APPENDIX H

USACE Description of the Status of Implementation of Its Asset Management Program

This Status of Implementation of Asset Management is primarily focused on inland navigation lock and dam projects consistent with the main focus of this report. The risk-informed asset management process maturity timeline for inland navigation is illustrated in the figure [on the following page], which also generally serves as the outline for this brief summary “status description.”

1. Starting with the development of the FY10 budget in 2008, the Navigation Business Line initiated use of the 5×5 Relative Risk Matrix in the evaluation of O&M [operations and maintenance] work packages for both coastal and inland projects. The 5×5 risk matrix used “condition” and “consequence” descriptions at each of 5 levels, with the measure of project total commodity tonnage being a key factor in estimating consequence. The Inland Marine Transportation System (IMTS) Improvement Report identified a business process review (BPR) to “implement a standardized annual condition assessment process.” As a result, the Corps began the development of what is now the Operational Condition Assessment (OCA) process. The OCA process was not yet completely implemented during the development of the 2010 Capital Projects Business Model (CPBM) so that initiative used the 5×5 condition description at the lock level.

FIGURE H-1 Risk-informed asset management process maturity timeline for inland navigation.

2. As noted in Engineer Circular [EC] No. 11-2-200, “Corps of Engineers Civil Works Direct Program Development Guidance–Fiscal Year 2013” dated 31 March 2011, in FY10, Asset Management developed, trained and deployed the national Operational Condition Assessment (OCA) process in all MSCs with inland and intracoastal navigation. The EC further stated that “consequences of diminished Navigation feature performance are computed for each budget line item that could result in an unscheduled closure . . . and will establish the initial transition from tonnage to economic consequence of unscheduled closure. The economic consequences will be a function of the probability of failure of the components and the economic impacts as determined by the Planning Center of Expertise for Inland Navigation in the Huntington District and calculated from the OCA risk process” (now known as the Operational Risk Assessment [ORA] process). To maintain consistency with the process at that time, the “risk reduction” was correlated with the consequence levels in the 5×5 risk matrix. Concurrent with the development of the OCA and ORA processes the Corps was heavily involved in the National Research Council’s Federal Facilities Council and was invited to present the processes to the Committee on Predicting Outcomes of Investments in Maintenance and Repair of Federal Facilities.
3. Upon completion of the Predicting Outcomes of Investments in Maintenance and Repair of Federal Facilities report, the Committee conducted a public report dissemination forum and invited two federal agencies whose maintenance budgeting processes best addressed the report’s findings and recommendations—the Department of Energy was one invitee and the Corps Civil Works Asset Management the other.¹ Highlights of the Corps presentation (see link in footnote) included the focus on mission critical components (those components for which failure will result in (1) the inability to pass traffic and/or (2) maintain the naviga-

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¹ Ellsworth, Douglas E, “U.S. Army Corps of Engineers–A Risk-Informed Approach to Asset Management,” Public Forum for National Research Council Committee on Predicting Outcomes of Investments in Maintenance and Repair of Federal Facilities, June 19, 2012. http://sites.nationalacademies.org/cs/groups/depssite/documents/webpage/deps_081950.pdf.

4. tion pool to pass that traffic; the probability of failure of the many components; and the economic impact to the commercial stakeholder (commodity shippers and carriers) for varying durations of outages due to potential failures. Collectively, the Corps risk-informed approach best addresses Recommendations 2, 3, and 6 of the report, which are as follows: corporate approach to mitigating risk which focuses on linking investments to mission and objectives; use risk to inform annual maintenance and use standard methods for gathering and updating data; and focus on collecting mission critical data and information, respectively.

5. Building on the transition in 2011 from tonnage to economic impact as a consequence in the 5×5 relative risk matrix, in 2013 the Corps codified another transition in Engineering Circular No.11-2-204, the budget development guidance for Fiscal Year 2015.² In addition to embedding the economic impact risk reduction into the 5×5 consequence category, risk reduction visibility was elevated and explicitly added as a navigation budget performance measure. To that end, Section I.15, Budget Data Submissions for Inland Navigation, stated “condition and risk analytical tool for inland navigation . . . that develops risk buy down performance measures used to rank critical nonroutine navigation budget work packages . . . must be used to develop performance measures for inland navigation critical non-routine maintenance budget packages.” Further, Section II of EC 11-2-204 introduced the strategy for maintenance, in addition to the critical non-routine, stating that “USACE Asset Management has developed an overall USACE Maintenance Management Strategy and a Maintenance Management Improvement Plan (MMIP). The MMIP and its associated implementation plan will provide that corporate maintenance management strategy; help to provide consistent maintenance management policies, processes, practices, and terminology; and begin to align maintenance investments with desired levels of performance.”
6. In June 2014 the Water Resources Reform and Development Act (WRRDA) was signed into law. Section 2002 of WRRDA 2014

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² http://www.publications.usace.army.mil/USACEPublications/EngineerCirculars.aspx.

Future. The Corps Asset Management continues to mature, applying lessons learned from the inland navigation processes to other business lines, as well as continuing to evolve the current navigation OCA and ORA processes. Possible future improvements may include the capability for fault-tree analysis, use of utility model theory, and other approaches to ensure investments across the life cycle and the entire portfolio of assets are focused on buying down risk to ensure the Corps continues to deliver project benefits, or value, to the nation.