<DOC>
[109 Senate Hearings]
[From the U.S. Government Printing Office via GPO Access]
[DOCID: f:29868.wais]
S. Hrg. 109-573
BUREAU OF RECLAMATION PLAN
FOR THE 21ST CENTURY
=======================================================================
HEARING
before the
COMMITTEE ON
ENERGY AND NATURAL RESOURCES
UNITED STATES SENATE
ONE HUNDRED NINTH CONGRESS
SECOND SESSION
TO
RECEIVE TESTIMONY 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
__________
MAY 23, 2006
Printed for the use of the
Committee on Energy and Natural Resources
_____
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COMMITTEE ON ENERGY AND NATURAL RESOURCES
PETE V. DOMENICI, New Mexico, Chairman
LARRY E. CRAIG, Idaho JEFF BINGAMAN, New Mexico
CRAIG THOMAS, Wyoming DANIEL K. AKAKA, Hawaii
LAMAR ALEXANDER, Tennessee BYRON L. DORGAN, North Dakota
LISA MURKOWSKI, Alaska RON WYDEN, Oregon
RICHARD M. BURR, North Carolina, TIM JOHNSON, South Dakota
MEL MARTINEZ, Florida MARY L. LANDRIEU, Louisiana
JAMES M. TALENT, Missouri DIANNE FEINSTEIN, California
CONRAD BURNS, Montana MARIA CANTWELL, Washington
GEORGE ALLEN, Virginia KEN SALAZAR, Colorado
GORDON SMITH, Oregon ROBERT MENENDEZ, New Jersey
JIM BUNNING, Kentucky
Bruce M. Evans, Staff Director
Judith K. Pensabene, Chief Counsel
Bob Simon, Democratic Staff Director
Sam Fowler, Democratic Chief Counsel
Nate Gentry, Counsel
Mike Connor, Democratic Counsel
C O N T E N T S
----------
STATEMENTS
Page
Burns, Hon. Conrad, U.S. Senator from Montana.................... 2
Craig, Hon. Larry E., U.S. Senator from Idaho.................... 3
Domenici, Hon. Pete V., U.S. Senator from New Mexico............. 1
Donnelly, Thomas F., Executive Vice President, National Water
Resources Association.......................................... 36
Duscha, Lloyd A., Consulting Engineer, National Research Council. 5
Keppen, Dan, Executive Director, The Family Farm Alliance........ 25
Rinne, William E., Acting Commissioner, Bureau of Reclamation,
Department of the Interior..................................... 10
Snyder, H. Diane, Executive Director, American Council of
Engineering Companies.......................................... 31
Yates, Scott, Director, Wyoming Water Project, Trout Unlimited... 39
APPENDIXES
Appendix I
Responses to additional questions................................ 47
Appendix II
Additional material submitted for the record..................... 65
BUREAU OF RECLAMATION PLAN
FOR THE 21ST CENTURY
----------
TUESDAY, MAY 23, 2006
U.S. Senate,
Committee on Energy and Natural Resources,
Washington, DC.
The committee met, pursuant to notice, at 10:10 a.m., in
room SD-366, Dirksen Senate Office Building, Hon. Pete V.
Domenici, chairman, presiding.
OPENING STATEMENT OF HON. PETE V. DOMINICI,
U.S. SENATOR FROM NEW MEXICO
The Chairman. The Senate Room will please come to order. I
did want to mention that Mr. Raley, who ordered this report and
was supposed to testify, has gotten real sick this morning, and
is not able to attend, so he will not be testifying here today.
We'll arrange to do that. We'll see how we do then, as we
proceed through.
First of all, I'd like to welcome you today to our hearing
on the National Research Council's report on the U.S. Bureau of
Reclamation.
Since the Reclamation Act was signed into law over 100
years ago, the Reclamation Act has accumulated an impressive
record of achievements. It is responsible for some of the most
architecturally and historically significant projects of the
21st century, including the Hoover Dam and Grand Coulee Dam.
Reclamation facilities have contributed significantly in
providing the water and the power necessary to populate the
Western United States and the development of its agricultural
economy.
Reclamation facilities provide water to over 30 million
people, 10 million acres of farmland and generate more than 40
billion kilowatts of hours of electricity annually.
However, the Bureau of Reclamation's mission has changed
significantly over the past 30 years. A combination of factors
has transformed Reclamation from an agency that constructs
large water and power projects to one that manages existing
facilities and operates them according to applicable law. For
this reason, it is time for Reclamation to evaluate its mission
for the 21st century, and to determine what capabilities are no
longer needed, and what additional capabilities may be required
to fulfill its mission.
The NRC report provided a good review of what changes will
be required of Reclamation over the coming years. However, the
NRC report and the Reclamation Action Plan are the beginning of
a long process. There are serious challenges facing Reclamation
that require a long hard look, including aging infrastructure,
human resources, stakeholder relations, outsourcing and the
promulgation of policies. I fully intend to hold additional
hearings to monitor Reclamation's implementation of the
findings of the NRC report, and the Reclamation Action Plan. I
take the NRC report seriously, and expect Reclamation to take
it seriously as well.
I'd like to welcome our witnesses for today's hearing, but
before we proceed, we will ask the Senators if any of them
desires to engage in some brief comments before we proceed to
the two witnesses in the first panel. Starting with those who
were here first, Senator Thomas, if you have any comments, and
then over to you, the Senator from Montana, then you, Senator
Craig.
Senator Thomas. Thank you, Mr. Chairman, I really don't
have an opening statement. I am interested, of course, in the
Reclamation Department and what they're doing, and I know in
the State of Wyoming, Reclamation is very active and lots of
things go on there. So, I'm interested in hearing the reaction
to the study, and more than anything, what the plans are for
the future. So, thank you, I look forward to the witnesses.
The Chairman. Thank you very much.
The Senator from Montana.
STATEMENT OF HON. CONRAD R. BURNS, U.S. SENATOR
FROM MONTANA
Senator Burns. Thank you very much, Senator Domenici. I
have a statement I will put in the record, and I'll have some
questions for the witnesses. It's a very interesting report.
[The prepared statement of Senator Burns follows:]
Prepared Statement of Hon. Conrad R. Burns, U.S. Senator From Montana
Thank you all for coming today to update us on this very important
topic.
The Bureau of Reclamation has an impressive history of bringing
water and power to the Western States. In 1903, Secretary of the
Interior Hitchcock authorized construction of the Milk River Project as
one of the first five reclamation projects under the new Reclamation
Service. Two years later he authorized construction of the St. Mary
Diversion Facilities. Completed in 1915, the Milk River Project and the
St. Mary Diversion Facilities have been in operation for nearly 100
years with minimum repairs and improvements.
The Milk River Project and the accompanying St. Mary Diversion
Facilities are known as the Lifeline of the Hi-Line. The St. Mary and
Milk River basins are home to approximately 70,000 people with a meager
per capita income of approximately $19,500. Most of these people
depend--directly or indirectly--on the project and would be
dramatically impacted by its failure and the loss of water in the Milk
River Project.
It is the backbone of the region's agricultural economy. It
provides water to irrigate over 110,000 acres on approximately 660
farms. The project also provides municipal water to approximately
14,000 people. Fisheries, recreation, tourism, water quality and
wildlife are all additional beneficiaries.
But now the St. Mary Diversion Facilities and the Milk River
Project are facing catastrophic failure. The steel siphons have leaks
and slope stability problems. Landslides along the canal and
deteriorated condition of the structure make the project an unreliable
water source.
As authorized in 1903, the Milk River Project is operated as a
single-use irrigation project. Since completion, nearly 100% of the
cost to operate and maintain the diversion infrastructure has been
borne by irrigators. The average annual O&M cost from 1998 to 2003 was
$420,000, of which irrigators were responsible for 98%. In addition,
irrigators are responsible for reimbursing the Reclamation for the
initial construction costs of the diversion facilities. Maintenance
costs have increased with the accelerating deterioration of the aging
facilities.
The National Research Council's report entitled, ``Managing
Construction and Infrastructure in the 21st Century Bureau of
Reclamation'' pinpointed many of the problems facing the Milk River
Project and St. Mary Diversion facilities. I am interested to hearing
more about the Council's findings and action the Bureau of Reclamation
is taking to find workable solutions.
Thank you again for joining us here today. I look forward to your
testimony.
Senator Burns. And I think it sort of reflects some of the
frustration that we feel here in the legislative branch with
regard to water and water development and because the--I think
the Bureau of Rec has done a great job in the West, and we
couldn't have done it without them and the policy since these
great projects were undertaken and developed and became very,
very successful. The Report points out where our failings are
and I think we ought to take some kind of action to deal with
that.
I have a situation in Montana that we are working very
strongly on, and I think when you look across the country,
you've got many of those kinds of situations facing us, and I
would be interested in hearing how we're going to sit down and
develop a master plan on how we start dealing with these
challenges of aging and old systems that have been sort of
pushed back on the back burner for so long by both Congress and
the administrations of the past. So, I thank you for these
hearings today.
The Chairman. Thank you very much.
Senator Craig.
STATEMENT OF HON. LARRY E. CRAIG, U.S. SENATOR
FROM IDAHO
Senator Craig. Mr. Chairman, let me ask unanimous consent
that my full statement be a part of----
The Chairman. It will be part of the record.
Senator Craig. I'm looking at the witnesses, and when I see
The Family Farm Alliance and Trout Unlimited, that's a
fascinating and important combination. We in the West are
growing at an unprecedented rate. We're arid. We're in a
limited water environment. We're going to build new
infrastructure. We need more water. We're going to change the
way it's used. We have new principles and ethics in the way
that water gets used. We have no water budget here. Somehow we
have to figure out how to do all of that, and I have. The
Bureau of Rec plays a very valuable role in it, historically
and in the future.
But I think relationships have to be different,
understandings have to be different, Mr. Chairman, and this
study will help us a great deal. Because, if the day of
building water infrastructure is over in the West, the day of
growth must stop--it isn't stopping. Three of the most arid
States in the Nation are now three of the fastest growing
States in the Nation. They will not grow without effective and
responsible use of water. Thank you.
[The prepared statement of Senator Craig follows:]
Prepared Statement of Hon. Larry E. Craig, U.S. Senator From Idaho
The Bureau of Reclamation has been a vital part of western
expansion over the last 100 years and continues to support safe food
supply, jobs, communities, and wildlife habitat. I commend the Bureau
for recognizing the need to review their business approach as we
continue into the 21st Century. Having said that, I would urge the
Bureau to actively pursue our goal of efficient and effective
government and not allow this to be just another bureaucratic report.
The arid West is experiencing unprecedented growth. Along with the
growth there is an increased need for water, not only for
municipalities, but also for a sustainable food supply and wildlife
habitat. I DO NOT believe our days of building infrastructure are over
and would like to think the Bureau will continue to work with our
states and water users to increase water supply that will support life
across the west.
The National Research Council's (NRC) report has been helpful in
identifying several governmental inefficiencies as well as reinforcing
concerns I have had for several years. We know in many cases that
outsourcing could financially benefit both our water users and
contracting firms. We also know that we have an aging infrastructure
that is facing high rehabilitation cost with declining budgets. It is
time that we take these findings and change the way business is done.
The Bureau must provide a fiscally responsible service with appropriate
expertise. We must be able to repair and build infrastructure without
financially overburdening our water users.
Currently in my state, we have a great example of why business as
usual will simply not work. In arid Southern Idaho, there is the 100-
year-old Mindoka dam that feeds thousands of acres of farm ground while
supporting a wildlife refuge and water for late fish flows.
Additionally, this water supports several farms, communities and hosts
recreation from boating to fishing. However, our irrigators pay a large
sum of money to keep that facility in working condition for the benefit
of many. This facility, because of its considerable age and faulty
original construction, needs a new spillway. This spillway is estimated
to cost nearly $35 million, increasing the irrigators' assessments by
nearly 30%. As the NRC study found, the Bureau has not been
particularly good at keeping costs down through the construction
process, which raises another concern of the final price tag. These
farmers are already paying $45 per acre. This increase will shut down
many farms in the area and severely impact communities. If the cost of
this project could be spread over 15 more years, these irrigators would
be able to afford their share of construction. Because this option is
not currently available, farmers are financially strapped and scared of
losing their land and community.
I am interested to hear all of your testimony after this thorough
report. I appreciate all of your hard work and time during this study
and am very interested to see how the Bureau of Reclamation ``takes the
bull by the horns.''
The Chairman. Very good observation. Senator, I might make
a comment in your presence, while you are here. Since I was
thinking this morning of calling you and congratulating you,
I'll do that here publicly. Since you went way out front on the
issue of asking the President of the United States to take a
more active role on the border by bringing in the National
Guard, I guess you must wake up each morning now as things are
progressing feeling a little better about your suggestion. And
I want to compliment you for taking that lead.
Senator Craig. Well, thank you, Mr. Chairman. The public
got it before we got it.
The Chairman. Yes.
Senator Craig. They understand border security. They also
understand a good immigration policy. One cannot go without the
other.
The Chairman. They also understood the National Guard could
be a very big help.
Senator Craig. Well, thank you for that observation.
The Chairman. That was what you were talking about.
Senator Craig. That's right.
The Chairman. And I heard you and I heard you well.
Senator Craig. Thank you.
The Chairman. And I truly--what I just said a while ago is
true, I wanted to call you, and now I call you right here in
public.
Senator Craig. Thank you much. I appreciate it.
The Chairman. Now, with that, we're going to proceed with
the witnesses. The two whose names are here, would you please
take your seats. The first one, although spelled R-I-N-N-E, I
understand is pronounced Rinne.
Mr. Rinne. That's correct, Mr. Chairman.
The Chairman. Is that correct?
Mr. Rinne. Yes.
The Chairman. Wow. That's pretty good for me. And Mr.--do
you pronounce it Lloyd Duscha?
Mr. Duscha. Duscha. Yes, sir, Mr. Chairman.
The Chairman. OK, we're going to have your written
testimony made a part of the record immediately. The Bureau of
Reclamation is Rinne, and the National Research Council is
Duscha. I think we'll proceed with you first, Mr. Duscha.
STATEMENT OF LLOYD A. DUSCHA, CONSULTING ENGINEER,
NATIONAL RESEARCH COUNCIL
Mr. Duscha. Thank you, Mr. Chairman and members of the
committee. I served on a National Research Council Committee
that authored the report entitled, ``Managing Construction and
Infrastructure in the 21st Century Bureau of Reclamation.'' And
I appreciate the opportunity to summarize my written testimony.
In recent years, Reclamation's focus and work load have
shifted from building infrastructure to operating, maintaining
and modernizing the infrastructure, from constructing dams to
evaluating dam safety and to addressing environmental issues.
At the same time, growth in the West has spurred demands for
more water and power resources. Reclamation will be challenged
to find ways to manage these resources so that it can meet
future demands. Reclamation has recognized the challenge and
the necessity of making the transition from largely a
construction organization to a resource management
organization.
Although its mission continues to be the effective
management of power and water resources in ways that protect
the health, safety, and welfare of the public, as well as being
environmentally and economically sound, achieving these
objectives is a dynamic, complex and uncertain matter.
The Committee observed that Reclamation's five regions have
different organization structures, capabilities and workloads.
In general, the regions appear to be functioning well in
encountering the usual challenges. Staff morale and loyalty are
commendable. Nevertheless, like most Federal agencies,
Reclamation is challenged by changing requirements and the need
to maintain the core competencies.
While examples of excellence were evident, in general, the
regions will need to evaluate their asset inventory and to
manage their assets more aggressively and to engage in
collaborative relationships with customers and stakeholders. If
Reclamation wants to demonstrate consistency under the
centralized management, it will need clear policy directives
and standards 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 self-development. At the same time, we emphasize
that Reclamation has a 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 have a continued
need for a centralized technical service, research and
oversight. But the committee also sees a need to evaluate the
size and configuration of the central units, to ensure that
services are delivered efficiently.
The study committee recognizes that organizations can and
do take on a variety of forms with varying degrees of success.
Some will function well despite their form, while others will
fall through despite the best of forms.
The internal culture and history of the organization play a
significant role in determining the appropriate structure and
the ultimate outcome. We believe that the organization
structure of Reclamation is basically appropriate for its
customer-driven mission. Nevertheless, we also believe there
are opportunities to improve the configuration as well as the
management.
