 221(a)(4) OF THE FLOOD CONTROL ACT OF 1970, AS AMENDED
1. Purpose. This regulation provides guidance on the implementation of the in-kind contribution
credit provisions of Section 221(a)(4) of the Flood Control Act of 1970, as further amended by
Section 1018 of the Water Resources Reform and Development Act of 2014 (WRRDA 2014) (42
U.S.C. 1962d-5b(a)(4)) (hereinafter referred to as “Section 221”). Section 221(a)(4) of the Flood
Control Act of 1970, as amended, and Section 1018 of WRRDA 2014 are provided in
Appendix A.
2. Applicability. This regulation applies to all HQUSACE elements, Major Subordinate
Commands (MSCs), and District Commands having Civil Works responsibility and is effective
immediately.
a. The Section 221 crediting provisions apply to the study, design, and construction of water
resources development projects authorized in the Water Resources Development Act (WRDA)
of 1986 or later laws, including projects initiated after November 16, 1986 without specific
authorization in law. In addition, the crediting provisions apply to the correction of design
deficiencies for projects authorized prior to WRDA of 1986. Finally, these provisions are also
applicable to a project under an environmental infrastructure assistance program.
(1) For a project with a project partnership agreement (PPA) that was executed on or after
November 8, 2007, such PPA may be amended to include work by the non-Federal sponsor that
has not yet been initiated for credit toward any remaining non-Federal cost share under that
agreement.
(2) Furthermore, in general, the crediting provisions of Section 221 will be used in lieu of
Section 104 of WRDA 1986 and Section 215 of the Flood Control Act of 1968. However, any
eligibility for credit under Section 104 of WRDA 1986 that was approved previously by the
Secretary will be honored.
b. The authority for credit under Section 221 is in addition to any other authority to provide
credit for in-kind contributions. Section 221 credit may be applied in lieu of other crediting
provisions if requested by the non-Federal sponsor.
This regulation supersedes ER 1165-2-208, dated 17 February 2012.
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3. Distribution Statement. Approved for public release. Distribution is unlimited.
4. Key Principles.
a. In General. Section 221 is a comprehensive authority that addresses the affording of
credit for the value of in-kind contributions provided by a non-Federal sponsor toward its
required cost share (excluding the required 5 percent cash for structural flood damage reduction
projects and the additional 10 percent cash payment over 30 years for navigation projects) if
those in-kind contributions are determined to be integral to a study or project.
b. Types of In-Kind Contributions. The types of in-kind contributions eligible for credit
include planning activities (including data collection and other services needed for a feasibility
study); design related to construction; and construction (including management; mitigation; and
construction materials and services).
c. Compliance with Applicable Federal Laws, Regulations, and Policies. Eligibility for
credit is subject to the non-Federal sponsor complying with all applicable Federal laws and
implementing regulations, including, but not limited to Section 601 of the Civil Rights Act of
1964, as amended (42 U.S.C. 2000d), and Department of Defense Directive 5500.11 issued
pursuant thereto; the Age Discrimination Act of 1975 (42 U.S.C. 6102); the Rehabilitation Act of
1973, as amended (29 U.S.C. 794), and Army Regulation 600-7 issued pursuant thereto; and 40
U.S.C. 3141-3148 and 40 U.S.C. 3701-3708 (labor standards originally enacted as the Davis-
Bacon Act, the Contract Work Hours and Safety Standards Act, the Copeland Anti-Kickback
Act); and the National Environmental Policy Act (42 U.S.C. 4321-4347) and other
environmental laws and regulations.
d. In-Kind Memorandum of Understanding (MOU).
(1) Construction. Section 221 provides that any construction work that has not been carried
out as of November 8, 2007 is eligible for credit only if the non-Federal sponsor executes an
agreement with the Secretary prior to carrying out such work. For purposes of Section 221
crediting only, “carrying out” construction work means initiation of construction using the non-
Federal sponsor’s labor force or issuance of the notice to proceed for such construction if
undertaken by contract. Therefore, in those cases where there is not yet an executed PPA, the
non-Federal sponsor must execute an in-kind MOU with the Corps of Engineers prior to
initiating construction or issuing the notice to proceed. Design work associated with that
construction is eligible for credit as long as an in-kind MOU or PPA is executed prior to the
construction being carried out. In addition, the construction carried out by the non-Federal
sponsor is not considered as part of the future without project condition.
