1

1 Contract No. 10-WC-40-384

2

3

4

5 UNITED STATES 

6 DEPARTMENT OF THE INTERIOR

7 BUREAU OF RECLAMATION

8

9 CONTRACT BETWEEN THE UNITED STATES AND 

10 THE NAVAJO NATION

11

12

13 PART I. SETTLEMENT 3

14 1. PREAMBLE 3

15 2. EXPLANATORY RECITALS 3

16 3. GENERAL DEFINITIONS 4

17 4. CONDITIONS 8

18 5. PRELIMINARY UNDERSTANDINGS 8

19 PART II. NIIP 9

20 6. WATER DELIVERY PROVISIONS 9

21 7. WATER SUPPLY AND SHORTAGE 11

22 8. COST PROVISIONS 12

23 9. LIMITED RESPONSIBILITY FOR DISTRIBUTION 13

24 PART III. ALP 13

25 10. WATER DELIVERY PROVISIONS 13

26 11. ALP PROJECT WORKS 15

27 12. CONSTRUCTION AND OPERATION OF FACILITIES 16

28 13. WATER SUPPLY SHORTAGE 18

29 14. BLOCK NOTICE FOR ALP WATER DELIVERY 18

30 15. COST PROVISIONS 19

31 16. TITLE TRANSFER 21

32 17. LIMITED RESPONSIBILITY FOR DISTRIBUTION 21

33 PART IV. NGWSP 21

34 18. WATER DELIVERY PROVISIONS 21

35 19. NGWSP FACILITIES 22

36 20. CONSTRUCTION AND OPERATION OF FACILITIES 23

37 21. WATER SUPPLY AND SHORTAGE 24

38 22. NOTIFICATION OF SUBSTANTIAL COMPLETION 24

39 23. BLOCK NOTICE FOR NGWSP WATER AVAILABLITY 25

40 24. CARRIAGE OF NON-PROJECT WATER 25

41 25. ADDITIONAL CAPACITY 26

42 26. COST PROVISIONS 27

43 27. CONVEYANCE OF TITLE 30

44 28. LIMITED RESPONSIBILITY FOR DISTRIBUTION 30

45 PART V. GENERAL 31

46 29. TERM OF CONTRACT 31
2

1 30. TRANSPORTATION LOSSES 31

2 31. UNCONTROLLABLE FORCES 31

3 32. SUBCONTRACTS 31

4 33. SEVERABILITY 33

5 34. TERMINATION 34

6 35. CONTRACT AMENDMENTS 34

7 36. SAVINGS CLAUSES 34

8 37. ENVIRONMENTAL COMPLIANCE AND COORDINATION 35

9 PART VI. STANDARD ARTICLES 36

10 38. AIR AND WATER POLLUTION CONTROL 36

11 39. ADMINISTRATION OF FEDERAL PROJECT LANDS 36

12 40. BOOKS, ACCOUNTS AND RECORDS 36

13 41. CONTAMINATION OR POLLUTION OF FEDERAL PROPERTY 37

14 42. CLEAN AIR AND WATER 38

15 43. PEST MANAGEMENT 39

16 44. INDIAN EMPLOYMENT - EQUAL EMPLOYMENT OPPORTUNITY 39

17 45. COMPLIANCE WITH CIVIL RIGHTS LAWS AND REGULATIONS 41

18 46. CERTIFICATION OF NONSEGREGATED FACILITIES 41

19 47. NOTICE TO PROSPECTIVE SUBCONTRACTORS OF REQUIREMENT FOR 

20 CERTIFICATIONS OF NONSEGREGATED FACILITIES 42

21 48. COMPLIANCE WITH RECLAMATION LAWS 42

22 49. RULES, REGULATIONS, AND DETERMINATIONS 42

23 50. GENERAL OBLIGATION – BENEFITS CONDITIONED UPON PAYMENT43

24 51. MEDIUM FOR TRANSMITTING PAYMENTS 43

25 52. CHARGES FOR DELINQUENT PAYMENTS 43

26 53. WATER QUALITY 43

27 54. WATER CONSERVATION 44

28 55. CONTINGENT UPON APPROPRIATIONS OR ALLOTMENTS OF FUNDS 44

29 56. NOTICES 44

30 57. OFFICIALS NOT TO BENEFIT 44

31

32
3

1 Contract No. 10-WC-40-384

2

3

4

5 UNITED STATES 

6 DEPARTMENT OF THE INTERIOR

7 BUREAU OF RECLAMATION

8

9 CONTRACT BETWEEN THE UNITED STATES AND 

10 THE NAVAJO NATION

11

12

13 PART I. SETTLEMENT

14

15 1. PREAMBLE

This contract is entered into this _17th 16 _ day of _December__, 2010, between the 

17 United States of America, acting through the Secretary of the Interior pursuant to the 

18 Northwestern New Mexico Rural Water Projects Act of March 30, 2009 (123 Stat. 1367), 

19 the Act of June 17, 1902 (32 Stat. 388), and acts amendatory thereof and supplementary 

20 thereto, all of which acts are commonly known and referred to as the Federal 

21 Reclamation Laws, specifically the Act of June 13, 1962 (76 Stat. 96), the Act of April 

22 11, 1956 (CRSP) (70 Stat. 105; 43 U.S.C. 620 et seq.), the Colorado Ute Settlement Act 

23 Amendments of 2000 (114 Stat. 2763A-258), and the Act of August 1, 1914 (38 Stat. 

24 583; 25 U.S.C. 385), and the Navajo Nation.