I should point out that our recommendations were purposely
general, as the study team believed that the specifics could be
best developed internally, where more detailed knowledge
resides. Such approach also enables those affected to play a
role in establishing ownership of the plan.
The Committee also offered some concepts on potential
future scenarios for the operation of Reclamation which should
not be construed as recommendations.
Because reviewing Reclamation's action plan for managing
excellence was not part of our assignment, the ensuing comments
reflect my opinion only. I was impressed by the depth and
content of the plan. It professionally addresses all the
recommendations in our report, albeit in a different format.
The action plan is also a reflection of the serious commitment
by the senior leadership of the Department and the Bureau
toward enhancing their effectiveness in executing their
assigned mission. This concludes my comments. Thank you.
[The prepared statement of Mr. Duscha follows:]
Prepared Statement of 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
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.
general summation
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:
<bullet> 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.
<bullet> 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.
<bullet> Urbanization. Land is being taken out of agricultural
production in many areas of the West and being developed for
industrial, commercial, and residential purposes.
<bullet> Increasing budget constraints. Reclamation's budget has been
effectively shrinking for many years, even as the needs have
increased.
<bullet> 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.
<bullet> Aging workforce. Reclamation's skilled and experienced
personnel will be retiring in large numbers over the next 5 to
15 years.
<bullet> Aging infrastructure. Most of Reclamation's major dams,
reservoirs, hydroelectric plants, and irrigation systems are 50
or more years old.
<bullet> Shift from design and construction to operations and
maintenance. Operations and maintenance (O&M) activities will
form a major part of the workload.
<bullet> 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.
<bullet> 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--
sometimesrehabilitation and new construction.
<bullet> 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.
<bullet> 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:
<bullet> Forecasted workload,
<bullet> Type of work anticipated,
<bullet> Definition of activities deemed to be inherently
governmental,
<bullet> Situations where outsourcing may not be practical,
<bullet> Particular expertise needed to fulfill the government's
oversight and liability roles,
<bullet> Personnel turnover factors that could affect the retention
of expertise, and
<bullet> 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.
outsourcing
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.
project management
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.
STATEMENT OF WILLIAM E. RINNE, ACTING COMMISSIONER, BUREAU OF
RECLAMATION, DEPARTMENT OF THE INTERIOR
Mr. Rinne. Thank you, Mr. Chairman, members of the
committee. It's a pleasure to be here today to discuss the
``Managing for Excellence'' action plan. With me today, sitting
right behind me, is my Deputy Commissioner, Larry Todd. And
with your permission, we may confer to answer some of your more
specific questions. Larry's been our executive lead in
developing the ``Managing for Excellence'' action plan.
The catalyst for the ``Managing for Excellence'' action
plan was the recently completed report of the National Research
Council. The Department of the Interior and Reclamation asked
the council to undertake this review in 2004 to receive an
evaluation of our business practices and capabilities from
outside experts to help us prepare for current and future
challenges. During its review, the committee consulted with
Interior and Reclamation policymakers, employees, water and
power customers, congressional staff and other Federal
agencies. Some of the key findings of that that I would like to
point out for your attention: Our customers want close contact
with Reclamation officials, consistency in Reclamation
policies, and decisionmakers with demonstrated professional
competence; Reclamation should perform an in-depth review of
its technical services center to identify core lead staffing
levels and optimum structure; Reclamation laboratory
organization and physical structures may be too large; admin
and other functions should be more aggressively outsourced;
long-term sustainment of aging infrastructure is a major
challenge; Reclamation should focus on completing and
publishing cost estimate directives and resist efforts to
submit projects to Congress with incomplete project planning
and cost estimates; and the growing need to include a broad
spectrum of stakeholders alters Reclamation's tasks and skills
required to accomplish them.
Mr. Chairman, Reclamation recognizes the seriousness of
these and other challenges detailed in the NRC report, and has
a plan to meet them. We have support for addressing these
issues at the highest levels of the Department of the Interior.
Deputy--and now-acting--Secretary Lynn Scarlett directed us to
devise a plan to address each finding and recommendation in the
NRC Report. With input from an array of stakeholders, the team
produced the action plan in February of this year. That plan
was developed in consultation with congressional committees, as
well as key stakeholders and Federal employees from rank and
file and also then-Secretary Gale Norton.
Some key aspects of the ``Managing for Excellence'' action
plan NRC report addressed in the action plan--excuse me, each
specific finding and recommendation in the NRC Report is
addressed in the action plan. The plan also draws on key
Presidential management initiatives and Reclamation customer
satisfaction surveys and other internal reports. It contains 41
separate action items that require critical analysis.
The timetable is ambitious. All but 12 of the 41 action
items are scheduled to be completed in 2006--calendar year
2006, with the remainder to be finished in 2007. Turning to the
action teams themselves, in terms of how they were selected in
the process, for team members, we had only two criteria: We
wanted to get the best and brightest. These are people we found
internally who were known for intellectual honesty and also had
a reputation with the outside stakeholders.
All teams have prepared a business plan as of this date for
each action item. We held a meeting in Denver in April--on
April 27 in Denver with the national stakeholder group. I think
the meeting was successful in developing an external outreach
plan. We'll have several stakeholder public meetings. The first
one is scheduled in early July.
We have also developed an internal communication plan for
Reclamation employees to submit some feedback, and we keep them
informed. We have an area management meeting, which is really
our program level, on June 5 to ensure that we're ready to work
with customers and employees.
Mr. Chairman, to succeed in this timeframe will require
active involvement of the stakeholders, leadership from
Congress and extra value from government agencies. This would
ultimately translate into improved capacity to carry out all
aspects of Reclamation's mission, including operation,
maintenance, and environmental compliance.
In summary, to move forward we must answer some important
questions, and I'll just hit four of these and then close. Can
we restore consistency and clarity to agency policy while
leaving operations 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
decisionmaking with a variety of customers and even transfer it
to them? And will we restore confidence in cost estimating?
These are just some of the questions we tackle.
Mr. Chairman, I would like to submit for the record a chart
describing each of the 41 action items, with each item's start
and end date, as well as one that depicts the schedule for our
action.
This concludes my remarks, and thank you for the
opportunity to speak today.
[The prepared statement of Mr. Rinne follows:]
Prepared Statement of William E. Rinne, Acting Commissioner,
Bureau of Reclamation, Department of the Interior
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:
<bullet> centralized policy and decentralized operations;
<bullet> Reclamation's technical service center;
<bullet> Laboratory and research activities;
<bullet> Outsourcing;
<bullet> Asset sustainment planning;
<bullet> Project management;
<bullet> Acquisition and contracting;
<bullet> Relationships with sponsors and stakeholders; and
<bullet> Workforce and human resources.
Instead of detailing each of the NBC'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:
<bullet> staff of Congressional Committees (authorizing and
appropriating, majority and minority, House and Senate);
<bullet> the Family Farm Alliance, National Water Resources
Association, and Trout Unlimited; and
<bullet> 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.
---------------------------------------------------------------------------
* The charts have been retained in committee files.
The Chairman. The charts will be made part of the record.
We thank you for your brief, but very good testimony. We very
much appreciate it.
Now, I'm going to ask the Senators, as they arrived, if
they have questions. Senator Thomas, do you have any questions?
Senator Thomas. Yes, thank you. Well, I'm interested in
your study, but what we talked about, the changes that have
taken place and the responsibilities and the role of the
Reclamation, as a result of the study, what differences are
there going to be in the Department, as opposed to what's been
in the past? What changes are talked about here, other than
just doing good things? Both of you, I wish you to respond.
Mr. Rinne. Senator, one of the things I would emphasize, I
think it was mentioned earlier, pretty early in the process,
but what we hope will come out of this is, where there--it
could be changes like the--it could be, in some places, numbers
of employees and the types of employees we have. I think what
we really want to get to is making sure that whatever we're
doing we're really meeting the needs of customers. We want to
be much more transparent in our active process. We don't know--
we've looked at things ranging from human resources to our
financial accounting. We want to look at that, and we want to
look at our technical services.
Senator Thomas. You're going to be doing what differently?
What's the difference in the Department from what it was 20
years ago as opposed to what your challenges are in the future?
Everybody wants to have more quality and do all of those kinds
of things, but what do you see as the role of the Department in
the future?
Mr. Rinne. I think one of the key goals, Senator, would be,
in the next 20 years, you have in Reclamation, as an example,
over half of our facilities are 50 years or older. I think the
challenge of maintaining that infrastructure, and in some
places enhancing that infrastructure for the future, is a
definite challenge. So I don't want to call it caretaking, but
it's very much different than constructing these facilities.
Now there may be some cases where we need more things for water
supply, but that's an example of the kind of thing we would--I
think we will try to position ourselves correctly, so we'll be
able to follow up.
The Chairman. I see. Thank you.
Mr. Duscha. I think basically when you're looking at this,
you're looking at a long-term change in culture here. That's
what you're driving at. I think you're looking at a long-term
change in culture, I mean, within an organization. Simply, we
have to look at--they're going to have to look at doing things
differently than they have in the past. The organization is not
going to be interested in doing the same things. The Big Dam
Era is over. You're going to have to get down to the
maintenance era, which is going to have to take a different
dedication than construction.
And so I think you'll find that the organization will be
different. But it's going to take time, it's not something that
can be done overnight, unless you just shake up the
organization thoroughly and bring a whole new crowd in. But I
don't think you want to do that, because I think that will
cause more problems than you bargained for.
Senator Thomas. Well, there's going to be differences from
the construction aspect. What about the environmental aspect of
the water management? Is that going to be different than it has
been in the past?
Mr. Rinne. Senator, what my reaction would be--obviously,
we're going to follow whatever the laws are. And I'll just use
the Endangered Species Act and the National Environment Act.
We're going to--we will look toward the idea of continuing to
deliver water, generating power, and do the other things that
are necessary. So, I think, to an extent, you have to be
realistic about that and say that there are going to be those
things that we must address. So, I think--you know, I don't see
that we discard it.
Senator Thomas. We need more energy. Are you going to be
able to orient yourself toward more efficiency and more
production out of your facilities?
Mr. Rinne. I think wherever the opportunity presents
itself. And some of that is underway, whether it's rewiring or
upgrades or things that make them more efficient and can
produce more energy. So I would say yes, if that opportunity
presents itself.
Senator Thomas. Thank you.
Thank you, Mr. Chairman.
The Chairman. Thank you.
The Senator from Montana.
Senator Burns. When we look at the--you say a lot of
changes, and there are a lot of changes--I don't think you're
going to be building very many more irrigation systems or any
of that, but I will tell you, as the Senator from Idaho noted,
that even though our water use is right now, our population
continues to grow.
We've got a finite amount of water, it's called snow pack
for a lot of us, and if you've got a low snow pack, well,
you're going to have low water. And I would suggest that in
that somewhere--the California situation is an interesting
situation. When we talk to the Western farmers or the San
Joaquin, those people who--the water users out of the
Sacramento or those rivers, we've got to make more water. The
only way you do that is you hold the water that you've got. So
that means off-stream storage. We haven't built much off-stream
storage here lately. We haven't even seen it in the designs or
if the Bureau of Reclamation is even taking a look at that or
increasing the pool sizes of the storage that we have today.
You can probably raise Shasta a foot and you'd produce a lot of
water for the San Joaquin. But you have the forces that want to
deal with the delta, and then you've got those forces who
actually want to cut back on agricultural production. They want
to do those kinds of things.
Mr. Rinne, are you telling us that in the future we're
going to deal with holding more water in its place? Off-stream
storage, is that in your plans anywhere?
Mr. Rinne. Well, Senator, a couple of examples, on the
Colorado River. And of course this isn't a Bureau of
Reclamation, as you're aware, but the States have a vital role.
But the process is going on. Like shortage guidelines that are
developing right now, one of the hopes out of that would be to
have better coordinated reservoir management between Glen
Canyon, Lake Powell and Lake Mead, which are really the two big
cups on the Colorado River that we use to manage the water
supply. There is, in fact, also, off-stream storage agreements
in southern Arizona and some in Nevada and the southern part of
California. In northern California the one thing I would say is
that we have some feasibility as to at least looking at
additional storage. Now, where those go to, obviously none of
us in Reclamation quite know, but we're always looking at ways
to better manage that water supply. And we're very, very much
aware of what the state of the challenge is: The growing
population, urban needs, the agriculture needs and other uses.
So it's a--I think that will be one of the biggest challenges
we face in the next 20 to 25 years, just being able to maintain
that very issue.
Senator Burns. Don't worry about 25 years, it's now.
Mr. Rinne. That's true.
Senator Burns. The challenge is now. Because we've got--our
population continues to grow and the demand for the water. We
know that all the water feeds off of the recharging of those
rivers, and in-stream flow is very, very important, but we've
just got it during the spring of the year. Look at the
Yellowstone River today. We're flooding now. Now, that water
ought to be going into some reservoir somewhere, being held for
August, September and October somewhere, and even into
December, for in-stream flow. But if you try to bring up this
thing of building off-stream storage and holding some of that
water, I'm telling you what, you create a furor like you can't
believe. Now one of these days we're going to have to take a
realistic look at that and say, ``OK'', because we can't live
without water. It's just not going to happen. So the root of
our debate, the bottom line of our development is going to be
how much water we have available for not only agriculture, but
just the people who seem to be migrating to the West. Some of
them, I would doubt are very good neighbors, but nonetheless
they're showing up.
And also, irrigation systems that we have appealed to
Congress, saying, ``We'd like to take over our system and get
the Bureau of Rec out. We're ready to assume, under the old
system of years ago, that this irrigation system, once we got
it paid off, back to the Government. We'd like to have it and
manage it ourselves. We always get pushed back from the
Department of the Interior; why?''
Mr. Rinne. I think what I would say is, that is one of the
very areas, Senator, that we're taking a real close look at.
The area being transfer or owning our facilities. And I think
both in transfer of owning--and even looking at title
transfers, that's one of the things we're looking at during
this period. We're going into where we really look at that.
Your comments--and I'm aware of it. I think the key thing would
be--I agree it has been that there are parts of those areas,
districts that have paid out, they're ready to take over and
operate and maintain them, and we should go along with that.
And I think you'll probably see more of that, as an outcome of
this, in the longer term.
Senator Burns. Well, I've got two or three that are pending
right now, and I see no reason why that transfer isn't made. It
goes to the owners, but there's no such thing as title, as land
title or water rights title. There's nothing to transfer,
there's just the business of who controls the O&M dollars. And
basically, I think it should be a fairly easy kind of transfer,
because those irrigators, those water users, they want to
control their own fate.
Mr. Rinne. Senator, there may be currently, as we speak--I
think if Mr. Raley were to testify, one of the areas that we're
evaluating right now, which is actually part of--I would say
our ``Managing for Excellence'' action plan is looking at our
northern Colorado water-consuming district and we're actually
going into the process right now to see if that makes sense to
turn over the owning of not only the infrastructure, but this
would be in collaborating and maintaining the dammings as well.
We're going through that process, and I expect it will be done
by the end of this year. So it's, I think, along the lines of
what you're talking about.
Senator Burns. Well, if we think of anything about our kids
or our grandkids--and I don't care if they're urban or rural,
irrigators or municipalities, or whatever--we've got to start
thinking water storage now. I don't think we can wait any
longer. Because, basically, if you look at the California
situation--and I was part of that 1991 settlement, and now
they're trying to do something else. I would have--going to be
a part of both of those. And it's not that we don't have the
water, the demands for the water has outstripped what we have
available.
So now I want to talk to you about the St. Mary Project.
Here's a project that was built a hundred years ago. It is the
lifeline of the Highline. It runs from St. Mary to Wolf Point,
MT. And you have all kinds of moving parts in that--you have a
Canadian situation, you have two Native American reservations
involved in that. And we're starting to build a master plan on
how we're going to re-do that whole system, because it's
falling apart. On most of our Indian reservations, I will tell
you, they haven't been managed very well. We've got the same
situation down on the Bighorn River, and some on the Little
Bighorn that are systems that the management has not been very
good. And it's not due to the local farmers, it's been the
government agencies that have been responsible for getting it
done. And the blame falls, I think, right here in Washington,
DC. So we want to tackle that problem also.