(a) Projects Specifically Authorized. For projects that are or will be specifically authorized
for construction, an In-Kind MOU for construction may be executed once there is vertical team
concurrence with the Tentatively Selected Plan (TSP) at the TSP Milestone. The TSP Milestone
is the point at which there is vertical team concurrence on the plan that will be released in the
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draft study report for public and agency review. Given the new SMART Planning Process, the
TSP Milestone should occur much earlier in the planning process than what was previously
achieved. Requests from non-Federal sponsors to execute an in-kind MOU for construction prior
to the TSP Milestone will be considered on a case-by-case basis and must be approved by the
Assistant Secretary of the Army (Civil Works). Since each project presents its own unique
combination of circumstances, each request will require an individual evaluation that will
include consideration of, but not limited to, the following criteria:
(i) Whether the proposed work is a modification of an existing Federal project;
(ii) Whether the proposed work will follow an existing levee alignment in the case of a flood
risk management project;
(iii) Whether the proposed work balances and integrates the wise use of the flood plain to
ensure public safety;
(iv) Whether the proposed work significantly reduces flood damage risk to human life,
property or critical infrastructure; and
(iv) Whether the proposed work will likely be included in the final project recommendation.
(b) Continuing Authority Program. For projects implemented under the Continuing
Authority Program or a regional authority that does not require additional authorization to
implement the project, an In-Kind MOU for design and implementation may be executed after
the MSC Commander approves the decision document for the project.
(2) Design. For projects that are or will be specifically authorized for construction, an In-
Kind MOU for design may be executed after the TSP Milestone.
(3) Planning.
(a) Projects Specifically Authorized. For projects that are or will be specifically authorized
for construction, Section 1002 of WRRDA 2014 eliminated the full Federal reconnaissance
phase that used to be undertaken prior to execution of a feasibility cost sharing agreement
(FCSA). In the past, a project management plan (PMP), which established the scope of the
planning, including activities needed to carry out the study, was developed during this
reconnaissance phase. Under the new single phase study process mandated by WRRDA 2014,
the project management plan will not be developed until after execution of FCSA. As the PMP,
including a determination of the scope of the study, will not be developed until after execution of
the FCSA, no In-Kind MOU for planning is permitted. Following execution of the FCSA and
development of the PMP, the provision of in-kind contributions is allowed under the FCSA.
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(b) Continuing Authority Program. For projects implemented under the Continuing
Authority Program or a regional authority that does not require additional authorization to
implement the project, sections 905(c) and 105(a)(3) of WRDA 1986, as amended, provide that
the first $100,000 of these studies is a Federal expense. Therefore, once a PMP has been
developed and the MSC Commander has approved initiation of the feasibility study, an In-Kind
MOU for planning may be executed.
(4) Any work undertaken by a non-Federal sponsor pursuant to an In-Kind MOU is at its
own risk and responsibility. An In-Kind MOU provides no assurance that the non-Federal
sponsor’s work will be determined to be integral to the Federal project or that any construction
undertaken by the non-Federal sponsor will be included as part of any ultimately recommended
Federal project. Execution of an In-Kind MOU in no way obligates the Corps to enter into any
future agreement for the project.
(5) In general, once a FCSA, design agreement, or PPA is executed, further use of In-Kind
MOUs is not appropriate for inclusion of additional in-kind contributions under that FCSA,
design agreement, or PPA, respectively. Special circumstances requiring expedited review and
execution of an amendment to an executed agreement should be coordinated with the
HQUSACE RIT.
(6) MSC Commanders may approve a District Engineer’s execution of Model In-Kind
MOUs for Construction or for Design, provided that the In-Kind MOUs do not include any
deviations. Any proposed deviations must be submitted to HQUSACE for approval prior to
execution. Models for the In-Kind MOU for construction, including design work, and for design
work only are available at
http://www.usace.army.mil/Missions/CivilWorks/ProjectPartnershipAgreements/model_other.aspx.
e. Integral Determinations.
(1) Section 221 provides that credit may be afforded only if the Secretary determines that the
material or service provided as an in-kind contribution by a non-Federal sponsor is integral to the
study or project.
1
To be integral to the study or project, the material or service must be part of
the work that the Federal Government would otherwise have undertaken for the study or for
construction of what is ultimately determined to be the Federal project. See Appendix B for
additional guidance on criteria and procedures for processing integral determinations.
(2) The approval of integral determinations is delegated to the MSC Commander. The
approval authority delegated to the MSC Commander is subject to the full compliance of each
1
The non-Federal Sponsor’s costs of Coordination Team participation and audits are not in-kind contributions and
are not included in “shared costs” for cost sharing purposes. Likewise, the Federal Government’s cost of
Coordination Team participation and audits are not included in “shared costs” for cost sharing purposes although
these costs are included in calculating any limit on Federal participation. The costs of the non-Federal Sponsor’s
performance of investigations for hazardous substances are eligible for inclusion as a shared costs and for credit as
an in-kind contribution and do not require a separate integral determination.