25

26 2. EXPLANATORY RECITALS

27 WHEREAS, the United States, the State of New Mexico, and the Navajo Nation 

28 have negotiated a resolution of all water right claims of the Navajo Nation to waters of 

29 the San Juan River Basin in New Mexico which are the subject of a general stream 

30 adjudication in New Mexico state court ; and

31 WHEREAS, the settlement of these claims will secure to the Navajo Nation a 

32 water supply; and

33 WHEREAS, it is the intent of this Contract that the Navajo Nation may exercise 

34 the right to market the water supply secured to it under this Contract subject to the 

35 provisions of this Contract and the agreement between the State of New Mexico, the 

36 Navajo Nation and the United States setting forth a stipulated and binding Settlement 
4

1 Agreement, as amended, pursuant to Section 10701 of the Northwestern New Mexico 

2 Rural Water Projects Act (123 Stat. 1367); and

3 WHEREAS, the Federal government is undertaking to construct additional water 

4 development facilities to fulfill the terms and conditions of the Northwestern New 

5 Mexico Rural Water Projects Act (123 Stat. 1367) and this Contract, as well as facilities 

6 to extend the current service area of the Navajo Indian Irrigation Project and facilities to 

7 convey municipal, industrial and domestic water supplies to Navajo Nation communities; 

8 and

9 WHEREAS, the Secretary of the Interior has determined in accordance with 

10 Section 11 of the Act of June 13, 1962 (76 Stat. 96), pursuant to the hydrologic 

11 determination recognized at Section 10604(a)(1) of the Northwestern New Mexico Rural 

12 Water Projects Act (123 Stat. 1367) that there is sufficient water reasonably likely to be 

13 available for use in the State of New Mexico to enable the United States to enter into this 

14 Contract:

15 NOW, THEREFORE, in consideration of mutual and dependent covenants and 

16 conditions contained herein, the parties agree to the following:

17

18 3. GENERAL DEFINITIONS

19 For the purposes of this Contract only, unless otherwise distinctly expressed or 

20 manifestly incompatible with the intent hereof, the term:

21 (a) “Animas-La Plata Project”, or “ALP”, means the project of the same name 

22 authorized by the Colorado Ute Settlement Act Amendments of 2000 (114 Stat. 2763A23 258; Public Law 106-554, Appendix D, Title III) including Ridges Basin Dam and Lake 

24 Nighthorse, the Durango Pumping Plant, the Ridges Basin Inlet Conduit, the Navajo 

25 Nation Municipal Pipeline and related facilities.

26 (b) “Association” means the Animas-La Plata Operations, Maintenance, and 

27 Replacement Association, established by the ALP Project sponsors who were signatory to 

28 the IGA, dated March 4, 2009, pursuant to the Colorado Uniform Unincorporated 

29 Nonprofit Association Act, 7-30-101 et seq., CRS (2006), to carry out the OM&R 

30 activities and responsibilities of the Project.
5

1 (c) “Consultation” or “Consult” refers to an ongoing obligation of both parties 

2 to implement the provisions of this Contract with a full exchange of information so as to 

3 assure that each party is provided full participation in the decision making process. 

4 Consultation shall be required of each party with respect to each section of the Contract 

5 regardless of whether the section itself sets forth a Consultation requirement. The 

6 Consultation required shall be reasonable under the circumstances, and except in exigent 

7 circumstances Consultation shall be undertaken in advance of decision making. In the 

8 event that agreement cannot be reached and the United States makes a decision, appeals 

9 are available to the extent allowed under applicable laws.

10 (d) “Contracting Officer” means the representative of the Secretary of the 

11 Interior authorized to administer this Contract.

12 (e) “Fixed OM&R costs” means costs of administration, overhead, labor, 

13 materials, and equipment required to maintain all pumps, storage tanks, pipelines, 

14 diversion facilities, reservoirs and inlet conduits, as may be appropriate. Fixed OM&R 

15 costs shall also include annual payments to an emergency reserve fund to meet costs 

16 incurred during periods of special stress caused by damaging droughts, storms, 

17 earthquakes, floods, or other emergencies threatening or causing interruption of water 

18 service, and annual payments to a replacement reserve fund to ensure adequate funds are 

19 available to replace equipment when needed.

20 (f) “Intergovernmental Agreement” or “IGA” means that agreement dated 

21 March 4, 2009 and entered into by the Colorado Water Resource and Power 

22 Development Authority, the La Plata Conservancy District, the Navajo Nation, the San 

23 Juan Water Commission, the Southern Ute Indian Tribe, and the Ute Mountain Ute 

24 Indian Tribe to establish the Animas-La Plata Operations, Maintenance, and Replacement 

25 Association (Association) and provide for the terms, conditions, and concepts under 

26 which OM&R of the transferred works of the ALP is to take place.