But I would tell you, in the long run, in the long haul,
for every one of us who have sat on this committee who have
grandchildren, the water storage and water availability in the
West now is the most challenging problem we have. We cannot
store too much water during the run-off right now. We had a
great snow pack last winter, but that's the first one we've had
in the last 7 years. And I would tell you that we'd like to
hang on to that if we possible could, it's good for the
environment, it's good for recreation, it's good for in-stream
flow, and it's also good for water users and everybody that's
around there. But I will tell you, it is one of the toughest
challenges we face. And we've got to figure out some way to
move beyond the objections of people who probably don't know
the difference between ``Sic 'em.'' and ``Come here.'' when it
comes to dealing with water, and trying to make the West work.
Thank you very much, and I'll go on and do some other things
and let these guys handle it. Thank you, Mr. Chairman.
The Chairman. Thank you. First, let me say to you, Mr.
Rinne, you and the Department, I'm not a professional, nor is
it my job to pass judgment on what you have done in response to
the critique, but I hope the way you've characterized it is
true--where you have no holds barred, you are doing the best
you can, you've got professional help, it's a real effort to
provide reorganization. Is that a fair assessment?
Mr. Rinne. Yes, it is, Mr. Chairman. We're striving. If
this is going to be successful--and maybe I ought to just say
it this way--me, just speaking personally--I think one of the
hardest things we're going to do is look at ourselves and look
at the organization, and I'll just be honest about that. And
that's the hard thing to do.
Having said that, I think if you're going to be successful
in this effort, we have to get help from others. And that's
what we're trying to do with our partners and stakeholders. If
we continue down the path we're going with the action plan and
the involvement of the stakeholders and obviously leadership
from Congress--and I heard your remarks about later hearings--I
think that kind of interest helps us. We need to stay
objective, so our intent is pure in this. We're not--we don't
like hearing everything we hear, but that's beside the point.
So, that's where--we're very serious about this.
The Chairman. Well, you know, when I got ready for this
hearing, the first thing I asked was how many people work for
the Bureau of Reclamation, and it's astounding--5,900 people.
It's a big organization. That means you're responsible, and
we're responsible, for an awful lot of lives and an awful lot
of activities, and an awful lot of status quos. People are not
expecting too Draconian a change in their--what they do for the
Department, even though we start this with a report that says
obviously things have to change rather drastically, because the
Department isn't doing its job, not because of the people,
they're nice people, good people, it's just that the work
changed right under them. They don't do the kind of work now
that they did when we started, and we haven't--the Department
hasn't changed, based upon the workload. That's the way I see
it, anyway. That's just my observation. That means there's a
lot of things you do that other people could do better than you
do, and do it cheaper, and there's a lot that you outsource and
have it done by others; right? That's part of the problem
you've got and you recognize that, I assume.
Mr. Rinne. Yes, Senator. In fact, that is one of several of
those action items that is really supposed to drill in on that
very thing. And where it makes sense, I think I used the word
in my comments about good business sense. I mean there are
things that we'll be using the jargon of. They are not
necessarily governmental, but others could do it, and that's
what we need to try to tease out for the great American public
and the tax payer and what we're doing.
The Chairman. Well, we obviously are going to have to
follow it carefully. And the Department is going to have to
follow it carefully--the big Department--and OMB, and we'll
just have to see how it turns out. I am rather pleased with the
first cut of what I've seen, the work that you've done, led by
you, that your Department has done. I think it's rather honest,
but I'm sure it's not total. A lot more is going to be done
before you're finished.
Let me ask you what your thoughts are about that.
Mr. Duscha. I was going to ask permission to comment on
this very thing.
The Chairman. Please.
Mr. Duscha. As I've participated in similar studies for
different Federal organizations and private organizations, you
know, on re-organization and so forth, I will have to say that
the Bureau of Reclamation has jumped into the report with a lot
more enthusiasm than I've seen in the other departments and has
made more progress than I've seen in this length of time. So,
I'm very, very convinced that they're dedicated to coming out
and doing a good job on this thing and doing the right thing.
The Chairman. Sometimes doing the right thing means that
some of them aren't going to be doing their same kind of work
that they've been doing now, for their government, later on.
Maybe some won't even be working for the government at all
later on. That still means the job of analyzing has to take
place.
With that, I want to yield to Senator Craig. And then I
know we have a new Senator from the other side of the aisle in
whose State part of this activity takes place. Senator Craig.
Senator Craig. Let me give you--not a hypothetical, a
reality--and see how it fits within your thinking, based on
your new management or approach toward that. Currently, in my
State, we have a great example of why business as usual just
isn't going to work. In arid southern Idaho there's a 100-year-
old irrigation/dam project known as Mindoka. It feeds thousands
of acres of farmland while supporting wildlife refuges and
waterflows for fish. Additionally, this water supports several
farms and communities, and hosts phenomenal recreation for
boating and all of that.
However, our irrigators pay a large sum of money to keep
the facility working. They are largely the only ones who pay.
This facility, because of its considerable age and the original
construction, needs a new spillway. The spillway is estimated
to cost nearly $35 million, increasing irrigators' assessment
by nearly 30 percent. And as the NRC study has found, the
Bureau has not been particularly good at keeping costs down
through construction processes, which raises another concern on
the final price tag. These farmers are already paying $45 an
acre. They're going to pay a lot more, obviously.
Now, we find out, and appropriately so, there are a lot of
other stakeholders involved. Should other stakeholders
participate in and pay for some of the value of the project
itself? It's a reasonable thing to be thinking about. At the
same time, cost of the project could be spread over 15 years.
Impacts are real, so we're at a loggerhead. We need it, for the
security of the project, for all that it brings for farming,
for ranching for communities, for recreation, now for water
quality, now for wetlands, and we have a price tag that is
almost unaffordable. This is probably a story played out across
the country today to that aging infrastructure you talked
about. How do we get creative here?
Mr. Rinne. If I strike out on this or not, I'll strike out
speaking.
Senator Craig. Well, I just pitched it, and it's a fairly
slow-moving softball.
Mr. Rinne. It's very much--it's a very fair question. I
would say as a general matter that we would expect--and I'm
trying, maybe to look into the future a little bit--we have to
have more and more of the beneficiaries pay. And sometimes that
does require looking at the way things were in the past--that
is the way you've characterized that--and for new uses, new
benefits we have a need to work toward that.
I say that, and that's not a slam dunk, and we are
concerned about areas such as, in this case, the costs go up.
And the other part of that, of course, are the things that
Congress directs us. And I guess just like everyone else, we
have budget pressures, and I want to point out the cost
containment. I think one of the things in our ``Managing for
Excellence'' action plan activity we hope to get to is there
may be--and there should be, in the case of Bureau of
Reclamation in design and construction, maybe it should be
contracted off away to save those dollars. The problem is that
I do think things like that--people who are interested in
benefits should probably need to look at their own paying, and
also need to look at the Federal need.
Senator Craig. We're playing out something right now in the
new Energy Act that is, I think, fascinating because frankly
when we try to design something here, to the best of our
knowledge we don't always know that it will work as well as we
hoped it would. But reports coming in right now would suggest
to me that it is working as well as we hoped it would and maybe
even working better, and that's the new hydro re-licensing
approach toward dams.
All of a sudden, when all the parties involved have to get
honest, when you just can't pass through costs because a law
says you've got to do it and that's what you're in the business
of doing--complying with and passing through costs--when you
turn to the private sector and say, ``Here are the standards,
meet them.''--we may not have all the best ideas, because maybe
the private sectors move much more quickly into that arena than
we have. It appears that that's beginning to happen with these
re-licensed hydro projects. And also when there is a bit of
arbitration involved in a public arena, no longer can the
demands just be flat out. They have to be partly conditioned,
standards have to be met, all of those kinds of things for all
of the parties involved.
Maybe one of the advantages--I don't know that it's
applicable elsewhere, but I do know that it appears to be
working at the moment, the reports coming are in. Now, there
are critics to it, but when we have--and my time is up--when
Commissioner Keys was brought on, one of the things I asked of
him was quite simple: Don't ever allow a Klamath to happen
again. We ought to be brighter and better and more nimble at
dealing with all of the parties involved than just to shut the
place down and let farmers starve. It was built for them
originally, they still have a stake in it, although laws will
argue that it's a broader one, and his commitment to me was
that it won't happen again, and it hasn't, thank goodness. That
doesn't mean it won't happen somewhere down the road, with all
of the competition for and the concern about water and usage,
but I think that kind of nimbleness is critical. And I will
also tell you that if you think you can operate like a
business, I have not yet seen a Federal agency successfully do
that. You just--it is not within your culture and your
character, it's not a criticism. So, contracting out and
allowing participation from the outside is clearly one
approach.
Last, Mr. Chairman, we're trying to get creative here. The
Chairman's done a lot of work in it, in trying to figure out
how to finance. If you're going to expect the private sector to
finance these projects to a large degree, then you must allow
them to participate in them in a very creative way. You may set
the standards, and you should. A lot of public policy involved
in the standards needs to be met for all of the interested
stakeholders. But water is the commodity of concern today in
the West and if we can't figure out how to do it better,
accomplish some of what the Senator from Montana has talked
about, then we have increasing problems that are going to
demand that ultimately we break away and figure out a way to do
it.
So, I thank you. I certainly believe these studies are
worthwhile. At the same time, don't forget that maybe policy
adjustment is also necessary to allow you to create greater
flexibility, and that's where the chairman and I and this
committee can help you play a role in all of this. Thank you.
The Chairman. The Senator is correct. Now we're going to
ask Senator Salazar from the State of Colorado if he'd like to
comment.
Senator Salazar. Thank you very much, Chairman Domenici,
and thank you also to the witnesses for being here today.
Let me just--for all of us here in the West, we recognize
very much the importance of the Bureau of Reclamation and the
legacy that it has left across the West. And I know in my State
there are many Bureau of Reclamation facilities and we work
well with the Bureau of Reclamation and I appreciate that work.
Today in the audience, for example, we have people from the
Southeastern Colorado Water Conservatory District in Jim
Broderick, Bill Long, Bill Reynolds and Christine Arbogast and
obviously the Fryingpan-Arkansas Project is of great importance
to us in Colorado. We have a number of other Bureau of
Reclamation projects throughout the State, including the ones
that are operated by the Northern Colorado Water Conservatory
District.
Bennett Raley who asked for this report has been a good
friend of mine for many years, probably some 20 years, and I've
seen him as being one of the foremost experts on water issues.
And I was delighted when he became the Assistant Secretary for
Water and Science in the Department of the Interior.
I think that Bennett was correct in making the request for
review of the Bureau of Reclamation and I think the findings
that we have here today are important findings as the Agency
looks at itself and tries to figure out how it's going to move
forward in the next century.
I have one comment and then just one question. The comment
is, I appreciate the Bureau of Reclamation continuing to put
its focus on completing the Animas-La Plata Project. It's
something Senator Domenici and myself and others worked on for
a very long time, and it's very important as a project that not
only deals with the issues between States, but between the
States and tribes in a way that ought to be a model with how we
deal with Indian reserve rights in other places in our Nation.
My question to you, Commissioner Rinne and Mr. Duscha, has
to do with--one of the recommendations out of the report was
increasing the number of small projects--you say, although the
demand for large new projects will remain low, it is likely
that the demand for small water storage irrigation and
distribution projects will increase. That's your recommendation
in the report. How would you implement, if you will, that
recommendation coming out of the report?
Mr. Duscha. Well, I think basically when we put that
recommendation in there, as we look at it, I think we see that
there are opportunities there yet for water storage and water
distribution but they have to be on the smaller scale involved
in smaller projects, and that sort of ties in with Senators
Burns's comments earlier about off-stream storage.
I think, with that, you're going to have to--these more
localized projects that will require local cooperation and
perhaps--I'm sure they'll require some Federal help someplace
in the mix, but----
Senator Salazar. When you speak about smaller projects, Mr.
Duscha, what size of project are you talking about?
Mr. Duscha. Well, it's not going to be a Roosevelt or
something like that. You're talking probably about a half-a-
million-dollar project, $5 million, $10 million projects.
Senator Salazar. Projects in that magnitude.
Mr. Rinne, on that question, I know we have a vote coming
up, so just----
Mr. Rinne. I'll make it real quick. I thought I would save
us on how we implement it, but I was thinking about an example,
trying to give you one. We're working on an example, a
temporary kind of regulated reservoir, like around the All-
American Canal, which in actuality, when it opened, it could
get up in that area where we actually have funding from non-
Federal sources, and then in turn they would get a portion of
our water. I think that's probably the key to getting there,
and I think that's an example.
The Chairman. We have a vote up and I'm going to go.
Senator Salazar [presiding]. I'll take over the committee,
Mr. Chairman. So we'll go ahead and revolutionize the Bureau of
Reclamation in your absence, sir.
We do have a vote that's underway, so in order to keep the
hearing moving, why don't we go ahead and continue this
conversation. I recognize the era of the big dams, Hoover and
Lake Mead, that's probably an era that has passed us by. But on
the other hand, there's a reality about water storage in the
West, and that is without water storage we would not have the
greening of the West in the way that we have it. And we also
have the reality of the huge competing demands that we have for
a limited water supply in the West and huge challenges are
being place on the Bureau of Reclamation, so I want you to, if
you will, bore down a little deeper on how it is that the
Bureau of Reclamation, moving into the 21st century, can look
at the possibility of the smaller projects, where the Bureau of
Reclamation can play a constructive role in making these
projects a reality. So if you would continue on that vein of
your answer, I would appreciate it.
Mr. Rinne. I'll try. A couple of things--and maybe it will
help me think on talking a little bit, too. One example, when
we talk about--I'll be responsive to your question. Another
example I was thinking about was on the Klamath Project that
was brought up earlier--it was actually a smaller project, or a
somewhat smaller project--and one example is we have actually
had some land purchases at the upper end of the reservoir of
Klamath Lake, the upper end of the lake, and what's significant
about that is, Senator, there are some lands that historically
have been used for other purposes and the non-return plan would
be that when the Lake is providing water and there's good
water, we can get water there. Those are small projects.
Reclamation would be able to work with the local planning
project people who try and absolve the interest in the area,
more in the facilitation.
I think for me a lot of the answer in the smaller projects
is going to be more along the lines of refinements of
operations. That may mean something a little bit out of stream.
It may just mean that we're managing the water that goes
through. There's just a lot of things with that that I would
put in a class with the smaller projects.
The peculiar thing would be it isn't something Reclamation,
say, is going to design and construct, but we're being partners
to allow them. And I think the more partners involved, the more
we must do that. And that's how we are going to get some of
these things done, by defending and getting the good ideas, and
do them in so many cases cheaper, too.
Senator Salazar. Does the Bureau of Reclamation, through
the Commissioner's office or anywhere else within the agency,
have a program that would be called a small projects program?
Let's suppose I know of a river, which I do, somewhere in
southern Colorado that might be looking at a small off-channel
reservoir project, and I want to come and find out what it is
that the Bureau of Reclamation might be able to do to help me
out, is there a door that says ``Bureau of Reclamation Small
Projects: we're here to help you''?
Mr. Rinne. We used to have a Small Reclamation Projects
Act, but that is not something in the 1990's. We actually
endcapped cooperation with stakeholders and others and actually
moved toward wrapping that program up. When we had loans, there
were small Reclamation projects that we gave loans for
different kinds of activity. We have not sought funding for
that and I would say, at this time, we don't have current plans
to do that.
And I suppose the other thing is--and you would be well
aware of this--short of maybe a specific authorization to do
something like a project that was--we were directed to that, we
probably wouldn't, on our own, move out and do something like
that.
I would say, though, that there are a couple of tools in
the box around. Water 2025 has been one of the tools that has
been very successful that way, in general. I'm sure many of you
have been briefed on this. We've had roughly a 41 percent
return on investment, or in round dollars I think we put in $14
or $15 million and we've had projects with non-Federal funding
come in up around $70 million. Most of the reason for doing it
right now is improvement of infrastructure. Some of that can
be--you can better manage the others for not using the sample
vignettes. I think that some of the Water 2025 will be a very
good tool. And then, in the area, in the one we continue to
look for, I believe it was appreciated when the Senate passed
the rural water legislation which included the future loan
guarantee. That's an area that, again, is not a panacea but
something that may provide the opportunity for ways to kind of
fix up our aging infrastructure and continue to improve the
efficiencies.
