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Witness Panel 1
Mr. William RinneActing CommissionerBureau of Reclamation
Testimony of William E. Rinne
Acting Commissioner of the Bureau of Reclamation
U.S. Department of the Interior
United States Senate
Committee on Energy and Natural Resources
May 23, 2006
Mr. Chairman and Members of the Committee, it is a pleasure to appear today to discuss Managing for Excellence, an action plan for the 21st Century Bureau of Reclamation.
The principal catalyst for Managing for Excellence was a recently completed report of the National Academies’ National Research Council (NRC) entitled, “Managing Construction and Infrastructure in the 21st Century Bureau of Reclamation.” Reclamation asked the NRC to undertake this review in 2004 to get expert review and comment from third parties on our business practices and capabilities as we face the decades ahead.
In preparing its report, the NRC Committee spent most of 2005 consulting with Reclamation and Department of the Interior policy makers (both career and Presidentially appointed), Reclamation operations staff, water and power customers of Reclamation, Congressional staff, and other government water agencies, both Federal and state.
The NRC focused its recommendations for Reclamation in nine issue areas:
• centralized policy and decentralized operations;
• Reclamation’s technical service center;
• Laboratory and research activities;
• Asset sustainment planning;
• Project management;
• Acquisition and contracting;
• Relationships with sponsors and stakeholders; and
• Workforce and human resources.
Instead of detailing each of the NRC’s 22 distinct findings and 24 recommendations, we would like to mention a few to give the Committee a sense of the scope of the NRC’s work.
1. Reclamation’s customers and other stakeholders want close contact with empowered Reclamation officials, but they also want consistency in Reclamation policies and decisions, and decision makers with demonstrated professional competence.
2. Policies, procedures, and standards should be developed centrally and implemented locally.
3. Reclamation should perform an in-depth review of its own Technical Services Center (TSC) to identify the core competencies it needs, the number of personnel it needs, and its optimum structure. This TSC assessment should be reviewed by independent experts and stakeholders.
4. Reclamation’s laboratory organization and its physical structures may be too large.
5. O&M and other functions should be more aggressively outsourced.
6. Long-term sustainment of aging infrastructure will require more innovation and greater efficiency.
7. Reclamation should give high priority to completing and publishing cost estimating directives and resist efforts to submit projects to Congress with incomplete project planning.
8. The growing need to include a broad spectrum of stakeholders alters Reclamation’s tasks and the skills required to accomplish them. Personnel must be equipped to address both technical uncertainties and the ambiguities of future social and environmental outcomes.
Mr. Chairman, you know Reclamation and its water and power customers well enough to appreciate how serious these and other challenges detailed in the NRC’s report are.
Reclamation is up to the challenge. We are determined to take advantage of this opportunity to implement reforms with the goal of reinvigorating our program and ensuring that we will be able to provide optimum value to our stakeholders well into the future.
Before the ink was dry on the NRC report, Deputy Secretary Lynn Scarlett, (now Acting Secretary) directed us to develop a plan whereby Reclamation would address each finding and recommendation in the NRC report. The Commissioner appointed a Reclamation executive team led by Deputy Commissioner Larry Todd. With helpful input from an array of stakeholders, the team produced Managing for Excellence, An Action Plan for the 21st Century, Bureau of Reclamation and delivered it to Secretary Gale Norton in February.
Stakeholders with whom the Reclamation team consulted in preparing Managing for Excellence included:
• staff of Congressional Committees (authorizing and appropriating, majority and minority, House and Senate);
• the Family Farm Alliance, National Water Resources Association, and Trout Unlimited; and
• the federal employees who care so much about the Bureau mission from rank-and-file Reclamation field workers to Secretary Norton, herself, who offered several crucial comments as the document was being developed.
Perspectives shared by Reclamation employees on a special web page set up just for that purpose were enlightening and highly constructive.
The result, Mr. Chairman, is a plan for decision-making that exceeds the original expectations of many of us involved.
Now let’s turn to what is in Managing for Excellence and how Reclamation expects to carry it out.
First, each specific finding and recommendation in the NRC report is addressed in Managing for Excellence. But the Reclamation team went further. Managing for Excellence also draws on key Presidential Management Initiatives, a Reclamation customer satisfaction survey, and other internal reports and recommendations. Moreover, when stakeholders weighed in with their suggestions, they did not confine themselves to the four corners of the NRC report. The result is a far more comprehensive and cohesive product.
Managing for Excellence is actually a catalogue of 41 separate “action items,” each of which requires critical analysis, serious thought, and some tough decision-making. However, the decision-making schedule is not open-ended. Each action item has a specific start date and end date. The schedule was carefully considered to make certain that each decision was afforded enough time to get it right but not so much time that the benefits of implementing decisions would be needlessly delayed. The timetable is ambitious. All but twelve of the 41 action items are scheduled to be completed (i.e., recommendations forwarded to Reclamation senior management) in 2006. Most of the rest cannot be completed sooner for logistical reasons. For example, one action item is to evaluate the effectiveness of an earlier action item.
Now let’s turn to the action teams that are charged with carrying out the action items. The teams are made up of individuals known for intellectual honesty and for being committed to carrying out the Reclamation mission. They have established a reputation for ingenuity and achievement in communication, consultation, and cooperation with diverse stakeholders.
The teams have already started working. Each one has prepared a work plan which includes timelines for steps from gathering data and perspectives, to analysis, to final decision recommendations on the schedule set out in Managing for Excellence.
Will each action item succeed? The answer may turn on the involvement of stakeholders. For example, roughly half of the action items cannot be credibly addressed without direct input from water and power customers. Other action items depend on wisdom of rank-and-file employees, changes to legislation, or expert guidance from government management experts inside and outside of the Department of the Interior. We will seek help and support from all these sources.
Funding to carry out the tasks contemplated in the plan will be made available by reprioritizing existing activities. Reclamation’s reprioritization of funds will be carried out consistent with an absolute commitment to ensure that all activities vital to Reclamation’s core mission, including ongoing operation, maintenance, and environmental compliance responsibilities, are unaffected. We anticipate that implementation of the action items will result in significant improvements in the efficiency of Reclamation’s management. This would ultimately translate into improved capacity to carry out all aspects of Reclamation’s mission, including operation, maintenance, and environmental compliance.
The significant investment of Reclamation staff time and resources is warranted: these 41 action items may well shape the future of Reclamation for years or even generations to come.
Will we be able to weave cooperative conservation throughout Reclamation’s culture? Can we restore consistency and clarity to agency policy while ensuring that operational organization is decentralized? Do we have the courage and wisdom to right-size technical services and, throughout Reclamation, to outsource more of our workload when that makes good business sense? Will we share O&M management and decision-making with a wide array of customers, or even transfer it to them? Will we restore confidence in project cost-estimating? And can we integrate these goals with Reclamation’s existing statutory mission?
Finally, the Administration has long been concerned about many of the challenges identified by the NRC report. These have been identified or clarified in PART assessments conducted over the past several years. In particular, the PART conducted in 2005 on Reclamation’s Water Management: Operations and Maintenance program stated as one of the follow-up actions to improve the program that Reclamation will follow up on the recommendations identified in the NRC report. Additionally, the PART directed the Bureau to, “[D]evelop a comprehensive, long-term strategy to operate, maintain, and rehabilitate Reclamation facilities”. Clearly, this dovetails with many of the issues identified by the National Academies, and we are moving forward to ensure that we are addressing these long-term challenges.
These are just some of the questions that we will tackle and answer in coming months. We need your guidance, encouragement, and moral support—and that of our many stakeholders, particularly our water and power customers—to make sure the answers we develop are the best for all Americans whom we are privileged to serve.
Mr. Chairman, we would like to submit for the record a chart describing each of the 41 action items with each item’s start and end date and team leader, as well as a chart that depicts the integrated schedule for all action items. We are pleased to answer any questions.
Mr. Lloyd DuschaConsulting EngineerNational Research Council
National Research Council’s Managing Construction and Infrastructure in the 21st Century Bureau of Reclamation and the U.S. Bureau of Reclamation’s Managing for Excellence: an Action Plan for the 21st Century
Lloyd A. Duscha., U.S. Army Corps of Engineers (retired), and
Member, Committee on Organizing to Manage Construction and Infrastructure
in the 21st Century Bureau of Reclamation
Board on Infrastructure and the Constructed Environment
Division on Engineering and Physical Sciences
National Research Council
Committee on Energy and Natural Resources
United States Senate
May 23, 2006
Good morning, Mr. Chairman and members of the Committee. My name is Lloyd Duscha. I am retired from the U.S. Army Corps of Engineers, and I served on the National Research Council committee that authored the report Managing Construction and Infrastructure in the 21st Century Bureau of Reclamation. The report was requested by the Department of Interior. The National Research Council is the operating arm of the National Academy of Sciences, National Academy of Engineering, and the Institute of Medicine of the National Academies, chartered by Congress in 1863 to advise the government on matters of science and technology. It is a pleasure to be here to discuss our report on this important topic.
The study committee was comprised of 12 experts from the public and private sectors and academia assembled for the purpose of advising the Bureau of Reclamation and the Department of the Interior on the “appropriate organizational, management, and resource configurations to meet its construction, maintenance, and infrastructure requirements for its missions of the 21st century.” To accomplish its task, the study committee met as a whole four times from February to August 2005 and conducted small-group site visits to offices and projects in each of the five Reclamation regions. We received briefings from and had discussions with Reclamation staff, its customers, and other stakeholders. We also spoke with representatives of organizations with missions similar to Reclamation’s including the U.S. Army Corps of Engineers, the Tennessee Valley Authority, and the California Department of Water Resources.
In recent years, Reclamation’s focus and workload have shifted from building dams, power plants, and other infrastructure to operating, maintaining, repairing, and modernizing them, from constructing dams to evaluating dam safety and mitigating the risk of potential failure, and to addressing environmental issues. At the same time, growth in the Western states has spurred demand for water and power. Reclamation will be challenged to find ways to manage water and power so that it can meet future demands. The Department of Interior and Bureau of Reclamation have recognized this challenge for the twenty-first century and the need for the bureau to make the transition from construction to resources management. Its mission continues to be the effective management of power and water resources in ways that protect the health, safety, and welfare of the American public and that are environmentally and economically sound. Achieving these objectives is a dynamic, complex, and uncertain matter.
The study committee observed that Reclamation’s five regions have different organizational structures, capabilities, and workloads. In general, the regions appeared to be functioning well in the face of challenges typical to this type of endeavor. Staff morale and loyalty to Reclamation’s mission are commendable. Nevertheless, Reclamation, like most federal agencies, is challenged by changing requirements and the need to maintain its core competencies.
Each of the five regions is responsible for sustaining a significant portfolio of facilities. Examples of excellence were evident. However, in general, the regions need to evaluate their inventory of assets and manage them more aggressively over the life cycle, and to engage in constructive relationships with customers and stakeholders. If Reclamation wants to demonstrate consistency throughout the organization under its style of decentralized management, clear, detailed policy directives and standards are needed to enable all elements to implement a uniform, structured approach. A delicate balance needs to be maintained so as not to impede decentralized units from demonstrating initiative and increasing their capabilities. At the same time, we emphasize that Reclamation, as the owner, has the responsibility to ensure that its facilities are planned, designed, constructed, and managed with a level of quality that is consistent throughout the organization.
We believe that Reclamation will continue to require centralized technical services, research, and oversight to support the local management of resources; however, the study committee also sees a need to evaluate the size and organizational structure of the central units to ensure that services are delivered efficiently and at a reasonable cost to Reclamation customers. Both the organization and quantity of services provided at the central, regional, and area offices are affected by how services that are not inherently government functions are outsourced.
The study committee recognizes that organizations can and do take on a variety of structures with varying degrees of success. Some will function successfully despite their structure, while others will falter even as they deploy the best of theoretical forms. The internal culture and history of an organization play a significant role in determining the appropriate structure and the ultimate outcome. We believe that the organizational structure of Reclamation is basically appropriate for its customer-driven mission to deliver power and water. Nevertheless, we also believe that there are opportunities to improve the construction and management of its facilities and infrastructure, as well as the management, development, and protection of water and related resources in an environmentally sound manner.
Conclusions and Recommendations
A number of important factors, realities, and issues have major impacts on Reclamation’s ability to respond quickly and effectively to the many diverse pressures and rapid changes occurring today. Equally important are the capabilities that are needed within Reclamation to deal effectively with the challenges posed by these impacts. Although the core of Reclamation’s basic mission remains much the same—to deliver water and to generate power in 17 western states—how that mission is carried out is constrained by and must be responsive to several realities:
• Environmental factors. The environmental revolution of the last decades of the twentieth century imposed new requirements to protect ecosystems and mitigate the impact of development on fish and wildlife. Engineers and builders must be both environmental experts and water resource experts.
