Report on Denver BOR "Managing for Excellence" Workshop  

The Bureau of Reclamation (Reclamation) last week in Denver , Colorado , conducted a two-day workshop on its “Managing for Excellence” program. This was the fifth in a series of public meetings hosted by Reclamation since last summer. Family Farm Alliance President Patrick O’Toole ( WYOMING ) and I participated in this meeting, as did several members of the Family Farm Alliance ( Alliance ). The focus of the Denver meeting was a presentation by “Managing for Excellence” Team 12, which was tasked with developing a process that will enable Reclamation to determine, on a continuing basis, the size and composition of the engineering and technical services staff that it needs in order to carry out its mission.

Team 12 will put together a report that will try to reflect the “blending” of discussion and proposals offered in Denver . This document will provide a description of a preferred organizational structure and start addressing a final deliverable: policy revisions that will enhance the customer’s ability to participate in Reclamation decision-making processes.

Team 12 will meet again in the coming week and begin drafting this document, which should begin narrowing the scope of this effort considerably. A Reclamation leadership meeting set for June 13 and additional internal work in July will provide forums for Team 12 to make progress on this matter. Reclamation anticipates that a draft paper will be submitted for stakeholder review by July. The next public workshop will be held in Portland (OREGON) in August.

The following has been prepared to summarize key developments discussed at this meeting, and to outline future steps. 

1. Background

“Managing for Excellence” is Reclamation’s response to Managing Construction and Infrastructure in the 21^st Century Bureau of Reclamation, a comprehensive report completed earlier this year by the National Research Council of the National Academy of Sciences. Executing the action plan is a primary initiative for Reclamation this year. This process provides an important opportunity for western water users to find further ways to improve transparency in Reclamation decision-making, provide improved accountability, and make the organization as efficient as possible. If our concerns are properly addressed in this process, the improvements generated will trickle down to every Western irrigator served by Reclamation. 

2. Participants

Attendance at the Denver meeting was the lowest of the five hosted by Reclamation, so far – between two and three dozen participants, total. There were 13 stakeholder and customer representatives present. Assistant Interior Secretary Mark Limbaugh attended on Wednesday, as did Commissioner Johnson, Deputy Commissioners of Reclamation Brenda Burman and Larry Todd.  Pacific Northwest Regional Director Bill McDonald – the Team 12 “executive sponsor” - was also present. Alliance members in attendance included representatives from the Central Valley Project Water Association (CALIFORNIA), Salt River Project (ARIZONA), Yuma-Mesa Irrigation District (ARIZONA), Water Consult (COLORADO), and Northern Colorado Water Conservancy District.  Representatives from Western power organizations and Trout Unlimited were also present.

3. Comments by the Leadership 

Mark Limbaugh outlined the four key issues that Reclamation wants to see institutionalized as a result of this process: 1) Transparency in decision-making; 2) Accountability; 3) Improved Efficiency; and 4) Enhanced effectiveness. Team 12 has come up with some very good ideas, the Assistant Secretary said, emphasizing that no decisions have yet been made, despite voluminous amount of print that has been put to paper. In Denver , we heard repeated statements from Reclamation that no decisions have been made yet regarding right-sizing and reorganization.

Commissioner Johnson thanked Bill McDonald for his leadership on this matter, and reinforced many of the statements made by Mark Limbaugh. 

Assistant Commissioner Todd provided an overall status update before Team 12 took the stage. He said that this process is “changing how Reclamation folks view relationships with customers”. He noted that much internal work has been completed, which customers will get an appreciation for in the coming months. At the current time, 30 of 41 action items identified in the “Managing for Excellence” Action Plan have been completed to “decision points”, signaling a Reclamation move into the implementation phase of this process.

4. Implementation Plans

Due in part to concerns expressed at our annual conference in Las Vegas , Reclamation and Interior officials announced in February that the first of many implementation plans associated with “Managing for Excellence” Action Team reports would be forthcoming. At the time, these plans were seen by many of us as another collective step – separate from the original “Managing for Excellence” timeline – intended to provide more detail and assurances that truly innovative, bold and clear actions would result from the “Managing for Excellence” process. Thus far only one implementation plan- Team 25 (Financial Status Reporting) - has been developed. However, according to Larry Todd, by this time next year all action items will be implemented. Because there are no other active implementation plans, it was suggested that a check list be developed to show the status on this matter.