27 (g) “Lake Nighthorse”, formerly Ridges Basin Reservoir, means the reservoir 

28 created by the impoundment on Basin Creek by Ridges Basin Dam, a facility of the ALP 

29 as authorized by the Colorado Ute Settlement Act Amendments of 2000 (114 Stat. 

30 2763A-258). 
6

1 (h) “Navajo Dam and Reservoir” means Navajo Dam and the reservoir created 

2 by the impoundment of the San Juan River at Navajo Dam as authorized by the Act of 

3 April 11, 1956, the Colorado River Storage Project Act (70 Stat. 105; Public Law 84-

4 485), as amended. 

5 (i) “Navajo-Gallup Water Supply Project”, or “NGWSP”, means the project of 

6 the same name authorized by Section 10602 of the Northwestern New Mexico Rural 

7 Water Projects Act (123 Stat. 1367).

8 (j) “Navajo Indian Irrigation Project”, or “NIIP”, means the project of the same 

9 name authorized by the Act of June 13, 1962 (76 Stat. 96; Public Law 87-483), as 

10 amended.

11 (k) “Navajo Lands” means lands set aside as reservation lands for the Navajo 

12 People, whether by treaty, statute, executive order or public land order. Also included in 

13 this definition are lands that are held in trust for the Navajo Nation by the United States, 

14 held in trust for members of the Navajo Nation by the United States, or held in fee 

15 ownership by the Navajo Nation.

16 (l) “Navajo Nation” means a body politic and federally-recognized Indian 

17 nation as provided for in Section 101(2) of the Federally Recognized Indian Tribe List of 

18 1994 (Public Law 103-454, 25 U.S.C. 497a(2)), also known variously as the “Navajo 

19 Tribe,” the “Navajo Tribe of Arizona, New Mexico & Utah,” and the “Navajo Tribe of 

20 Indians” and other similar names, and includes all bands of Navajo Indians and chapters 

21 of the Navajo Nation, acting through its authorized representative.

22 (m) “Navajo Nation Municipal Pipeline”, or “NNMP”, means the pipeline to 

23 convey the Navajo Nation’s ALP water from the City of Farmington, New Mexico, to 

24 Navajo Nation communities along the San Juan River valley in New Mexico, including 

25 the City of Shiprock, as a facility of the ALP authorized by the Colorado Ute Settlement 

26 Act Amendments of 2000 (114 Stat. 2763A-258; Public Law 106-554, Appendix D, Title 

27 III).

28 (n) “Navajo Settlement Act” means Subtitle B of Title X the Act of March 30, 

29 2009 (123 Stat. 1367; Public Law 111-11).

30 (o) “OM&R” means annual operation, maintenance and replacement. 
7

1 (p) “Partial Final Decree” means a final and binding judgment and decree 

2 entered by the court in the stream adjudication, setting forth the rights of the Navajo 

3 Nation to use and administer waters of the San Juan River Basin in New Mexico, the 

4 form of which is attached as Appendix 1 of the Settlement Agreement.

5 (q) “Project Operator” means the entity that has been transferred the OM&R 

6 responsibilities for a specific project covered under this Contract. 

7 (r) “Project Participant(s)” means participant(s) in the NGWSP, namely the 

8 Navajo Nation, the City of Gallup and, should it choose to participate, the Jicarilla 

9 Apache Nation.

10 (s) “San Juan River” means that river which originates in the State of Colorado 

11 and flows through or constitutes the boundary of the Navajo Indian Reservation in 

12 northwestern New Mexico and southeastern Utah, where it flows into Lake Powell.

13 (t) “Secretary” means the Secretary of the United States Department of the 

14 Interior or an authorized designee.

15 (u) “Settlement Agreement” means the agreement between the State of New 

16 Mexico, the Navajo Nation and the United States executed in 2010, pursuant to Section 

17 10701 of the Northwestern New Mexico Rural Water Projects Act (123 Stat. 1367). 

18 (v) “Statutory Water Allocation” means the municipal and industrial (M&I) 

19 water allocation delivered to the Navajo Nation from the ALP pursuant to Section 

20 6(a)(1)(A)(ii)(III) of the Colorado Ute Settlement Act Amendments of 2000, Public Law 

21 106-554.

22 (w) “Subcontract” means a contract between the Navajo Nation and a third party, 

23 pursuant to this Contract and subject to the provisions of the Navajo Settlement Act, the 

24 Settlement Agreement, the Partial Final Decree, and approval of the Secretary or 

25 authorized representative, to supply water for beneficial use on or off Navajo Lands in 

26 the State of New Mexico, subject to and consistent with the same requirements and 

27 conditions of State law, and any applicable Federal law, interstate compact, and 

28 international treaty as they apply to the exercise of water rights held by non-federal, non29 Indian entities.
8

1 (x) “Subcontractor” means any entity and/or persons entering into a subcontract 

2 with the Navajo Nation, subject to the approval of the Secretary or authorized 

3 representative.