• American Indian water rights and rural water needs. American Indian water agreements and growing demands to provide adequate supplies of good quality water to small rural communities place new demands on the regulation of river flow and storage and distribution systems.
• Urbanization. Land is being taken out of agricultural production in many areas of the West and being developed for industrial, commercial, and residential purposes.
• Increasing budget constraints. Reclamation's budget has been effectively shrinking for many years, even as the needs have increased.
• Broader set of stakeholders. Water users of all types—farmers, power distributors, consumers, homeowners, environmentalists, Indian tribes, and virtually everyone else who uses water and power in the 17 western states—are impacted by and pay in some way for what the bureau does.
• Aging workforce. Reclamation’s skilled and experienced personnel will be retiring in large numbers over the next 5 to 15 years.
• Aging infrastructure. Most of Reclamation’s major dams, reservoirs, hydroelectric plants, and irrigation systems are 50 or more years old.
• Shift from design and construction to operations and maintenance. Operations and maintenance (O&M) activities will form a major part of the workload.
• Title transfer. Transferring ownership of government-owned facilities to nonfederal agencies and the private sector, while reducing Reclamation's O&M workload, introduces budgetary and oversight issues that may necessitate new business models.
• Water user operation of government-owned facilities. Reclamation has turned over and will undoubtedly continue to turn over some of its facilities to water user groups, often local water districts, for operation, maintenance and—sometimes—rehabilitation and new construction.
• New modes of augmenting the water supply. In the absence of significant climate change or major technological breakthroughs, water resources will remain constant, while demand can be anticipated to increase.
• Increase in the number of small projects. Although demand for large new projects will remain low, it is likely that demand for small water storage, irrigation, and distribution projects will increase.
In view of the preceding constraints, the study committee made several recommendations for Reclamation to develop the appropriate organizational, managerial, and resource configurations to meet its construction, maintenance, and infrastructure requirements for its twenty-first century missions. I should point out that our recommendations were purposely general in nature. The study committee believed that the specifics could be best developed internally where more detailed knowledge resides. Such an approach also enables those affected to play a role in establishing ownership and developing loyalty to the plan.
Centralized Policy and Decentralized Operations
To optimize the benefits of decentralization, Reclamation should promulgate policy guidance, directives, standards, and how-to documents that are consistent with the current workload. The commissioner should expedite the preparation of such documents, their distribution, and instructions for their consistent implementation. Reclamation’s operations should remain decentralized and guided and restrained by policy but empowered at each level by authority commensurate with assigned responsibility to respond to customer and stakeholder needs. Policies, procedures, and standards should be developed centrally and implemented locally. The design groups in area and project offices should be consolidated in regional offices or regional technical groups to create a critical mass that will allow optimizing technical competencies and provide efficient service. Technical skills in the area offices should focus on data collection, facility inspection and evaluation, and routine operations and maintenance (O&M).
Technical Service Center and Reclamation Laboratory and Research Activities
The commissioner should undertake an in-depth review and analysis of the Technical Service Center (TSC) to identify the needed core technical competencies, the number of technical personnel, and how the TSC should be structured for maximum efficiency to support the high-level and complex technical needs of Reclamation and its customers. The proper size and composition of the TSC are dependent on multiple factors, some interrelated:
• Forecasted workload,
• Type of work anticipated,
• Definition of activities deemed to be inherently governmental,
• Situations where outsourcing may not be practical,
• Particular expertise needed to fulfill the government’s oversight and liability roles,
• Personnel turnover factors that could affect the retention of expertise, and
• The need to maintain institutional capability.
This assessment and analysis should be undertaken by Reclamation’s management and reviewed by an independent panel of experts, including stakeholders.
The workforce should be sized to maintain the critical core competencies and technical leadership, and to increase outsourcing of much of the engineering and laboratory testing work. Alternative means should be explored for funding the staff and operating costs necessary for maintaining core TSC competencies, thereby reducing the engineering service costs reimbursable by customers.
Reclamation’s Research Office and TSC laboratory facilities should be analyzed to determine which specific research and testing capabilities are required now, and in the future; which of capabilities can be found in other government organizations, academic institutions, or the private sector; which physical components should be retained; and which kinds of staffing are necessary. The assessment should recognize that too great a reliance on outside organizations can deplete an effective engineering capability that, once lost, is not likely to be regained. In making this assessment Reclamation should take into account duplication of facilities at other government agencies, opportunities for collaboration, and the possibility for broader application of numerical modeling of complex problems and systems. Because many of the same factors that influence the optimum size and configuration of the TSC engineering services also apply to the research activities and laboratories, Reclamation should consider coordinating the reviews of these two functions.
Reclamation should establish an agency-wide policy on the appropriate types and proportions of work to be outsourced to the private sector. O&M and other functions at Reclamation-owned facilities, including field data collection, drilling operations, routine engineering, and environmental studies, should be more aggressively outsourced where objectively determined to be feasible and economically beneficial.
Planning for Asset Sustainment
Benchmarking of water distribution and irrigation activities by Reclamation and its contractors should be a regular part of their ongoing activities. Because effective planning is the key to effective operations and maintenance, Reclamation should identify, adapt, and adopt good practices for inspections and O&M plan development for bureau-wide use. Those now in use by the Lower Colorado and Pacific Northwest regions would be good models. Reclamation should formulate comprehensive O&M plans as the basis for financial management and the development of fair and affordable repayment schedules. Reclamation should assist its customers in their efforts to address economic constraints by adopting repayment requirements that ease borrowing requirements and extend repayment periods.
Reclamation should establish a comprehensive set of directives for a structured project management process for managing projects and stakeholder engagement from inception through completion and the beginning of O&M. Reclamation should also give high priority to completing and publishing cost estimating directives and resist pressures to submit projects for congressional authorization with incomplete project planning. Cost estimates that are submitted should be supported by a conceptual plan, environmental assessment, and design documents that are sufficiently complete to support the estimates.
Reclamation should establish a structured project review process to ensure effective oversight from inception through completion of construction and the beginning of O&M. The level of review should be consistent with the cost and inherent risk of the project. Oversight of large or high-risk projects should include the direct participation of the commissioner or his or her designated representative. The criteria for review procedures, processes, documentation, and expectations at each phase of the project need to be developed and applied to all projects, including those approved at the regional level.
A training program that incorporates current project management and stakeholder engagement tools should be developed and required for all personnel with project management responsibilities. In addition, project managers should have professional certification and experience commensurate with their responsibilities.
Acquisition and Contracting
Reclamation should establish a procedure and a central repository for examples of contracting approaches and templates that could be applied to the wide array of contracts in use. This repository should be continually maintained and upgraded to allow staff to access lessons learned from use of these instruments.
Relationships with Sponsors and Stakeholders
Making information readily available about processes and practices, both in general and for specific projects and activities, should be a Reclamation priority. Successful practices, such as those used in the Lower Colorado Dams Office, should be analyzed and the lessons learned should be transferred, where practical, throughout the bureau.
Workforce and Human Resources
Reclamation should analyze the competencies required for its personnel to oversee and provide contract administration for outsourced activities. Training programs should ensure that those undertaking the functions of the contracting officer’s technical representative are equipped to provide the appropriate oversight to ensure that Reclamation needs continue to be met by the contractor.
In light of the large number of retirements projected over the next few years and the potential loss of institutional memory inherent in these retirements, a formal review should be conducted to determine what level of core capability should be maintained to ensure that Reclamation remains an effective and informed buyer of contracted services. Reclamation should recruit, train, and nurture personnel who have the skills needed to manage processes involving technical capabilities as well as communications and collaborative processes. Collaborative competencies should be systematically related to job categories and the processes of hiring, training, evaluating the performance of, and promoting employees. Reclamation should facilitate development of the skills needed for succeeding at socially and politically complex tasks by adapting and adopting a small-wins approach to organizing employee efforts and taking advantage of the opportunities to celebrate and build on successes.
Bureau of Reclamation Response
An important element in the study committee’s ability to complete its assigned tasks was the support and participation of the bureau staff at all levels. The study committee appreciated the cooperation and support of all of the Reclamation officials who assisted the committee in this review. Before completing our work, we became aware that former Commissioner Keys had directed the development of a detailed response to our recommendations. The NRC committee applauds this rapid and enthusiastic response. We are not in a position to provide a detailed analysis, but it appears that Reclamation’s response, Managing for Excellence, sets forth an action plan to address all of the issues identified in the NRC study. Many of the study committee’s recommendations will require further analysis by Reclamation personnel, and changes that implement these initiatives may take considerable time. As noted in the NRC report, Reclamation should seek independent reviews of its assessments and organizational changes. Nevertheless, it appears that the Bureau, under strong leadership commitment, has made a good start.
This concludes my testimony. Thank you for the opportunity to discuss our report with you.
Witness Panel 2
Mr. Dan KeppenFamily Farm Alliance
Testimony of Dan Keppen
Executive Director, The Family Farm Alliance
Submitted to the U.S. Senate Committee on Energy and Natural Resources
The National Research Council Report:
“Managing Construction and Infrastructure in the 21st Century Bureau of Reclamation”
and the U.S. Bureau of Reclamation Report:
“Managing for Excellence: An Action Plan for the 21st Century”.
May 23, 2006
Chairman Domenici and Members of the Committee:
Thank you for this opportunity to submit testimony on behalf of the Family Farm Alliance (Alliance). My name is Dan Keppen, and I serve as the executive director for the Alliance, which advocates for family farmers, ranchers, irrigation districts, and allied industries in seventeen Western states. The Alliance is focused on one mission - To ensure the availability of reliable, affordable irrigation water supplies to Western farmers and ranchers. In short, we are the Bureau of Reclamation’s agricultural water customers.
I will provide the Family Farm Alliance perspective on a recently completed National Research Council report (“Report”) that examined the Bureau of Reclamation's (BOR) organization, practices and culture. This Report made a number of recommendations to change the way Reclamation operates. Reclamation in turn has responded with its Managing for Excellence Action Plan (“Action Plan”). This testimony provides the Alliance’s assessment of the Report and Action Plan.
Overview of Family Farm Alliance Philosophy
The members of the Family Farm Alliance believe that streamlined federal regulation and decision-making are the keys to sound Western water policy. Wherever possible, meaningful delegation of decision-making authority and responsibility should be transferred to the local level, with less federal intrusion in basin issues. The Alliance believes strongly that Reclamation should focus on fulfilling its core mission of delivering water and power in accordance with applicable contracts, water rights, interstate compacts, and other requirements of state and federal law. Inherent in this definition of core mission is the need to prioritize the expenditure of federal funds and other resources of the Department of the Interior.
The Alliance is engaged in this process to ensure that water users are being served in the most cost-efficient manner. We are encouraged that the Subcommittee is focusing on this important matter, and we’re certain that the Subcommittee and the Administration share the Alliance’s goal of improving Reclamation’s long-term management and transparency at a time when resources must be maximized to better develop water and power supplies in the western United States.
Similar Family Farm Alliance Efforts
A number of years ago, the Family Farm Alliance took the lead in an effort to improve containment and accountability for work by the Bureau of Reclamation that was either funded in advance by water users or subject to repayment obligations. With the cooperation of the Bureau of Reclamation, great progress was made in this regard. That effort ultimately yielded improved clarity and opportunity for customers to participate in development of O&M programs for facilities in which they share the cost. In fact, Reclamation’s recent Action Plan favorably comments on that earlier Alliance-Reclamation interaction. Given that federal, state, local, and private funds will be scarce, it is imperative that these efforts continue.
Family Farm Alliance Involvement in this Process
We have spent considerable time and resources in the past year working with the NRC Committee and Reclamation as the Committee developed Managing Construction and Infrastructure in the 21st Century – Bureau of Reclamation, which was finalized earlier this year. In June of 2005, the Alliance completed our own collection of case studies, titled: The Bureau of Reclamation’s Capability to Fulfill Its Core Mission: The Customer’s Perspective (“Alliance Report”). On June 23, 2005 in Washington, D.C., the Alliance presented its final case study report to the Committee. In May and June of 2005, the NRC Committee also sent out teams of three to tour “case study” sites throughout the West, and committee members met with Alliance representatives at three of these site visits (Boise, Denver and Sacramento).
2005 Alliance Report Findings
Overall, there is considerable agreement between the NRC Report and the Alliance case studies report. Our report compiled experiences from around the West – both good and bad – to provide the Committee with observations, findings and recommendations intended to be used constructively by Congress, the Bureau of Reclamation and other Interior Department agencies in dealing with the issues. Nine individual case studies were developed for irrigation districts served by six Reclamation projects in California, Colorado, Idaho, Nevada and Oregon. Our report found that:
1. Reclamation frequently demands that design work on water projects be performed by Reclamation staff.
2. Cost estimates prepared by Reclamation for proposed work are often significantly higher than reasonably anticipated costs.