5. Key Points of Discussion

Customers want Reclamation to increase the transparency of its work processes, sources of costs, and decision-making processes; and to improve accountability related to costs and decisions. Water customers have expressed a desire to have input to Reclamation’s decisions regarding whether the design and management of a particular construction job will be performed by either: 1) Reclamation or a consulting firm selected by Reclamation; or 2) The customer or a consulting firm selected by the customer. Customers have also expressed interest in having input to the engineering and design standards employed by Reclamation, and to the timing of extraordinary maintenance and replacement work.

1. Workload Management

Team 12 in Denver offered up a flow diagram, entitled “Workload Management,” as a

starting point for this discussion. The diagram illustrated the basic steps which go into

the overall process of identifying and managing the workload associated with a construction job on Reclamation owned facilities, be they transferred works (i.e., facilities which customers have agreed, pursuant to contract, to operate and maintain subject to certain Reclamation oversight) or reserved works (i.e., facilities operated and maintained by Reclamation personnel).

The process starts with “workload planning,” at which time design and construction work is identified, scheduled, and budgeted, and matters regarding design standards are initially addressed. It must then be determined who will perform the identified work. Whatever criteria are employed to inform this determination, it leads to a decision by Reclamation as to which construction work is handled by its customers, and which by Reclamation.

Bill McDonald emphasized that customer input to the workload management process should occur at all steps of the process, with “data gathering and feedback” occurring between customers and Reclamation as construction jobs are completed to see how the process can be improved and made as cost effective as possible. He explained that the team was seeking specific input, ideas and information to identify mutual objectives. He observed that it was clear that processes and procedures are important for Reclamation’s customers.

·        Reclamation Perspective

Discussion ensued regarding a recent Reclamation employee meeting, where the focus of dialogue was placed primarily on organizational concepts (see below). It appears that most Reclamation employees felt that any of the proposed options – either independently or in combination - could work, if necessary. Also at that meeting, Reclamation employees were vocal in their support that a key understanding of business practices by everyone involved was very important.

An interesting dynamic has evolved in the Reclamation-customer relationship over the past few decades. There was a day when water and power customers took Reclamation’s word as the gospel – no one challenged the agency’s near-exclusive expertise. Now, there is more expertise in the private sector (much of it attributed to ex-Reclamation employees now working as consultants) which has created a different relationship. Plus, new statutory constraints associated with ecology-focused laws have changed Reclamation’s work load.   Bill McDonald stressed the reality that, more than anything else, federal budget constraints are driving Reclamation’s work load.

·        Customer Perspective

Key customer concerns regarding workload planning include:

1. The need for customers to have input “earlier in the process”;

2. Questions about whether or not the current collaborative processes are being uniformly used. (It appears that the power community is more satisfied with current processes than the water user community);

3. Flexibility is needed to reflect rapidly changing issues / factors;

4. Procurement of services;

5. Accountability – who is responsible? 

Several water user representatives expressed support for the ability of all customers to have the same recourse on these matters as is presently afforded the power users on the Lower Colorado River .

It was repeatedly noted that the U.S. Army Corps of Engineers and Reclamation are the sold owners of a critical national resource: expertise in dam and hydroelectric operations.  That expertise must be maintained. 

Alliance representatives brought up the issue of area manager accountability and how that might help improve collaborative processes at the local level. Mark Limbaugh responded that the Reclamation Manual already at least partially addresses this concept. We continued to push this issue the next day, suggesting that it would be helpful for everyone to fully understand the current policy, and support strengthening it, if necessary (see “Key Results”, below).

Pat O’Toole perhaps best summed up things from the water user perspective. 

“We’re farmers that have been asked to provide food first, and now to provide fuel, with more environmental overlay all the time,” he said. “Profit margins are getting tighter, and some of us feel that Reclamation costs are getting larger, while it is becoming difficult to figure out why that is. We need to find ways to address these concerns, while at the same time making sure that Reclamation maintains its core abilities to continue to serve rural communities.”

