National Research Council’s Managing Construction and Infrastructure in the 21st Century Bureau of Reclamation and the U.S. Bureau of Reclamation’s Managing for Excellence: an Action Plan for the 21st Century 

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

before the

Committee on Energy and Natural Resources
United States Senate

May 23, 2006
 
 Good morning, Mr. Chairman and members of the Committee.  My name is Lloyd Duscha.  I am retired from the U.S. Army Corps of Engineers, and I served on the National Research Council committee that authored the report Managing Construction and Infrastructure in the 21st Century Bureau of Reclamation.  The report was requested by the Department of Interior.  The National Research Council is the operating arm of the National Academy of Sciences, National Academy of Engineering, and the Institute of Medicine of the National Academies, chartered by Congress in 1863 to advise the government on matters of science and technology.  It is a pleasure to be here to discuss our report on this important topic. 

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:

• Environmental factors.  The environmental revolution of the last decades of the twentieth century imposed new requirements to protect ecosystems and mitigate the impact of development on fish and wildlife.  Engineers and builders must be both environmental experts and water resource experts.
• American Indian water rights and rural water needs.  American Indian water agreements and growing demands to provide adequate supplies of good quality water to small rural communities place new demands on the regulation of river flow and storage and distribution systems.
• Urbanization.  Land is being taken out of agricultural production in many areas of the West and being developed for industrial, commercial, and residential purposes.
• Increasing budget constraints.  Reclamation's budget has been effectively shrinking for many years, even as the needs have increased.
• Broader set of stakeholders.  Water users of all types—farmers, power distributors, consumers, homeowners, environmentalists, Indian tribes, and virtually everyone else who uses water and power in the 17 western states—are impacted by and pay in some way for what the bureau does. 
• Aging workforce.  Reclamation’s skilled and experienced personnel will be retiring in large numbers over the next 5 to 15 years.
• Aging infrastructure.  Most of Reclamation’s major dams, reservoirs, hydroelectric plants, and irrigation systems are 50 or more years old.
• Shift from design and construction to operations and maintenance.  Operations and maintenance (O&M) activities will form a major part of the workload.
• Title transfer.  Transferring ownership of government-owned facilities to nonfederal agencies and the private sector, while reducing Reclamation's O&M workload, introduces budgetary and oversight issues that may necessitate new business models.
• Water user operation of government-owned facilities.  Reclamation has turned over and will undoubtedly continue to turn over some of its facilities to water user groups, often local water districts, for operation, maintenance and—sometimes—rehabilitation and new construction.
• New modes of augmenting the water supply.  In the absence of significant climate change or major technological breakthroughs, water resources will remain constant, while demand can be anticipated to increase.
• Increase in the number of small projects.  Although demand for large new projects will remain low, it is likely that demand for small water storage, irrigation, and distribution projects will increase.

In view of the preceding constraints, the study committee made several recommendations for Reclamation to develop the appropriate organizational, managerial, and resource configurations to meet its construction, maintenance, and infrastructure requirements for its twenty-first century missions.  I should point out that our recommendations were purposely general in nature.  The study committee believed that the specifics could be best developed internally where more detailed knowledge resides.  Such an approach also enables those affected to play a role in establishing ownership and developing loyalty to the plan.

Centralized Policy and Decentralized Operations

 To optimize the benefits of decentralization, Reclamation should promulgate policy guidance, directives, standards, and how-to documents that are consistent with the current workload.  The commissioner should expedite the preparation of such documents, their distribution, and instructions for their consistent implementation.  Reclamation’s operations should remain decentralized and guided and restrained by policy but empowered at each level by authority commensurate with assigned responsibility to respond to customer and stakeholder needs.  Policies, procedures, and standards should be developed centrally and implemented locally.  The design groups in area and project offices should be consolidated in regional offices or regional technical groups to create a critical mass that will allow optimizing technical competencies and provide efficient service.  Technical skills in the area offices should focus on data collection, facility inspection and evaluation, and routine operations and maintenance (O&M).