3. Some customers reported unsatisfactory contract management by Reclamation staff.
4. Customers were skeptical of the technical abilities (especially relative to engineering and inspection) of Reclamation staff, particularly newer hires.
5. Reclamation sometimes shows an apparently unwillingness to document the basis for accounting of construction, NEPA work, and other cost estimates.
6. Customers believe they do not have recourse to fully understand and engage with Reclamation in decision-making and related cost estimates.
7. Reclamation tends to over-staff meetings or work on some projects.
8. Reclamation needs to improve "turn-around" times for design work or decisions.
Several contributors to our report observed that Reclamation in recent years has carried out few major new construction projects. As a consequence, the agency’s engineers and management staff lack practical construction experience. The designers and builders of Reclamation’s most impressive works have long since retired, and the current generation of engineers, planners and managers has not had the opportunity to develop the skills of their predecessors. Moreover, many contributors believe that Reclamation has too few licensed engineers.
Despite these negative findings, there is also evidence that Reclamation staff members from regional and area offices can play a key role in helping to find the right path to make multi-agency processes and projects work. When strong relationships are developed between Reclamation employees (especially in area or regional offices) and local water users, cooperative and innovative solutions can be reached. There are other models in the West – such as state water project grant and loan programs in California– where successful projects have been completed. A template for success might be one where state and federal agency regulators establish criteria, funding agencies write the checks, and local districts and their consultants implement and satisfy regulatory criteria and funding eligibility requirements.
Alliance Perspective on the NRC Report
It appears that the NRC Committee heard the Alliance’s concerns. When we transmitted our report to the Committee last June, we noted that a template for success might be one where “state and federal agency regulators establish criteria, funding agencies write the checks, and local districts and their consultants implement and satisfy regulatory criteria and funding eligibility requirements”. We also observed that meeting the challenge of modernizing the West’s aging water infrastructure will require a corps of highly qualified professionals serving in the public and private sectors. We recommended that Reclamation must either hire skilled and experienced engineers and managers, or turn to the private sector to provide the human resources necessary to maintain and improve the agency’s facilities.
You will note a similar flavor in the NRC Report recommendations:
• Recommendation 2a: "The commissioner should undertake an in-depth review and analysis of the Technical Service Center (TSC) to identify the needed core technical competencies, the number of technical personnel, and how the TSC should be structured for maximum efficiency to support the high-level and complex technical needs of Reclamation and its customers… This assessment and analysis should be undertaken by Reclamation’s management and reviewed by an independent panel of experts, including stakeholders."
• Recommendation 2b: "The workforce should be sized to maintain the critical core competencies and technical leadership but to increase outsourcing of much of the engineering and laboratory testing work".
• Recommendation 2c" "Alternative means should be developed for funding the staff and operating costs necessary for maintaining core Technical Service Center competencies, thereby reducing the proportion of engineering service costs reimbursable by customers."
• Recommendation 4 suggests that "Reclamation should establish an agency-wide policy on the appropriate types and proportions of work to be outsourced to the private sector. Operations and maintenance and other functions at Reclamation-owned facilities, including field data collection, drilling operations, routine engineering, and environmental studies, should be more aggressively outsourced where objectively determined to be feasible and economically beneficial."
• Recommendation 5b: "....Reclamation should assist its customers in their efforts to address economic constraints by adapting repayment requirements that ease borrowing requirements and extend repayment periods."
• Recommendation 6d-"A training program that incorporates current project management and stakeholder engagement tools should be developed and required for all personnel with project management responsibilities. In addition, project managers should have professional certification and experience commensurate with their responsibilities."
• Recommendation 6e. "Reclamation should give high priority to completing and publishing cost estimating directives and resist pressures to submit projects to Congress with incomplete project planning. Cost estimates that are submitted should be supported by a design concept and planning, environmental assessment, and design development documents that are sufficiently complete to support the estimates. Reclamation should develop a consistent process for evaluating project planning and the accuracy of cost estimates."
The philosophy embedded in future management scenario discussed in the Report - “federal funding and local execution” – closely matches the philosophy observed in the most successful of the case studies we presented to the NRC Committee.
Reclamation’s Action Plan: Managing for Excellence
As previously noted, Reclamation has analyzed the report’s findings and recommendations and has developed an action plan called Managing for Excellence. In presentations at the Alliance’s annual conference in Las Vegas last March, Interior Department and Reclamation officials emphasized that they are taking the findings of the NRC very seriously. There appears to be genuine enthusiasm within Reclamation about proceeding with its Action Plan. Team leaders for 41 different action items have been identified, and these leaders, senior executives, and the regional directors appear to be very organized and focused on this process.
On April 27 of this year, the Alliance participated in a workshop with Reclamation and water and power customers to help set priorities for Reclamation as it moves forward with implementing its “Managing for Excellence” Action Plan. The workshop was held in Denver. The general issues of concern that were raised related primarily to Reclamation’s engineering and design services, asset sustainment, and major repair challenges. Overall, we were pleased with the constructive dialogue and brainstorming that occurred between Reclamation and its customers at the day-long Denver meeting.
Specific Recommendations Regarding Design, Construction and Procurement
In general, we believe that Reclamation’s Action Plan will provide opportunities to address the concerns identified in last year’s Alliance report. We do have a few specific ideas on how we think key Report recommendations can be realized, either through the process proposed in the Action Plan, or, if necessary, by Congress. As we work further with Reclamation in this process, we intend to define our expectations in a manner that easily demonstrates whether Reclamation has met them or not. Key initial expectations include the following:
• Reclamation revises the customer interaction process to include written procedures for customer input on current financial circumstances of all Reclamation infrastructure, including cost invested, repayment status, O&M cost allocation, design life, facility condition, etc, and a documented means through which Reclamation used (or didn’t use) this input;
• Reclamation develops and implements a transition plan to achieve an agency with “right-sized” design, estimating and construction management staff;
• Reclamation adopts a policy that contractors who pay for 50% or more of specific work can elect to use irrigation district personnel or private consultants for design, procurement, construction, and contract and construction management;
• Reclamation proposes reductions at Technical Service Center that are real and not achieved by reassignments to the Regions or reclassifications of existing job categories;
• Standards for construction and O&M are based on an assessment of the relative risk, consequences of failure, marginal return, and subject to appeal to policy level officials;
• Reclamation moves to use “performance-based” instead of “design-based” standards for any work which is paid for in part by contractors, and emphasize use of “off-the-shelf” components, as opposed to redesigning projects.
• Reclamation requires reporting of actual costs of work charged to contractors by function and specific employee (or at least job title and classification, with description of work performed) within a reasonable time period (perhaps six months).
• Reclamation does not perform design, construction, and procurement work unless the Commissioner certifies that there is a substantial likelihood that Reclamation can perform the work at issue at a cost equal to or less than if outsourced (based on a defined Reclamation project cost).
• Reclamation requires reporting/tracking for projects that monitor actual Reclamation costs, as well as providing for advance notification to contractors and Congress that there is a material risk that Reclamation will exceed defined Reclamation project costs.
In summary, fundamental fairness requires that when a water user is paying for work in advance or through repayment mechanisms, that water user should have the option to have the work executed in the manner that provides the most return for the investment. Qualified districts or water user organizations should be provided with the option to perform or contract with qualified private contractors any work on federal facilities that does not fall within the category of “essential governmental functions” so long as appropriate standards are met.
Specific Recommendations Regarding Reclamation’s Role with Title Transfers
Reclamation has talked about the benefit of transferring title of some Reclamation facilities to non-federal authorities that can demonstrate capability to continue operating the project. It is seen as a benefit to the federal government because of the loss of liability and future financial responsibility for non-reimbursable purposes as non-reimbursable OM&R. There appears to be a handful of districts that are currently pursuing title transfers, and we hear complaints from some that title transfers of federal water projects to local sponsors are unappealing. We expect Reclamation to develop goals that require transfer of facility title or O&M responsibilities for an increasing percentage of Reclamation facilities to project beneficiaries.
The Action Plan provides a process where Reclamation can address this important issue directly with customers. We have asked Reclamation to investigate impediments to project title transfer, and then develop recommendations to help streamline unrealistic regulatory processes.
Several of our members who have participated in title transfers have identified the cumbersome National Environmental Policy Act (NEPA) and National Historic Preservation Act (NHPA) processes as primary reasons for difficulties. The attached summary of one Nevada water district’s experience on this matter further details this issue and is included with this testimony as “Exhibit A”.
We will continue to engage with Reclamation and Congress this year as we seek to implement the NRC Committee’s recommendations.
Transparency and value of Reclamation’s construction and O&M costs are of critical importance to our organization. The Family Farm Alliance Board of Directors earlier this year formed a subcommittee of Western landowners and water professionals to engage in the process proposed by the Action Plan. This group will continue to assess how the Report and the Action Plan may be used as a basis for potential policy and management changes at the Bureau of Reclamation.
Interior Assistant Secretary Mark Limbaugh has assured the Alliance and other stakeholders that we will have an active role in working with Reclamation to implement the Report’s recommendations. This is very encouraging. Regular briefings and interaction with Reclamation and Congress will be needed to keep the momentum moving on this important process. However, we will not be able to fully judge whether Managing for Excellence has been a success until the action items are completed in December 2007.
The Family Farm Alliance looks forward continuing to work with the Committee and the Bureau of Reclamation to ensure that water users who pay for Reclamation's services get the best value for their investment.
Thank you for this opportunity to present our views today.
Exhibit A – Incentives for Title Transfers
Although the Bureau of Reclamation has for several years touted the benefits of transferring ownership of certain Bureau facilities to local authorities, there remain significant hurdles to such title transfers. These include:
• Significant “up-front” costs that must be borne by the local entity.
• Reclamation bears little, if any, of the costs associated with transfers.
• If the title transfer fails, the district is totally responsible for the sunk cost of the process, even if specific activities required by Reclamation would have otherwise eventually been paid by Reclamation (e.g. cultural resources inventories).
• The infrastructure is often in a state of deterioration. Many projects are old and in need of major maintenance.
• Title transfer processes can take several years, and some participating districts have had problems with getting the proposed transfer to score positively.
Several of Alliance members who have participated in title transfers have identified the cumbersome NEPA (National Environmental Policy Act) and National Historic Preservation Act (NHPA) processes as primary reasons for difficulties. In some areas, our members have observed that much of the resistance associated with title transfer NEPA and NHPA issues comes from internal staff at the Bureau of Reclamation.
For example, the Environmental Impact Statement for the Humboldt Project Conveyance in Nevada - informally called the Humboldt Title Transfer - has been completed and the Record of Decision issued. This process was informally started in 1991 and formally began in 1997.
Thus far Pershing County Water Control District (PCWCD or District) has expended more than $1 million in pursuit the transfer of title to the District. However, in order to comply with federal statutes addressing archaeological and other cultural resources concerns, Reclamation, with the District’s financial assistance, will need to complete identification of cultural resources efforts on the transfer lands under the NHPA, as well as other legislation including the Native American Graves Protection and Repatriation Act and the Archaeological Resources Protection Act. This process may take an additional 5-7 years and is estimated to cost over $1.3 million for research design and inventory. PCWCD is obligated to pay half of the costs. Not included in this figure are any mitigation costs which would add significantly to the projected expenses.
The justification for this enormous expenditure of time and money is based on Section 106 regulation, 36 CFR Part 800.5(a) (2) (viii), that defines transfers of property out of Federal ownership or control as adverse effects if the agency transferring the property determines that there are inadequate legally enforceable restrictions or conditions to ensure long term preservation of the property’s historic significance.
We appreciate the need for identification and protection of cultural resources in circumstances where there is the potential for alteration or destruction of the historic properties. However, in the case of the Humboldt Conveyance, the lands being transferred to PCWCD will continue to be used for exactly the same purposes and in the same manner that they are currently used under Reclamation’s stewardship. Ironically, some the lands that are to be transferred to PCWCD are acquired lands, that is, patented lands held by private individuals that were acquired by United States specifically for Project purposes. In the District’s view, acquired properties ought to be exempt from Section 106 regulation because in such cases the federal government is placed in the chain of title after patent and the lands are not “public” in the same sense as unpatented lands.
Reclamation and Congress should investigate these impediments to title transfer and suggest or support, as may be appropriate, language that would modify the requirements of Section 106 in such instances.
The Honorable Diane SnyderExecutive DirectorAmerican Council of Engineering Companies of New Mexico
STATEMENT OF H. DIANE SNYDER
THE AMERICAN COUNCIL OF ENGINEERING COMPANIES
SENATE ENERGY AND NATURAL RESOURCES COMMITTEE
“CONSTRUCTION AND INFRATRUCTURE IN THE BUREAU OF RECLAMATION”
May 23, 2006
Mr. Chairman and Members of the Committee, my name is H. Diane Snyer and I am testifying today on behalf of the American Council of Engineering Companies (ACEC). ACEC is the voice of America's engineering industry. Council members – numbering more than 5,500 firms throughout the country – are engaged in a wide range of engineering works that propel the nation's economy, and enhance and safeguard America's quality of life.