Senator Salazar. I appreciate your comments. And I do think
that that's a key part in terms of at least the water
management issues and opportunities as the West is looking at
some of these smaller projects.
We are getting close. I think we have about 5 minutes left
in the vote, so what we're going to do is put the hearing into
recess and then, in the meantime, Senator Domenici will come
back. So if we can maybe get the second panel ready to go, and
continue on with the hearing.
Thank you very much for attending the hearing today, Mr.
Rinne and Mr. Duscha.
[Recess.]
The Chairman. Sorry for the delay, but I had to attend
another hearing in between to make a quorum for another
chairman.
The second panel will be made up of Dan Keppen, executive
director of The Family Farm Alliance. Are you ready?
Mr. Keppen. Yes, Mr. Chairman.
The Chairman. The Honorable Diane Snyder, executive
director of the American Council of Engineering Companies, from
New Mexico. Are you here and ready? Nice to have you here. And
Thomas Donnelly, executive vice president of the National Water
Resources Association, Arlington, VA, and Scott Yates, director
of the Wyoming Water Project at Trout Unlimited, Arlington, VA.
We're going to start in that order. We'll ask that each one
keep their testimony brief. If you have prepared remarks, we'll
make it part of the record. And we'll try to get out of here in
the next 15 to 20 minutes. Thank you very much for being here.
Let's start on your end. Let's go with you, sir.
STATEMENT OF DAN KEPPEN, EXECUTIVE DIRECTOR,
THE FAMILY FARM ALLIANCE
Mr. Keppen. Thank you, Mr. Chairman. My name is Dan Keppen.
I'm the executive director of The Family Farm Alliance. We're a
non-profit organization that advocates for family farmers and
ranchers in 17 western States, I'm from Klamath Falls, OR.
I guess I'm going to modify my prepared comments a little
bit just to respond to some of the commentary on the first
panel. I think maybe, in a nutshell, how you can encapsulate
our views on this whole Reclamation action plan and the NRC
report is absolutely--we share your concerns that new storage
is needed in the West right now, and perhaps the best way to
address that concern is for Reclamation and other agencies, in
certain ways, to get out of the way and help streamline the
regulatory process so that we can move some of these processes
forward. Because right now we've got population growth going on
and there are no new major supplies being developed. And what's
happening by default is agriculture is becoming the reservoir
to meet these new demands. And we're concerned about national
implications and policy implications associated with all the ag
that is possibly going out of production right now, because
without new supplies, the water is going to be taken from ag by
default.
So, I guess I would just like to say that The Family Farm
Alliance, in this particular process, has been involved for a
year. We spent a good portion of our time last year developing
case studies to provide to the academy that would provide input
on how our folks dealt with Reclamation, both from a good point
and a bad point. We had both good examples and bad examples.
The academy came out with a report. They obviously listened to
what we had to say. We pretty much agreed with the findings of
the National Academy. And then the big question was, how is the
Bureau of Reclamation going to address those findings?
They rolled out their action plan, and for the most part, I
think we're really encouraged with how they are going about
addressing those findings. They set up this ``Managing for
Excellence'' process. They've been very open with the
stakeholders. They've given us a place--The Family Farm
Alliance--a place at the table. And I think that the forum they
set up, if it's actually implemented the way they've laid it
out, will give us an opportunity to have our concerns addressed
and, I think, ultimately, make the Bureau of Reclamation a more
efficient agency, which is an important thing for our
membership, because our members actually do pay for a portion
of the operations that go on at the Bureau of Reclamation.
I think we just have a few specific ideas that we're
looking to see accomplished here in the next year. We'd like to
see Reclamation address this, or Congress if necessary, and
give the sponsor who pays over 50 percent of the cost the right
to have the design, procurement, and construction outsourced,
as previously mentioned. We'd like to see better improvements
to the transparency of decisionmaking, especially where
Reclamation customers are responsible for payment of costs. And
we'd like to see impediments to project title transfers
investigated and reclamations developed that allow locals to
have a better sense that they're actually going to get a title
transfer accomplished in a short period of time.
The Chairman. What about that? I don't get that.
Mr. Keppen. Well, it was mentioned earlier that title
transfers from the Federal Government to a local entity--
there's opportunities out there to do it, certain districts
have done that, but there's definitely a perception out there
that it's a very lengthy, expensive process, and we've got case
studies that prove that. We'd like to find ways to encourage
districts to do more of those by removing some of the
regulatory impediments, especially those associated with NEPA
and the National Historic Preservation Act.
The Chairman. OK.
Mr. Keppen. So, we'll look forward to working with your
committee and the Bureau of Reclamation on those and the other
recommendations we've identified in our written testimony.
Thank you.
[The prepared statement of Mr. Keppen follows:]
Prepared Statement of Dan Keppen, Executive Director,
The Family Farm Alliance
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:
<bullet> 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.''
<bullet> 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''.
<bullet> 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.''
<bullet> 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.''
<bullet> 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.''
<bullet> 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.''
<bullet> 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:
<bullet> 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;
<bullet> Reclamation develops and implements a transition plan to
achieve an agency with ``right-sized'' design, estimating and
construction management staff;
<bullet> 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;
<bullet> Reclamation proposes reductions at Technical Service Center
that are real and not achieved by reassignments to the Regions
or reclassifications of existing job categories;
<bullet> 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;
<bullet> 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.
<bullet> 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).
<bullet> 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).
<bullet> 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.
next steps
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:
<bullet> Significant ``up-front'' costs that must be borne by the
local entity.
<bullet> Reclamation bears little, if any, of the costs associated
with transfers.
<bullet> 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).
<bullet> The infrastructure is often in a state of deterioration.
Many projects are old and in need of major maintenance.
<bullet> 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 Chairman. Thank you. Excellent. Let's proceed now to
Mr. Snyder. Is that the way we did it? Oh, no. Ms. Snyder, nice
to have you with us.
STATEMENT OF H. DIANE SNYDER, EXECUTIVE DIRECTOR,
AMERICAN COUNCIL OF ENGINEERING COMPANIES
Ms. Snyder. Thank you, Mr. Chairman, it's always a pleasure
to see you and be here.
I am the executive director for ACEC-New Mexico, the
American Council of Engineering Companies. I also serve as a
New Mexico State Senator, and have the pleasure and honor of
representing about 44,000 of New Mexicans.
ACEC, Mr. Chairman and members of the committee, is the
voice of America's engineering industry. Our council members
number up to 5,500 firms throughout the country, and we
represent a broad spectrum of engineering. ACEC today is a
large federation of 51 State and regional councils. Our member
firms employ over 300,000 engineers, architects and related
specialists, and we are annually responsible, Mr. Chairman, for
over $100 billion worth of projects both in the private and the
public sector. So we know what we're doing, Mr. Chairman.
Our member firms range in size, like many in New Mexico,
from a single engineer up to firms that employ thousands. Our
mission is to simply contribute to the prosperity and welfare
of the United States by advancing the business interests of our
member firms. I appreciate the opportunity to come before you
today.
ACEC, Mr. Chairman, as you know, we have spoken with you
and Senator Bingaman and your staffs. We've previously raised
concerns about the practice of the Bureau for offering and
providing consulting engineering services to customers in
direct competition with the private sector. We're particularly
concerned and disturbed by the fact that tax dollars are the
ones being used to perform services that are readily available
from the private firms.
One example, particularly, that leaps out to all of us as
unfair government competition is the Animas-La Plata Water
Supply Project in southern Colorado and northwestern New
Mexico. Engineering firms were lining up, Mr. Chairman, when
the original appropriation of $344 million was put out, knowing
full well that teams were being formed, that we had the
expertise within the engineering firms even in New Mexico and
Colorado to do this work. However, the Bureau convinced the
tribes involved that, in fact, they could do the design and
construction.
Unfortunately, they ended up contracting out less than 10
percent of the front-end engineering work, and none of the
construction costs. That's direct competition, and with all due
respect to the Bureau, Mr. Chairman, we know that today's
results of the Animas-La Plata Project--the increase in funding
has gone from $344 million to a request of over $500 million,
and the most alarming concern, of course, for most of us, and
I'm sure you share this concern, is that the local cost share
has risen from a little over $3 million to $7 million. There
are very few small communities in New Mexico who can afford
this, and certainly in other States.
Another example that has directly impacted New Mexico is
the----
The Chairman. Are you suggesting that that would have been
different had they not done it that way and put it out for--
outsourced it?
Ms. Snyder. Yes, Mr. Chairman, I respectfully submit that
it would. One of the things that I do know, because I'm very
familiar with the members in New Mexico, is that we understand
the geology. We do a special training for the geology of New
Mexico and the hydrology and what needs to be done, and there's
no way we would have ended up with not understanding the
bedrock that the project was being built on. And if such a
mistake--information had been misinterpreted, as the Bureau
indicated to you in your prior hearing, then in fact, our
engineering firms would have eaten a large share of that cost,
of the $162 million. So, yes, the cost would have been
different and much less.
The Ute Dam Project, sir, was built--the reservoir was
actually built for storage in the 1950's and 1960's--the early
1960's, based on the understanding of the very limited life of
the Ogallala Aquifer. We now know that it's even a shorter and
more limited life. The most recent projections I've heard are
less than 20 years' reserve of water.
During the 1960's, 1970's, 1980's and 1990's, Mr. Chairman
and members of the committee, the Bureau of Reclamation did a
series of studies, and finally received authorization to
conduct a feasibility study. They spent millions of dollars,
but to this day they have advanced the project one degree
closer to a design or construction stage. The local water
association in 1998 then went out to the private sector. They
hired an engineering firm which developed a feasibility study.
In 2004, Mr. Chairman, I believe they came to this committee
first and asked for your support. The people of eastern New
Mexico brought the feasibility study to Congress to secure
Federal funding. Unfortunately, the Bureau criticized the
report and concluded the report did not conform to their U.S.
Bureau of Reclamation standards. The project was immediately
withdrawn and the entire process was started over. Currently,
this project has not been moved past the feasibility study, and
Mr. Chairman, it is my belief, and those of many of us in New
Mexico, that if we continue at the same rate of study and
design and work that's been accomplished year to date in this
project, that the people in eastern New Mexico will bet getting
dirt and dust out of their water taps before we have a
feasibility study and the funding in place. It's a great
concern, and I know you share that concern, Mr. Chairman.
One of the things that, in retrospect, we believe is that
the Bureau should have served in the oversight capacity and
that both the local State government and the private sector
should have proceeded as full partners in the process.
We agree--ACEC agrees with the report of the National
Research Council, with the finding of inconsistencies in the
areas of acquisition and contracting policies. The
inconsistency and the implementing of the acquisition policies
is in how each region or district makes the determination as to
what functions they will keep in-house, even though some of
them are considered inherently--not inherently governmental
functions. What we believe is the Bureau needs to establish a
centralized and consistent acquisition policy and procedures at
headquarters, rather than allowing each region to make up their
own policies.
We certainly--ACEC agrees with the report's recommendation
that the commissioner needs to undertake a detailed analysis of
how the agency should be structured. We also support the fact
that they do need to maintain their critical core competencies,
but as the report says, increase outsourcing of as much of the
engineering and laboratory testing work. This would reduce the
proportion of engineering service cost chargeable to the
customer. It also states that the functions--most of them are
not inherently governmental functions and concludes that it
should be contracted out to the public sector.
In addition, Mr. Chairman, many people say that that goal
is impossible, it can't be done. And I'm so sorry that Senator
Thomas had to leave, but as you well know, he chairs your
subcommittee on the National Park Service. The National Park
Service has done a complete change since 1988. They have
restructured their process for acquiring construction design
and construction project supervision. And while the Government
previously provided all of these services, now all of the
construction supervision and 90 percent of the design services
are satisfied through private sector contracts. That's a
remarkable record, Mr. Chairman, and they've been incredibly
successful.
And, again, ACEC wants to thank Senator Thomas, yourself
and his subcommittee. By shifting from a project-focused
activity to project management and standards activity, the
National Park Service has achieved incredible successes.
Greater emphasis on common structure specifications has been
helpful in both private and public sector, and finally, Mr.
Chairman, it's simplified the funding for the entire
construction program.
The National Park Service has done an incredible job. ACEC
encourages the Bureau to follow this successful model that is
already in place. They have proven how successful it is. They
can--it demonstrates clearly how Federal agencies can
effectively partner with the private sector to carry out
successful programs on behalf of the taxpayer.
The action plan, Mr. Chairman, we believe is a great step
in the right direction. We commend the Bureau for its long
history of providing service to the West and to our citizens,
but we certainly encourage and believe that you and your
leadership and Congress needs to keep a strict oversight to
make sure that the Bureau stays on track in its changes.
In conclusion, Mr. Chairman, ACEC believes that the
taxpayers, the people of the United States, ultimately win when
there is fair competition and when Federal agencies and the
private sector partner together. We look forward to working
with you, Mr. Chairman, the members of your Committee and the
Bureau of Reclamation toward achieving these common goals.
And with that, I thank you again for allowing me to come,
and I look forward to any questions, Mr. Chairman.
[The prepared statement of Ms. Snyder follows:]
Prepared Statement of H. Diane Snyder, Executive Director,
the American Council of Engineering Companies,
Mr. Chairman and Members of the Committee, my name is H. Diane
Snyder 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 u.s. 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
Associations' 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 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.
conclusion,
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.
The Chairman. Thank you very much.
Now, we'll proceed to Mr. Donnelly, executive vice
president of the National Water Resource Association.
STATEMENT OF THOMAS F. DONNELLY, EXECUTIVE VICE PRESIDENT,
NATIONAL WATER RESOURCES ASSOCIATION
Mr. Donnelly. Thank you, Mr. Chairman.
We applaud the National Research Council on its report and
the Bureau of Reclamation and its plan to address the
recommendations in that report. However, in order to ensure
that the effort accomplishes its purpose, it's necessary that
we are in complete agreement on what the overriding mission of
the Bureau of Reclamation should be over the next several
decades.
The council's report identifies ``construction, maintenance
and infrastructure requirements'' as the Bureau's 21st century
mission without weight. The major construction mission of the
Bureau of Reclamation has been completed. While future projects
or programs may be authorized and funded by Congress, we
believe construction will be a secondary mission for the Bureau
in the future.
We believe the primary and overriding mission of the Bureau
of Reclamation is maintaining the existing water and power
infrastructure at peak operational efficiency. Many of these
projects have met or exceeded their designed life and are now
in need of modernization and/or rehabilitation. Today the
Bureau of Reclamation does not have all of the tools necessary
to address this emerging problem.
For example, Reclamation does not have a program which
enables water users to modernize and rehabilitate their
projects and pay those costs over time under reasonable terms
and conditions. In addition, it's not clear that the Bureau of
Reclamation has an accurate grasp of the scope of the problem
West-wide.
Our association, with the support of The Family Farm
Alliance and the Western States Water Council, is in the
process of conducting a survey of water infrastructure needs
throughout the Western United States. It is our hope that with
the information that we obtain, and with Reclamation's
assistance, we will be able to provide Congress with a
blueprint of the rehabilitation and modernization requirements
and associated costs over the next several decades.
In February, then-Commissioner John Keys requested that the
National Water Resources Association coordinate and facilitate
the participation and input from the Bureau's customers on
their ``Managing for Excellence'' action plan. Representatives
from our Association, the Family Farm Alliance, the Western
States Water Council and the American Public Power Association
met in Denver on April 27. The Bureau's ``Managing for
Excellence'' team leaders briefed us on their plan, and engaged
in a frank and open discussion about our concerns and
expectations. We have agreed to meet again at the end of June
with the Bureau, and we expect to get more detailed information
at that time.
In summary, we looked at the ``Managing for Excellence''
action plan as an opportunity for the Bureau of Reclamation and
its customers to re-cast the Bureau's capabilities to meet the
fundamental challenge of operating and maintaining its existing
facilities at peak efficiency. We greatly appreciate the
opportunity to present this testimony today and we will work
with you, Mr. Chairman, and the committee in any way that we
can.
[The prepared statement of Mr. Donnelly follows:]
Prepared Statement of Thomas F. Donnelly, Executive Vice President,
National Water Resources Association
The National Water Resources Association (NWRA) is a nonprofit
federation of state associations and individuals dedicated to the
conservation, enhancement, and efficient management of our Nation's
most precious natural resource,--WATER. The NWRA is the oldest and most
active national association concerned with water resources policy and
development. Its strength is a reflection of the tremendous
``grassroots'' participation it has generated on virtually every
national issue affecting western water conservation, management, and
development.