4 (y) “Transferred Works” means facilities which are necessary to support the 

5 operation and maintenance of one of the three projects identified in this Contract, and for 

6 which the OM&R responsibility has been transferred to the Navajo Nation by the United 

7 States.

8 (z) “Variable OM&R costs” means the costs of power including power 

9 consumption and a proportional percentage of power demand costs for the pumping of 

10 water. In the case of the NGWSP, Variable OM&R costs also include costs associated 

11 with the treatment of water.

12

13 4. CONDITIONS

14 This Contract will give rise to rights and obligations on the part of the Navajo 

15 Nation and the United States. The provisions of Part IV, and the provisions of Article 32 

16 Part V as they relate to Part II and Part IV, will become enforceable only after the Partial 

17 Final Decree is entered by the District Court of San Juan County, New Mexico, in the 

18 general stream adjudication of the San Juan River stream system, New Mexico v. United 

19 States, No. 75-184, which Partial Final Decree adjudicates water rights of the Navajo 

20 Nation in and from the San Juan River Basin in New Mexico per paragraph 3.0 of the 

21 Settlement Agreement and is of the form provided in Appendix 1 to the Settlement 

22 Agreement. All other provisions of the Contract will be enforceable upon execution of 

23 the Contract. 

24

25 5. PRELIMINARY UNDERSTANDINGS

26 (a) The Navajo Nation may purchase, receive and use ALP water in accordance 

27 with the relevant provisions of this Contract prior to the entry of the Partial Final Decree. 

28 (b) The obligations of the parties under Contract No. 14-06-W-269 between the 

29 United States and the Navajo Nation for delivery of water from Navajo Reservoir for the 

30 principal purpose of furnishing irrigation water to the NIIP shall continue in force until 
9

1 the entry of the Partial Final Decree after which Contract No. 14-06-W-269 shall be 

2 superseded by this Contract.

3 (c) Separate contracts for additional water, as available, may be negotiated 

4 between the Navajo Nation and the United States in the future pursuant to the provisions 

5 of paragraph 8.0 of the Settlement Agreement, but they do not constitute any part of the 

6 consideration for this Contract.

7 (d) Except as specifically provided in this Contract and as provided in the 

8 waivers and releases set forth in Section 10703 of the Navajo Settlement Act, nothing in 

9 this Contract should be construed to affect or alter other obligations that the United States 

10 may have under treaty, statute, or otherwise to provide or operate water project facilities 

11 and water distribution systems on Navajo Lands.

12

13

14 PART II. NIIP

15 6. WATER DELIVERY PROVISIONS

16 (a) The United States agrees to deliver, or make available for delivery, to the 

17 Navajo Nation an average diversion of not more than 508,000 acre-feet per year, or the 

18 quantity of water necessary to supply an average depletion of 270,000 acre-feet per year 

19 from the San Juan River, whichever is less, during any period of ten consecutive years, 

20 and not more than 584,200 acre-feet in any one year for delivery to the NIIP from:

21 (i) Navajo Reservoir from the following delivery points under State 

22 Engineer File No. 2849:

23 (A) the intake to the NIIP main canal; or

24 (B) the Navajo Dam outlet works; or 

25 (ii) inflows below Navajo Dam under State Engineer File No. 3215 at 

26 Cutter Reservoir or at Gallegos Reservoir or suitable alternative; or

27 (iii) both (i) and (ii) in combination.

28 (b) Pursuant to Section 2(c) of the Act of June 13, 1962, as amended by Section 

29 10402(a) of the Navajo Settlement Act, water delivered pursuant to Part II Article 6(a) 

30 may be used within the area served by the NIIP facilities for irrigation and the following 

31 purposes:
10

1 (i) Aquaculture purposes, including the rearing of fish in support of the 

2 San Juan River Basin Recovery Implementation Program authorized by Public 

3 Law 106-392 (114 Stat. 1602).

4 (ii) Domestic, industrial, or commercial purposes relating to agricultural 

5 production and processing.

6 (iii) The generation of hydroelectric power as an incident to the diversion 

7 of water by the NIIP for authorized purposes.

8 (iv) The implementation of the alternate water source provisions described 

9 in subparagraph 9.2 of the Settlement Agreement executed under Section 

10 10701(a)(2) of the Navajo Settlement Act.

11 (c) Pursuant to Section 2(d) of the Act of June 13, 1962, as amended by Section 

12 10402(a) of the Navajo Settlement Act, water diverted by the NIIP may be transferred to 

13 areas located within or outside the area served by the NIIP facilities and on or off Navajo 

14 Lands for any beneficial use in accordance with:

15 (i) the agreement executed under section 10701(a)(2) of the Navajo 

16 Settlement Act;

17 (ii) this Contract; and

18 (iii) any other applicable law. 

