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Bureau of Reclamation Contract Renewal and Administration: When Is a Contract Not a Contract?

William H. Holmes, Gail L. Achterman, Proceedings of 41st Annual Rocky Mountain Mineral Law Institute (1995)

The Bureau of Reclamation (Reclamation) under Commissioner Daniel Beard has changed many of its basic policies. Recognizing that there are no more federal dams to be built in the western United States, Reclamation is struggling to reinvent itself as a premier water resources management agency.1 Reclamation policy now is to use its future contracts to respond to changing public values.

In particular, Reclamation has altered its policies on contract administration, most notably in its recent efforts to prevent water spreading throughout the West. It has also taken the position that it has no duty to renew reclamation contracts and that it has the authority to impose extensive water management requirements as a condition of contract renewal.

Reclamation's new policy directions suggest that it often views its contracts with irrigation districts and others as something less than a binding commitment. In its recent Contracts and Repayment Policy, Reclamation states that the Bureau should avoid signing formal contracts whenever possible, refuse to enter into new contracts if the terms of existing contracts are disputed, and insist on new contract terms at renewal to generate revenue, reallocate water, reprice water, and shorten contract terms. Although contracts may be subject to change in certain circumstances, such as when Congress exercises its sovereign authority