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001142 1. The accuracy and completeness of the 1999 construction cost estimate,. along with additional costs associated with final Project design and construction;'" 2. The failure to include the cost of contracting under the Indian Self-Determination and Education Assistance Act (ISDEA) P.L.938-638; and, 3. Inadequate communication between Reclamation and sponsors of the Project concerning cost factors related to design options and decision-making. Tbe 1999 Project Construction Cost Estimate In general, the report shows that, with the exception ofthe Ridges Basin Dam feature, the 1999 Project construction cost estimate was incomplete and inaccurate for the pumping plant, inlet conduit, gas pipeline and road relocations, and the newly-added Navajo Nation Municipal Pipeline. The 1999 estimate was prepared by qualified engineers hired by the Ute Mountain' . Ute Tribe (UMUT) who relied upon several years of Reclamation data and analyses. Key factors that contributed to the underestimate included: . Dependence on appraisal level information at the feasibility study phase; . Mischaracterization of site conditions; and . Failure to fully factor in the cost impacts of environmental and legislative requirements. A crucial problem with the 1999 estimates was that they were identified as being at the feasibility level, when they were actually based upon Jess developed appraisal level data. Another factor that contributed was oversight. In the early 1990's, Reclamation was reorganized to give Area Offices greater autonomy to design and manage construction, eliminating the Technical Support Center's (TSC) oversight role. This fact alone contributed to the lack of attention to the 1999 estimates accuracy or source. Despite concerns raised by TSC technical staff in Denver to the Western Colorado Area Office that the feasibility design and estimate used in the 1999 Draft Supplemental Environmental Impact Statement (DSE1S) did not contain sufficient information and detail to complete an in-depth review of cost estimates, work on the 1999 DSEIS pushed ahead without addressing this concern. In 1999 and early 2000, attention was on completing environmental requirements with limited focus on accuracy of the cost estimate. Nevertheless, the 1999 cost estimate was included in the July 2000 Final Supplemental Environmental Impact Statement (FSEIS), used to support the Colorado Ute Settlement Act Amendments of 2000 authorizing the project, and formed the basis for negotiations of repayment contracts for some of the Project sponsors. The 2003 estimate for the Durango Pumping Plant is $52 million above the 1999 estimate. Approximately $38 million of this increase was due to the type and quantity of material that must be excavated: bedrock vs. soil, and project management and site support costs.