Technical Service Center and Reclamation Laboratory and Research Activities

 The commissioner should undertake an in-depth review and analysis of the Technical Service Center (TSC) to identify the needed core technical competencies, the number of technical personnel, and how the TSC should be structured for maximum efficiency to support the high-level and complex technical needs of Reclamation and its customers.  The proper size and composition of the TSC are dependent on multiple factors, some interrelated: 

• Forecasted workload,
• Type of work anticipated,
• Definition of activities deemed to be inherently governmental,
• Situations where outsourcing may not be practical,
• Particular expertise needed to fulfill the government’s oversight and liability roles,
• Personnel turnover factors that could affect the retention of expertise, and
• The need to maintain institutional capability.

 This assessment and analysis should be undertaken by Reclamation’s management and reviewed by an independent panel of experts, including stakeholders.
 The workforce should be sized to maintain the critical core competencies and technical leadership, and to increase outsourcing of much of the engineering and laboratory testing work.  Alternative means should be explored for funding the staff and operating costs necessary for maintaining core TSC competencies, thereby reducing the engineering service costs reimbursable by customers. 
 Reclamation’s Research Office and TSC laboratory facilities should be analyzed to determine which specific research and testing capabilities are required now, and in the future; which of capabilities can be found in other government organizations, academic institutions, or the private sector; which physical components should be retained; and which kinds of staffing are necessary.  The assessment should recognize that too great a reliance on outside organizations can deplete an effective engineering capability that, once lost, is not likely to be regained.  In making this assessment Reclamation should take into account duplication of facilities at other government agencies, opportunities for collaboration, and the possibility for broader application of numerical modeling of complex problems and systems.  Because many of the same factors that influence the optimum size and configuration of the TSC engineering services also apply to the research activities and laboratories, Reclamation should consider coordinating the reviews of these two functions.

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.