I am the Executive Director of ACEC New Mexico a membership organization for 48 engineering firms. The Council represents the business of engineering for over 40,000 New Mexicans employed in the engineering industry.
In addition, I am a New Mexico State Senator in the middle of my second four-year term. My district is in Albuquerque and I have the honor and privilege of representing 44,000 New Mexicans. Prior to being elected to office I served as – what has recently become a four-letter word – a lobbyist for our state chamber of commerce, small business issues, and water and wastewater regulation and infrastructure development.
Today ACEC is a large federation of 51 state and regional councils representing the great breadth of America's engineering industry. ACEC member firms employ more than 300,000 engineers, architects, land surveyors, scientists, and other specialists, responsible for more than $100 billion of private and public works annually. Member firms range in size from a single registered professional engineer to corporations employing thousands of professionals. The Council's mission is to contribute to America's prosperity and welfare by advancing the business interests of member firms.
I appreciate this opportunity to come before you today to discuss the business practices of the U.S. Bureau of Reclamation, and how that not only affects engineering firms, but the very people it is suppose to help.
Problems with the US Bureau of Reclamation
ACEC has raised concerns previously regarding the U.S. Bureau of Reclamation’s (USBR) practice of offering and providing consulting engineering services to customers in direct competition with private engineering firms. What is particularly disturbing is that the USBR uses taxpayer dollars to compete directly with the private sector, and often performs engineering work in-house where the agency lacks the manpower or expertise necessary to perform the work.
One example of unfair government competition by the USBR raised by ACEC members is the Animas La Plata Water Supply Project in Colorado. Engineering firms with the capability to perform the work began to form teaming arrangements in anticipation of a RFP to design/construct the $344 million project. However, USBR convinced the tribes to allow it to do the design and construction management for this project with in-house staff. According to firms familiar with the project, USBR only contracted out approximately 5-10% of the front-end engineering work, and none of its construction management functions.
Another noteworthy example of where USBR could have more effectively utilized the private sector on behalf of their client and the taxpayer is the Indian water rights settlement with the Chippewa-Cree Tribe. Under the “Chippewa Cree Tribe of the Rocky Boy’s Reservations Indian Reserved Water Rights Settlement and Water Supply Enhancement Act of 1999” (106-163), USBR was allocated $3 million to conduct a feasibility study to evaluate alternatives for municipal, rural, and industrial water supply for the Chippewa Cree Tribe Reservation. In addition, the report was to include a regional feasibility study to evaluate water issues, and outline how water resources can best be managed to serve the needs of Montana's citizens.
Instead of allowing the private sector to undertake the studies, however, USBR designated itself as the entity to accomplish the work. The study was supposed to identify a preferred alternative, conduct a National Environmental Policy Act (NEPA) evaluation, a cultural resources survey, and an economic evaluation. In the end, USBR completed the study late, and later determined that it was not a “true” feasibility study under the agency’s own standards. USBR did not identify a preferred alternative but simply screened the options from twelve to six. No further work was performed, and since the report did not identify a preferred alterative as required under agency guidelines, the work product could not be presented to Congress to secure additional federal funding.
Since then, the State of Montana has taken the lead in doing the feasibility study. The State completed an engineering and economics report using a private engineering firm in 1 year (while USBR had over 3 years to complete their $3 million dollar study). What is particular disturbing is that USBR had proposed to obtain another $8 million from Congress to compete the another feasibility study over 3 more years, while the state believes that this work can be completed in 1-2 years at a fraction of the cost.
The last example which directly affects New Mexico (NM) is Ute Dam project. The state of New Mexico built Ute Dam and reservoir in 1950-60 as a water supply storage reservoir realizing that the limited life of the Ogallala aquifer serving the east side of New Mexico. In 1963-64, 17 eastern New Mexico communities and counties formed the Eastern NM Inter-Community Water Supply Association and developed a feasibility study to put the storage in Ute to beneficial use. The feasibility study was to be 100% privately financed and owned/operated by the Assocations’members.
The USBR did a series of studies and received federal authorization to conduct a feasibility study, and in the process spend lots of money, but not advancing the project to a design or construction stage, however, project never got off the ground so the project went out to the private sector and a private sector firm was picked to finish the feasibility study.
In 2004, there was an attempt to secure federal funding for the Ute Dam project. However, USBR’s criticized the report and concluded that the report did not conform to USBR standards. The project was immediately withdrawn and the entire process started all over again. Currently, the project has not moved beyond the feasibility study stage.
ACEC believes that the proper role for USBR should have been to oversee the work done by both the state and the private sector-- not taking the lead away from the state and the work away from qualified engineering companies.
Unfortunately, USBR does not seem to stop in competing directly with the private sector. USBR’s 2004 Federal Activities Inventory Reform Act (FAIR) reveals that USBR intends to increase its water recovery/reuse program by expanding the number of technical assistance programs it offers to Tribes for water programs. In fact from 1999-2005, USBR’s FAIR Act inventory reveals that it currently has 680 federal time equivalence (FTE) working in engineering functions that have been deemed commercial.
USBR should follow the example of the National Park Service (NPS) in making effective use of private sector engineering services. Since 1998, the NPS has restructured its processes for acquiring construction design and construction project supervision. While Government personnel previously provided these services, the agency now has all construction supervision and 90% of all design requirements satisfied through support contracts with private firms.
By shifting from a project-focused activity to a project management and standards activity, the NPS has experienced new successes and achievements. NPS has established more meaningful and professional associations with the design community on both a national and local level. Greater emphasis on the development of common construction specifications is helping to standardize the facilities maintenance and support function. These efforts are foundational to increasing the authority of superintendents to execute projects at the local level, within the standards and specifications developed. This transformation has simplified the funding of the entire construction program, providing for base funding of the Denver Service Center activities within established funding metrics developed to reflect significant major project components and cost drivers.
ACEC encourages USBR to follow the successful model established by the NPS, which demonstrates how federal agencies can effectively partner with the private sector to carry out successful programs on behalf of the taxpayer.
Comments on National Research Council’s Report
ACEC agrees with the report of the National Research Council of the National Academies of Science “Managing Construction and Infrastructure in the 21st Century Bureau of Reclamation” of finding inconsistencies in the areas of acquisition and contracting policies. The inconsistency in implementing acquisition policies is in how each region or water district makes the determination what functions to keep in-house even though it is not considered an inherently governmental function. USBR needs to establish a centralized and consistent acquisition policy and procedures at USBR headquarters rather than allowing each region or water district to make-up their own policies.
ACEC agrees with the report’s recommendations that the USBR’s Commissioner needs to undertake a detailed analysis of how the agency should be structured for maximum efficiency in order to retain the “critical core competencies and technical leadership but increase outsourcing of much of the engineering and laboratory testing work”, which would assist in “reducing the proportion of engineering service costs chargeable to the customer.” What’s more, the report states that many of USBR’s activities are not considered inherently governmental functions as defined by the Office of Management and Budget (OMB) Policy Letter 92-1, and concludes that USBR should establish an agency-wide detailed review of functions or activities that should be contracted out to the private sector.
Response to Reclamation Action Plan for the 21st Century
ACEC believes that the action plan detailed by USBR to implement the report’s recommendations is a good first step in the right, and encourages USBR to work with the private sector. However, ACEC believes that for the action plan to work, Congress needs to engage in proper oversight to make sure that USBR stays on track.
ACEC believes that taxpayers ultimately win when there is competition. ACEC looks forward to working with you to promote that goal.
Again, thank you for allowing me to come here today and I look forward to any questions that you have.
Mr. Scott YatesDirector, Wyoming Water ProjectTrout Unlimited
Statement of Scott Yates
Director, Wyoming Water Project
Energy and Natural Resources Committee
United States Senate
May 23, 2006
Mr. Chairman, Members of the Committee, I appreciate the opportunity to appear
before you today to provide Trout Unlimited’s views and perspective on the National Research Council (NRC) report entitled, “Managing Construction and Infrastructure in the 21st Century, Bureau of Reclamation” and Reclamation’s action plan completed in response to the NRC’s findings and recommendations.
Trout Unlimited (TU) is the nation’s largest coldwater fisheries conservation organization dedicated to the protection and restoration of our nation’s trout and salmon resources, and the watersheds that sustain those resources. TU has more than 160,000 members organized into 450 chapters in 38 states. Our members generally are trout and salmon anglers who give back to the resources they love by voluntarily contributing substantial amounts of their personal time and resources to fisheries habitat protection and restoration efforts on public and private land. The average TU chapter donates 1,000 hours of volunteer time on an annual basis.
My name is Scott Yates and I serve as Trout Unlimited’s Wyoming Water Project Director, however, I am fortunate to have lived and worked in a few different places across the west. Prior to accepting my current position, I initiated and led TU’s Idaho Water Project for four years including an overlapping six month stint as the interim Executive Director for the Henry’s Fork Foundation, and recently gained useful private sector experience having worked for Portland General Electric in Oregon as the license manager for the largest hydroelectric project located wholly inside the State of Oregon – the Pelton Round Butte Project on the Deschutes River.
The mission of TU’s Western Water Project is to conserve, protect and restore healthy flows in the coldwater fisheries of Colorado, Idaho, Montana, Utah and Wyoming. All of our activities are guided by two key tenants; 1) healthy rivers are a necessary part of the ecosystem and 2) restoring rivers strengthen adjacent communities. Some of our nation’s greatest trout fisheries in the West are below federal dams, including blue ribbon trout fisheries on river systems like the Snake, Henry’s Fork, Green, Beaverhead, Shoshone, North Platte, Gunnison, and numerous others.
As stated on its website, the current mission statement for the Bureau of Reclamation (Reclamation) is to manage, develop, and protect water and related resources in an environmentally-sound manner in the interest of the American public. Clearly, this broad mandate encompasses much more than “delivering water and generating power,” the two historically prominent and primary purposes for large Reclamation dams. In recent committee briefings and meetings, some still describe Reclamation’s mission as limited to such activities and “whatever it takes” to accomplish water delivery and power generation. (see page 22 of NRC report). But the mission has broadened to include numerous other drivers, not the least of which includes protecting and restoring river resources.
TU believes the NRC accurately and poignantly described the underlying challenge for Reclamation, namely, that the agency must embrace change and adapt to the 21st century by recognizing that its mission encompasses more than just delivering water and producing power. Moreover, adapting to today’s circumstances is not optional. As the NRC states in its report, Reclamation must (emphasis added) be responsive to several realities including environmental factors to thrive and survive into the future.
On page 10 of its report, NRC states that the “predominant workload has changed from new construction to O&M, repair, . . . modernization of aging infrastructure, . . . and environmental restoration and enhancement.” As such, it is imperative that Reclamation transition into a pro-active river management agency, by developing and implementing programs and designing budgets to ensure river health needs are met.
Consistent with the NRC findings and recommendations, there are four key components to address as Reclamation transitions into the 21st Century: (1) strengthening outreach and diverse stakeholder participation; (2) policy consistency – improve consistency between national policy directives and programs and implementation at the regional, area, and local offices; (3) the need for either organic legislation or use of existing authority (i.e. the Fish and Wildlife Coordination Act) to expand the reach of Reclamation’s technical services division in a coordinated and consistent way; and (4) retaining identifiable substantive environmental and natural resource protection measures when future proposals involving shifting operations and maintenance and construction to project beneficiaries or other outside sources.
I. Strengthening Outreach and Diverse Stakeholder Participation
As the NRC report states, upfront, ongoing and inclusive collaboration with
diverse stakeholders will strengthen and enhance Reclamation’s decisions and processes. In part, NRC Recommendation 1b states that Reclamation’s stakeholders want close contact with empowered officials. Similarly, on page 95 of its report, NRC notes that “consideration of the effects of a project on environmental costs and opportunities to increase sustainability must become ingrained from the outset, not simply an add-on to business as usual.” Upfront consideration of environmental issues in a collaborative way ensures far less controversy, increases the chance for multi-stakeholder buy-in, and hopefully, leads to final decisions that are more likely to be technically and legally defensible. From TU’s perspective, collaboration must be broader than just project beneficiaries.
In some areas of the country, Reclamation already has a proven track record of
conducting its business in this way. One example involves Palisades Dam on Idaho’s South Fork Snake River. The South Fork Snake River is one of the West’s great native trout fisheries, and is frequented by anglers from all over the country, including on an annual basis, by Vice President Cheney. However, federal and state resource agencies and other stakeholders such as TU and the Upper Snake River irrigation community have been grappling in recent years with the possibility that Yellowstone cutthroat (YCT) may be listed under the federal Endangered Species Act. The South Fork represents the last big river population of YCT in Idaho, but YCT numbers had dwindled in recent years and non-native but naturally reproducing rainbow trout threatened the genetic integrity of the South Fork populations.
