WSPC03491

• File Number: 8220.106.O
• Description: Colorado River Water Projects - Animas La Plata - Project Funding
• State: CO
• Basin: Colorado Mainstem
• Water Division: 5
• Date: 11/1/2003
• Author: DOI-BOR
• Title: Animas La Plata Project - Construction Cost Estimates - Report to the Secretary - November 2003
• Water Supply Pro - Doc Type: Report/Study

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affecting the comparison of the 1999 PCE to the 2003 PCE. Sunk costs are added
into overall project costs.

E. Indian Self-Determination and Education Assistance Act (ISDEA),
P.L. 93-638, Contracting Process

The spirit and intent"of the ISDEA is to provide Tribes an opportunity to be self-
determining and to take a more active role in those activities that impact their
daily lives. Under the ISDEA, the Secretary must allow a Tribe to contract for
any work that is a program, service, function, or activity administered by the
Secretary for the benefit of a Tribe. The ISDEA is not a sole-source program; it is
a congressionally mandated, direct-source program that directs the Secretary to
contract with Tribes under certain situations. In the 1988 Settlement Act,
Congress mandated application of the ISDEA to the Animas-La Plata Project.

Title I of the ISDEA establishes a Federal self-determination policy that entitles
Federally recogI}ized Indian Tribes to plan, conduct, and administer programs and
services that traditionally have been performed on their behalf by the Federal
government. The law provides for self-determination contracts in a framework
that is commonly referred to as the "638 Process." Tribal contracting for
construction programs, projects, or activities pursuant to Title I of the law is
subject to a proposal and review process that differs significantly from the
traditional competitive bidding procurement process (the regulations
implementing this title can be found at 25 CFR Part 900).

Under the ISDEA, the fixed-price cons1n!ction contracts4 are to be comprised of:
(1) the reasonable costs to the Tribe of actually performing the work; (2) the costs
to the Tribe of auditing the general and administrative expenses incurred by the
Tribe in performing the work; (3) the costs of developing the project proposal;
and (4) a fair profit. The ISDEA regulations state that in negotiating a "638"
contract, the Secretary shall share all relevant cost information, as the object of
the negotiations is to arrive at a fair and equitable price for the award, not to
obtain the lowest possible award price. The regulations further state that the
agreed upon price does not have to be in strict conformance with either party's
cost estimate.

Reclamation and the Ute Mountain Ute Tribe began negotiations in early 2002 for
the first project related construction contract. These negotiations resulted in
awards that were approximately 37, 17, and 29 percent higher than the detailed
IGCE.

The 1999 PCE did not include the additional costs that could be incurred through
application of the ISDEA. Instead, the 1999 estimate was based on the potential
costs of construction in a competitive bidding environment. As previously

, 111is contracting method was requested by the Ute Mountain Ute Tribe.

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