United States Senate
Committee on Energy and Natural Resources
Hearing on The National Research Council Report, Managing Construction and Infrastructure
in the 21st Century Bureau of Reclamation and the U.S. Bureau of Reclamation Report,
Managing for Excellence: An Action Plan for the 21st Century
Testimony of Bennett W. Raley
May 23, 2006
Mr. Chairman, Members of the Committee, thank you for your gracious invitation to
testify today. I am particularly grateful that you have taken the time to consider the important
issue of how the Bureau of Reclamation should prepare itself to serve the American people in the
21st Century. I have attached to my remarks a copy of a July 19, 2005 letter to the Chairman of
the National Academy of Sciences Committee on Managing Construction and Infrastructure in
the 21st Century Bureau of Reclamation, which I would request be submitted for the record
along with these remarks. This letter recounts some of the history that led to the request to the
National Academy for a review of the structure and focus of Reclamation.
We have now seen Reclamation’s initial response to the Report of the National Academy.
I believe that Reclamation’s “Managing for Excellence” represents a good faith and serious first
step by the agency to respond to the challenges identified by the National Academy. I think that
it is worth noting that this response was directed by Deputy Secretary Scarlett and Assistant
Secretary Limbaugh. As this Committee knows, the fact that a response was directed by senior
officials in Interior signals that the outcome of this process is likely to be reviewed and approved
at the most senior levels in the Department and will not simply be left to the agency. That is a
good thing, as change is never easy, and particularly so when the needed change threatens longheld
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
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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.
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I also suggested that Reclamation must become more efficient. This suggestion is based
on the fact that, as the Family Farm Alliance has pointed out on a number of occasions,
stakeholders view Reclamation’s design and construction work to be too expensive and too slow.
These conflicts are likely the result of Reclamation’s attempt to preserve capabilities that are in
excess of what is required for it to fulfill its inherently governmental functions. There are too
many examples of excess staffing of meetings and delays and overruns for the design of facilities
to discount the problems as isolated incidents. Simply put, the single most important reform
element that Reclamation could and should adopt is to provide that except in cases where the
proposed facility involves a substantial and risk to public health and safety, an entity that
provides 50% or greater of the costs has the option to have planning, design, procurement, and
construction performed by qualified non-federal parties subject to Reclamation oversight. A
policy that allows dissatisfied stakeholders to elect to not use Reclamation services for
construction services will provide internal incentives for Reclamation to be more efficient, as it
will, as an institution, quickly understand that poor quality service will result in a continued
decline in its role in construction activities. Conversely, cost effective and timely services will
likely result in more work for Reclamation employees. This simple mechanism will probably do
more to cure Reclamation’s problems at its Denver Center than anything else. However,
Congress will have to watch carefully or it will find that projects funded by scarce federal funds
may not receive the same level of effort to ensure efficiency.
As for the third area where Reclamation must change, “more transparency” means
developing a greater capacity to track and report costs, whether paid by federal taxpayers or
water and power project beneficiaries. Reclamation has continued to improve in this area, but
much remains to be done before it can report in a timely fashion where it spends federal and nonfederal
funds.
I have previously articulated “10 Tests for Success” to be used to assess whether
Reclamation’s “Managing for Excellence” will result in meaningful change or simply join the
long list of studies and reports that gather dust in Interior offices and elsewhere:
1. Reclamation adopts a policy that project beneficiaries who pay for 50% or more of
specific work can elect to use District personnel or private consultants for design,
procurement, construction, and contract and construction management.
2. Reclamation uses “performance based” instead of “design based” standards for
construction work.
3. Standards for construction and O&M used by Reclamation are based on an assessment of
the relative risk, consequences of failure, marginal return, and subject to appeal to policy
level
4. Reclamation adopts GPRA Goals that require transfer of O&M for an increasing
percentage of Reclamation facilities to project beneficiaries.
5. Reclamation adopts GPRA Goals that establish minimum percentage of planning, design,
procurement, construction and contract management to be performed by project
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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.
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Bennett Raley
6573 S Heritage Pl East
Centennial, CO 80111
Email: braley@troutlaw.com
July 19, 2005
Dr. James K. Mitchell, Sc.D., P.E.
Geotechnical Engineer
209 Mateer Circle
Blacksburg, VA 24060
Via Email: jkm@vt.edu, cc: Mike Cohen: MCohen@nas.edu
Re: Organizing to Manage Construction and Infrastructure in the 21st Century Bureau of
Reclamation, Project Identification Number: BICE-J-04-01-A
Dear Dr. Mitchell;
I was the Assistant Secretary for Water and Science, Department of the Interior from July 17,
2001 to December 3, 2004. I thought it might be of some interest if I relayed to the Committee
the history of and reasons for the request for a Review of Reclamation by the National Research
Council, as well as some observations on the issue before the Committee. Of course, I no longer
speak for the Department and the thoughts expressed in this letter are mine alone.
By way of introduction, I have been around Reclamation and western water issues for 38 years,