In the West, water infrastructure is every bit as important as
transportation infrastructure. It is essential to the continued
economic growth and development of the region and the nation. Water
infrastructure needs continue to exist, particularly considering the
West's rapid population growth [8 out of 10 of the fastest growing
states are Reclamation States]. The Bureau of Reclamation operates and
maintains a vast array of water supply facilities built over the past
hundred years. Many of these facilities are approaching or have
exceeded their design life. That is not to say they are no longer
serviceable. Properly managed and maintained these facilities will
continue to operate efficiently and deliver water well into the future.
The purpose of the National Research Council's report, Managing
Construction and Infrastructure in the 21st Century Bureau of
Reclamation and the U.S. Bureau of Reclamation's response, Managing for
Excellence: An Action Plan for the 21st Century is to define the
principle mission of the Bureau of Reclamation for the next several
decades and ensure that Bureau's resources and capabilities are
adequate to carry out that mission.
Over the past twenty years the Bureau of Reclamation has struggled
with its transition from construction agency to water management agency
amid confusing and often conflicting Congressional directives and
fluctuating policies of various Administrations. Unlike the National
Park Service, the Bureau of Land Management and most other federal
agencies, the Bureau of Reclamation has never had a comprehensive
Organic Act defining its mission.
With Reclamation's construction program essentially completed and
lacking clear direction on its future mission, the agency has struggled
over the past two decades to define that mission. Beginning in the mid-
1980's, Reclamation's leadership went through a series of internal
assessments. These efforts were intended to set a clear direction for
the future of Reclamation. However, under three different
Administrations with basic differences in philosophy, the result was
confusing to Reclamation's customers and often demoralizing to the
agency's professional staff.
As a result of this confusion and in light of mounting complains
from water users concerning increasing and often questionable
administrative costs, then Assistant Secretary of the Interior Bennett
Raley requested that the National Research Council conduct an
independent study advising the Department on the appropriate
organizational, management, and resource capabilities necessary to meet
its mission into the 21st Century.
We applaud the National Research Council on its report and the
Bureau of Reclamation on its plan to address the recommendations in
that report. However, in order to insure that this effort accomplishes
the purpose and task requested of the Council, it is fundamentally
necessary that we are in complete agreement on what the overriding
mission of the Bureau of Reclamation must be over the next several
decades. Nowhere in the Council's report is this question addressed in
detail. The report identifies ``construction, maintenance and
infrastructure requirement'' as the Bureau's 21st Century mission
without weight.
For the most part, the construction mission of the Reclamation
Program has been completed or in the process of being completed. While
future projects or programs may be authorized and funded by Congress,
we believe construction will be a secondary mission for the Bureau in
the future.
Reclamation projects authorized by Congress continue to provide
numerous and substantial benefits for the entire United States and will
well into the future if efficiently managed and maintained. The Bureau
currently manages over 300 projects. In the next several decades, we
believe, that the primary and overriding mission of the Bureau of
Reclamation is maintaining the existing water and power infrastructure
at peak operational efficiency. As previously stated, many projects
have met or exceeded their design life and are in need of modernization
and/or rehabilitation.
Today, the Bureau of Reclamation does not have all of the tools
necessary to address emerging aging infrastructure problems. For
example, Reclamation does not have a program which enables water users
to modernize or rehabilitate their projects and payoff those costs over
time under reasonable terms and conditions. Such works are considered
operation and maintenance and consequently the costs must be paid back
in the year that they occur. This is a problem that, if not addressed
as part of this evaluation, will result in severe consequences sooner
rather than later.
In addition, it is not clear to us that the Bureau of Reclamation
has an accurate grasp of the scope of the problem West-wide. The
National Water Resources Association is in the process of attempting to
conduct a survey of water infrastructure repair needs throughout the
West. It is our hope that, with the information we obtain through our
survey and with Reclamation's assistance and the information they
currently possess on the condition of their projects, we will be able
to provide Congress with a ``blue print'' of the rehabilitation and
modernization requirements and associated costs over the next several
decades.
In February, Commissioner John Keys requested that the National
Water Resources Association coordinate and facilitate the participation
and input from the Bureau's customers on their ``Managing for
Excellence'' Action Plan. Representatives from NWRA, the Family Farm
Alliance, Western States Water Council and the American Public Power
Association met in Denver on April 27. The Bureau's ``Managing for
Excellence'' team leaders briefed us on their plan and engaged in a
frank and open discussion about our concerns and expectations. We have
agreed to meet again at the end of June when the Bureau is expected to
have more detailed recommendations to present and discuss.
In summary, we look at the ``Managing for Excellence'' Action Plan
as an opportunity for the Bureau of Reclamation and its customers to
recast the Bureau's capabilities to meet the fundamental challenge of
operating and maintaining its existing facilities at peak efficiency.
We greatly appreciate the opportunity to present to the Committee our
concerns and vision for the future mission of the U.S. Bureau of
Reclamation and are prepared to answer any question members of the
Committee may have either today or in the future.
The Chairman. That was a very, very good summary. And I
think you're right on, we must do exactly what you've said.
Mr. Donnelly. Thank you, Mr. Chairman.
The Chairman. Scott Yates, Trout Unlimited.
STATEMENT OF SCOTT YATES, DIRECTOR, WYOMING WATER PROJECT,
TROUT UNLIMITED
Mr. Yates. Thank you, Mr. Chairman. Trout Unlimited truly
appreciates the opportunity to come and comment today. We truly
appreciate the opportunity to come today and talk a little bit
about the NRC report and the Bureau's response. I direct our
water project based in Lander, WY, it's part of a Western Water
Project that we have where we work in States like Wyoming,
Montana, Colorado and Utah on streamflow issues. And while a
lot of that is State-based, obviously some of our greatest
trout fisheries are below big Bureau of Reclamation dams and
our members and the associated businesses that depend on those
fisheries are very interested in how those projects are
managed.
Our focus comes from the written testimony I have provided,
focused on four primary issues. And I'm going to just throw
those out there just briefly, and then I'm going to throw out a
little bit of a field example of how some of that has played
out in a factual context.
We focused on kind of the new mission of the Bureau, I
guess. A lot of folks have focused on the old mission of the
Bureau today. I think that mission has expanded in the--
certainly in the last 10 years, and maybe in the last 20, to
include more and more environmental measures, so we focused on
that issue and strengthening the Bureau's outreach, diverse
stakeholder partnerships, and policy consistency. As we move
from region to region working on these issues, a lot of times
we just don't see policy consistency in area offices, regional
offices.
There is a need, perhaps, for some organic legislation to
allow the good work that the Bureau does in the field with
their technical field staff to get some good things done on the
ground, perhaps not on the mainstreams, but in important
tributary environments.
And then for policies that do involve shifts in O&M
maintenance and construction in terms of outsourcing, that we
allow the Bureau to impose regulations or environmental
standards to ensure that whatever the public resources are
involved they're protected in that type of shift. We're
certainly not opposed to those types of efforts, I think that
makes a lot of sense. We've even looked at some of that stuff
ourselves in recent years. It's become more efficient in what
we do.
What I want to talk about a little bit is the South Fork of
the Snake River. I just moved around it about 3 weeks ago and
I'm looking forward to participating in Reclamation projects
and management activities and the Shoshone here in the future.
But my field experience has been in the South Fork of the
Snake.
I directed our Idaho Water Office. I initiated and directed
that project for 5 years down at Idaho Falls and helped kick
off the watershed project on the South Fork Snake.
On the South Fork, like our other Western States where we
operate, we really focus on the ground and trying to develop
stakeholder partnerships that involve Federal-State resource
agencies and, of course, the agricultural community, because we
feel that those are going to be integral to protecting strong
fisheries in the future.
On the South Fork, back in 2001, the commission kicked off
a very aggressive scientific study called the Ecologically
Based System Management Project. And the main concern is the
Yellowstone cutthroat trout was petitioned for listing under
the Federal ESA. And I think the Bureau and the other
stakeholders in the basin, including the irrigation community
and fisherman, were a little bit concerned about what the
implications were in terms of additional regulatory
constraints, and the stakeholder groups got together and
started talking about the issue early.
By 2001 the Bureau had come up with this Ecologically Based
System Management Project where they had a biological station--
one of the foremost leaders in the world in terms of big river
study and big river ecology--to take a look at the South Fork
Snake. And I think the advantage of looking at the South Fork
Snake is there is an area below a large Federal dam, where they
still had some relatively intact living environment. And the
study went on for 20 years and really didn't finish up--
actually, I think it's still finishing up on some of the lower
sections of the Snake where the other fork comes in. But some
of the conclusions were that there were ways to manage
Palisades Dam to protect and restore some of that river
environment, and I think it's important to note that those
conclusions were judged in the light of the fact that they
really needed to operate--they specifically stated they wanted
to operate within the existing river constraints and the water
operation constraints and stream storage and operations.
But all that data dovetailed with good data from the Idaho
Department of Fish and Game in terms of fish populations and
hydrologic data, instead of the assessment that was being
carried out by the Idaho State University. And what it involved
was a change in operations in the winter to actually stay a
little bit more warmer. We did not let as much water down, but
then had that hold there for a strategic time period in the
spring to release as fresher, which would then benefit the
native Yellowstone cutthroat trout.
Now the importance of this as an informational point is
that it is a little bit counterintuitive from a fishery
standpoint. We've argued for years about the importance of
waterflows. They're still important, but I think, in this
context, more important is to have a little bit of flexibility
in the winter and to move water a little bit creatively in the
spring. And I think while this is early in the stages of
implementation--we've actually implemented it for 2 years--
we're going to look forward to fish population data in the
future years to see if it is helping out. And this is not going
to be an every-year occurrence. In fact, it is unusual that we
have a lot of water like this year, as Senator Craig and
Senator Thomas noted, we may not have as much flexibility. But
the fact is the Bureau took a leadership role in developing
this information in trying to get stakeholders together where
they have not partnered as much in the past, such as the
irrigation districts and District One in Idaho, the folks at
Trout Unlimited, the Fork Foundation and then the State and
Federal agencies. We've been able to more forward, and I think
frankly it's one of the real success stories in the last few
years, and I wanted to just highlight that.
There are a lot of ways out there, as the Bureau looks at
the way it works, that we can work together to come up with
creative solutions with a lot of different stakeholders. With
the assumption that fishers and farmers can get together, I
don't think that's always the case. I appreciate the
opportunity, thank you.
[The prepared statement of Mr. Yates follows:]
Prepared Statement of Scott Yates, Director, Wyoming Water Project,
Trout Unlimited
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 lb
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
0 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:
<bullet> 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
<bullet> 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 Chairman. Very interesting. As you know, we're
approaching noon, and you've all been here a long time. I think
this is one of the more constructive hearings we've had, and I
hope that we can continue it forward. I don't know where the
momentum will come from, but I hope it comes from within the
Bureau as they push to try to accomplish what they set forth.
You can rest assured we will watch through our oversight and we
will pursue vigorously seeing to it that significant changes in
the way you do business occur so that you can remain a viable
organization in a changing environment. Thank to all of you who
came so far to help us today, we greatly appreciate it, and
your testimony will certainly be very valid and used. Thank you
very much.
The committee stands in recess.
[Whereupon, at 12:03 p.m. the hearing was adjourned.]
APPENDIXES
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Appendix I
Responses to Additional Questions
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Responses of Lloyd A. Duscha to Questions From Senator Domenici
Question 1. Generally, do you feel that Reclamation's Action Plan
is a good first step towards meeting the challenges it is currently
facing? If not, what would you suggest?
Answer. I consider the Action Plan an excellent first step. All the
issues raised by the NRC committee have been addressed. It will take
some time to develop the details and even more time to implement the
changes. I should note that the NRC report recommended that
implementation of the action plan undergo an independent review.
Question 2. Mr. Duscha, as you are aware, many complaints from
Reclamation customers focus on the cost of Reclamation services as
compared with those of the private sector.
In general, do you believe that Reclamation is overstaffed? If so,
where is it overstaffed?
Answer. The NRC committee did not review the personnel complement
in sufficient detail to draw any firm conclusions on staffing. In the
committee's review, the regional and area offices did not appear to be
overstaffed; however, there was concern that TSC might be overstaffed.
The committee recognized that additional study was needed to determine
appropriate complements. The committee provided a list of criteria that
should be considered by Reclamation as it assesses the staffing levels.
Question 3. In undertaking the report, did you find successful
examples of Reclamation outsourcing?
Answer. The answer is somewhat dependent on the definition of
outsourcing. Traditionally, Reclamation outsources its construction
activities to the private sector, as well as operation and maintenance
of Reclamation-owned facilities to local water contractors.
Observations indicated that most other outsourcing was for the more
routine support services. In the case of Parker Dam generator
rehabilitation, the committee observed successful outsourcing of
engineering and a combination of in-house and outsourced rework. The
engineering in this case was outsourced at the request of the power
customers. The committee also heard that there were instances of
outsourcing at TSC.
Question 4. Did you find instances in which Reclamation projects
were ``over-engineered,'' adding to the total cost to Reclamation
customers?
Answer. Over-engineering is a term often overused without context.
A rightful determination of over-engineering would require detailed
review of specific projects, which was beyond the committee's scope.
Many charges of over-engineering emanate from a difference in
understanding of the respective responsibilities of the involved
parties, and in viewing a short-term solution versus a life-cycle
approach. The committee did review correspondence regarding the design
of an outflow for the Carter Lakes reservoir. In this instance,
Reclamation's more conservative approach increased the cost of the
project but seemed to be justified.
Question 5. Did you find instances in which Reclamation cost
estimates were ``padded'' in order to ensure that the ultimate costs
were not above original cost estimates?
Answer. Presumably, you are referring to estimates of engineering
costs. The committee did not review such estimates. Customers claimed
that TSC was more expensive and that they added unneeded staff to the
project. This would be difficult to verify.
Question 6. How did costs of those services undertaken by
Reclamation compare with similar services undertaken by the private
sector?
Answer. The committee did not make such comparison. A detailed
study covering a representative sample of projects would be needed.
Question 7. You recognize in the NRC report that O&M, field data
collection, drilling operations, routine engineering, and environmental
studies should be ``more aggressively outsourced.''
What did you find was the greatest impediment to increasing work
outsourcing by Reclamation?
Answer. The report did not address impediments, but it appears to
me that inertia and overcoming an attitude that the private sector and
other outside interests have lesser capabilities were factors.
Question 8. What activities should not be outsourced?
Answer. Reclamation should continue to manage its high risk
facilities against physical and operational failure. This requires the
requisite management and technical competence, which can only be
maintained with institutional, hands-on experience. Overextending
outsourcing can erode these capabilities, and once the core
competencies are lost, they are difficult to regain.
Question 9. Based on the fact that few, if any, large construction
projects are undertaken by Reclamation, should any capabilities
necessary for construction of large facilities be retained in
Reclamation? If so, for what purpose?
Answer. In many instances, the repair and modernization of existing
facilities require the same or greater level of engineering and
construction expertise as required for new construction. This is
especially true for safety of dams and hydropower facilities.
Question 10. There is, from my perspective, a double-edged sword
with respect to outsourcing. While Reclamation customers want cheaper
services, we want to make sure that private-sector services are
performed competently.
How can Reclamation ensure that outsourced activities are performed
competently?
Answer. As mentioned previously, Reclamation will need to develop
and maintain the requisite managerial competence to mange private
contractors. To develop such individuals will require maintaining some
technically challenging work for in-house execution. The committee
noted that additional detailed study is needed to determine the
appropriate size and configuration of the TSC, and that such study
should be undertaken by Reclamation and be subject to external peer
review.
Question 11. With respect to the TSC, the NRC report states that
you ``question the size'' of the TSC.
What do you believe would be the optimal size of the TSC?
Answer. The committee noted that additional detailed study is
needed to determine the appropriate size and configuration of the TSC.
The committee suggested criteria that could be used but noted that such
a study should be undertaken by Reclamation and be subjected to
external peer review.
Question 12. Do you have any suggestions on how to make the TSC
more cost efficient?
