California Construction News staff writer
A federal court ruling has affirmed the U.S. Bureau of Reclamation’s authority to convert certain water service contracts into long-term repayment contracts under the Water Infrastructure Improvements for the Nation (WIIN) Act — a decision expected to reduce long-term costs for water users and accelerate federal cost recovery for water projects.
The U.S. District Court for the Eastern District of California entered judgment supporting Reclamation’s interpretation of the WIIN Act, finding that the agency is obligated to convert water service contracts when requested and that its discretion is limited to financial terms explicitly outlined in the Act.
Under these conversions, contractors can prepay their share of project construction costs, eliminating the need for future contract renewals and associated administrative burdens. The prepayment option also allows for lower long-term costs for contractors and enables the federal government to recover funds more quickly, potentially providing resources for future water storage and infrastructure projects.
In its decision, the court agreed that:
- The WIIN Act mandates contract conversion upon request by a contractor, and
- Section 4011(a)(4)(C) of the Act removes Reclamation’s discretion to modify any “water service … contractual rights” beyond financial adjustments specified in the law.
- Because the law removes Reclamation’s discretion in this context, the court also found that the agency was not required to conduct environmental reviews under the National Environmental Policy Act (NEPA) or consultations under the Endangered Species Act (ESA) for these contract conversions.
“This ruling affirms Congress’s intent to streamline federal water contracting and support more efficient water management in the West,” said Acting Assistant Attorney General Adam Gustafson of the Justice Department’s Environment and Natural Resources Division (ENRD), who announced the judgment.
The case was handled by Trial Attorneys David Gehlert and Jeff Candrian of ENRD’s Natural Resources Section.
The WIIN Act, enacted in 2016, includes provisions designed to improve water infrastructure and delivery systems across the western United States. The upheld contract conversion process is one of several measures intended to modernize water policy and funding mechanisms for long-term sustainability.