almost 25 of which have been spent working as a lawyer for water users and water districts with
an ongoing relationship with Reclamation. I have also worked on United States Senate staff on
two occasions, and have served as a Special Assistant Attorney General for a western state in
connection with matters that are closely related to federal Reclamation law and projects.
In summary, I agree with a letter recently sent by the Family Farm Alliance to United States
Senator Pete Domenici that stated that “the Bureau of Reclamation must focus on fulfilling its
core mission of delivering water and power in accordance with applicable contracts, water rights,
interstate compacts, and other requirements of state and federal law. Essential components of the
core mission are: 1) providing for the operation and maintenance of existing facilities that are
likely to remain in federal ownership; and 2) providing for the rehabilitation and replacement of
infrastructure that is likely to remain in federal ownership. Inherent in this definition of core
mission is the need to prioritize the expenditure of federal funds and other resources of the
Department of the Interior.” It is critically important that Reclamation position itself to achieve
this goal in the most cost-effective manner possible.
The world has changed since 1902, and many water users are no longer dependant on the federal
government to finance and construct complex water supply projects or facilities. Were it not for
the unfortunate fact that the federal government has retained title to far more Projects and
facilities than was originally envisioned by the Reclamation Act, water users would proceed
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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
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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 20th century.
The request for the Review evolved from the consideration of a number of factors. First,
President Bush has defined Presidential Management Initiatives that are to be implemented by all
federal agencies. See http://www.whitehouse.gov/omb/budget/fy2002/mgmt.pdf. Two PMI’s,
Human Capital Management and Competitive Sourcing were particularly relevant. The focus on
Human Capital Management was not particularly threatening to Reclamation, as it recognized
the challenges associated with its aging work force that was developed to meet the demands of a
prior era and the difficulty of recruiting for an agency with a static mission. However, as was
likely the case for all federal agencies, the PMI on Competitive Sourcing was viewed as a threat
to existing personnel and programs. Second, senior Department officials had requested that all
bureaus identify existing programs that could be cut or eliminated. Not surprisingly, this request
was viewed with great suspicion, and the response was at best slow and begrudging. This
attitude was captured by the response to a question regarding what existing programs and
capability were necessary to fulfill Reclamation’s “core mission” - the reply was that “it is all
core mission.” Likewise, the instinctive response to budget pressures was to preserve all
programs and capabilities by allocating whatever shortfall was at issue across all programs in
order to avoid “zeroing out” lesser priorities. Third, a review of the reasons for Reclamation’s
discovery that the costs of the Animas-La Plata Project were approximately 50% over prior
estimates concluded that one of the contributing factors was that Reclamation did not have an
effective “construction management” program in place. This failure was not solely the fault of
Reclamation, as senior management in Interior (myself included) did not focus on the fact
that1994-5 “sunsetting” of the Reclamation Instructions was not replaced by a comparable
system that provided for a chain of command, responsibility, and authority over construction
management activities. Members of Congress who were very unhappy with the Animas-la Plata
experience were made aware of this Review and there is likely some expectation that it will
address some of the issues presented by that experience. I assume that you have been fully
briefed on this issue, its potential relevance to your work, and expectations that may exist in
Congress in this regard.
A reflection on these factors resulted in several intermediate-level conclusions - it was
unreasonable to expect Reclamation (or any other agency, for that matter) to provide a coldly
analytical assessment of what aspects of its existing program were not essential to fulfilling a
limited core mission (in part because of the unavoidable strategic and tactical “gaming” aspects
of the development of the budget inside Interior, inside the Administration, and in Congress); it
4
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 Scope1 to enable
the Committee to focus its efforts on the question of what capability Reclamation needs in order
to fulfill its core mission. The inclusion in the Project Scope of an explanation of the “essential
components” of Reclamation’s core mission was an attempt to provide a tiered hierarchy of
needs that the Reclamation Program must meet under any foreseeable combination of political
and fiscal scenarios. I use the term “Reclamation Program” here as an intentionally broad term
that can encompass activities performed by Reclamation employees as well as activities
performed by others in connection with Reclamation Projects or activities.
The three tiers of this hierarchy reflect the base case for the Reclamation Program, starting with
the definable and unavoidable reality of operating and maintaining existing projects, moving to
the foreseeable, but less predictable need to rebuild existing infrastructure, and concluding with
the likely, but even less predicable need to provide for new project construction. The philosophy
reflected in this hierarchy is that the first priority of the Reclamation Program should be to
maintain the capability required by the essential components or base case for the future of the
Reclamation Program, and that the development and maintenance of additional capabilities
should clearly be subordinated to the need to protect priority capabilities. Implicit in this
formulation of Project Scope is a concern that an attempt by Reclamation to develop and
maintain capabilities beyond those required for the base case will, in a limited budget
