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<br />001143 <br /> <br />Neither the total volume to be excavated nor the bedrock was factored into the.initial <br />design concepts by the contractor. <br /> <br />Another $28 miJlion of the increase was to relocate parts of gas pipelines and County <br />Road 211 from the Ridges Basin Reservoir site, again due to increased excavation and <br />directional driJling. <br /> <br />Reclamation did not identify these significant costs until completing final designs for the <br />Durango Pumping Plant. <br /> <br />Costs to comply with P.L. 93-638 <br />The spirit and intent of the ISDEA is to provide Tribes an opportunity to be self- <br />determining and to take a more active role in those activities that impact their daily lives. <br />Under the ISDEA, the Secretary must al10w a Tribe to contract for any work that is a <br />program, service, function, or activity administered by the Secretary for the benefit of a <br />Tribe. The ISDEA is not a sole-source program; it is a congressional1y mandated, direct- <br />source program that directs the Secretary to contract with Tribes under certain situations. <br />In the 19.88 Settlement Act, Congress mandated application of the ISDEA to the Animas <br />La-Plata Project. <br /> <br />Contracting under P.L. 93-638 (the "638 process") differs from traditional competitive <br />bidding. Under the ISDEA, the fixed-price construction contracts (requested by the Ute <br />Mountain Ute Tribe) are to be comprised of: (1) the reasonable costs to the Tribe of <br />actually performing the work; (2) the costs to the Tribe of auditing the general and <br />administrative expenses incurred by the Tribe in performing the work; (3) the costs of <br />developing the project proposal; and (4) a fair profit. <br /> <br />The obj ective of the negotiations is to arrive and a fair and equitable price for the award, <br />not to obtain the lowest possible award price. Nor does the price have to conform to <br />either party's cost estimate. <br /> <br />The 1999 cost estimate did not include additional costs of applying ISDEA. Instead, it <br />was based on construction costs in a competitive bidding environment. The 2003 Project <br />construction cost estimate includes a 30% Estimating Difference Factor (EDF) that would <br />be applied to future Project contracts. The intent of using the EDF was to try to more <br />accurately estimate and account for Reclamation and contractor administrative and other <br />costs likely to occur in negotiating future ISDEA contracts. While the 2003 EDF equate <br />to $43 million to apply ISDEA, accounting for 24% of the increase (none of which was <br />included in the 1999 estimate), there is some optimism that the actual amount could be <br />less for the remainder of the Project as Reclamation, the Tribe, and other Project sponsors <br />work more closely on Project implementation. <br /> <br />Communications between Reclamation and Project Sponsors <br />The report found that communications and discussions between Reclamation Project staff <br />and Project sponsors about the cost factors related to design options and decision-making <br />have been inadequate. Specifically, communication as required by existing contracts was <br />