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integral determination to law and policy and may not be further delegated within the MSC or to
the District Commander. A separate integral determination is not required for planning activities
included in the PMP, approved by the MSC Commander, as required for the study effort.
f. Determining the Amount of Credit.
(1) The amount of in-kind contributions that may be eligible for inclusion in shared costs for
cost sharing purposes under the applicable cost sharing agreement will be subject to an audit by
the Government to determine the reasonableness, allocability, and allowability of such amount.
(2) The creditable amount is the lesser of the costs incurred by the non-Federal sponsor to
obtain such materials or services; the market value of such materials or services as of the date
that the non-Federal sponsor provides such materials or services for use in the study or project;
or the Government’s estimate of the cost for such work if it had been accomplished by the
Government. This amount is not subject to interest charges or to adjustment to reflect changes in
price levels between the time the in-kind contributions were completed and the time the amount
is credited.
(3) Any in-kind contributions performed or paid for by the non-Federal sponsor using funds
provided by another Federal agency (as well as any non-Federal matching share or contribution
that was required by such Federal agency for such program or grant) are not eligible for credit
unless the Federal agency providing the Federal portion of such funds verifies in writing that the
funds are authorized to be used to carry out the study or project.
(4) After execution of the applicable FCSA, Design Agreement (DA), or PPA, the non-
Federal sponsor will submit to the Government (not less frequently than every 6 months or as
provided in the agreement) credit request(s) for eligible in-kind contributions under that
agreement. The credit requests will contain the following: written certification by the non-
Federal sponsor of the payments made to contractors, suppliers, or employees for in-kind
contributions; copies of all relevant invoices and evidence of such payments; written
identification of costs that have been paid with funds or grants provided by a Federal agency as
well as any non-Federal matching share or contribution that was required by such Federal agency
for such program or grant; and a written request for credit of a specific amount not in excess of
such specified payments. Failure to provide sufficient documentation supporting the credit
request will result in a denial of credit in accordance with the terms of the applicable cost sharing
agreement.
(5) In-kind contributions are subject to a review (for feasibility level and design activities) or
on-site inspection (construction), as applicable, and certification by the Government that the
work was accomplished in a satisfactory manner and in accordance with applicable Federal laws,
regulations, and policies. The Government will not include in the costs to be shared under the
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applicable cost sharing agreement or afford credit for any work the Government determines was
not accomplished in a satisfactory manner or in accordance with applicable Federal laws,
regulations, and policies.
(6) In general, the amount of credit for in-kind contributions that can be afforded under a
FCSA or a PPA is limited to the amount of the non-Federal sponsor’s cost share under that
agreement. As the costs of design under a DA are included in total project costs under a PPA,
credit for in-kind contributions under a DA is carried over to the PPA, and the maximum of
amount of credit for in-kind contributions under a PPA is limited to the non-Federal sponsor’s
required cost share under the PPA. Credit for in-kind contributions may not be afforded toward
the required 5 percent cash payment for structural flood damage reduction projects or the
additional 10 percent cash payment for navigation projects.
(7) Credit for in-kind contributions for planning is limited to credit that can be afforded
under a specific FCSA. In other words, excess credit may not be carried over to design or
construction of the project. Credit for planning work by the non-Federal sponsor is limited to its
50 percent of planning costs and will be done in accordance with the PMP, under the terms and
conditions in the FCSA.
(8) Credit for in-kind contributions provided by a non-Federal sponsor for the construction
of a project, or separable element thereof, that are in excess of the non-Federal cost share for an
authorized separable element of a project may be applied toward the non-federal cost share for a
different authorized separable element of the same project. Additional Federal appropriations
will be required to offset the application of any excess credit to another separable element.
(9) If the value of eligible in-kind contributions exceeds the amount of credit that can be
afforded pursuant to the provisions of a PPA (i.e., exceeds the required non-Federal cost share
for all features covered by that PPA), only the amount of credit afforded should be included in
total project costs. Recalculation of total project costs will be required to exclude from total
project costs the value of in-kind contributions that exceed the amount of credit that can be
afforded. In addition, the amount excluded will not be considered part of total costs for the
purposes of Section 902 of WRDA 1986 calculations.