Answer. The process for making TSC more cost efficient should begin
with creating a properly sized and configured organizational structure
that is consistent with the needs of the bureau and its customers. It
will need a cadre of individuals with multi-functional capabilities and
a nimble organization that is adaptable to change.
Question 13. The NRC report found that Reclamation and its customer
are facing numerous challenges with respect to aging infrastructure,
primarily with finding ways to meet the financial burden that this
poses.
From your perspective, do believe Reclamation recognizes the need
for more appropriations to be made available to perform more O&M on
existing facilities?
Answer. I believe Reclamation recognizes that additional resources
are required to overcome a maintenance backlog. A large part of the O&M
expenditures are reimbursable by the beneficiaries in the year
expended. Such repayment schedule causes hardship occasionally for
large, non-routine expenditures.
Question 14. Did you identify any other financing mechanisms that
can be made available to Reclamation customers to address the costs
associated with aging infrastructure?
Answer. The committee did not identify any extant mechanisms that
would be available to Reclamation customers. In the private sector, the
term recapitalization is used in reference to repair and replacement of
major components as a facility ages. In the Federal government sector,
a mechanism may possibly be to provide a low cost loan to the
beneficiary, to be repaid with interest over time.
Question 15. To what extent can operations and maintenance be
transferred from Reclamation to beneficiary districts in order to free
up money within Reclamation for other purposes? Which types of projects
should be transferred?
Answer. Responsibility for operation and maintenance expense of
Reclamation facilities is defined by statute and authorization. Having
beneficiaries perform some of the Reclamation O&M does not reduce
Reclamation's total obligation as the beneficiaries will be reimbursed
for their effort. On the other hand, the beneficiaries may want to
accept responsibility for reimbursable O&M under the belief that they
can accomplish it at less cost and in shorter time. Outside of the
major hydroelectric facilities and high risk dams, the operation and
maintenance functions could be transferred.
Question 16. The NRC report found that Reclamation needs to
promulgate Reclamation-wide policies and directives in order to promote
consistency and accountability within Reclamation.
To what extent can Reclamation reinstate the Reclamation
Instructions that were retired at the end of Fiscal Year 2005?
Answer. The committee was led to believe the Instructions were
retired in 1993. Although much of the material may still be pertinent,
they will have to be rewritten to reflect an empowered decentralized
organization and a higher degree of outsourcing.
Question 17. The NRC report found that there are significant
problems facing Reclamation's work force.
What suggestions do you have for Reclamation to maintain
institutional knowledge in the face of the number of projected
retirements?
Answer. One approach is to arrange transitional assignments that
pair upcoming retirees with potential replacements. Another approach is
to require that retiring employees prepare a historical record of past
events and decisions they believe can impact the future; such as, known
risk decisions that should be periodically reevaluated.
Question 18. How do you suggest that Reclamation foster
collaborative skills among its existing workforce and new employees?
Answer. Successful collaboration is largely driven by developing
the proper cultural attitude. Although there are training courses that
can aid in behavioral recognition and help instill intrinsic skills, it
is important that top management demonstrate their continual commitment
to the principle.
Responses of Lloyd A. Duscha to Questions From Senator Bingaman
Question 1. In your view, does Reclamation have sufficient
resources to carry-out the many responsibilities it is being asked to
address in the 21st Century? What is your opinion on the most serious
issue facing Reclamation in the future?
Answer. On an overall basis and on the premise that its
infrastructure inventory will not expand markedly, I believe
Reclamation has sufficient resources to discharge its many
responsibilities. However, continued pressures on limiting resources
could have an effect in the long run.
Question 2. The NRC focuses a lot of attention on the Denver
Technical Service Center (TSC). Reclamation has asserted, though, that
the TSC is competitive with private engineering firms and that water
users only pay for TSC costs if its services are required for work on
the water users' particular project.
Do you agree with Reclamation's response regarding the TSC? Is the
cost of the TSC services the primary concern or is it that it competes
with the private sector?
Answer. I am unaware of any direct response from Reclamation on
this issue. Comparing engineering costs is difficult as each project
has its own peculiar scope and complexity and there are no established
benchmarks. The committee did hear from Reclamation customers that TSC
costs more than private sector services. The TSC hourly rates presented
the committee did not appear to be out-of-line with the private sector;
however, this does not account for any differences in relative
productivity. Competition with the private sector was not a validation
factor.
Question 3. Your testimony states that Reclamation needs ``to
evaluate their inventory of assets and manage them more aggressively
over the life cycle.''
Did the NRC find serious problems with the condition of
Reclamation's infrastructure? Is there a concern among stakeholders
that a significant number of structures are not being properly
maintained?
Answer. The committee did not undertake an examination of all
facilities. The committed did observe inconsistent evaluations of
Reclamation's asset management by its customers, but did not see any
facilities that were not being adequately maintained. Aggressive
management will require consistent, detailed condition assessments
followed by planning that addresses the needs and available resources
and establishes priorities.
Question 4. You note that Reclamation needs clear, detailed policy
directives that will help guide its decentralized management style.
Can you provide some examples of situations where different
Reclamation offices have implemented inconsistent policies?
Answer. The committee's observation was based on reports from
customers, particularly the Family Farm Alliance. The committee
believed that the problems encountered at Animas-La Plata were in part
due to a lack of clear directives. As another example, the Carter Lake
Dam outflow control decisions seemed to be ad hoc. Reclamation
personnel acknowledged a need for more detailed central policy and
standards. This shortcoming is not uncommon under decentralization.
______
Responses of H. Diane Snyder to Questions From Senator Domenici
Question 1a. The NRC report states that O&M, field data collection,
drilling operations, routine engineering, and environmental studies
should be ``more aggressively outsourced where objectively determined
to be feasibly and economically beneficial.''
Do you agree with this statement?
Answer. Yes. Reclamation should probably still be in charge of O&M
for their large federally owned facilities which are unlikely to be
transferred to local sponsors. This can be viewed as an inherently
governmental function. Also, planning of locally sponsored / owned
projects, operation and maintenance of locally sponsored l owned
projects, planning and design of projects that are not necessarily
``routine'', and value engineering. The private sector is particularly
flexible and adept at developing projects that are sensitive to the
local context and innovative.
Question 1b. Which additional activities do you believe should be
outsourced?
Answer. Essentially all non-governmental functions, e.g. design,
construction, etc. They can perform oversight.
Question 1c. Are there any activities that should not be
outsourced?
Answer. Yes, those activities that are inherently governmental
(appraisal level planning) and activities related to NEPA, NHPA, etc.
Also, ACEC suggests that Reclamation is well positioned for long-range
planning activities, research (such as the hydraulic research lab in
Denver and brackish water development), possibly technical support /
oversight on locally sponsored and owned projects, and operation and
maintenance of large scale federally owned facilities with a national
interest.
Question 2. Do you believe that Reclamation work is generally of
the same quality of work performed by a competent engineering firm?
Answer. It is difficult to make a blanket statement in this regard.
It has been our experience that Reclamation's quality of work is
determined by various regions and area offices. Generally, Reclamation
work is inferior to private consultants work as noted in ACEC's written
testimony. In general, I would say it takes longer and it is less
efficient to get to the same place with Reclamation's work.
Question 3a. A common complaint from my constituents is that
Reclamation services could almost always be performed cheaper by the
private sector.
Is it your experience that Reclamation costs are higher than those
found in the private sector for similar services?
Answer. Yes.
Question 3b. If so, to what do you attribute these higher costs?
Answer. There is a basic lack of accountability and a lack of
proper budget oversight by Reclamation. Several factors which
contribute to higher costs for work performed by Reclamation included:
(1) federal wages are generally higher than private wages in certain
areas; (2) additional overhead in the form of multiple layers of
management and support personnel; and (3) less emphasis on getting
deliverables out in a timely manner. Time is money and delays are
particularly felt on the construction side.
Question 3c. In your experience, have you found instances in which
Reclamation projects were ``over-engineered,'' adding to the total cost
to Reclamation customers?
Answer. Yes, Reclamation is more entrenched in national policies
and procedures (even if some of those have sunset) that are not as
sensitive to the local context or flexible with respect to the specific
project being planned and designed. This can result in a project that
takes longer to develop and implement. Time is often the most critical
cost element in a project (3 to 10% annual increases in cost). To be
fair to reclamation staff, with Reclamation Instructions sunset they
are put in the position of having to develop policy and procedures on a
project by project basis--particularly when they are not the project
owner but are tasked with providing input 1 oversight because federal
funds are involved.
Question 4. In your experience, have you found instances in which
Reclamation cost estimates were ``padded'' in order to ensure that the
ultimate costs were not above original cost estimates?
Answer. ACEC does not have any direct experience with this.
However, we do know that other projects under Reclamation's control
have experienced significant cost escalation over time resulting in
intense scrutiny of Reclamation's procedures--a factor that influences
their input and oversight of projects that are not directly under their
control.
Response of H. Diane Snyder to Question From Senator Bingaman
Question 1. Your testimony provides several examples of situations
where public and private funding has been used for project studies that
Reclamation rejected as not meeting its standards.
Does Reclamation have clear standards and criteria for feasibility
studies and cost estimates that are useful to private engineering firms
doing work on water projects?
Answer. ACEC understands our members that have worked with
Reclamation is that the organization does not have clear procedures and
standards for feasibility studies and cost estimates. The NRC report
states Commissioner Daniel P. Beard in a memo in 1993 stated:
In order to ensure that this approach to implementing
instructions and technical is followed, all existing guidance
will be sunset at the end of fiscal year 1995 unless
affirmatively retained, or revised and reissued prior to then.
The report continues to state that even though in 2005 Reclamation
started a web-based manual the process has been slow and inadequate.
However, the directives and standards in the web-based version of the
Reclamation Manual are not as comprehensive as the older ``Reclamation
Instructions.'' The current Directive/Standard for feasibility studies
(CMP 05-02) is vague, and the documents that should address cost
estimates (BGT series) are of little value.
Also, a pattern has evolved where Reclamation projects are being
developed on a case by case basis due to the lack of (1) clear
standards and criteria (Reclamation Instructions having sunset) and (2)
a clear role for Reclamation's involvement in projects that they are
not the lead on. One of the biggest issues we have faced with
Reclamation is due to this lack of a clear role for Reclamation in
locally sponsored projects. If the project is not ``theirs'' they are
less interested in seeing it move ahead.
One recommendation made by the NRC and endorsed by ACEC is the need
for a centralized acquisition policy within the Bureau of Reclamation's
headquarters, however, still providing enough flexibility for the
different regions and district offices to function.
______
Responses of The Family Farm Alliance to
Questions From Senator Domenici
Question 1. You mention in your testimony that Reclamation should
pursue more title transfers and transfers of operational and
maintenance responsibilities to beneficiary districts.
In general, have you found a willingness of Reclamation to pursue
title transfers?
Answer. The Alliance has found that, while Reclamation policy is to
pursue title transfers, Reclamation practice discourages transfers.
Reclamation appears to support transferring title to those that can
demonstrate capability to continue operating the project. Transfers are
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. Further, such transfers will produce
an immediate positive revenue flow to the Treasury, avoid long term
federal operation and maintenance costs, and transfer the ongoing
liability and responsibility for the project from the federal
government to local interests.
Although policy makers within the Administration, at the highest
level, have supported transfers, lingering bureaucracy has proven to be
a significant impediment. Several of our 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.
Question 2. Are your members generally in favor of assuming
operational and maintenance responsibilities from Reclamation?
Answer. Family Farm Alliance members are generally in favor of
assuming operational and maintenance responsibilities from Reclamation.
Local entities throughout the west have begun to operate and maintain
federal projects under contract with the Bureau of Reclamation, with
almost uniformly better results at lower cost. Many local entities
believe that taking over federal facilities through title transfers
will serve the twin goals of strengthening local control and downsizing
the federal government to sustain a balanced federal budget. Efforts to
transfer the ownership of federal water facilities to those water user
entities that desire to obtain title should also be encouraged.
Question 3. How would you suggest streamlining the title transfer
process?
Answer. Last year marked the second time in the past decade that
the Family Farm Alliance canvassed its membership to assess
Reclamation's transfer process and identify ways to improve it. Here
are some of the priority ideas offered up by some of our members in
2005:
<bullet> Pass simple, brief and specific legislation that would
exclude title transfers from NEPA, unless there is clear
evidence suggesting that project operations will change.
Something must be done to address the unwieldy NEPA process
that currently applies to title transfer processes. Many in the
water user community have argued that NEPA should not apply to
some transfers. They strongly believe, that, because a transfer
project does not change how a project is operated, a NEPA
categorical exclusion should apply.
<bullet> Reclamation and Congress should investigate NHPA impediments
to title transfer and suggest or support, as may be
appropriate, language that would modify the requirements of
Section 106 in such instances. Part of 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.
<bullet> Develop generic legislation authorizing title transfer based
on a district's capability to assume ownership and continue
with a viable project. The condition of the projects is a major
issue in making the determination to move forward with title
transfer.
<bullet> Legislate timelines which force Reclamation to make progress
at certain milestones for specific projects. New Mexico water
users ultimately had success using this approach.
Question 4. A common complaint of Reclamation customers is that the
costs of Reclamation services are often ``significantly higher than
reasonably anticipated costs.''
To what do you attribute this statement?
Answer. This statement derives primarily from the documented first-
hand experiences of our members from throughout the West. The Family
Farm Alliance in 2005 specifically asked irrigation districts and
organizations of farmers to provide examples of: 1) poor or exemplary
project management by Reclamation; 2) management of Reclamation
projects by non-federal authorities; and 3) instances where Reclamation
is operating beyond its traditional mission. This effort led to the
development of nine individual case studies for irrigation districts
served by six Reclamation projects in five Western states. The final
report that summarizes our findings is entitled ``The Bureau of
Reclamation's Capability to Fulfill Its Core Mission: The Customer's
Perspective'', and was presented to the National Research Council Board
on Infrastructure and the Constructed Environment, Committee on
Organizing to Manage Construction and Infrastructure in the 21st
Century in June of 2005.
We support our statement based in part on case studies included in
this report. Consider the following examples:
<bullet> The Northern Colorado Water Conservancy District (District)
since 1999 has been working to complete a project that would
add an outlet to Carter Lake Reservoir. The objective of the
District has been to complete this project by April 2007 in the
most cost-effective manner possible with a total cost not to
exceed $10 million. Significant cost overruns (in some cases as
much as 77 percent) have occurred on the pre-design phases of
this project. According to the District, these cost overruns
are related to the management of the project, as is
demonstrated by the fact that as many as 17 Reclamation
employees attended a meeting to discuss a project that is
relatively small in scope and not extraordinary from an
engineering and policy perspective.
<bullet> The Pershing County Water District (Nevada) was critical of
Reclamation's cost estimates for transfer-related work that
were significantly higher than estimates prepared by qualified
consultants.
<bullet> The Santa Ynez Water Conservation District (District) serves
rural agricultural, domestic and commercial customers on 10,850
acres in Santa Barbara County, California. Over the past nine
years, the District has been faced with the challenge of
absorbing unanticipated expenditures caused by Reclamation cost
overruns on the Cachuma Project. These cost overruns have been
significant and, in the District's opinion, avoidable. For
example, Congress allocated $41.5 million for the Bradbury Dam
Seismic Strengthening Project, based on a report submitted by
Reclamation. The construction cost for the project was
completed 15% below the budget amount. Yet, amazingly, total
costs were 18% over budget, caused entirely by an 82% overrun
in the Contract Administration and Design & Specification
functions. The latter cost more than doubled, from $2.5 million
to $6.24 million.
<bullet> In the mid 1990's, Hermiston Irrigation District
participated in a safety of dams update to its facilities in
northeastern Oregon. Included in that update process was a
requirement by Reclamation to install a new backflow structure.
Despite objection from the District to Reclamation's proposed
design--which the District felt was not acceptable from an
operations standpoint--Reclamation proceeded with final design
and construction of the facility. As predicted by the District,
numerous operational problems over the next three years led to
a revised design of the structure, which the District was
required to pay for as part of the safety of dams expense.
Importantly, 55 percent of the price tag was attributed to
engineering costs generated by Reclamation staff.
Although not covered specifically in our case study report, we have
all heard concerns expressed about the costs of the Animas-La Plata
Project, which were approximately 50% over prior estimates. I believe
two other witnesses who submitted testimony at your May 23, 2006
hearing--Mr. Bennett Raley and Ms. Diane Snyder--have addressed this
issue in further detail.
