§624 Limitation on Improvement Work by Private Contract

Summary

Private contracts for river and harbor work must not be used when the Secretary of the Army, acting through the Chief of Engineers, finds either that Government-owned equipment (Government plant) can reasonably do the work and the private contract price is more than 25% higher than the estimated cost to do it with Government plant, or that the private contract price is more than 25% higher than a fair estimated cost for a well-equipped private contractor. When making those cost estimates, the Chief of Engineers must count labor and materials and also add proper charges for things like depreciation, supervision and overhead, interest on capital invested, and other appropriate expenses. For Government plant estimates the interest rate used cannot be higher than the maximum current rate the United States is paying on its bonds or similar debt. For private contractor estimates include, besides labor and materials, items such as depreciation, supervision, overhead, workers’ compensation, general liability insurance, state and local taxes, interest on capital, and other appropriate charges.