environment, put at risk Reclamation’s ability to fulfill its core mission in an effective manner.
ISSUES FOR CONSIDERATION BY THE COMMITTEE
Reclamation is unique in that it has a greater degree of “user funding” for its
programs than do other federal agencies.
One might assume that everything that Reclamation currently does is in fact essential for it to
perform its core mission. However, I am of the opinion that there is great risk to Reclamation if
this position prevails.
As the Committee has already heard, Reclamation is somewhat unique among federal agencies
because much of its work is funded directly or indirectly by its water and power customers.
Some of this work is funded directly by the users, and Congress funds some of it subject to the
1 See
http://www4.nas.edu/webcr.nsf/5c50571a75df494485256a95007a091e/09caed00ca8dce0b85256f8d00601302?Open
Document&Highlight=0,reclamation
5
requirement that water and power users repay the federal treasury over time. Consequently,
there is a far greater degree of sensitivity to and scrutiny of Reclamation staffing decisions than
exists for other federal agencies. This level of sensitivity and scrutiny is likely to intensify in
coming years as the relative proportion of federal dollars invested in water supply infrastructure
decreases and results in a correspondingly greater burden on already scarce non-federal funding
sources. This trend will mean that there will be a greater proportion of direct funding by users
and a relative decrease in Congressional funding subject to repayment obligations. This trend is
of great importance to the matter before the Committee, as it is one thing for an agency to justify
the maintenance of human capital or other program resources when it is the dominant fiscal force
or when the costs of doing so are born by taxpayers, and quite another thing to attempt to
preserve or build a program or when the costs are paid by specific project proponents who do not
want to pay for the maintenance of additional capacity.
Any attempt by Reclamation to maintain internal capability beyond that required by the base
case and for which the water and power users are willing to pay is likely to at a minimum create
political and other tensions between Reclamation and its constituency, and may result in direct
intervention by Congress on behalf of those who are being asked to pay for the additional
capacity. Moreover, attempts to shield this capacity from these pressures by funding the
additional capacity through non-reimbursable sources are not likely to succeed in the long term
because of the operation of administration and congressional funding caps and the inability of
Reclamation to prevent excess capacity from being billed to reimbursable accounts. Concerns
regarding Reclamation’s ability to provide engineering and related services in an effective
manner are surfacing with increasing frequency with both water users and Congress. There are
several recent cases of attempts by water users to seek legislation that would mandate a role for
qualified districts and private consultants, and a senior Senator recently circulated of legislation
that would fund projects through the Reclamation budget but require that Reclamation contract
with the Corps of Engineers to do the work.
On numerous occasions over the past 6 months I have had the opportunity to talk to water district
representatives about their perceptions of the broad issue of Reclamation costs and overhead.
Several unmistakable patterns characterize these conversations:
- With a few exceptions, water managers that work with Reclamation like and respect
their Area and Regional Offices. I also have a high personal regard for all of the
Regional Directors, and while I have not met or worked with all of the Area Offices, most
of them are very capable. In addition, I grew to appreciate the talents and hard work of a
large number of Reclamation employees throughout the agency, and appreciate my
having the opportunity to serve with them.
- Water users complain bitterly about virtually all aspects of the work performed by the
Denver Technical Services Center. To quote a recent conversation “ as soon as Denver
got involved costs skyrocketed and the work ground to a halt.” I want to make it clear
that in my personal opinion this problem is not Mike Roluti’s fault, nor am I directing
criticism at individual employees within the Denver Technical Services Center. The
Denver Center is an institutional problem that is beyond the capacity of the direct
supervisor or individual employees to fix.
6
- 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.
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.
7
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 nonreimbursable
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 user8
funded agency. This reality makes it imperative that Reclamation be able to tailor its capacity to
user demands and available funds far more quickly than is required for other federal agencies.
At a programmatic level, I would suggest that there are two broad areas and one specific
program that define the appropriate role for Reclamation employees, and that activities outside of
these areas should be presumed to be appropriate to be performed by non-Reclamation entities.
The two broad areas that should be performed by Reclamation employees are management of
Reclamation Projects and construction management, and the specific Program is the Safety of
Dams Program. This conclusion is consistent with conclusions reached in Outsourcing
Management Functions for the Acquisition of Federal Facilities (2000), Commission on
Engineering and Technical Systems:
The committee reviewed federal legislation and policies related to inherently governmental
functions—a critical determinant of which activities federal agencies can and cannot
outsource. An inherently governmental function is defined as one that is so intimately
related to the public interest that it must be performed by government employees. An
activity not inherently governmental is defined as commercial. The committee concluded
that, although design and construction activities are commercial and may be outsourced,
management functions cannot be clearly categorized.
http://www.nap.edu/books/0309072670/html/3.html. (Emphasis added). While the scope and
focus of the inquiry of the Commission was not identical to that of this Committee, the context
was similar enough to make its conclusion relevant here.