(10) No reimbursements are authorized for in-kind contributions under Section 221 except
as provided in paragraph 4 g., below.
g. Lands, Easements, Relocations, Rights-of-Way, and Areas for Disposal of Dredged
Material (LERRDs). Section 221 does not alter any other requirement for the non-Federal
sponsor to provide LERRDs for a project, and the non-Federal sponsor should coordinate with
the District to ensure that appropriate real estate interests for the project are acquired. Any
LERRDs associated with in-kind contributions determined to be integral to the project will be
credited to the project as LERRDs except the LERRs needed for fish and wildlife mitigation.
(The costs of LERRs needed for fish and wildlife mitigation are assigned to the project
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purpose(s) causing the need for such mitigation and are subject to construction cost sharing
established for that project purpose.) In addition, for a navigation project, LERRs are creditable
only toward the requirement for the non-Federal sponsor to pay an additional 10 percent of the
cost of the general navigation features.
(1) Previously, credit for in-kind contributions was afforded only toward the non-Federal
sponsor’s required cash contribution after consideration of the value of LERRDs provided by the
non-Federal sponsor. WRRDA 2014 changes how credit for in-kind contributions is calculated.
For projects other than navigation projects, to the extent that credit for LERRDs combined with
credit for the value of in-kind contributions exceed the non-Federal share of the cost of a project,
WRRDA 2014 provides that the Secretary, subject to the availability of funds, shall enter into a
separate reimbursement agreement to reimburse the non-Federal sponsor for the difference
between creditable LERRDs and in-kind contributions and the non-Federal cost share.
Therefore, at the final accounting for the project, to the extent funds for the project remain
available, the Secretary shall execute an agreement with the non-Federal sponsor for
reimbursement of the difference.
(2) If funds remaining on a project are insufficient to provide full reimbursement under
paragraph g.(1), the non-Federal sponsor may request reimbursement. The Secretary shall
prioritize such requests, and enter into reimbursements agreements, in the order the requests
were received, as funds become available for reimbursements.
5. Design. Design by the non-Federal sponsor must be performed in accordance with the
requirements in ER 1110-2-1150, reviewed in accordance with ER 1110-1-12, and subject to the
applicable peer review guidance. In accordance with section 105(c) of WRDA 1986, the costs of
design shall be shared in the same percentages as the purposes of such project.
a. If the value of eligible in-kind contributions is less than the non-Federal sponsor’s share of
design costs, the non-Federal sponsor must contribute sufficient funds to equal its share of total
design costs.
b. If the value of eligible in-kind contributions is greater than the non-Federal sponsor’s
share of total design costs, then no cash payment from the non-Federal sponsor is required. The
value of all of the non-Federal sponsor’s eligible in-kind contributions (including those in excess
of its share of total design costs) will be included in total project costs in the PPA. The
maximum amount of credit that may be afforded pursuant to the PPA is limited to the non-
Federal sponsor’s cost share under that agreement.
6. Construction.
a. To be eligible for credit, in-kind contributions prior to execution of the PPA must have
been provided or performed after execution of an In-Kind MOU. Credit for in-kind
contributions will not be afforded toward the non-Federal sponsor’s requirement to provide in
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cash 5 percent
of
the costs for structural flood damage reduction projects (either specifically
authorized or implemented pursuant to Continuing Authority
Program Sections
14,
205, or 208
projects); the non-Federal sponsor's requirement to pay for betterments or any other work
performed by the Government on behalf
of
the non-Federal sponsor; the non-Federal sponsor's
requirement to provide lands, easements, rights-of-way, relocations, or improvements to enable
the disposal
of
dredged or excavated material required for the project or separable element
of
the
project; or the non-Federal sponsor's additional payment
of
10
percent
of
the cost
of
general
navigation features for a navigation project.
b. The non-Federal sponsor may not initiate construction following execution
of
a PPA until
the designs, detailed plans and specifications, and arrangements for such work have been
approved by the Government.
In
addition, any proposed changes to approved designs and plans
and specifications must be approved
by
the Government in advance
of
such construction. Upon
completion
of
construction, the non-Federal sponsor will furnish to the Government a copy
of
all
final as-built drawings.
c.
For CAP authorities and regional authorities that are implemented with a single agreement
covering design and implementation,
if
a non-Federal sponsor proposes to provide or perform all
or a portion
of
the design for a project as in-kind contributions, a PPA addressing both design
and construction is required.
FOR THE COMMANDER:
2 Appendices
Appendix
A-42
U.S.C. 1962d-5b(a)(4)
Appendix B - Criteria and
Procedures
u_p.J;/l_
8
D. PETER HELMLINGER
COL,
EN
Chief
of
Staff
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16 Dec 15
APPENDIX A
Section 221(a)(4) of the Flood Control Act of 1970, as amended (42 U.S.C. 1962d-5b(a)(4))
SEC. 221. WRITTEN AGREEMENT REQUIREMENT FOR WATER RESOURCES
PROJECTS.