19 (d) If the Navajo Nation proposes to change the place or purpose of use or the 

20 point of diversion in the exercise of its rights to use water for the uses described in Part II 

21 Article 6(b) or 6(c) of this contract, in addition to providing notice to the New Mexico 

22 State Engineer as required by Paragraph 18 of the Partial Final Judgment and Decree of 

23 the Water Rights of the Navajo Nation, notice shall be provided to the United States 

24 pursuant to Part VI Article 56 of this contract.

25 (e) The Navajo Nation shall be solely responsible for the construction, 

26 operation, maintenance and replacement specific to all modifications and additions to 

27 NIIP facilities that are necessary to use NIIP water for the purposes provided in Part II 

28 Article 6(b)(i) through (iv) and 6(c) above. As long as title to NIIP facilities is held by 

29 the United States, the Navajo Nation shall obtain the approval of the United States prior 

30 to the construction of any modification or addition to the NIIP facilities.
11

1 (f) The Navajo Nation under this Contract shall have no holdover storage rights 

2 in Navajo Reservoir from year to year. Any water at Navajo Reservoir subject to 

3 delivery hereunder not called for by the end of each calendar year shall become 

4 integrated with the water supply for all purposes of the reservoir at that time.

5 (g) The Navajo Nation must notify the Contracting Officer and the Project 

6 Operator of its scheduled locations, amounts and timings of anticipated deliveries or 

7 diversions prior to any delivery of water from Navajo Reservoir under State Engineer 

8 File No. 2849. The requested delivery or change in delivery shall be made by the 

9 Contracting Officer or the Project Operator in a reasonable time within the ability to 

10 manage the operation of Navajo Dam or the NIIP intake, as appropriate, or as otherwise 

11 agreed to between the Navajo Nation and the Contracting Officer . 

12 (h) Nothing in this Contract is intended to impose on the United States any 

13 obligation to maintain Navajo Dam and Reservoir or the NIIP beyond their useful lives,

14 or to take extraordinary measures to keep these facilities operating.

15 (i) The points of delivery of water made available for use pursuant to this 

16 section from Navajo Reservoir and from inflows to the San Juan River arising below the 

17 reservoir shall be as specified in Part II Article 6(a) unless changed consistent with the 

18 Partial Final Decree and pursuant to agreement of the Contracting Officer and the Navajo

19 Nation. Water made available at Navajo Dam to make the diversions and depletions 

20 described in subparagraphs 3(d), 3(e) and 3(f) of the Partial Final Decree that are 

21 supplied under this Contract pursuant to the alternate water source provisions of 

22 subparagraph 9.2 of the Settlement Agreement shall be accounted under the contract 

23 rights for delivery of water under the NIIP described in Part II herein.

24 (j) To the extent that delivery of water is made through or from federal 

25 facilities, the Navajo Nation will reimburse costs associated with this delivery in 

26 accordance with the provisions of Part II Article 8 of this Contract.

27

28 7. WATER SUPPLY AND SHORTAGE

29 (a) Notwithstanding any other provisions of this Contract, in times of shortage 

30 in the Navajo Reservoir water supply to meet demands under contracts for delivery of 

31 water from said supply, taking into account water available from inflows below Navajo 
12

1 Dam to help meet the demands, the Navajo Nation will share in the available water 

2 supply in the manner set forth in Section 11 of the Act of June 13, 1962 (76 Stat. 96) as 

3 amended by Section 10402(b) of the Navajo Settlement Act.

4 (b) On account of drought or other causes outside the control of the United 

5 States, there may occur at times during any year a shortage in the quantity of water 

6 available for use by the Navajo Nation pursuant to this Contract. In no event shall any 

7 liability accrue against the United States or any of its officers, agents, or employees, for 

8 any damage, direct or indirect, arising out of any such shortage, and payments due the 

9 United States provided for herein shall not be reduced because of such shortage.

10

11 8. COST PROVISIONS

12 Charges for water made available pursuant to Part II Article 6 will be as follows:

13 (a) The Navajo Nation’s construction cost obligation for the NIIP within the 

14 ability of the land to repay shall be allocated and payment deferred under the provisions 

15 of the Leavitt Act (47 Stat. 564), as authorized in subsection 4(d) of the Colorado River 

16 Storage Project Act (70 Stat. 105). The Navajo Nation’s construction cost obligation for 

17 the NIIP beyond the ability of the land to repay shall be non-reimbursable as authorized 

18 in subsection (6) of the Colorado River Storage Project Act (70 Stat. 105). 

19 (b) The Navajo Nation’s OM&R obligation for the NIIP for the delivery of 

20 water made available pursuant to Part II Article 6(b)(i) and (ii) will be based on the 

21 incremental increase in OM&R costs associated with the conveyance and delivery of that 

22 water. Provisions for payment of these costs shall be made in a future agreement 

23 between the Navajo Nation and the United States pursuant to Section 4 of the 1962 Act. 