Question 5. How do you suggest we reduce the costs associated with
Reclamation services?
Answer. We have recommended several means of reducing costs
associated with Reclamation services, and these are included in our
written testimony. They include the following:
<bullet> Reclamation should develop and implement a transition plan
to achieve an agency with ``right-sized'' design, estimating
and construction management staff;
<bullet> 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;
<bullet> Reclamation proposes reductions at Technical Service Center
that are real and not achieved by reassignments to the Regions
or reclassifications of existing job categories;
<bullet> 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;
<bullet> 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.
<bullet> 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).
<bullet> 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.
Question 6. How do you suggest that Reclamation maintain
appropriate oversight of outsourced work to ensure that it is performed
in a competent manner?
Answer. I believe Bennett Raley's observations on this issue, as
identified in his July 19, 2005 letter to NRC Committee Chairman
Mitchell, best apply here. Reclamation 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.
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 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.
Reclamation itself already hires outside consultants to assist it
in dam safety peer reviews, and some of the outside consultants were
trained by Reclamation. There are many highly qualified engineers that
work elsewhere in the profession.
Question 7. You propose a reduction in the staff of the TSC. How do
you reach this conclusion? What, from your perspective, would be the
optimal size of the TSC?
Answer. The optimal size of the Technical Services Center (TSC) can
be ascertained by developing and implementing a transition plan to
achieve an agency with ``right-sized'' design, estimating and
construction management staff. We believe that a review of the list of
programs and activities that are carried out from the TSC would reveal
a number of functions that may fall outside of the definition of
``management'' or an ``inherently governmental activity'' associated
with Reclamation. Much of this work is important, legally mandated, and
involves many people who are respected professionals. However, we
believe other federal agencies, the private sector, and universities
can also perform much of this work.
The Family Farm Alliance believes that Reclamation can propose
reductions at the TSC that are real and not achieved by reassignments
to the Regions or reclassifications of existing job categories. This
conclusion is based on findings from the aforementioned 2005 case study
report, and is bolstered by comments that we heard at a Reclamation
stakeholder meeting held in Denver this past April. At that meeting,
stakeholders expressed concerns regarding the TSC being overstaffed and
assigning too many people to projects. The Family Farm Alliance and
other customer representatives in Denver stated their wishes to see the
TSC staffed to maintain core capabilities at the leanest levels.
Question 8. In your testimony, you mention the need for Reclamation
to do a better job of soliciting comment from customers and
stakeholders. How do you propose improving stakeholder and customer
involvement in decision making?
Answer. Reclamation should revise 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.
At Reclamation's April 27, 2006 National Stakeholder's Meeting on
Managing for Excellence, held in Denver (noted in our response to
question #7, above), it was clear that customers were interested in
gaining a better understanding of Reclamation's business model,
particularly how costs are charged, accounted for, allocated, reported,
billed, etc. Most importantly, customers want to understand what they
are being billed for. This information could be provided through
workshops held with regional constituents on charging and allocation
processes.
Stakeholders are frustrated that their input to budget formulation
seems to go unused and that they are not provided feedback on status of
budget requests. For example, Reclamation has not always been
responsive to their questions regarding costs/charges and needs to
communicate more readily with customers.
We would like to provide more input on O&M planning and budgeting.
Since the budgeting process prohibits Reclamation from sharing
information, water customers would like to provide more input early in
the budget development process to assist in making decisions regarding
requested funds.
We would like this outreach to be more consistent across the West.
Several area offices have been more successful at integrating customer
outreach in O&M Planning and the Budget Process. The processes used at
these offices should be applied elsewhere as a model or best practice.
The funds requested from Congress for long-term planning should
extend beyond O&M Planning to also include rehabilitation and eventual
replacement costs. Multipurpose costs should be explained upfront in
more detail, and districts would like some control over how
multipurpose costs are spent.
Responses of The Family Farm Alliance to
Questions From Senator Bingaman
Question 1. Reclamation asserts that its customers do not pay for
the services of the TSC unless it is used for planning, design, and
construction activities related to the customer's project. Do you
agree? If customers are given the option to use other engineering
services for projects in which the customers pay 50% or more of the
cost, would the FFA still be concerned about the staffing levels at the
TSC?
Answer. Based on discussion at Reclamation's April 27, 2006
National Stakeholder's Meeting on Managing for Excellence (held in
Denver), it is clear that Reclamation believes stakeholders have little
understanding of the TSC, including how it is funded and its size,
function, workload, and operating practices. At the Denver meeting, we
were told by a TSC employee at that meeting that roughly 80% of TSC
staff time can be linked directly to specific project work. It appears
that the actual billing rate utilized is developed to reflect the 20%
``non-direct charge'' nature of this work.
We believe that continued cooperation and educational exchange
opportunities between Reclamation and its customers, similar to the
approach-laid out in Managing for Excellence, will lead to a mutual
understanding of this matter. Whether Reclamation's customers are
paying only for project-specific TSC services or not, customers are
definitely concerned about perceived excessive TSC charges being racked
up on those specific projects. As the Managing for Excellence action
plan is implemented, the optimal size of the TSC can be ascertained by
developing and implementing a transition plan to achieve an agency with
``right-sized'' design, estimating and construction management staff.
Question 2. Please provide a more detailed explanation of the use
of ``performance-based'' standards instead of ``design-based''
standards.
Answer. When we use the term ``design-based'' standards, we are
referring to the actual design and construction of facilities. A
``performance-based'' approach refers to the appropriate role of
establishing performance or other standards to meet minimum engineering
requirements. It is well accepted that Reclamation should be
responsible for establishing appropriate design standards for work on
federally owned structures. However, we also believe that it would
helpful 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.
There is a perception with some western water users that
Reclamation ``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 public safety
issues, it is not necessarily appropriate for work funded by water
users that does not present serious public safety risks. In some cases,
certain districts (unlike Reclamation) may be willing to take on
liability associated with less robust designs on non-critical projects.
These issues can quickly move beyond engineering criteria to
fundamental policy decisions that undermine balancing of risks in an
environment where financial resources are limited. Greater
opportunities may exist for innovation and efficiency and should be
considered when analyzing engineering standards. One suggestion would
be to provide for a quick ``mini-peer review'' involving outside
consultants that project sponsors could utilize for disputes\1\
---------------------------------------------------------------------------
\1\ Bennett Raley letter to Dr. James K Mitchell dated July 19,
2005, pp. 9-10.
---------------------------------------------------------------------------
______
Responses of Scott Yates to Questions From Senator Domenici
Question 1. Do you believe that environmental restoration
activities should be a focus of Reclamation or do you feel that these
activities are better carried out by other federal agencies?
Answer. Yes, environmental restoration activities should be a core
component of the agency's management of its own projects. We do not
mean to imply that Reclamation should usurp other federal agency's
roles and responsibilities. Rather, with regard to operation of
Reclamation projects, no other agency has the authority to determine
appropriate mitigation for Reclamation projects absent Endangered
Species consultation authority with either NOAA or the Fish and
Wildlife Service.
According to the agency's website, Reclamation's mission is to
``develop, manage, and protect water and related resources in an
environmentally and economically sound manner in the interest of the
American public.'' As such, it seems clear that Reclamation would be
unable to achieve its mission without engaging in environmental
restoration activities, especially as they relate to ongoing impacts
from Reclamation projects. The NRC report states that Reclamation needs
to focus on ``sustaining its facilities, infrastructure, and resources,
as well as responsibly managing the environment'' (page 23). In other
words, Reclamation needs to take an active role in addressing
environmental challenges created, in part, by the agency's projects.
As a practical matter, Reclamation personnel are best suited to
guide and conduct environmental restoration activities related to
Reclamation projects because of their first-hand knowledge of each
project and its impacts. The Bureau has programs in place, such as the
Water Conservation Field Services Program, that include engineering and
environmental staff members that are able to identify partnership and
restoration opportunities in river drainages with Reclamation projects.
Such programs should be fully funded and directly identified and vested
as a core program for the agency so that important restoration goals
and objectives are met.
Question 2. From your perspective, has Reclamation done an adequate
job of soliciting comment from the environmental community? If not, how
would you improve their relationships with the environmental community?
Answer. Unfortunately, Reclamation has not always engaged a diverse
array of stakeholders in a meaningful way. This is a programmatic issue
for Reclamation in terms of developing and institutionalizing broader
consultation strategies, but it also implicates the agency for lack of
consistency agency-wide. It is important to note that informal
consultation and soliciting input from stakeholders such as TU goes
beyond formal decisions that involve compliance with broad federal
environmental statutes such as the CWA, ESA, or NEPA. This is
particularly important in light of the fact that the agency has managed
to largely insulate itself from NEPA compliance. For instance,
Reclamation water delivery contracts are subject to renewal only once
every 40 years. Even then some contracts are not subject to NEPA if
Reclamation determines that no ``significant changed circumstances''
exist.
The bottom line is that Reclamation regional and area offices often
make operational proposals or take various actions that do not always
invoke substantive or procedural laws or regulation, but still have
prospective impacts. Some Reclamation offices are better than others at
identifying such situations, but the agency is far from consistent in
working with TU and other members of the environmental community on a
broad spectrum of issues, not just when required by the law to do so.
One way to improve communication and collaboration with
stakeholders, including conservation organizations, would be for
Reclamation leadership in DC to clearly provide direction to the
regional and area offices to engage non-traditional partners on
operational and other Reclamation issues that could impact river
management or health. This would include existing direction that Bureau
staff participate in watershed restoration efforts underway in project
basins, such as creating and implementing TMDLs to manage water quality
impacts below Reclamation dams. Not only would Reclamation's pro-active
engagement better comply with federal Clean Water Act requirements, but
it would provide an opportunity for the Bureau to improve its relations
with diverse stakeholders. Reclamation leadership should make it clear
that staff time spent on such watershed restoration activities (and
compliance with federal law) is expected, encouraged, and will be
rewarded.
In addition to focusing Reclamation staff in general terms on
watershed activities and existing multi-stakeholder efforts to assess
and identify water management issues and solutions, the agency could
also better utilize existing authority, such as the Fish and Wildlife
Coordination Act consultation provisions, to engage the environmental
community and other local participants. The statute provides an
underutilized framework, and therefore a built-in starting point, for
setting up and establishing guidelines for Reclamation to engage the
public regarding agency activities and water management issues.
Question 3. Do you believe that Reclamation has adequate staff to
engage the environmental community and the appropriate state and
federal agencies in making decisions regarding project operations?
Answer. The answer to this question varies widely from region to
region and state office to state office. For example, as discussed in
more detail in my written testimony regarding the Sun River,
Reclamation officials in Montana cite lack of staff as the reason they
have not completed a reservoir operations model re-run for two full
years that has been requested by the multi-stakeholder Sun River
Watershed Group as a way to begin implementation of the EPA-approved
TMDL on the Sun River. At the same time, the Pacific Northwest Regional
staff has been able to cover a tremendous amount of ground in Oregon,
Washington, and Idaho in response to both issues related to dam
operations and field-based partnerships to restore important tributary
habitat. The difference between regions may not necessarily involve
understaffing or limited resources, but merely the lack of support and
clear direction from Washington, DC that collaboration and
communication with diverse stakeholders would improve the situation.
Responses of Scott Yates to Questions From Senator Craig
Question 1. I see in your written testimony you have recommended
that the Bureau should also look into 3rd party costs and benefits. The
water that is spread over these projects covers critical wildlife
habitat that have advocacy groups and critical farm ground that
supports communities. Therefore, how would you propose those 3rd party
cost/benefits be calculated and who is the ``3rd party''? Also, for
your group to receive greater ``benefits,'' would you be willing to pay
for those project upgrades?
Answer. A mitigation duty exists for Reclamation because of the
adverse impacts to water quality and fish and wildlife habitat caused
by its projects. Federal law already largely defines the extent of this
duty, such as compliance with the Endangered Species Act, Clean Water
Act TMDLs and state water quality standards. Current project
beneficiaries need to pay for actions necessary to meet these mandatory
mitigation duties just as rate-payers pay for mitigation requirements
at FERC-licensed hydro dams.
On the other hand, the costs of conservation benefits that are over
and above mandatory mitigation requirements may need to be paid for
from some type of payment pool created by all benefiting parties.
Discussions over the past few years amongst stakeholders in the Henry's
Fork drainage have focused on identifying creative operational
strategies to reduce drought year impacts on the phenomenal wild trout
fishery below Island Park Dam. Much like on the South Fork Snake, these
groups have been successful in identifying scenarios during dry years
where water can be moved downstream in the winter and earmarked in
American Falls Reservoir--this has resulted in increased fishery flows
during the critical winter time period for fish and additional power
generation with little increase in risk for Reclamation or the
irrigators regarding meeting storage rule curves or contractual
delivery obligations.
At the same time, TU and others have thrown out additional
scenarios that would involve more water during the winter time period
and a corresponding increased risk that the reservoir will not refill.
The idea in this case would be to create a fund whereby the risk for
such a strategy does not fall on irrigators, but rather a fund is
created to reimburse irrigators if such operations result in water not
being stored and delivered pursuant to contractual obligations.
Obviously, this is a difficult topic and there is not yet consensus in
the Henry's Fork watershed regarding such an alternative. But creating
a drought pool where, under certain circumstances, Reclamation and the
irrigation community would be indemnified for taking additional water
management risks is one example of where conservation groups would be
willing to seek private, state, tribal, and federal funding sources to
provide increased resource benefits.
Question 2. At this point, has there been a change in Bureau of
Reclamation priorities because of this study? If so, what has moved up
on the priorities and what has suffered?
Answer. It is too early to tell. Reclamation's action items set
forth in it plan responding to the NRC report will not be complete
until December 2007. However, our initial conversations with the agency
reflect an urgency to work with stakeholders regarding the issues and
recommendations identified in the NRC Report. Most importantly from
TU's perspective, the agency appears willing to intensify efforts to
engage conservation groups, along with traditional project
beneficiaries, as the agency reflects on its approach and assesses
possible organizational and institutional change regarding how it
manages Reclamation projects and water in the West.
Response of Scott Yates to Question From Senator Bingaman
Question 1. In your review of Reclamation's Action Plan do you
believe that it is giving appropriate consideration to the conservation
and protection of water and related resources as a core part of its
mission in the future? If not, how do you think that mission can be
enhanced within Reclamation?
Answer. Some parts of the action plan give appropriate
consideration to conservation and protection, some parts do not, and
some parts are too broad to be able to asses whether or not the agency
contemplated conservation and protection.
Some parts of the action plan are too broad at this point to
determine whether or not the agency is giving appropriate consideration
to conservation and protection. For example, one action item identified
in the plan related to major repair challenges reads ``[d]evelop
processes or measuring tools to determine whether a major repair
project is warranted.'' One way to enhance Reclamation's conservation
and protection mission would be to include consideration of water and
natural resources impacts as part of such processes developed by agency
officials.
Other parts do not sufficiently address conservation and
protection. The action plan states that determining and achieving the
appropriate level of future construction is a key assessment that must
be considered in looking to the agency's future. The plan defines
future construction to include major repairs of existing infrastructure
and salinity control projects. Unfortunately, neither the functional
areas to be evaluated nor the benchmarks set forth in the plan for
future construction mention consideration of impacts to water and
related resources. A clear identification of consideration of such
resources would. strengthen the action plan.
On the other hand, some components of the plan appropriately
consider conservation and protection. For example, the plan sets forth
key issues that must be addressed prior to contemplating any future
transfers of O&M including how to ensure that Federal responsibilities
such as environmental, recreation and cultural resources are met.
With respect to better enhancing the conservation and protection
mission overall within the agency, Trout Unlimited strongly recommends
that the Committee either provide additional statutory authority to the
agency to do so or require the agency to vigorously use existing legal
mechanisms, such as the Fish and Wildlife Coordination Act. Reclamation
has proved a valuable partner in numerous tributary habitat restoration
projects in the Pacific Northwest, but the agency should identify how
to expand their reach throughout the West to fund actual construction
costs throughout mainstem and tributary reaches in watersheds where
Reclamation dams exist.
______
Responses of Thomas F. Donnelly to Questions From Senator Domenici
Question 1. Mr. Donnelly, you state in your testimony that
Reclamation customers frequently complain about the administrative
costs associated with Reclamation services.