2. Key Day 1 Themes

By the end of the first day, it became apparent that a few key points were being hammered home by the stakeholders present:

1. Improvements throughout Reclamation can be made based on the successful customer relationship models in place in the Lower Colorado Region;

2. Districts would like the ability to outsource more work;

3. A dispute resolution mechanism should developed to address “dueling engineer” conflicts and differences regarding engineering design standards;

4. An appropriate role should be developed for those “public interest” entities (in more blunt terms – the enviros) who, along with the rest of us, are helping to pay for the non-reimbursable costs incurred by Reclamation.

The issue of liability – and how the federal assumption of liability will be dealt with and possibly transferred if local interests take an increased role in leading design efforts – was also a topic of repeated discussion.

3. Organizational Conceptual Alternatives 

Team 12 put considerable energy into describing how Reclamation currently operates and developing four possible alternative operation scenarios. Rather than to get into a detailed description of this matter, I suggest that you check out the “Managing for Excellence” website.

Of the four scenarios presented, it appears that the stakeholders were most comfortable with the so-called “enhanced utilization” option, which would set up another Reclamation oversight group to assure that outsourcing potential would be assessed before technical work projects are publicly introduced. This new group would assist in planning and workload coordination. This option would establish and/or revise the existing policy and directives to be more directive than suggestive, and senior level managers will be accountable for implementation. The intent is to maintain core capability through application of a consistent workflow protocol. As presented, work would emphasize Reclamation capabilities before outsourcing. For example, the area office decides whether they can do work in-house; if they do not have resources or technical capability then regional office staff is approached to do the work; if the regional office does not have resources or technical capability then work is offered to Technical Services Center (TSC). If TSC cannot handle work, then work would be outsourced.

Customers were fairly strong and uniform in expressing their concerns that, regardless of the organizational structure, area managers need to retain primary control for decision-making. It was also suggested that Reclamation avoid structures that are rigid; flexibility will continue to be a necessary asset to deal with water and power resources challenges. For the most part, customers were more interested in finding ways to improve their ability to assist with workload planning and track costs, and to more fully understand the recourse they have when they disagree with Reclamation decisions. Some concerns were expressed about this option’s treatment of outsourcing as the option of “last resort”.

4. Oversight

This issue – which was very briefly discussed – centers around those instances where Reclamation is responsible for reviewing the engineering work that districts or their consulting firms undertake. Such oversight ranges from periodic reviews of operation and maintenance (RO&Ms) on transferred works to individual, one-time reviews of the designs for extraordinary maintenance and replacements on transferred works. Such oversight is undertaken because of Reclamation’s continuing responsibility and liability for federally owned facilities, but it does add to customers’ costs. The degree and nature of oversight undertaken also affects Reclamation’s engineering and technical services staffing and expertise needs.

Discussion ensued about those instances when Reclamation oversight is needed. Customers suggested that an existing Salt River Project agreement be used as a potential template. Northern Colorado Water Conservancy District suggested that consideration be given to using performance standards in lieu of conducting independent reviews. 

5. Core Capabilities? Work Load Analysis? 

Since the public meetings began last summer, many customers understood that Reclamation would be undertaking internal work load studies to assess the agency’s “core capabilities”, “inherently governmental functions”, and the like. Many of us have been waiting anxiously for these studies, because we felt they would provide revealing characteristics or trends essential to a meaningful “right-sizing” or Reclamation. Alas – it does not appear that we will be seeing this type of data, at least not anytime soon. In Denver , we were essentially told that “insufficient” information restricts Reclamation from performing a “suitably predictable” workload assessment for the purposes of right-sizing.

Instead, a graph was presented showing the number of Reclamation employees in the past century. During Reclamation’s go-go years (1940’s and 1950’s), approximately 17,000 employees worked for the agency. In recent years, numbers have dropped: 8,500 to 5,500 in the past 13 years. Team 12 presenters raised concerns about potential ramifications in the near future, when infrastructure needs will have to be prioritized, and Reclamation may not have the numbers and expertise to effectively address those challenges. Reclamation explained that to truly maintain in-house technical expertise, three to five other “experts in training” need to follow up behind, which will ensure decades of continued expertise within the agency.