(a) COOPERATION OF NON-FEDERAL INTEREST.-
******************************************************************
(4) Credit for in-kind contributions.
(A) In general. A partnership agreement described in paragraph (1) may provide with
respect to a project that the Secretary shall credit toward the non-Federal share of the cost
of the project, including a project implemented without specific authorization in law or a
project under an environmental infrastructure assistance program, the value of in-kind
contributions made by the non-Federal interest, including--
(i) the costs of planning (including data collection), design, management,
mitigation, construction, and construction services that are provided by the non-Federal
interest for implementation of the project;
(ii) the value of materials or services provided before execution of the partnership
agreement, including efforts on constructed elements incorporated into the project; and
(iii) the value of materials and services provided after execution of the partnership
agreement.
(B) Condition. The Secretary may credit an in-kind contribution under subparagraph
(A) only if the Secretary determines that the material or service provided as an in-kind
contribution is integral to the project.
(C) Work performed before partnership agreement.
(i) Construction.
(I) In general. In any case in which the non-Federal interest is to receive credit
under subparagraph (A) for the cost of construction carried out by the non-Federal
interest before execution of a partnership agreement and that construction has not been
carried out as of November 8, 2007, the Secretary and the non-Federal interest shall enter
into an agreement under which the non-Federal interest shall carry out such work and
shall do so prior to the non-Federal interest initiating construction or issuing a written
notice to proceed for the construction.
(II) Eligibility. Construction that is carried out after the execution of an agreement
to carry out work described in subclause (I) and any design activities that are required for
that construction, even if the design activity is carried out prior to the execution of the
agreement to carry out work, shall be eligible for credit.
(ii) Planning.
(I) In general. In any case in which the non-Federal interest is to receive credit
under subparagraph (A) for the cost of planning carried out by the non-Federal interest
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before execution of a feasibility cost-sharing agreement, the Secretary and the non-
Federal interest
shall enter into an agreement under which the non-Federal interest shall carry out such
work and shall do so prior to the non-Federal interest initiating that planning.
(II) Eligibility. Planning that is carried out by the non-Federal interest after the
execution of an agreement to carry out work described in subclause (I) shall be eligible
for credit.
(D) Limitations. Credit authorized under this paragraph for a project--
(i) shall not exceed the non-Federal share of the cost of the project;
(ii) shall not alter any other requirement that a non-Federal interest provide lands,
easements, relocations, rights-of-way, or areas for disposal of dredged material for the
project;
(iii) shall not alter any requirement that a non-Federal interest pay a portion of the
costs of construction of the project under sections 101(a)(2) and 103(a)(1)(A) of the
Water Resources Development Act of 1986 (33 U.S.C. 2211(a)(2); 33 U.S.C.
2213(a)(1)(A)) of the Water Resources Development Act of 1986 (33 U.S.C. 2211; 33
U.S.C. 2213); and
(iv) shall not exceed the actual and reasonable costs of the materials, services, or
other things provided by the non-Federal interest, as determined by the Secretary.
(E) Analysis of costs and benefits. In the evaluation of the costs and benefits of a
project, the Secretary shall not consider construction carried out by a non-Federal interest
under this subsection as part of the future without project condition.
(F) Transfer of credit between separable elements of a project. Credit for in-kind
contributions provided by a non-Federal interest that are in excess of the non-Federal cost
share for an authorized separable element of a project may be applied toward the non-
Federal cost share for a different authorized separable element of the same project.
(G) Application of credit.
(i) In general. To the extent that credit for in-kind contributions, as limited by
subparagraph (D), and credit for required land, easements, rights-of-way, dredged
material disposal areas, and relocations provided by the non-Federal interest exceed the
non-Federal share of the cost of construction of a project other than a navigation project,
the Secretary, subject to the availability of funds, shall enter into a reimbursement
agreement with the non-Federal interest, which shall be in addition to a partnership
agreement under subparagraph (A), to reimburse the difference to the non-Federal
interest.
(ii) Priority. If appropriated funds are insufficient to cover the full cost of all
requested reimbursement agreements under clause (i), the Secretary shall enter into
reimbursement agreements in the order in which requests for such agreements are
received."; and
(H) Applicability.
(i) In general. This paragraph shall apply to water resources projects authorized
after November 16, 1986, including projects initiated after November 16, 1986, without
specific authorization in law, and to water resources projects authorized prior to the date
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of enactment of the Water Resources Development Act of 1986 (Public Law 99-662)
[enacted June 10, 2014], if correction of design deficiencies is necessary.