Why do you believe costs for Reclamation services exceed those
found in the private sector?
Answer. I can't say with any degree of certainty that Reclamation's
costs of services are significantly greater than the private sector.
All of the complaints that our member have voiced are antidotal.
However, on some recent projects (i.e. Animas-La Plata) excessive
administrative costs have been applied to the projects. For more
detail, I would refer the Committee to former Assistant Secretary of
the Interior Bennett Raley. Regardless, this issue should be addressed
by the Bureau of Reclamation as part of the ``Managing for Excellence''
process.
Question 2. Do you believe that this is a result of overstaffing at
Reclamation?
Answer. Again, we are hopeful that the ``Managing for Excellence''
process will include a critical assessment of the Bureau's future
staffing needs. We are concerned that the Bureau has maintained
capabilities which were required for their construction mission of the
past, but are no longer necessary for their maintenance mission of the
future.
Question 3. In your testimony, you mention the hardship that
current annual repayment schedules impose on Reclamation customers and
the need to ease that burden.
Have you encountered situations in which your members are not able
to meet their O&M obligations?
Answer. Yes, but for a number of reasons. On single purpose
irrigation project, particularly in the northern tier States where
there is only one growing season, project beneficiaries have struggled
for years to meet their annual O&M obligations. When rehabilitation of
project facilities becomes necessary it is often deferred because the
beneficiaries can not repay the cost within the year they are
incurred.. When this happens deferred maintenance often becomes
critical maintenance. This is a huge issue in the context of the
Bureau's aging infrastructure.
Question 4. How do you suggest that we meet this need? What
alternative financing mechanisms do you propose to help Reclamation
customers meet the O&M costs allocable to them?
Answer. It is important to distinguish between routine operation
and maintenance costs and modernization and rehabilitation needs. Often
the Bureau is forced to blur that line because they have no available
option. Over the past two years, we have engaged in discussions with
Bureau representatives concerning this problem. Unfortunately, the
Bureau of Reclamation is tremendously restrained with what it can offer
as a solution by the Administration's Office of Management and Budget
and consequently, unable to think ``outside the box.'' Recently, the
Bureau has discussed with us the possibility of a program of loan
guarantees as a solution. In some instances, loan guarantees can work,
but loan guarantees do not offer a comprehensive solution. We believe
there are a number of potential solutions, some using existing
authority and others requiring new program authorization. Modernization
and or rehabilitation of these projects could be accomplished through
various means: project specific authorization (amendment of original
authorization or new authorization) and appropriations, a
congressionally authorized U.S. Bureau of Reclamation modernization and
rehabilitation program, an infrastructure revolving fund or use of the
existing Reclamation Fund. A restructuring of the Reclamation Fund,
established under Section 1 of the Reclamation Act of 1902 (32 Stat.
388; 43 U.S.C. 391), is an example of a potential solution using
existing authority. The ``Fund'' currently has approximately $4.5-5.0
billion in it. In reality, it was envisioned to address both new
project construction and the modernization and rehabilitation of the
existing infrastructure.
Question 5. Have you conducted a preliminary assessment of
Reclamation infrastructure repair needs? If so, what is your estimate?
Answer. We are in the process of conducting a survey of project
facilities Westwide to determine the scope of the aging infrastructure
problem as it relates to Bureau of Reclamation facilities. To date we
have only received between 20 and 30 responses. Most of the responses
are from projects in the Pacific Northwest. We are hopeful that the
information we gather through this survey combined with information the
Bureau possesses on its projects can be combined to provide Congress
with a ``blueprint'' of aging infrastructure funding needs over the
next several decades.
At this time, we can not provide the Committee with an accurate
estimate.
Question 6. You mention in your testimony that your organization
has been asked to participate in the promulgation of Reclamation's
Action Plan.
Generally, do you believe that Reclamation has solicited
stakeholder and customer perspectives in responding to the NRC report?
Answer. I believe that the leadership of the Bureau of Reclamation
and the Department are making every effort to include the Bureau's
customers in addressing the recommendations in the NRC report.
Customer input is being actively sought and I am confident will be
seriously evaluated.
Response of Thomas F. Donnelly to Question From Senator Bingaman
1. Do you think that Reclamation's mission in future should include
an active role in helping municipalities, Indian tribes, and other
rural communities address their future water needs, or should
Reclamation be limited to focusing its attention on existing water and
power infrastructure?
Answer. [None given.]
______
[Responses to the following questions were not received at
the time hearing went to press.]
U.S. Senate,
Committee on Energy and Natural Resources,
Washington, DC, May 30, 2006.
Hon. Lynn Scarlett,
Acting Secretary, Department of the Interior, Washington, DC.
Dear Madam Secretary: I would like to take this opportunity to
thank you for sending Mr. William Rinne to testify before the Senate
Committee on Energy and Natural Resources on Tuesday, May 23, 2006, to
give testimony regarding 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.
Enclosed herewith please find a list of questions which have been
submitted for the record. If possible, I would like to have your
response to these questions by Monday, June 12, 2006.
Thank you in advance for your prompt consideration.
Sincerely,
Pete V. Domenici,
Chairman.
[Enclosure.]
Questions From Senator Domenici
Reclamation's Action Plan, identifies 41 ``action items'' that,
according to Reclamation, require thorough analysis and decision
making.
Question 1. When will you complete analysis required to implement
the Action Plan?
Question 2. When will you complete implementation of the Action
Plan?
Question 3. Do you believe that any legislation is. needed in order
to implement this plan?
Mr. Rinne, I am particularly concerned with Reclamation's ability
to maintain its existing infrastructure. Reclamation facilities
represent a public investment of approximately $250 billion.
Additionally, many rely on water and power that the facilities provide.
The average Reclamation facility is over 50 years old. Some Reclamation
facilities are over 90 years old. In many instances, these facilities
have exceeded their original operational lives. Meeting increasing
operations, maintenance and rehabilitation obligations in light of
budget cuts will prove especially challenging for Reclamation and its
customers. For this reason, we need to ensure that costs passed on to
customers provide Reclamation customers with the greatest value.
Question 4. Do you believe that OMB appreciates the increasing
budgetary burden that O&M obligations on these facilities will impose
on Reclamation? If so, how does the Administration justify a proposed
cut of 13 percent to Reclamation's budget for FY2007?
Question 5. In general, how do you plan to meet increasing O&M
obligations and protect the federal investment in Reclamation projects?
As you are aware, Reclamation customers are responsible for
repaying O&M costs annually. The NRC report found ``some water
customers already find full payment of O&M activities difficult and
major repairs and modernization needs . . . cannot be met under the
current repayment requirements.''
Question 6. Have you encountered situations where customers are not
able to meet their O&M costs obligations? If so, have you explored any
options for helping them meet his burden? If so, what?
Question 7. Are you concerned that if adequate sums are not made
available for O&M obligations, that it would put the structural
integrity of some Reclamation facilities at risk?
As you are aware, some overhead costs within Reclamation are passed
on to its customers. Many customers claim that ``overstaffing'' within
Reclamation is the reason costs are much higher than they would be in
the private sector. However, the NRC report also recognizes the need to
maintain ``core competencies'' in order for Reclamation to be a smart
purchaser of private sector services.
Question 8. How do you plan to address the claims of customers that
overstaffing exists within Reclamation and that the overstaffing
results in excessive costs to Reclamation customers?
Question 9. Do you plan to undertake any outreach efforts to
justify the need for Reclamation's workforce and the cost associated
with the current workforce?
Question 10. Based on the fact that few, if any, large construction
projects undertaken by Reclamation, should capabilities necessary for
construction of large facilities be retained in Reclamation?
Of great concern to me is the problem of attrition which is
currently facing Reclamation. The NRC report recognizes that, because
of the aging workforce, a large number of staff will be retiring soon.
Question 11. How do you plan to recruit employees to address
problems with attrition within Reclamation, including the retention of
institutional memory?
Question 12. How do you plan to remain competitive with the private
sector in order to attract new employees?
Question 13. Do you believe that Reclamation has adequate training
programs underway in order to ensure that new and existing employees
have the collaborative skills they need?
It is my understanding that services undertaken by the TSC have
been benchmarked against similar services undertaken by the private
sector.
Question 14. What have you found in these benchmarking activities?
Have you found that TSC services are generally more expensive than
comparable services in the private sector?
The NRC report states that while it does not question the need for
the TSC, it does question the size.
Question 15. Do you agree that the TSC employs too may people? If
so, do you believe that fact significantly contributes to the cost of
TSC services?
Mr. Rinne, the FY2003 Omnibus Appropriations Act contained a
provision requiring Reclamation to use the private sector for 10
percent of its planning, engineering and design work in fiscal year
2003, and 10 percent in each subsequent year until the level of work is
at least 40 percent.
Question 16. Has Reclamation complied with this statutory mandate?
Question 17. What is the current amount of outsourced work in these
areas?
According to OMB Circular A-76, ``commercial activities should be
subject to the forces of competition.'' The Circular also states that
``the government shall perform inherently governmental activities.''
Question 18. What activities would you define as ``inherently
governmental'' and which activities do you believe should be subject to
the forces of competition?
Question 19. Do you agree with the NRC report's finding that
Reclamation could outsource more?
The NRC report states that O&M, field data collection, drilling
operations, routine engineering, and environmental studies should be
``more aggressively outsourced where objectively determined to be
feasibly and economically beneficial.''
Question 20. Do you agree with this statement? How do you plan to
determine which services can be outsourced more ``aggressively
outsourced''?
Former Assistant Secretary for Water and Science, Bennett Raley,
who requested the NRC report, found ``construction functions can almost
always be performed cheaper and more efficiently by districts or
private companies.'' I have heard similar complaints from Reclamation
customers as well.
Question 21. Is it your experience that Reclamation costs are
higher than those found in the private sector for similar services? If
so, to what do you attribute these higher costs?
Question 22. Generally, do you believe that increased outsourcing
would result in cost savings to Reclamation customers?
The NRC report recognizes that some technical capabilities need to
be retained within Reclamation so that it can remain a smart purchaser
of private sector services.
Question 23. How do you plan to determine what level of technical
capabilities need to retained? Should these technical capabilities be
retained at the TSC, regional, area or project offices?
Mr. Rinne, a frequent complaint I hear from Reclamation customers
is that they often do not feel included in decision-making processes
and it is not clear how Reclamation makes decisions. Based on the NRC
report, it appears that many of the complaints that customers and
stakeholders have with Reclamation would disappear if Reclamation
included them in the decision-making process and were more transparent
in their operations.
Question 24. Do you agree with the NRC report that providing for
stakeholder involvement will make it easier for Reclamation ``to obtain
buy-in from sponsors and stakeholders''?
Question 25. What successful models within Reclamation can you
point to regarding stakeholder involvement?
The Reclamation Action Plan states ``it is critical that we
maintain and strengthen our capability to work with our many
stakeholders.''
Question 26. What additional skills do you believe need to be
fostered among Reclamation employees in order to improve relationships
with customers and stakeholders?
Question 27. How do you plan to foster these skills?
At the end of Fiscal Year 2005, then-Commissioner Beard retired a
comprehensive set of policy statements and procedural directives call
``Reclamation Instructions.'' This resulted in a lack of policy
guidance. Although a new Reclamation Manual has been developed, the NRC
states that ``it is incomplete.''
According to the National Water Resources Association the
retirement of the Reclamation Instructions had a ``profoundly negative
effect on the organization.''
Question 28. Do you agree with the NWRA's statement?
Question 29. Do you believe that the revocation of the Reclamation
Instructions resulted in a lack of consistency within Reclamation and a
lack of accountability among Reclamation employees?
The NRC report recommends that Reclamation ``should promulgate
policy guidance, directives and how-to documents.''
Question 30. Do you agree with this statement?
Question 31. To what extent can the Reclamation Instructions be
reinstated?
Question 32. Do you agree with the finding of the NRC report that
Reclamation should ``establish a structured project management
process'' with respect to cost estimating? When will Reclamation's
directives on cost estimating be implemented?
Question From Senator Craig
Question 1. As recognized in the NRC report, rehabilitation costs
are becoming increasingly burdensome to our water users. Can you tell
me how the Bureau intends to fix this problem and what the time frame
may be?
Questions From Senator Burns
In your report, ``Managing for Excellence'' you highlight several
questions surrounding major repair challenges. This includes how do you
help customers finance their share of major repair projects?
Question 1. What progress have you made on finding workable
solutions to the ``major repair challenges'' you face?
In recent years, the Sun River Watershed Group in Montana, a group
that includes the irrigation districts and other interested
stakeholders, has come together to explore ways to restore flows to the
Sun River and thereby protect and enhance the Sun's wild trout fishery.
The river is the site of a 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.
Recently, 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.
It is my understanding that some time ago Bureau representatives
agreed to re-run the reservoir operations model to determine if there
is some flexibility to increase winter flows. 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.
Question 2. Does the Bureau plan to re-run the reservoir operations
model and share the results with the Sun River Watershed Group? If yes,
please tell me when this will occur. If no, please elaborate as to why.
Questions From Senator Bingaman
The NRC testimony references the budget constraints that
Reclamation has to deal with.
Question 1. In your view, has Reclamation's mission expanded beyond
what it can effectively manage given its budget constraints? Is there
room for making the organization more efficient, thereby increasing its
capacity for on-the-ground activity that will benefit communities west-
wide?
As I noted in my opening statement, there has been much frustration
in New Mexico due to Reclamation's lack of clear standards for project
planning and cost estimates. Moreover, we continually hear Reclamation
testimony before this Committee objecting to various projects and
activities on the grounds that the engineering studies and cost
estimates provided by the proponents do not meet Reclamation's
feasibility study standards. The ACEC testimony on Panel 2 provides
some examples.
Question 2. Does Reclamation have clear standards for feasibility
studies? Does it have clear standards for developing cost estimates?
How is this whole issue being addressed in the Action Plan?
Concerns have been raised that title transfers or O&M transfers, in
which the federal nexus is diminished, could result in the loss of
attention on the restoration of river health in a number of areas.
Question 3. Is the Action Plan looking at this issue? Is there a
way to engage in title and O&M transfers while still ensuring that
environmental issues will continue to be addressed?
Question 4. Is the Action Plan looking at the role of the National
Historic Preservation Act in title transfers?
NRC's testimony recommends that Reclamation formulate comprehensive
O&M plans to help develop fair and affordable repayment schedules.
Question 5. Is such a plan in the works? If so, when do you expect
to finish it? How does Reclamation currently handle payment for large
rehabilitation projects such as dam safety repairs? Does Reclamation
anticipate needing new authority in the future to help it address the
issue of paying for the upkeep of aging infrastructure?
Please provide a detailed explanation of the process by which
Reclamation assesses annual O&M charges to its customers.
Question 6. Is all O&M, including large-scale rehabilitation/repair
projects, required to be paid back on an annual basis?
Question 7. How are repairs paid for pursuant to Reclamation's Dam
Safety Program?
Trout Unlimited's testimony expresses concern about Reclamation's
failure to participate in the Sun River Watershed Group's request for
model runs to assess new reservoir operations that might improve
watershed health.
Question 8. Why hasn't Reclamation been willing to model
alternative reservoir operations?
Appendix II
Additional Material Submitted for the Record
----------
Statement of Bennett W. Raley
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 non-federal 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.
______
Bennett Raley,
Centennial, CO, July 19, 2005.
Dr. James K. Mitchell, Sc.D., P.E.,
Geotechnical Engineer, Virginia Tech University, Blacksburg, VA.
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.
background
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 government.
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 20 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 that 1994-5 ``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.
project scope
The Office of the Assistant Secretary for Water and Science drafted
the Project Scope\1\ 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.
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\1\ See http://www4.nas.edu/webcr.nsf/
5c50571a75df494485256a95007a091e/
09caed00ca8dce0b85256f8d00601302?OpenDocument&Highlight=O,reclamation.
---------------------------------------------------------------------------
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:
<bullet> 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.
<bullet> 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.
<bullet> 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 Reclamation supervision.
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 found them.
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.
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\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 clients.
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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 Reclamation.
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 non-reimbursable fiscal resources.
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 user-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/htmi/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 structure.
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, the inability 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.
Sincerely yours,
Bennett W. Raley.