24 (c) The Navajo Nation shall pay the United States or its designee if some 

25 organization other than the United States is operating Navajo Dam and Reservoir, the 

26 Navajo Nation’s proportionate share of the OM&R costs for Navajo Dam and Reservoir 

27 assignable to the amount of water made available pursuant to Section 10402(d) of the 

28 Navajo Settlement Act. The Navajo Nation’s obligation for Navajo Dam and Reservoir

29 OM&R costs shall be triggered by either a Subcontract or the notice provided by the 

30 Navajo Nation to the United States, as described in Part II Article 6(c) and (d), 

31 respectively. The Navajo Nation’s obligation for Navajo Dam and Reservoir OM&R 
13

1 costs shall be paid on the basis of annual cost estimates made by the United States, or its 

2 designee, based upon the quantity of the NIIP water that is made available under 

3 Subcontracts authorized by Section 10402(d). The estimates will be sent annually to the 

4 Navajo Nation on or before May 1 for the next Federal Fiscal year, which begins October 

5 1 of the same calendar year and ends September 30 of the next calendar year. The 

6 Navajo Nation shall advance its annual share of the Navajo Dam and Reservoir OM&R 

7 costs for the next Federal fiscal year on or before September 30. The first such billing 

8 will be issued based upon the effective date NIIP water is provided under Subcontracts 

9 and in the event this effective date shall be for costs of service of less than a full year, 

10 such costs shall be prorated for the period covered.

11

12 9. LIMITED RESPONSIBILITY FOR DISTRIBUTION

13 (a) Upon delivery, as specified under Part II Article 6(a) herein, the Navajo 

14 Nation shall hold the United States, its officers, agents, employees, and successors or 

15 assigns, harmless from every claim for damages to persons or property, direct or indirect, 

16 and of whatever nature, arising out of or in any manner connected with the control, 

17 carriage, handling, distribution or use of such water beyond the point of delivery; except 

18 to the extent that such responsibilities are placed on the United States by Act of Congress.

19

20

21 PART III. ALP

22 10. WATER DELIVERY PROVISIONS

23 (a) Pursuant to the Colorado Ute Settlement Act Amendments of 2000, the 

24 United States agrees to deliver or make available for delivery to the Navajo Nation a 

25 municipal and industrial water allocation with an average annual depletion not to exceed 

26 2,340 acre-feet from the ALP water supply under New Mexico State Engineer File No. 

27 2883, subject to the provisions of the Navajo Settlement Act, the Settlement Agreement, 

28 the Partial Final Decree and this Contract. Water delivered pursuant to this article shall 

29 be measured utilizing measuring facilities installed by the United States as a part of the 

30 ALP at the following points of delivery:

31 (i) The outlet works of Ridges Basin Dam; or
14

1 (ii) Bypassed at the Durango Pumping Plant; or

2 (iii) Both in combination.

3 (b) The Navajo Nation may divert its ALP water at the points of diversion for 

4 use by the Navajo Nation under its water rights for the ALP, consistent with the Navajo 

5 Settlement Act, the Settlement Agreement, the Partial Final Decree and this Contract. 

6 Sufficient water will be delivered from ALP water released from Lake Nighthorse or 

7 bypassed at the Durango Pumping Plant to meet the annual water allocation requirements 

8 of the Navajo Nation up to its Statutory Water Allocation. 

9 (c) If the IGA is in effect, the Navajo Nation shall have the right to receive 

10 water from storage from Lake Nighthorse in accordance with the Joint Storage Pool as 

11 described in the IGA.

12 (d) If the IGA is voided or otherwise terminated, the Navajo Nation under this 

13 Contract shall have 869 acre-feet of storage capacity space allocated for its exclusive use 

14 in Lake Nighthorse to support use of the ALP water supply as described in Part III Article 

15 10(a). The United States, or the Project Operator, shall fill and refill the Navajo Nation’s 

16 storage capacity space as often as direct flow is available from the Animas River to fill 

17 said space under the ALP diversion right issued in the State of Colorado and the Animas18 La Plata Project Compact (82 Stat. 898). The Navajo Nation shall have holdover storage 

19 rights in Lake Nighthorse from year to year to the extent that water stored in the Navajo 

20 Nation’s storage capacity space may be held for exclusive delivery to the Navajo Nation 

21 in future years as necessary to meet the delivery demands of the Navajo Nation in 

22 accordance with Part III Article 10(a) and 13(a). Nothing in this Contract shall prohibit 

23 the Navajo Nation from acquiring additional storage capacity space in Lake Nighthorse if 

24 additional space becomes available.