(ii) Authorization as addition to other authorizations. The authority of the Secretary
to provide credit for in-kind contributions pursuant to this paragraph shall be in addition
to any other authorization to provide credit for in-kind contributions and shall not be
construed as a limitation on such other authorization. The Secretary shall apply the
provisions of this paragraph, in lieu of provisions under other crediting authority, only if
so requested by the non-Federal interest.
*********************************************************************
Section 1018 of the Water Resources Reform and Development Act of 2014
Sec. 1018. CREDIT FOR IN-KIND CONTRIBUTIONS.
(a) In General.--Section 221(a)(4) of the Flood Control Act of 1970 (42 U.S.C. 1962d-
5b(a)(4)) is amended--
(1) in subparagraph (A), in the matter preceding clause (i), by inserting "or a project under
an environmental infrastructure assistance program" after "law";
(2) in subparagraph (C) by striking "In any case" and all that follows through the period at
the end and inserting the following:
"(i) CONSTRUCTION.--
"(I) In General.--In any case in which the non-Federal interest is to receive credit under
subparagraph (A) for the cost of construction carried out by the non-Federal interest before
execution of a partnership agreement and that construction has not been carried out as of
November 8, 2007, the Secretary and the non-Federal interest shall enter into an agreement under
which the non-Federal interest shall carry out such work and shall do so prior to the non-Federal
interest initiating construction or issuing a written notice to proceed for the construction.
"(II) Eligibility.--Construction that is carried out after the execution of an agreement to
carry out work described in subclause (I) and any design activities that are required for that
construction, even if the design activity is carried out prior to the execution of the agreement to
carry out work, shall be eligible for credit.
"(ii) PLANNING.--
"(I) In General.--In any case in which the non-Federal interest is to receive credit under
subparagraph (A) for the cost of planning carried out by the non-Federal interest before
execution of a feasibility cost-sharing agreement, the Secretary and the non-Federal interest shall
enter into an agreement under which the non-Federal interest shall carry out such work and shall
do so prior to the non-Federal interest initiating that planning.
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"(II) Eligibility.--Planning that is carried out by the non-Federal interest after the
execution of an agreement to carry out work described in subclause (I) shall be eligible for
credit.";
(3) in subparagraph (D)(iii) by striking "sections 101 and 103" and inserting "sections
101(a)(2) and 103(a)(1)(A) of the Water Resources Development Act of 1986 (33 U.S.C.
2211(a)(2); 33 U.S.C. 2213(a)(1)(A))";
(4) by redesignating subparagraph (E) as subparagraph (H);
(5) by inserting after subparagraph (D) the following:
"(E) Analysis of Costs and Benefits.--In the evaluation of the costs and benefits of a
project, the Secretary shall not consider construction carried out by a non-Federal interest under
this subsection as part of the future without project condition.
"(F) Transfer of Credit Between Separable Elements of a Project.--Credit for in-kind
contributions provided by a non-Federal interest that are in excess of the non-Federal cost share
for an authorized separable element of a project may be applied toward the non-Federal cost
share for a different authorized separable element of the same project.
"(G) APPLICATION OF CREDIT.--
"(i) In General.--To the extent that credit for in-kind contributions, as limited by
subparagraph (D), and credit for required land, easements, rights-of-way, dredged material
disposal areas, and relocations provided by the non-Federal interest exceed the non-Federal share
of the cost of construction of a project other than a navigation project, the Secretary, subject to
the availability of funds, shall enter into a reimbursement agreement with the non-Federal
interest, which shall be in addition to a partnership agreement under subparagraph (A), to
reimburse the difference to the non-Federal interest.
"(ii) Priority.--If appropriated funds are insufficient to cover the full cost of all requested
reimbursement agreements under clause (i), the Secretary shall enter into reimbursement
agreements in the order in which requests for such agreements are received."; and
(6) in subparagraph (H) (as redesignated by paragraph (4))--
(A) in clause (i) by inserting ", and to water resources projects authorized prior to the date
of enactment of the Water Resources Development Act of 1986 (Public Law 99-662), if
correction of design deficiencies is necessary" before the period at the end; and
(B) by striking clause (ii) and inserting the following:
"(ii) Authorization As Addition to Other Authorizations.--The authority of the
Secretary to provide credit for in-kind contributions pursuant to this paragraph shall be in
addition to any other authorization to provide credit for in-kind contributions and shall not be
construed as a limitation on such other authorization. The Secretary shall apply the provisions of
this paragraph, in lieu of provisions under other crediting authority, only if so requested by the
non-Federal interest.".
