a recent construction effort on the UMR–IWW—construction of a second lock at Lock and Dam 26–cost nearly three times the estimated cost. Clearly, a 20 percent contingency was too small in that case. In construction projects, there are many factors that can raise costs far beyond the original estimate, as demonstrated at Lock and Dam 26. The committee judges the risks of cost escalation to be far greater than the 20 percent or 25 percent estimates that the Corps has been using. If lock extensions on the UMR–IWW are sensitive to construction costs being no more than 25 percent above the Corps' estimate, it is likely that escalating costs will greatly reduce the project's net benefits.
Large and important projects such as proposed lock extensions on the UMR–IWW would benefit from a second opinion. Whether the issue is surgery, revising the Head Start program, or extending locks, issues such as these are too important to not receive an independent judgment on the merits of the various approaches and a careful scrutiny of the analysis. There are nearly always different possible approaches to achieving a goal; decision-makers need assurance that the analysis was conducted carefully and is state-of-the-art. Before embarking on important decisions—particularly ones involving more than $1 billion of construction—an independent peer review is crucial. The final feasibility study of the UMR–IWW system should be given a thorough independent peer review by an interdisciplinary panel of experts from outside the Department of Defense. The committee notes that Section 216 of the Water Resources Development Act of 2000 (WRDA 2000) mandated a National Academies review of the Corps' procedures for independent peer review of feasibility reports. This upcoming study should help broaden and strengthen the Corps' peer review procedures, which ultimately should lead to better feasibility studies.