Apparently, in recent weeks, more internal comments about the “Managing for Excellence” process have been generated within Reclamation then ever before. There is a sense that things are getting “more personal” as far as some of the area offices, etc are concerned. Some Reclamation employees equate “right-sizing” with “downsizing”, and this obviously generates much more interest than discussions about title transfers, reserved works, and the like. 

The bottom line is that Reclamation has determined that its present workflow and planning practices do not provide a predictable workload from which to make “right-sizing” decisions. The other significant conclusion that Team 12 has reached is that there are insufficient or inconsistent tracking tools available for Reclamation managers to measure workforce utilization and cost-effectiveness. Accordingly, Team 12 has concluded that strategic, consistent business practices -- along with defined workload and advanced planning -- must be addressed before “right-sizing” of the engineering and technical staff needed to sustain Reclamation expertise can be dealt with. Team 12 believes that addressing and resolving business practices and organizational issues first will not only allow the team to evaluate “right-sizing” as part of the M4E effort, but will also allow the team to develop proposals for an ongoing process that will allow Reclamation to continuously address “right-sizing” into the future.

6. Key Results 

Alliance members and other water users at the meeting advocated for several key measures which we believe will improve Reclamation performance and its relationship with customers. On the matters of most interest to water customers, we are beginning to see how some of our concerns will be addressed. Reclamation publicly committed to begin the work necessary to ultimately lead to a firm deliverable: creation of Reclamation policy and / or modifications to the Reclamation Policy Manual that would institutionalize concepts important to federal water customers.

The Alliance for some time has advocated that Reclamation should establish a mandatory requirement for Reclamation area managers to set a target budget for reimbursable costs for the upcoming fiscal year. If the district agrees, then the area manager has the responsibility to manager to the target, inform the district in advance of potential overruns, and explain, in detail, unforeseen circumstances that caused the target budget to be exceeded. If the district does not agree to the proposed target budget, the issue would then be elevated to the regional director and commissioner. The effectiveness of the area manager to meet these targets would be incorporated into the manager’s annual performance review. It appears that a fairly recent Reclamation policy that partially captures this concept will be revisited and possibly strengthened.

We have advocated that Reclamation should adopt a policy that contractors who pay for specific work can elect to use District personnel or private consultants for design, procurement, construction, and contract and construction management. If Reclamation is to review this work, those related costs must be controlled, possibly through an outside peer review process if differences exist between Reclamation and District engineers. While this concept has been a topic of debate between Reclamation and customers, it appears that Reclamation is willing to consider policy language that directs area managers to collaboratively address outsource possibilities proposed by local districts. We have proposed that, if differences occur, a formal appeal methodology would be established by policy to settle disputes that may arise. 

Reclamation also appeared responsive to our request that the agency revises the customer interaction process to include written procedures for customer input on current financial circumstances of all Reclamation infrastructure, including cost invested, repayment status, O&M cost allocation, design life, facility condition, etc, and a documented means through which Reclamation used (or didn’t use) this input.

We repeatedly emphasized that we would like to start seeing draft policy that reflects these concepts; Reclamation representatives appeared to agreed that final policy changes would be a natural deliverable evolving out of this process.

7. Next Steps

Team 12 will put together a report that will try to reflect the “blending” of discussion and proposals offered in Denver . This document will provide a description of a preferred organizational structure (somewhat similar to what was originally proposed under the “enhanced utilization” option) and start working towards a final deliverable: policy revisions that will enhance the customer’s ability to participate in Reclamation decision-making processes (see previous section).

Team 12 will meet again in the coming week and begin drafting this document, which should begin narrowing the scope of this effort considerably. A Reclamation leadership meeting set for June 13 and additional internal work in July will provide forums for Team 12 to make progress on this matter. Reclamation anticipates that a draft paper will be submitted for stakeholder review by July. The next public workshop will be held in Portland (OREGON) in August. 

Please do not hesitate to contact me if you have any questions on this matter.

Dan Keppen

Executive Director

Family Farm Alliance