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(b) Applicability.--Section 2003(e) of the Water Resources Development Act of 2007 (42
U.S.C. 1962d-5b note) is amended--
(1) by inserting ", or construction of design deficiency corrections on the project," after
"construction on the project"; and
(2) by inserting ", or under which construction of the project has not been completed and
the work to be performed by the non-Federal interests has not been carried out and is creditable
only toward any remaining non-Federal cost share," after "has not been initiated".
(c) Effective Date.--The amendments made by subsections (a) and (b) take effect on
November 8, 2007.
(d) Guidelines.--
(1) In General.-- Not later than 1 year after the date of enactment of this Act, the Secretary
shall update any guidance or regulations for carrying out section 221(a)(4) of the Flood Control
Act of 1970 (42 U.S.C. 1962d-5b(a)(4)) (as amended by subsection (a)) that are in existence on
the date of enactment of this Act or issue new guidelines, as determined to be appropriate by the
Secretary.
(2) Inclusions.-- Any guidance, regulations, or guidelines updated or issued under
paragraph (1) shall include, at a minimum--
(A) the milestone for executing an in-kind memorandum of understanding for
construction by a non-Federal interest;
(B) criteria and procedures for evaluating a request to execute an in-kind memorandum of
understanding for construction by a non-Federal interest that is earlier than the milestone under
subparagraph (A) for that execution; and
(C) criteria and procedures for determining whether work carried out by a non-Federal
interest is integral to a project.
(3) Public and Stakeholder Participation.-- Before issuing any new or revised guidance,
regulations, or guidelines or any subsequent updates to those documents, the Secretary shall--
(A) consult with affected non-Federal interests;
(B) publish the proposed guidelines developed under this subsection in the Federal
Register; and
(C) provide the public with an opportunity to comment on the proposed guidelines.
(e) Other Credit.--Nothing in section 221(a)(4) of the Flood Control Act of 1970 (42 U.S.C.
1962d-5b(a)(4)) (as amended by subsection (a)) affects any eligibility for credit under section
104 of the Water Resources Development of 1986 (33 U.S.C. 2214) that was approved by the
Secretary prior to the date of enactment of this Act.
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APPENDIX B
Criteria and Procedures for In-Kind Contribution Integral Determinations
B-1. Determining if In-Kind Contributions Are Integral to the Study/Project. Establishing and
allowing credit is a two-step process whereby: 1) eligibility for credit is determined based on
whether the in-kind contribution is integral to the study or project, and 2) actual affording of
credit is accomplished based on an audit of the non-Federal work by the District Engineer under
the terms of the FCSA, DA, or PPA, as appropriate. The level of analysis to determine if work is
integral to the project is scalable. For instance, work accomplished by the non-Federal sponsor
on its own under an In-Kind MOU must be fully analyzed to determine whether it is integral to
the project, i.e., work that the Government otherwise would have performed for the project. In
general, for work that will be accomplished after execution of a DA or PPA, it will be clearer
what work is required for the project and therefore integral to the project; furthermore, the
Government will be approving plans and specifications prior to the work being undertaken by the
non-Federal sponsor.
a. Approval Level of Integral Determinations. Under the terms of Paragraph 4.e. of this
regulation, approval of integral determinations is delegated to the MSC Commander. This
authority may not be further delegated.
b. Timing of Integral Determinations.
(1) In general, the integral determination should be completed immediately prior to review
and approval of a DA or PPA, or amendment as applicable, that provides for the affording of
credit. The integral determination for planning efforts is accomplished as part of the
development of the PMP.
(2) Include at least 30 days in the project schedule for processing at the MSC of the
Integral Determinations by the MSC Commander. These times are recommended for scheduling
purposes and should be extended if processing identifies significant issues requiring resolution.
c. Procedures for Processing.
(1) For a feasibility study, planning activities, including data collection, must be included
in the approved Project Management Plan in order for those contributions to be eligible for
credit.
(2) The District will prepare an Integral Determination Report (IDR) for design and
construction work that includes at a minimum the information contained in the following
paragraphs. A suggested format for an IDR can be found at
http://www.usace.army.mil/Missions/CivilWorks/ProjectPartnershipAgreements/model_other.aspx
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The IDR should contain a description of the activities required to perform the design or
construction, as applicable, of the Federal project or separable element in sufficient detail to
allow a comparison with the description of the proposed in-kind contributions; a detailed
description of the work items proposed to be provided or performed as in-kind contributions; a
discussion of how each work item proposed to be provided or performed as an in-kind
contribution is integral to the project; an estimate of the costs of each work item proposed to be
provided or performed as an in-kind contribution; the estimated amount of credit to be afforded
for each work item proposed to be provided or performed as an in-kind contribution; and a
District Commander recommendation identifying which of the proposed in-kind contributions
should be considered integral to the project. If the in-kind contributions were provided or
performed prior to execution of the applicable cost sharing agreement, then also include in the
IDR the results of the review or inspection, as applicable, and certification by the District
Commander on whether the work was accomplished in a satisfactory manner and in accordance
with applicable Federal laws, regulations, and policies; and documentation of satisfactory
environmental compliance for the construction portion of the in-kind contributions.