During 2000 to 2001 Reclamation officials from the Pacific Northwest Region initiated the Ecologically Based System Management (EBSM) Project – a three- phase pilot study funded by Reclamation and conducted by the Flathead Lake Biological Station. The goal of the EBSM Project was clear – determine the hydrologic regimes necessary to provide a functioning South Fork ecosystem within the constraints of state water law and contractual obligations. The information generated by the Reclamation study was incredibly important in putting together the ecological picture for the South Fork, and dovetailed completely with excellent fish population data collected and analyzed by the Idaho Department of Fish and Game and critical hydrologic analysis by Idaho State University.
Perhaps the most impressive part of Reclamation’s EBSM efforts involved the agency’s ability to coalesce a diverse group of stakeholders regarding implementation of the EBSM flow recommendations. The agency was able to present complex findings in an organized and understandable manner, including recommendations that required creative operations during certain water years that challenged historic assumptions about not only how water could be stored and delivered in the Upper Snake River system, but also about fishery needs and the relationship between native cutthroat year class production and survival and the hydrograph. The Reclamation accomplished re-operation of a major BOR dam with the support of non-traditional partners – and in doing so was able to both meet traditional water needs during drought years and expand flexibility regarding the timing and movement of water to benefit the struggling native cutthroat fishery.
I would argue that the South Fork Snake River effort is one of the most comprehensive and successful native trout restoration efforts in the West and Reclamation is right in the middle developing sound science, proposing dam operations that incorporate such principles while still fulfilling project purposes, and helping disseminate information and ensure multi-stakeholder participation and support. Reclamation’s effort on the South Fork is also a good example of a federal resource management agency doing more than just sitting back and waiting for a species to be listed under the ESA prior to taking action. If Yellowstone cutthroat are not listed under the ESA, Reclamation’s activities over the past five years will be one of the primary reasons.
II. Policy Consistency – Improving Consistency Between National Policy Directives and Programs and Implementation at the Regional, Area, and Local Offices
With the focus TU places on river protection and restoration, it is often confounding for our Western Water Project offices when Reclamation river management or programmatic activities vary from project to project. Obviously, some of these differences are based on ecological conditions in a specific river system or on the water storage and delivery dynamics that either limit or constrain re-operation or management flexibility. Further, in some areas consensus amongst stakeholders is either non-existent or in the initial stages of fruition. There are some river systems, however, where the table has been set for creative management below a Reclamation dam and the agency has failed to take advantage. The Sun River in Montana is a good example of where Reclamation efforts have limited the success of a stakeholder group convened to assess both irrigation rights and obvious ecological river needs.
The Sun River’s headwaters drain the pristine Bob Marshall Wilderness area below Glacier National Park. The Sun River joins the upper Missouri River near Great Falls, Montana. The Reclamation reservoir behind Gibson Dam, lies just beyond the Forest Service boundary, and serves two downstream irrigation districts. The Sun River has suffered from severe and chronic dewatering due to substantial irrigation water withdrawals for many decades. However, in recent years, productive discussions have begun among the irrigation districts and interested stakeholders, Trout Unlimited among them, on finding ways to restore flows to the Sun River and thereby protect and enhance the Sun’s wild trout fishery.
These discussions have taken place through the Sun River Watershed Group and have focused on ways to meet federal Clean Water Act requirements – the Sun River is a Section 303(d) listed stream below Gibson Dam – by addressing the probable causes for river impairment including flow alteration and resultant thermal modification and habitat modification. The Sun River Watershed Group worked closely with DEQ to develop TMDLs that effectively address environmental and agricultural concerns. One of the most difficult issues in this process was finding cooperative ways to address the Sun’s water quantity, or flow, problems.
While chronic low flows were identified as a limiting factor for both water quality and the Sun River fishery, river flows are an important source of irrigation water for basin farmers. The river is the site of a large Reclamation water project, which includes Gibson dam and reservoir, a secondary diversion dam, two smaller storage reservoirs, and numerous irrigation canals. The Reclamation project provides water to the Greenfields Irrigation District (GID) and the Fort Shaw Irrigation District (FSID). Several other major ranches have additional water right claims from the Sun River downstream of the Gibson reservoir. During drought years, the river barely contains enough water to satisfy the irrigators’ water rights, and the riverbed is nearly run dry.
Despite assessing complex and historically contentious issues, the Sun River Watershed Group has maintained a diverse membership list that includes representatives of the Cascade, Lewis and Clark, and Teton County Conservation Districts; Reclamation; GID; FSID; DEQ; the Broken O Ranch; the USDA Natural Resources Conservation Service; Montana Fish, Wildlife and Parks; Pacific Power and Light; Trout Unlimited; the Medicine River Canoe Club; Missouri River Flyfishers; Audubon Chapter; and the Russell Country Sportsmen’s Association. The Group also receives support from numerous local businesses and organizations, as well as all three of Montana’s Congressmen and has received numerous awards for finding innovative and cooperative solutions to environmental and agricultural problems.
The Group’s diverse membership grappled with the hard issues of stream flows and water rights during the TMDL process. The Watershed Group came up with an approach for exploring flow restoration that was acceptable to all stakeholders, tied these flow restoration goals to thermal TMDL targets, and the Sun River TMDL was approved by the EPA last year. A first-step in the flow restoration goals is improving river winter flows below Reclamation’s Gibson Dam, by taking a close look at reservoir operations and the current reservoir fill regime to determine whether some flexibility could be found in the operational regime to increase winter flows without jeopardizing the ability of Gibson Reservoir to fill with the spring peak flows due to snow-melt.
Unfortunately, Watershed Group momentum and efforts to assess reservoir operations have been stymied by a lack of cooperation from Reclamation. For nearly two years, Reclamation has been promising the Watershed Group and its stakeholders that it would re-run the reservoir operations model to determine if there was in fact some flexibility to increase winter flows. There is reason to believe that this flexibility does in fact exist, because the reservoir has never failed to fill in its 70-year history due to the large spring peak flows coming from the east side of the Bob Marshall Wilderness Area. In addition, the Sun River Watershed Group invested significant resources in a detailed review of flow regime and snow pack data that should aid Reclamation’s model re-run. Nevertheless, Reclamation has consistently failed to meet its promise to re-run the reservoir operations model, and has been extending its deadline to do so in 6-month increments for nearly two years. Despite support from the Sun River Watershed Group, and despite a consensus recommendation from all stakeholders – including the two irrigation districts that the Reclamation project serves – Reclamation has still not come through.
When juxtaposed with successful Reclamation partnership efforts on the South Fork Snake River, there is little discernible excuse for the agency approach in the Sun River Basin. The agency needs to continually strive for transparency and consistency on reservoir reoperation issues, and take advantage of existing partnership mechanisms such as the Sun River Watershed Group. The South Fork Snake River example cited above is a good example of the agency identifying a programmatic vision that was coordinated at the Regional level and supported by staff at the area office and local staff levels and moving forward to achieve multiple and diverse river management goals. There is no reason a similar situation should not occur in the Sun River Basin.
III. The Need for Either Organic Legislation or Flexible Use of Existing Authority to Expand the Coordinated and Consistent Reach of Technical Services Division
TU recognizes the importance of Recommendation 1c in NRC’s report stating that “[d]ecentralization has meant that some area and project offices housing a dedicated technical office are staffed by only one or two individuals. The committee is concerned about the effectiveness of such small units and whether their technical competencies can be maintained.” This recommendation has obvious implications for project beneficiaries as it relates to increasing institutional capacity via outsourcing certain traditional Reclamation activities. However, the increased role for Reclamation technical field staff in addressing environmental issues must be preserved and even expanded in order for the agency to fulfill its expanded mission in the 21st century including assessing and addressing river health issues associated with its projects. This should include Reclamation either seeking additional statutory authority or utilizing existing legal mechanisms – such as the Fish & Wildlife Coordination Act – in order to fully address complex resource issues.
The Columbia River Basin is replete with examples of where Reclamation Water Conservation Field Service Program (WCFSP) representatives have made a difference regarding the design of fish passage or water use efficiency projects that benefits ESA-listed salmon and steelhead. The Federal Columbia River Power System (FCRPS) off-site habitat program is designed to meet Biological Opinion (BiOp) requirements for tributary stream flow and habitat improvements. However, while program funding for this ESA-driven program has been reasonable, the agency lacks full authority to accomplish program tasks. Reclamation technical staff is able to provide technical assistance such as up-front data collection, engineering, and design for specific projects but lack statutory authority to construct or provide financial assistance necessary to truly ensure BiOp obligations are met. At no cost, or some reasonable additional cost, to taxpayers, more could be accomplished with technical service programs with adequate authority.
Reclamation technical services programs have also had a positive impact outside ESA-listed salmonid drainages in the Snake River Basin. TU has developed a large-scale watershed restoration project in the Rainey Creek drainage – an important South Fork Snake River Yellowstone cutthroat trout spawning tributary. The key to project success has been the willingness of landowners to assess the fish migration and entrainment issues. Reclamation has provided funding from the Snake River Area Office via the Technical Assistance to States Program that enabled a WCFSP staffer to help assess Rainey Creek water use and management issues and identify cost-effective and technically-defensible solutions. Reclamation staff looked at all major diversion points and measured several of the key ditches for water loss and then developed a report entitled Water Use and Efficiency Analysis for Rainey Creek – Idaho that details mitigation measures to eliminate the fish barriers and improve stream flows in the Rainey Creek system.
These types of efforts by Reclamation staff are invaluable to non-profit conservation groups such as TU whose mission includes working on-the-ground with the agricultural community in high priority native and wild trout drainages to protect and restore habitat. Such efforts should not be limited to river basins where ESA-listed fish are present or to areas within a specific Reclamation project boundary. Reasonable and locally supported solutions in places like Rainey Creek - high priority restoration areas that are outside project boundaries but certainly located in a river basin with at least one Reclamation storage dam – should be encouraged. Such projects include water conservation, fish passage, and habitat improvement projects in off-Project tributaries that may alleviate the need for project water or at the least, reduce the overall conservation burden on dam operators and project beneficiaries. Reclamation needs the authority and consistent funding to explore these opportunities.
IV. To the Extent that Reclamation Reorganization Results in Shifting Responsibility for O&M and Construction to Project Beneficiaries or Other Non-Governmental Entities, Reclamation Must Ensure that These Entities Fulfill the Agency’s Core Mission of Natural Resource Management and Protection.
In the event that, in response to the National Research Council’s report, Reclamation’s leadership decides to reorganize the agency in a way that greatly increases the outsourcing of technical work, it will be critical that the instruments used to achieve this outsourcing bind the entities doing this work in the future to fulfill both Reclamation’s stewardship responsibility, and its core natural resource management mission. This will be necessary particularly where Reclamation considers transferring its own responsibilities to project beneficiaries who have no historical experience with being responsible for the conservation, protection or restoration of rivers or aquatic species.
The NRC report and Reclamation’s response reveal at least three different examples of potential transfers of responsibility where assurance of the means, will and accountability for on-going stewardship will be important: title transfers, O&M, and performance-based construction standards.
A. Title Transfers
Reclamation should contemplate project ownership transfers only when doing so
results in certain and sustained improvement in the ability to meet future needs of the west. We should not be satisfied with fundamental changes to the current system, such as change in ownership, unless there is a very substantial return on the enormous federal investment in Reclamation projects. Much of this return should be in the form of improved fish and wildlife benefits, both because they were harmed during construction and operation of Reclamation facilities, but more importantly, continued economic growth in the west demands restoration of river health.
Meeting this requirement has been particularly problematic with regard to title transfers because the project beneficiary who assumes ownership has rarely, if ever, had a mission which included ESA compliance or river restoration goals. Given that title transfers will, as a matter of course, dilute the project’s federal nexus, there is a very real possibility that the new owner will not sustain any stewardship mission, absent explicit directives in the transfer instruments.
Reclamation’s action plan includes the following action item – determine where opportunities exist for mutually beneficial transfer of title to project sponsors in order to eliminate Reclamation’s responsibility and costs for those facilities, and encourage any that are appropriate. As Reclamation proceeds with this task, we urge its leadership adhere to the NRC’s recommendation that open communication and an inclusive process are keys to moving forward in a successful way. This is imperative to meeting the requirement that title transfers produce a return on the substantial federal investment in Reclamation projects.
B. Operations and Maintenance
Finding 5b in the NRC report states that the O&M burden for an aging infrastructure will increase, and that “long term sustainment will require more innovation and greater efficiency in order to get the job done.” This finding should not be used to justify haphazard and wholesale transfers of O&M. To the contrary, Reclamation’s action plan set forth key issues that must be addressed prior to contemplating any future transfers of O&M, including:
• How much O&M of our reserved works can be beneficially outsourced while maintaining the core capabilities necessary to ensure the agency remains a smart buyer of services and effectively fulfills its mission responsibilities; and
• how can we ensure that Federal responsibilities such as environmental, recreation and cultural resources are met? (see page 10 of Reclamation Action Plan).