25 (e) The Navajo Nation must notify the Contracting Officer and the Project 

26 Operator of any requests for or changes in delivery of water from the ALP under State 

27 Engineer File No. 2883. The requested delivery or change in delivery shall be made by 

28 the Project Operator in a reasonable time within its ability to manage the operation of the 

29 project and in accordance with the IGA if the IGA is in effect, or as otherwise agreed to 

30 between the Navajo Nation, the Contracting Officer, and the Project Operator.
15

1 (f) Nothing in this section is intended to impose on the United States any 

2 obligation to maintain Ridges Basin Dam and Lake Nighthorse and related facilities or 

3 the NNMP beyond their useful lives, or to take extraordinary measures to keep these 

4 facilities operating

5 (g) The points of delivery of water made available for use pursuant to this 

6 section from the ALP shall be as specified in Part III Article 10(a) unless changed 

7 consistent with the Partial Final Decree and pursuant to written agreement of the 

8 Contracting Officer and the Navajo Nation. 

9 (h) To the extent that delivery of water is made through or from federal 

10 facilities, the Navajo Nation will reimburse costs associated with this delivery in 

11 accordance with the provisions of Part III Article 15 of this Contract.

12

13 11. ALP PROJECT WORKS

14 Subject to the terms and conditions of this and other applicable contracts related 

15 to the ALP, the United States has constructed the following ALP Project Works and 

16 appurtenant facilities, has acquired lands, and shall provide certain moveable property 

17 and equipment to the Project Operator needed for ALP operation and maintenance as, in 

18 the opinion of the United States in consultation with the Association, are necessary for 

19 ALP purposes, without being limited by enumeration and within the limit of funds made 

20 available by the Congress and the contracting parties.

21 (a) The Project Works consist of the following:

22 (i) Ridges Basin Dam and Lake Nighthorse and appurtenant facilities, the 

23 storage facility for the Project, are located on Basin Creek in Ridges Basin 

24 approximately 3 miles southwest of Durango, Colorado. The reservoir has a 

25 capacity of approximately 120,000 acre-feet.

26 (ii) Durango Pumping Plant and appurtenant facilities are located adjacent 

27 to the Animas River and pumps water from the Animas River for storage in 

28 Lake Nighthorse.

29 (iii) Ridges Basin Inlet Conduit and appurtenant facilities extend from the 

30 Durango Pumping Plant to Lake Nighthorse.
16

1 (iv) Operation and Maintenance Facilities will be constructed as 

2 determined necessary by the United States, after consultation with the Project 

3 Construction Coordinating Committee, for the required operation and 

4 maintenance of ALP Project Works.

5 (b) In addition to the ALP Project Works identified in Part III Article 11(a) 

6 above, the United States is constructing the Navajo Nation Municipal Pipeline to 

7 augment the existing system that conveys municipal water supplies, in an amount not less 

8 than 4,680 acre-feet per year, to the Navajo Indian Reservation at or near Shiprock, NM 

9 as a facility of the ALP authorized under Section 15(b) of the Colorado Ute Settlement 

10 Act Amendments of 2000. 

11 (c) The United States, after consultation with the Navajo Nation, shall have the 

12 right at any time to increase the capacity of the ALP Project Works or any unit or feature 

13 thereof for other than currently authorized project purposes without additional capital or 

14 operation and maintenance cost to the Navajo Nation; provided, that the Navajo Nation's 

15 use of the Statutory Water Allocation shall not be impaired thereby. The right of use of 

16 such increased capacity is reserved to the United States.

17 (d) Any additions, changes to, or operation of ALP Project Works or changes in 

18 use of the water allocations pursuant to Sec. 6(a)(1)(A)(ii) of the Colorado Ute Settlement 

19 Act Amendments of 2000, as amended, from that stated in the Animas-La Plata Final 

20 Supplemental Environmental Impact Statement (FSEIS) dated July 2000 and subsequent 

21 Record of Decision dated September 25, 2000, shall, as required by law, be subject to 

22 further compliance with applicable environmental statutes, which shall include an 

23 analysis of potential impacts on other project Sponsors.

24 (e) Construction and operation of the ALP will be in accordance with the 

25 Environmental Commitments in Chapters 4 and 5 of the FSEIS, which are attached as 

26 Exhibit A to this Contract.

27

28 12. CONSTRUCTION AND OPERATION OF FACILITIES

29 (a) Nothing in this Contract shall be construed to obligate the United States to 

30 construct, install, operate or maintain dams, pumps, pipelines, storage tanks, distribution 

31 lines or other facilities required to take, measure, convey or distribute water for use 
17

1 beyond agreed upon points of delivery; except, that the United States shall have such 

2 obligations as conferred upon the Secretary by the authorities to construct, maintain and 

3 operate the ALP in accordance with the Colorado River Storage Project Act (70 Stat. 

4 105), the Act of June 13, 1962 (76 Stat. 96), and the Colorado Ute Settlement Act 

5 Amendments of 2000 (114 Stat. 2763A-258). The ALP shall be operated in a manner 

6 consistent with applicable law.

7 (b) Coordination of construction, operation and maintenance of the ALP shall be 

8 accomplished through the following two committees:

9 (i) The Project Construction Coordination Committee, which consists of 

10 representatives of the Bureau of Reclamation and Project contractors, 

11 including the Navajo Nation, provides coordination and consultation on the 

12 construction activities among all ALP sponsors, seeking common 

13 understanding and consensus on decisions associated with final plans, 

14 construction schedules and costs for ALP facilities, and shall dissolve upon 

15 completion of ALP construction.

