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The U.S. Army Corps of Engineers (Corps) is the world's largest public engineering, design, and construction management agency. In FY 2006 it began incorporating performance information into its budget process, but Congress raised concerns that the criteria used by the Corps to prioritize projects are not transparent and the budget formulation process could achieve a higher return on investment. This report: (1) describes the information the Corps uses in its budget formulation process and the implications of the process; and (2) evaluates whether the President's recent budget requests for the Corps are presented so that agency priorities are clear and proposed use of funds transparent. Includes recommendations. Charts and tables.