Similar to title transfers, Reclamation must proceed cautiously when
contemplating O&M transfers or outsourcing. Project beneficiaries do not have a mission that includes river restoration and we cannot lose that key component of Reclamation’s mission. Any O&M transfers must include provisions to retain the stewardship and resource protection and restoration components of Reclamation’s mission.
The NRC report and Reclamation’s response suggest that Reclamation is poised to ramp up its outsourcing of operation and maintenance responsibilities for existing projects and facilities. While TU appreciates that outsourcing may be cost-effective at some level, and may not threaten a loss of core competencies within the agency, it is important that Reclamation only proceed with such outsourcing on a case-by-case basis, after a complete review of all of the costs of this strategy. In a thorough cost assessment, Reclamation must include third party benefits and costs, such as those associated with river restoration. Operating Reclamation facilities on the South Fork Snake and Sun rivers demonstrates that there may be significant positive benefits to reoperation of such facilities. But, with non-federal operators, they may be unlikely to identify, explore, or seek to achieve such benefits absent explicit language in their contracts providing either requirements or incentives to do so.
C. Performance-based construction standards
Trout Unlimited believes that there is no reason for Reclamation not to move to performance-based standards for contractors who are constructing and/or rehabilitating federal facilities. However, because of the broad nature of Reclamation’s mandate, it will be imperative that Reclamation provide uniform policy guidance regarding the scope of such standards. For example, performance based standards must incorporate environmental compliance and resource protection measures. Given the nature of Reclamation’s mission, performance based standards could provide bonuses to contractors who go “beyond compliance,” who incorporate green building standards, who incorporate energy efficiency components into their work and whose work ultimately allows for river and fishery restoration.
Thank you again for the opportunity to testify today. I look forward to answering any
questions you may have.
The Honorable Bennett RaleyEsquire
United States Senate
Committee on Energy and Natural Resources
Hearing on The National Research Council Report, Managing Construction and Infrastructure
in the 21st Century Bureau of Reclamation and the U.S. Bureau of Reclamation Report,
Managing for Excellence: An Action Plan for the 21st Century
Testimony of Bennett W. Raley
May 23, 2006
Mr. Chairman, Members of the Committee, thank you for your gracious invitation to
testify today. I am particularly grateful that you have taken the time to consider the important
issue of how the Bureau of Reclamation should prepare itself to serve the American people in the
21st Century. I have attached to my remarks a copy of a July 19, 2005 letter to the Chairman of
the National Academy of Sciences Committee on Managing Construction and Infrastructure in
the 21st Century Bureau of Reclamation, which I would request be submitted for the record
along with these remarks. This letter recounts some of the history that led to the request to the
National Academy for a review of the structure and focus of Reclamation.
We have now seen Reclamation’s initial response to the Report of the National Academy.
I believe that Reclamation’s “Managing for Excellence” represents a good faith and serious first
step by the agency to respond to the challenges identified by the National Academy. I think that
it is worth noting that this response was directed by Deputy Secretary Scarlett and Assistant
Secretary Limbaugh. As this Committee knows, the fact that a response was directed by senior
officials in Interior signals that the outcome of this process is likely to be reviewed and approved
at the most senior levels in the Department and will not simply be left to the agency. That is a
good thing, as change is never easy, and particularly so when the needed change threatens longheld
I also participated in the first meeting between Reclamation and some of its stakeholders,
which was held on April 27th in Denver. Assistant Secretary Limbaugh opened the meeting, and
Reclamation was represented by a solid team of senior management and staff. Based on the
comments from the Reclamation participants at this meeting, I believe that many in Reclamation
understand the seriousness of this effort and the need to make meaningful changes in
Reclamation’s institutional structure. Reclamation participants in the meeting were open and
willing to participate in an iterative discussion of the issues. This willingness to engage in a
frank discussion allayed to a great degree the fear that Reclamation’s “outreach” would consist
of staged presentations that avoided the difficult issues. The prospects for success will be
greatly enhanced if Reclamation continues to engage in a meaningful discussion of the issues
However, the test of success will be whether Reclamation emerges from this process as a
more realistic, more efficient, and more transparent entity. Reclamation must be more realistic,
which means that it must recognize that it is time for it to evolve from an institution that believes
that it must have the capability to do everything associated with the planning, design, operation,
and maintenance of Reclamation Projects. Times have changed, and other entities have emerged
that are fully capable of taking an enhanced role in all aspects of Reclamation Project operations
subject to Reclamation oversight that is narrowly tailored to protect inherently governmental
functions and responsibilities. Reclamation must also recognize that continued shift towards
user-funded construction will require a corresponding shift away from Reclamation-dominated
decision-making for those projects. These changes will require institutional courage, as they
inherently involve downsizing or eliminating existing offices and programs.
We should soon be able to assess whether Reclamation has the institutional courage that
will be required if it is to step aside where others can do work that it has traditionally done. On
April 10, 2006, Assistant Secretary Limbaugh requested that Reclamation identify five examples
in each Region of opportunities for Reclamation to create new or enhance existing partnerships
that could be pursued as a part of its Managing for Excellence. A copy of this request is attached
to my testimony. Reclamation’s response to this request will be very telling. If the response is
timely and includes proposals for partnerships that represent a meaningful change from the status
quo, it will be a meaningful sign that Reclamation is indeed serious about affecting change. If,
on the other hand, the response is delayed for months, or is characterized by either meaningless
“fluff and stuff” or suggestions that are clearly impossible to implement, we will have cause to
conclude that meaningful and realistic changes must be driven from sources external to the
I can report one positive response to Assistant Secretary Limbaugh’s request. On April
21, 2006, Acting Commissioner of Reclamation William Rinne requested that the Northern
Colorado Water Conservancy District consider taking over responsibility for several power
facilities that are a part of the Colorado-Big Thompson Project. A copy of this request is
attached to my testimony. Reclamation and the Northern Colorado Water Conservancy District
have had a number of meetings to discuss this proposal, and intend to provide a plan for
consideration of this proposal to the Commissioner and Assistant Secretary by July 16, 2006.
These discussions have included representatives of the Western Area Power Administration and
the preference power beneficiaries of the Colorado-Big Thompson Project. Reclamation is to be
commended for its initiative in proposing that the Northern District take additional responsibility
for C-BT Project operations. While it is premature to conclude that these discussions will result
in the actual transfer, the initial discussions have been positive and have not identified any
insurmountable barriers. The complexity of these discussions is increased by the fact that the
related issue of customer funding for costs associated with power facilities is also being
discussed. Assistant Secretary Limbaugh has assured the participants that while a change in
current appropriations-based funding is of interest to the Department, a change from the current
method of funding these costs is not a required element of a transfer of additional responsibility
for project operations and maintenance to project beneficiaries. I have also attached a copy of a
concept paper that describes the Northern District’s perspective on this matter.
If Reclamation’s response to Assistant Secretary Limbaugh’s April 10, 2006 request
contains concepts like that proposed by Acting Commissioner Rinne regarding the Colorado-Big
Thompson Project, and if Reclamation moves forward to actually implement a number of these
proposals, it will have demonstrated that it indeed is serious about the response to the challenges
outlined by the National Academy.
I also suggested that Reclamation must become more efficient. This suggestion is based
on the fact that, as the Family Farm Alliance has pointed out on a number of occasions,
stakeholders view Reclamation’s design and construction work to be too expensive and too slow.
These conflicts are likely the result of Reclamation’s attempt to preserve capabilities that are in
excess of what is required for it to fulfill its inherently governmental functions. There are too
many examples of excess staffing of meetings and delays and overruns for the design of facilities
to discount the problems as isolated incidents. Simply put, the single most important reform
element that Reclamation could and should adopt is to provide that except in cases where the
proposed facility involves a substantial and risk to public health and safety, an entity that
provides 50% or greater of the costs has the option to have planning, design, procurement, and
construction performed by qualified non-federal parties subject to Reclamation oversight. A
policy that allows dissatisfied stakeholders to elect to not use Reclamation services for
construction services will provide internal incentives for Reclamation to be more efficient, as it
will, as an institution, quickly understand that poor quality service will result in a continued
decline in its role in construction activities. Conversely, cost effective and timely services will
likely result in more work for Reclamation employees. This simple mechanism will probably do
more to cure Reclamation’s problems at its Denver Center than anything else. However,
Congress will have to watch carefully or it will find that projects funded by scarce federal funds
may not receive the same level of effort to ensure efficiency.
As for the third area where Reclamation must change, “more transparency” means
developing a greater capacity to track and report costs, whether paid by federal taxpayers or
water and power project beneficiaries. Reclamation has continued to improve in this area, but
much remains to be done before it can report in a timely fashion where it spends federal and nonfederal
I have previously articulated “10 Tests for Success” to be used to assess whether
Reclamation’s “Managing for Excellence” will result in meaningful change or simply join the
long list of studies and reports that gather dust in Interior offices and elsewhere:
1. Reclamation adopts a policy that project beneficiaries who pay for 50% or more of
specific work can elect to use District personnel or private consultants for design,
procurement, construction, and contract and construction management.
2. Reclamation uses “performance based” instead of “design based” standards for
3. Standards for construction and O&M used by Reclamation are based on an assessment of
the relative risk, consequences of failure, marginal return, and subject to appeal to policy
4. Reclamation adopts GPRA Goals that require transfer of O&M for an increasing
percentage of Reclamation facilities to project beneficiaries.
5. Reclamation adopts GPRA Goals that establish minimum percentage of planning, design,
procurement, construction and contract management to be performed by project
beneficiaries or outsourced.
6. GPRA Goals incorporated into SES Performance Reviews.
7. ABC Accounting at Project level available to Project beneficiaries by job classification
and specific task - “Transparency”.
8. Reclamation adopts Scenario 2 or Scenario 3 from NRC Report.
9. Total Reclamation Workforce is reduced by other than the rate of attrition -
10. Reductions at the Denver TSC are real and not achieved by reassignments to the Regions
or reclassifications of existing job categories.
I would invite this Committee to modify and improve on this list (I do not claim it to be
something I thought of, as much of it reflects thoughts of others) – it is essentially intended to
provoke discussion and to create an expectation of real change. I also believe that it is important
that we recognize what these measures would do and not do. These measures are intended to
preserve Reclamation’s role in supervising federally owned water projects – they can be
implemented without the need for a transfer of title and would not affect, in any way, the
requirements or application of federal laws such as the National Environmental Policy Act and
the Endangered Species Act. These measures would allow Reclamation to focus scarce human
capital resources on “inherently governmental” activities that cannot and should not be delegated
to local project beneficiaries. Finally, they would not conflict with the need for Reclamation to
preserve technical capabilities required for circumstances when Reclamation will be the lead for
construction activities, nor would they conflict with the enhancement of Reclamation’s
construction management activities. However, it is only fair that I note that the discussion with
Reclamation representatives at the outreach session in Denver persuaded me that No. 9 –
downsizing by more than the rate of attrition, is not necessarily an appropriate goal. As for the
rest, I am waiting for Reclamation or others to agree, disagree, or come up with a better list.
In today’s fiscal reality, it is in the best interests of everyone for Reclamation to devote
scarce federal dollars to tasks that others cannot perform, and for Reclamation to be able to
supervise and provide accountability for public funds that are invested in federal projects while
maximizing the role of other competent entities in the operation, maintenance and rehabilitation
of the irreplaceable investment in water supply infrastructure in the West.
Reclamation has a long and proud history of excellence. I am very proud to have been
associated with Reclamation in my career. None of my remarks should be construed to be a
criticism of Reclamation employees, or for that matter of Reclamation itself. The need for
change does not mean that what came before was wrong or misguided. Sometimes, as is the case
with Reclamation today, institutions must change to meet the evolving needs of the people they
Thank you for your patience with me today.
6573 S Heritage Pl East
Centennial, CO 80111
July 19, 2005
Dr. James K. Mitchell, Sc.D., P.E.
209 Mateer Circle
Blacksburg, VA 24060
Via Email: firstname.lastname@example.org, cc: Mike Cohen: MCohen@nas.edu
Re: Organizing to Manage Construction and Infrastructure in the 21st Century Bureau of
Reclamation, Project Identification Number: BICE-J-04-01-A
Dear Dr. Mitchell;
I was the Assistant Secretary for Water and Science, Department of the Interior from July 17,
2001 to December 3, 2004. I thought it might be of some interest if I relayed to the Committee
the history of and reasons for the request for a Review of Reclamation by the National Research
Council, as well as some observations on the issue before the Committee. Of course, I no longer
speak for the Department and the thoughts expressed in this letter are mine alone.