(3) The district will submit the IDR to the MSC District Support Team for action. The
MSC District Support Team will perform the MSC review of the IDR. The MSC review team
also will include members from the MSC Office of Counsel and from the MSC Planning
Community of Practice (CoP), MSC Engineering and Construction CoP, MSC Real Estate CoP,
and other CoPs, as needed. In addition, if the proposed in-kind contributions consist of design or
construction of dams, levees, or bridges, the MSC review team must include the MSC Dam,
Levee, or Bridge Safety Officer. After satisfactory resolution of all comments on the IDR and a
determination that the IDR complies with all applicable law and policy, the MSC District
Support Team shall prepare an Integral Determination memo for approval and signature by the
MSC Commander.
(4) The Integral Determination approval memo will state whether the work identified in
the IDR, or a portion thereof, has been determined to be integral to the project. In addition, the
memo should state that the determination of the actual value of the in-kind contributions and
affording credit for such amount will be accomplished by the Government in accordance with the
limitations, conditions, and terms of the applicable cost sharing agreement.
B-2. Considerations in determining whether the work is integral and creditable: The proposed
in-kind contributions consist of work that the Government would have otherwise provided or
performed for the project, except for performance of activities that are inherently governmental
responsibilities (see paragraph B-3 below). Examples of activities that are acceptable in-kind
contributions: performance of design of all or a portion of the Federal project, including data
collection related to design work; demolition of buildings on lands required for the project;
performance of design or construction related studies for historic preservation activities except
data recovery; performance of cost shared monitoring and adaptive management; and
construction of a portion of the project.
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a. For proposed in-kind contributions performed prior to execution of the applicable cost
sharing agreement, the in-kind contributions have been reviewed or inspected, as applicable, and
certified by the Government that the work was accomplished in a satisfactory manner and in
accordance with applicable Federal laws, regulations, and policies.
b. For any proposed in-kind contributions proposed to be performed after execution of the
PPA, the plans and specifications must be approved by the District Commander prior to initiation
of the construction work.
c. For materials provided for use in construction work managed by the Government, the
materials must meet the minimum Government requirements for materials and any substitute
materials have been determined by the Government to be a functional equivalent in accordance
with policies governing contractor substitution of materials.
d. The non-Federal sponsor should coordinate with the District to ensure that appropriate
real estate interests to support the in-kind contributions and project are acquired.
B-3. The following will not be accepted as in-kind contributions:
a. The proposed in-kind contributions are not part of the Federal project.
b. The proposed in-kind contributions consist of performance of activities that are
inherently Governmental responsibilities (e.g., management of Government contracts;
performance of District Quality Review, Agency Technical Review, Independent External Peer
Review, or Policy Compliance Review; determining if Value Engineering evaluations are
acceptable; determining the LERRD required for the project or separable element of the project;
determining the value of LERRD for crediting purposes; or making determinations as to
compliance with applicable environmental laws and regulations).
c. The proposed in-kind contributions are features or obligations that are a 100 percent
non-Federal sponsor responsibility (e.g., purposes of land reclamation, local drainage, to protect
against land or bank erosion, and/or the removal of hazardous, toxic, or radioactive wastes; local
service facilities; betterments; acquisition and performance of LERRD, except for the provision
of dredged or excavated material disposal facilities for commercial navigation projects; and
performance of operation, maintenance, repair, rehabilitation, or replacement (OMRR&R);
d. The proposed in-kind contributions have or will create a hazard to human life or
property.
e. The proposed in-kind contributions have been determined to be environmentally
unacceptable.
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f. For proposed in-kind contributions performed prior to execution of the applicable cost
sharing agreement, after review or inspection, as applicable, the Government cannot certify the
proposed in-kind contributions were accomplished in a satisfactory manner and in accordance
with applicable Federal laws, regulations, and policies.
g. For proposed in-kind contributions performed prior to execution of the applicable cost
sharing agreement, the non-Federal sponsor has not performed the necessary OMRR&R,
resulting in the work no longer functioning as needed for the project.
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