Management of Reclamation Projects. As is recognized by the above quote, within the broad
category of management of Reclamation Projects there is a range of circumstances that should
govern the level of management that is required to be performed by Reclamation personnel. For
example, some water Districts have financial, managerial, engineering, and other capabilities that
rival that of Reclamation (in some cases because the District personnel were previously
Reclamation personnel). Other Reclamation Projects may require a far more extensive
Reclamation presence because of conflicts relating to Project operations, sheer Project
complexity, or a lack of capacity within the local District.
Consequently, the capacity required for Project “management” will vary widely between
Reclamation Projects. This variance is likely already captured to some degree and reflected by
staffing levels within the existing Regional and Area Offices. The Denver TSC does not and
should not perform “management” functions, as this would be both inefficient and inconsistent
with Reclamation’s “line authority” approach. Similar conclusions can be reached about other
aspects of Reclamation’s Denver Service Center. While well intended and the home to many fine
Reclamation employees, the Denver Service Center does not fit well within the strong “line
authority” structure of Reclamation. Simply put, the chain of command for Reclamation runs
from the Commissioner to the Regional Directors to the Area Offices. Notwithstanding this
clear line of authority that is followed in theory and practice, the Denver Service Center is
staffed by an inordinate number of Senior Executive Service employees who have, over time,
had a very difficult time finding a comfortable “fit” or role within the Reclamation management
structure.
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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
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Plata Project, the number of participating entities and tribal trust aspects of the Project make it
appropriate for Reclamation to serve in a more expansive role than would otherwise be the case.
However, these unique cases will not characterize the role of Reclamation in the future.
I have heard on occasion that the existence of dam safety or other aspects of particular projects
require that Reclamation personnel perform all of the design work. This assertion is not
persuasive, as there is no rational reason why the fact that a professional engineer is employed or
not employed by Reclamation is relevant to the exercise of his or her professional engineering
judgment. Reclamation itself hires outside consultants to assist it in dam safety peer reviews,
and some of the outside consultants were trained by Reclamation. The quality of the engineer is
determined by education, intelligence, and experience, not employment status. This position
inappropriately confuses the appropriate role of establishing appropriate performance or other
standards to meet minimum engineering requirements with the actual design and construction of
the facility. To be blunt, the assertion that Reclamation is uniquely qualified to design structures
that have public safety implications is not credible and does a great disservice to the many highly
qualified engineers that work elsewhere in the profession.
I believe that it is well accepted that Reclamation should be responsible for establishing
appropriate design standards for work on federally owned structures. However, I would suggest
that it would helpful for Committee to make recommendations regarding the manner in which
these design standards are established, and a process for resolving disagreements between
Reclamation engineers and qualified non-Reclamation engineers regarding the appropriateness
of particular standards. In particular, I and others have at times perceived that Reclamation
reflexively “over-designs” project elements based on an institutional philosophy that assumes
that facilities should be designed using the most conservative design standards. While this
approach may be appropriate for federally funded work and for work with material public safety
issues, it is not necessarily appropriate for work funded by water users that does not present
serious public safety risks. These issues can quickly move beyond engineering criteria to
fundamental policy decisions that implicate the balancing of risks in an environment where
financial resources are limited. One suggestion would be to provide for a quick “mini-peer
review” involving outside consultants that project sponsors could utilize for disputes. However,
the success of this approach would require Reclamation to welcome such a review instead of
viewing it as a personal or professional attack.
The Safety of Dams Program. While an intellectual case can be made for considering the
Safety of Dams Program to be just another engineering exercise, I believe that the unique nature
of this program justifies the maintenance of the required expertise within Reclamation. Public
safety is directly affected by this Program, and unlike other aspects of the Reclamation Program,
there is a need for Program-wide uniformity. This Program also has significant national security
implications. However, the Horsetooth Reservoir case study previously submitted to the
Committee by Mike Applegate reveals that while the Safety of Dams Program may be
technically strong, it may also have serious management flaws. Simply put, the fact that even
after a roughly 50% reduction in costs as a result of Reclamation’s Value Engineering Program,
the non-construction costs were equal to approximately 70% of the construction costs. This is
far above any standard ratio in the industry. Moreover, the unexplained reduction of project
costs from $77 million to $56 million creates credibility issues for the SOD Program. Finally,
of Reclamation to provide a final accounting for project costs 18 months after
completion of the project borders is deeply troubling. While my trust in Reclamation is
substantial, any government program that cannot or will not provide a public accounting for how
it spent $56 million of public funds is one bad actor away from a disaster. Reclamation can and
should provide greater transparency and accountability for its expenditures of public funds.
Thank you for considering these comments.
Sincerely yours,
Bennett W. Raley