By way of introduction, I have been around Reclamation and western water issues for 38 years,
almost 25 of which have been spent working as a lawyer for water users and water districts with
an ongoing relationship with Reclamation. I have also worked on United States Senate staff on
two occasions, and have served as a Special Assistant Attorney General for a western state in
connection with matters that are closely related to federal Reclamation law and projects.
In summary, I agree with a letter recently sent by the Family Farm Alliance to United States
Senator Pete Domenici that stated that “the Bureau of Reclamation must focus on fulfilling its
core mission of delivering water and power in accordance with applicable contracts, water rights,
interstate compacts, and other requirements of state and federal law. Essential components of the
core mission are: 1) providing for the operation and maintenance of existing facilities that are
likely to remain in federal ownership; and 2) providing for the rehabilitation and replacement of
infrastructure that is likely to remain in federal ownership. Inherent in this definition of core
mission is the need to prioritize the expenditure of federal funds and other resources of the
Department of the Interior.” It is critically important that Reclamation position itself to achieve
this goal in the most cost-effective manner possible.
The world has changed since 1902, and many water users are no longer dependant on the federal
government to finance and construct complex water supply projects or facilities. Were it not for
the unfortunate fact that the federal government has retained title to far more Projects and
facilities than was originally envisioned by the Reclamation Act, water users would proceed
independently with the planning, design, construction, and operation of many facilities that
replace, modernize, and enhance existing Projects. If Reclamation is to achieve the goals
outlined by the Family Farm Alliance, it must accept the reality that the Reclamation role in
construction projects that are primarily funded by water users should be limited to the
development of design standards, supervision of work to ensure that the design standards are
met, and accountability for public funds expended for these projects. Reclamation must also
recognize that water districts and the private sector have engineering and other capabilities that
are equal to or exceed those remaining within the agency and which can perform project design,
contracting, construction, and related functions in a more cost efficient manner.
Let me start with by observing that the request did not derive from a desire to have the
Committee engage in a wide-ranging discussion of what the mission of the Bureau of
Reclamation should be in coming decades. The Department had defined the “core mission” of
Reclamation as “delivering water and power” in accordance with legal requirements of state and
federal law. That definition, when combined with the strategic planning and budget processes of
the Department, provided Reclamation with direction from the Administration regarding its
mission. This definition of “core mission” was intentionally pragmatic and limited in scope in
order to avoid “mission creep” and to provide a basis for a disciplined focus and prioritization of
Reclamation resources and efforts. This definition of core mission was further explained
internally and externally by observing that the existing and foreseeable budgets of Reclamation
would not likely be adequate to provide for the operation, maintenance and replacement of
existing facilities, meeting the mandatory requirements of Biological Opinions issued under the
federal Endangered Species Act, and funding measures security measures required by the post-
11 September environment. The challenge to those who wanted to spend money on other aspects
of the Reclamation Program not included within core mission was to justify taking funds away
from these priorities for another objective.
In addition, Secretary Norton’s Water 2025 Initiative defined the role of Reclamation from a
substantive or philosophical perspective. See http://www.doi.gov/water2025/. Certain aspects of
Water 2025 may be relevant to your Review. Water 2025 intentionally avoided the classic
approach of a “sweeping study” combined with a “grand pronouncement” of a government
program to solve western water conflicts. Water 2025 instead focused on the demographic,
hydrographic, and fiscal realities that will shape western water policy for coming decades, and
identified pragmatic “tools” that can be implemented to minimize or avoid water supply related
crises that will otherwise occur in the next 25 years. These tools – water conservation and
increased efficiency, markets, collaboration (specifically long-term biological opinions under the
ESA), technology (specifically ocean and brackish groundwater desalinization), and system
optimization were selected because of their capacity to be implemented and make progress in an
environment characterized by very limited federal funds and an absence of public and political
support for the construction of new infrastructure that would increase the available water supply
on a programmatic or large scale basis.
It may be of interest to note that the success of Water 2025 does not depend on the maintenance
or expansion of the Reclamation Program at or beyond current levels. This assumption was a
reflection of the reality that the Reclamation budget is unlikely see a substantial and sustained
increase regardless of which party controls the legislative or executive branches of the federal
I have no doubt that the Committee would be capable of producing a thoughtful and provoking
analysis of what the Reclamation mission should be in the future. However, unless that vision is
accompanied by the implementation of a parallel political strategy, it is likely that such an effort
will join other similar attempts over the years as they gather dust on agency shelves. In my view,
the Committee will provide a great service if it instead focuses its talents on the more mundane
but critically important issue of assisting Reclamation in reorienting its program to deal with the
fact that fiscal and political realities indicate that its role in the 21st century will not be a reprise
of its role in the 20th century.
The request for the Review evolved from the consideration of a number of factors. First,
President Bush has defined Presidential Management Initiatives that are to be implemented by all
federal agencies. See http://www.whitehouse.gov/omb/budget/fy2002/mgmt.pdf. Two PMI’s,
Human Capital Management and Competitive Sourcing were particularly relevant. The focus on
Human Capital Management was not particularly threatening to Reclamation, as it recognized
the challenges associated with its aging work force that was developed to meet the demands of a
prior era and the difficulty of recruiting for an agency with a static mission. However, as was
likely the case for all federal agencies, the PMI on Competitive Sourcing was viewed as a threat
to existing personnel and programs. Second, senior Department officials had requested that all
bureaus identify existing programs that could be cut or eliminated. Not surprisingly, this request
was viewed with great suspicion, and the response was at best slow and begrudging. This
attitude was captured by the response to a question regarding what existing programs and
capability were necessary to fulfill Reclamation’s “core mission” - the reply was that “it is all
core mission.” Likewise, the instinctive response to budget pressures was to preserve all
programs and capabilities by allocating whatever shortfall was at issue across all programs in
order to avoid “zeroing out” lesser priorities. Third, a review of the reasons for Reclamation’s
discovery that the costs of the Animas-La Plata Project were approximately 50% over prior
estimates concluded that one of the contributing factors was that Reclamation did not have an
effective “construction management” program in place. This failure was not solely the fault of
Reclamation, as senior management in Interior (myself included) did not focus on the fact
that1994-5 “sunsetting” of the Reclamation Instructions was not replaced by a comparable
system that provided for a chain of command, responsibility, and authority over construction
management activities. Members of Congress who were very unhappy with the Animas-la Plata
experience were made aware of this Review and there is likely some expectation that it will
address some of the issues presented by that experience. I assume that you have been fully
briefed on this issue, its potential relevance to your work, and expectations that may exist in
Congress in this regard.
A reflection on these factors resulted in several intermediate-level conclusions - it was
unreasonable to expect Reclamation (or any other agency, for that matter) to provide a coldly
analytical assessment of what aspects of its existing program were not essential to fulfilling a
limited core mission (in part because of the unavoidable strategic and tactical “gaming” aspects
of the development of the budget inside Interior, inside the Administration, and in Congress); it
was unreasonable to expect Reclamation to provide a dispassionate assessment of what aspects
of its core mission must be performed by Reclamation personnel and what aspects of its core
mission could be performed by others; and the private sector was likewise not particularly well
suited to an objective review of these issues. The National Research Council Board on
Infrastructure and the Constructed Environment was then identified as an organization that could
provide this type of review and analysis because of its perceived ability to act independent of any
self-interest and provide a disciplined response to the requested Project Scope.
The Office of the Assistant Secretary for Water and Science drafted the Project Scope1 to enable
the Committee to focus its efforts on the question of what capability Reclamation needs in order
to fulfill its core mission. The inclusion in the Project Scope of an explanation of the “essential
components” of Reclamation’s core mission was an attempt to provide a tiered hierarchy of
needs that the Reclamation Program must meet under any foreseeable combination of political
and fiscal scenarios. I use the term “Reclamation Program” here as an intentionally broad term
that can encompass activities performed by Reclamation employees as well as activities
performed by others in connection with Reclamation Projects or activities.
The three tiers of this hierarchy reflect the base case for the Reclamation Program, starting with
the definable and unavoidable reality of operating and maintaining existing projects, moving to
the foreseeable, but less predictable need to rebuild existing infrastructure, and concluding with
the likely, but even less predicable need to provide for new project construction. The philosophy
reflected in this hierarchy is that the first priority of the Reclamation Program should be to
maintain the capability required by the essential components or base case for the future of the
Reclamation Program, and that the development and maintenance of additional capabilities
should clearly be subordinated to the need to protect priority capabilities. Implicit in this
formulation of Project Scope is a concern that an attempt by Reclamation to develop and
maintain capabilities beyond those required for the base case will, in a limited budget
environment, put at risk Reclamation’s ability to fulfill its core mission in an effective manner.
ISSUES FOR CONSIDERATION BY THE COMMITTEE
Reclamation is unique in that it has a greater degree of “user funding” for its
programs than do other federal agencies.
One might assume that everything that Reclamation currently does is in fact essential for it to
perform its core mission. However, I am of the opinion that there is great risk to Reclamation if
this position prevails.
As the Committee has already heard, Reclamation is somewhat unique among federal agencies
because much of its work is funded directly or indirectly by its water and power customers.
Some of this work is funded directly by the users, and Congress funds some of it subject to the
requirement that water and power users repay the federal treasury over time. Consequently,
there is a far greater degree of sensitivity to and scrutiny of Reclamation staffing decisions than
exists for other federal agencies. This level of sensitivity and scrutiny is likely to intensify in
coming years as the relative proportion of federal dollars invested in water supply infrastructure
decreases and results in a correspondingly greater burden on already scarce non-federal funding
sources. This trend will mean that there will be a greater proportion of direct funding by users
and a relative decrease in Congressional funding subject to repayment obligations. This trend is
of great importance to the matter before the Committee, as it is one thing for an agency to justify
the maintenance of human capital or other program resources when it is the dominant fiscal force
or when the costs of doing so are born by taxpayers, and quite another thing to attempt to
preserve or build a program or when the costs are paid by specific project proponents who do not
want to pay for the maintenance of additional capacity.
Any attempt by Reclamation to maintain internal capability beyond that required by the base
case and for which the water and power users are willing to pay is likely to at a minimum create
political and other tensions between Reclamation and its constituency, and may result in direct
intervention by Congress on behalf of those who are being asked to pay for the additional
capacity. Moreover, attempts to shield this capacity from these pressures by funding the
additional capacity through non-reimbursable sources are not likely to succeed in the long term
because of the operation of administration and congressional funding caps and the inability of
Reclamation to prevent excess capacity from being billed to reimbursable accounts. Concerns
regarding Reclamation’s ability to provide engineering and related services in an effective
manner are surfacing with increasing frequency with both water users and Congress. There are
several recent cases of attempts by water users to seek legislation that would mandate a role for
qualified districts and private consultants, and a senior Senator recently circulated of legislation
that would fund projects through the Reclamation budget but require that Reclamation contract
with the Corps of Engineers to do the work.
On numerous occasions over the past 6 months I have had the opportunity to talk to water district
representatives about their perceptions of the broad issue of Reclamation costs and overhead.
Several unmistakable patterns characterize these conversations:
- With a few exceptions, water managers that work with Reclamation like and respect
their Area and Regional Offices. I also have a high personal regard for all of the
Regional Directors, and while I have not met or worked with all of the Area Offices, most
of them are very capable. In addition, I grew to appreciate the talents and hard work of a
large number of Reclamation employees throughout the agency, and appreciate my
having the opportunity to serve with them.
- Water users complain bitterly about virtually all aspects of the work performed by the
Denver Technical Services Center. To quote a recent conversation “ as soon as Denver
got involved costs skyrocketed and the work ground to a halt.” I want to make it clear
that in my personal opinion this problem is not Mike Roluti’s fault, nor am I directing
criticism at individual employees within the Denver Technical Services Center. The
Denver Center is an institutional problem that is beyond the capacity of the direct
supervisor or individual employees to fix.
- Water users believe that Reclamation has lost substantial components of the engineering
and other construction-related expertise that it once had as an inevitable result of
retirements, reductions in funding and the dearth of new federal Reclamation Projects,
and the emergence of a cadre of highly qualified engineering personnel within water user
districts and the private consulting sector. However, water users are unwilling to pay for
or otherwise support the reacquisition of this capacity within Reclamation because they
believe that the strictures and limitations inherent in the use of federal agencies will mean
that design, procurement, and construction functions can almost always be performed
cheaper and more efficiently by districts or private consultants under appropriate
Although water users complain bitterly about the cost of and services provided by the Technical
Services Center, most are unwilling to complain publicly because of a fear of retaliation by
Reclamation, and a concern that their Area Offices and Regional Office will feel compelled to
defend the Denver Center. However, both the number and substance of these discussions lead
me to conclude that the dissatisfaction with the Denver Technical Services Center is widespread
and substantive in nature. It is also worth noting that neither I nor others who have been
exploring this issue have found water users that thought that the Denver Center was great and
who did not want the option to do the work themselves or via qualified consultants. That does
not mean that there is not, somewhere, a District that is very happy with the Technical Services
Center or which does not want to have the option to use non-federal capacity - I just have not
While I do not have hard data to support this conclusion, I believe that there is a particularly
pernicious dynamic at work that almost guarantees that the Technical Services Center will lurch
from one conflict to another. Simply put, the official line is that the TSC is “self-funded.” In
order to preserve the appearance of a need for the capacity at the TSC, Reclamation as an
institution has a strong incentive to force work to TSC in order to maintain high utilization rates.
