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 long held
institutional biases.
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
with stakeholders.
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
agency.
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
funds.
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
construction work.
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
level
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 -
“Rightsizing”.
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
serve.
Thank you for your patience with me today.