Several recent examples of Reclamation’s attempt to force water users to use TSC provide a
basis for this conclusion. However, because it also appears that there is not enough work to
really keep all of this capacity working in an efficient manner, I fear that unused capacity tends
to be assigned or drift to whatever project can bear the costs.2 When water users become aware
of excess staffing or unacceptably high project cost estimates, Reclamation responds by
“bargaining down” the cost of the work under scrutiny, at times by significant margins.
Reclamation’s routine willingness to reduce the cost of most projects that come under scrutiny
provides strong evidence of a practice of overstaffing or over-estimating for projects in general.
Stated another way, since Reclamation is not a profit-making entity, it cannot be achieving these
reductions by taking a lesser profit, and must be reducing its costs by either eliminating excess
staffing or having other projects subsidize the cost of the project under scrutiny.
2 It may well be that the problem of overstaffing is the collective result of well-intentioned TSC employees who
want to contribute, want to be productive, and as a consequence show up to work on whatever projects are at hand.
This dynamic can explain numerous examples of TSC staffing or involvement in a project that would not be
accepted in the private sector because of the need to be price competitive, make a profit, and satisfy cost conscious
I do believe that the TSC has been able to manage the costs of specific projects when under
scrutiny and significant pressure. However, I am fearful that the result is that the unutilized
capacity shifts to a project not under scrutiny and the problem is replicated elsewhere. Thus, a
de facto policy of “overstaff until caught because we have to show full utilization” means that
one projects’ gain in cost control results in the shift of costs to less vigilant projects until they too
come under scrutiny. The consequence of this destructive cycle is a loss of confidence in
One aspect of the institutional problems associated with the TSC is that it appears to operate
outside of the normal Reclamation chain of command. Area Managers and Regional Directors
are responsible to water users for costs associated with their respective offices. However, the
TSC reports to the Commissioner outside of the Area Office/Regional Director structure. It
appears that Area Offices and Regional Directors do not directly control staffing and other
decisions that affect costs associated with work performed by the TSC on Projects that are
otherwise within their jurisdiction. This mismatch between responsibilities and control over
work may well put an Area Manager, who must deal with water users on a daily basis, in the
impossible position of attempting to control costs in a parallel component of Reclamation that is
perceived to be directly responsible to the Commissioner.
I do not believe that it is in Reclamation’s long-term interests to continue a political battle with
its constituents in order to preserve or enhance capacity because the battle will damage
Reclamations’ credibility with water users and with Congress.
The critical issue before this Committee is to identify which capabilities must
Reclamation maintain within the agency and which capabilities can be provided by
qualified non-Reclamation entities.
The importance of defining the capabilities that should be maintained within the Reclamation
Program turns on the answer to the question of what capabilities must be performed by
Reclamation and which can be performed by qualified non-Reclamation entities. If Reclamation
maximizes the use of non-Reclamation capabilities, it can add or eliminate capabilities using
other federal agencies such as the Corps of Engineers or qualified non-federal contractors as
needed. In this scenario the capacities of the Reclamation Program can fluctuate with actual
demands for which appropriate funding is provided. Capacity that is maintained or added
because and only for so long as someone wants it and will pay for it, whether that person be
Congress or a water user, is unlikely to be controversial. If, however, Reclamation attempts to
maintain internal capacity beyond the minimum required to meet anticipated needs, the question
becomes far more important, as any over-estimate of the capacity required will be difficult to
correct and become either a source of conflict with water users or a drain on available nonreimbursable
I strongly believe that Reclamation should adopt the approach of tailoring its personnel needs
and internal program components to maximize the use of non-Reclamation capacity. This
conclusion is not based on a belief that Reclamation personnel are somehow less qualified than
the alternatives. This conclusion is directly based on the unique nature of Reclamation as a user8
funded agency. This reality makes it imperative that Reclamation be able to tailor its capacity to
user demands and available funds far more quickly than is required for other federal agencies.
At a programmatic level, I would suggest that there are two broad areas and one specific
program that define the appropriate role for Reclamation employees, and that activities outside of
these areas should be presumed to be appropriate to be performed by non-Reclamation entities.
The two broad areas that should be performed by Reclamation employees are management of
Reclamation Projects and construction management, and the specific Program is the Safety of
Dams Program. This conclusion is consistent with conclusions reached in Outsourcing
Management Functions for the Acquisition of Federal Facilities (2000), Commission on
Engineering and Technical Systems:
The committee reviewed federal legislation and policies related to inherently governmental
functions—a critical determinant of which activities federal agencies can and cannot
outsource. An inherently governmental function is defined as one that is so intimately
related to the public interest that it must be performed by government employees. An
activity not inherently governmental is defined as commercial. The committee concluded
that, although design and construction activities are commercial and may be outsourced,
management functions cannot be clearly categorized.
http://www.nap.edu/books/0309072670/html/3.html. (Emphasis added). While the scope and
focus of the inquiry of the Commission was not identical to that of this Committee, the context
was similar enough to make its conclusion relevant here.
Management of Reclamation Projects. As is recognized by the above quote, within the broad
category of management of Reclamation Projects there is a range of circumstances that should
govern the level of management that is required to be performed by Reclamation personnel. For
example, some water Districts have financial, managerial, engineering, and other capabilities that
rival that of Reclamation (in some cases because the District personnel were previously
Reclamation personnel). Other Reclamation Projects may require a far more extensive
Reclamation presence because of conflicts relating to Project operations, sheer Project
complexity, or a lack of capacity within the local District.
Consequently, the capacity required for Project “management” will vary widely between
Reclamation Projects. This variance is likely already captured to some degree and reflected by
staffing levels within the existing Regional and Area Offices. The Denver TSC does not and
should not perform “management” functions, as this would be both inefficient and inconsistent
with Reclamation’s “line authority” approach. Similar conclusions can be reached about other
aspects of Reclamation’s Denver Service Center. While well intended and the home to many fine
Reclamation employees, the Denver Service Center does not fit well within the strong “line
authority” structure of Reclamation. Simply put, the chain of command for Reclamation runs
from the Commissioner to the Regional Directors to the Area Offices. Notwithstanding this
clear line of authority that is followed in theory and practice, the Denver Service Center is
staffed by an inordinate number of Senior Executive Service employees who have, over time,
had a very difficult time finding a comfortable “fit” or role within the Reclamation management
A review of the list of “Programs, Initiatives, and Activities” that are largely carried out from
the Denver Service Center includes a number of functions that may well fall outside of a careful
definition of “management” or an “inherently governmental activity associated with
Reclamation, including; the Building Seismic Safety Program, aspects of the Cultural Resources
Program, DataWeb, the Fisheries Applications Research Group, substantial aspects of the
Geotechnical Engineering Groups, the History Program, aspects of the Hydroelectric Research
and Technical Services Program, aspects of Infrastructure Services, substantial aspects of the
International Affairs Office, the entire JobCorps Program (regardless of whether Reclamation is
fully reimbursed for its costs), the Materials Engineering and Research Lab, all aspects of the
Museum Property Program not mandated by federal law, the Remote Sensing and GIS Program,
the Science and Technology Program, aspects of the River Systems and Meteorology Group,
aspects of the Research and Natural Resources Program, the Science and Technology Program,
aspects of the Sedimentation and River Hydraulics Group, the entire Technical Services Program
except for the Dam Safety Group, aspects of the Water Resources Research Laboratory, and
aspects of the Water Resource Services Program. See, http://www.usbr.gov/main/programs.
I realize that there are overlaps and other inconsistencies within this list, but it is what
Reclamation uses to describe its Programs. Much of this work is important, some of it is
required by statute, many of the people involved are very, very good, and some of them are (or at
least were) personal friends. However, the value of this work and the people that perform the
work does not make these programs essential management functions or an “inherently
governmental activity”, nor does existence of a statutory requirement require that the work be
performed by, as opposed to supervised by, Reclamation employees. Other federal agencies, the
private sector, and universities can also perform much of this work. I would be very surprised if
a careful and objective review of the existing capacity of the Denver Service Center did not
conclude that a minimum of 30% was either not required to fulfill Reclamation’s core mission or
could be performed on an as-needed basis by non-Reclamation entities.
Construction Management. The Animas-la Plata experience highlighted the consequences of
the decision 10 years ago to sunset the Reclamation Handbook without creating a replacement
structure for the management of construction projects. Reclamation will be responsible to the
public, to Congress, and to water users for a wide array of construction activities in the future.
These activities will include both the replacement of the infrastructure completed over the past
century as well as the construction of new components and facilities. While there is no inherent
reason why Reclamation must perform research, design, contracting, and construction work, it
must be able to 1) account for all funds associated with these projects and ensure that they are
spent for authorized purposes, and 2) ensure that the work is performed in a manner that meets
applicable engineering or other standards. Simply put, I believe that under any foreseeable
future scenario Reclamation will need a strong construction management program that includes
both fiscal and engineering components. However, these components should be deployed to set
standards in advance, monitor compliance, and report on results. Performance of these functions
does not, absent a statutory requirement, mean that Reclamation employees must design projects,
serve as the ”general contractor,” perform research, or serve as the day-to-day construction
manager. Qualified water districts and the private sector can perform each of these functions
under Reclamation supervision. I also recognize that in some unique cases, like the Animas-la
Plata Project, the number of participating entities and tribal trust aspects of the Project make it
appropriate for Reclamation to serve in a more expansive role than would otherwise be the case.
However, these unique cases will not characterize the role of Reclamation in the future.
I have heard on occasion that the existence of dam safety or other aspects of particular projects
require that Reclamation personnel perform all of the design work. This assertion is not
persuasive, as there is no rational reason why the fact that a professional engineer is employed or
not employed by Reclamation is relevant to the exercise of his or her professional engineering
judgment. Reclamation itself hires outside consultants to assist it in dam safety peer reviews,
and some of the outside consultants were trained by Reclamation. The quality of the engineer is
determined by education, intelligence, and experience, not employment status. This position
inappropriately confuses the appropriate role of establishing appropriate performance or other
standards to meet minimum engineering requirements with the actual design and construction of
the facility. To be blunt, the assertion that Reclamation is uniquely qualified to design structures
that have public safety implications is not credible and does a great disservice to the many highly
qualified engineers that work elsewhere in the profession.
I believe that it is well accepted that Reclamation should be responsible for establishing
appropriate design standards for work on federally owned structures. However, I would suggest
that it would helpful for Committee to make recommendations regarding the manner in which
these design standards are established, and a process for resolving disagreements between
Reclamation engineers and qualified non-Reclamation engineers regarding the appropriateness
of particular standards. In particular, I and others have at times perceived that Reclamation
reflexively “over-designs” project elements based on an institutional philosophy that assumes
that facilities should be designed using the most conservative design standards. While this
approach may be appropriate for federally funded work and for work with material public safety
issues, it is not necessarily appropriate for work funded by water users that does not present
serious public safety risks. These issues can quickly move beyond engineering criteria to
fundamental policy decisions that implicate the balancing of risks in an environment where
financial resources are limited. One suggestion would be to provide for a quick “mini-peer
review” involving outside consultants that project sponsors could utilize for disputes. However,
the success of this approach would require Reclamation to welcome such a review instead of
viewing it as a personal or professional attack.
The Safety of Dams Program. While an intellectual case can be made for considering the
Safety of Dams Program to be just another engineering exercise, I believe that the unique nature
of this program justifies the maintenance of the required expertise within Reclamation. Public
safety is directly affected by this Program, and unlike other aspects of the Reclamation Program,
there is a need for Program-wide uniformity. This Program also has significant national security
implications. However, the Horsetooth Reservoir case study previously submitted to the
Committee by Mike Applegate reveals that while the Safety of Dams Program may be
technically strong, it may also have serious management flaws. Simply put, the fact that even
after a roughly 50% reduction in costs as a result of Reclamation’s Value Engineering Program,
the non-construction costs were equal to approximately 70% of the construction costs. This is
far above any standard ratio in the industry. Moreover, the unexplained reduction of project
costs from $77 million to $56 million creates credibility issues for the SOD Program. Finally,
of Reclamation to provide a final accounting for project costs 18 months after
completion of the project borders is deeply troubling. While my trust in Reclamation is
substantial, any government program that cannot or will not provide a public accounting for how
it spent $56 million of public funds is one bad actor away from a disaster. Reclamation can and
should provide greater transparency and accountability for its expenditures of public funds.
Thank you for considering these comments.
Bennett W. Raley