16 (ii) The Association consists of representatives of those entities which 

17 have been identified by the Colorado Ute Settlement Act Amendments of 

18 2000, as amended, to receive a water allocation. This Association has 

19 contracted with Reclamation for the operation and maintenance of ALP 

20 multipurpose facilities and developed, among the ALP sponsors, a common 

21 understanding of the appropriate level of OM&R activities to be performed on 

22 the ALP multipurpose facilities to assure the long-term operational integrity of

23 ALP and public safety. Ultimately, the Association will oversee the ongoing 

24 OM&R activities of ALP, providing consultation and coordination among the 

25 Association members and Reclamation on such items as annual OM&R 

26 funding, maintenance schedules, and public safety issues.

27 (iii) Failure of the committees to reach common understandings or to 

28 otherwise coordinate with the Bureau of Reclamation on construction, 

29 operation and maintenance of the ALP shall in no way nullify or reduce the 

30 obligation of the United States to construct, operate and maintain ALP

31 facilities, including the NNMP, or to deliver water to the Navajo Nation as 
18

1 authorized by the Colorado Ute Settlement Act Amendments of 2000 (114 

2 Stat. 2763A-258), the Navajo Settlement Act, the Settlement Agreement, and 

3 this Contract.

4

5 13. WATER SUPPLY SHORTAGE

6 (a) With respect to water made available from the ALP under the terms of this 

7 Contract, during periods when the Contracting Officer, or the ALP Operator finds that the

8 direct flow of the Animas River is insufficient to supply 100 percent of the water 

9 deliveries under contracts for ALP water, the Navajo Nation shall share in the available 

10 direct flow consistent with Article 1 of the Animas-La Plata Project Compact (82 Stat. 

11 898). 

12 (b) In any year in which there may occur a shortage in the Statutory Water 

13 Allocation from any cause at the points of delivery, the ALP Operator reserves the right 

14 to make a conclusive determination of shortage and to apportion the available ALP water 

15 allocation among the ALP sponsors subject to the Colorado Ute Settlement Act 

16 Amendments of 2000, as amended, the IGA, and applicable laws, including the Animas17 La Plata Project Compact.

18 (c) On account of drought or other causes outside the control of the United 

19 States, there may occur at times during any year a shortage in the quantity of water 

20 available for delivery to the Navajo Nation pursuant to this Contract. In no event shall 

21 any liability accrue against the United States or any of its officers, agents, or employees, 

22 for any damage, direct or indirect, arising out of any such shortage, and payments due the 

23 United States provided for herein shall not be reduced because of such shortage. 

24

25 14. BLOCK NOTICE FOR ALP WATER DELIVERY

26 (a) When the ALP Project Water becomes available for use by the Navajo 

27 Nation, the United States shall, after consultation, give the Navajo Nation written notice, 

28 referred to herein as the "ALP Block Notice". The ALP Block Notice shall contain: (1) 

29 the quantity of Project Water available to the Navajo Nation from the ALP, and (2) the 

30 effective date that water is available for delivery to the Navajo Nation. 
19

1 (b) The ALP Block Notice and any amendments thereto shall become a part of 

2 this Contract.

3 

4 15. COST PROVISIONS

5 The Navajo Nation’s cost obligations for the ALP will be as follows:

6 (a) Prior to water becoming available for use by the Navajo Nation, pursuant to 

7 Part III Article 14(a) above, the OM&R costs allocated to the Navajo Nation’s ALP 

8 Project Water shall be paid by Reclamation. Upon water becoming available for use by 

9 the Navajo Nation, pursuant to Part III Article 14(a) above, the Contracting Officer will 

10 notify the Navajo Nation of the transfer of responsibility for the Navajo Nation’s ALP 

11 OM&R costs at least sixty (60) days prior to the effective date of the transfer. 

12 (b) The OM&R costs allocated to the Navajo Nation’s Statutory Water 

13 Allocation will be comprised of:

14 (i) the Navajo Nation’s share of Fixed OM&R costs of the multipurpose 

15 facilities as defined in the IGA. The Navajo Nation’s share, as identified in 

16 the IGA is 2.5% of the total Fixed OM&R costs. If the IGA is voided or 

17 otherwise terminated, the Navajo Nation’s share of Fixed OM&R costs will be 

18 defined by the final cost allocation;

19 (ii) the Navajo Nation’s share of Variable OM&R costs of the 

20 multipurpose facilities, which are actual costs of replacing water released 

21 from storage in Lake Nighthorse by request of the Navajo Nation, as defined 

22 in the IGA, which contains provisions for a Variable OM&R fund, designed to 

23 pay all or part of the ALP Variable OM&R costs;

24 (iii) all OM&R costs associated with the NNMP during the period in which 

25 title to the pipeline is held by the United States. In addition, the Navajo 

26 Nation shall be responsible for providing OM&R of the NNMP and for 

27 funding the OM&R costs of the pipeline when title of the pipeline is 

28 transferred to the Navajo Nation. The Navajo Nation’s OM&R 

29 responsibilities associated with the NNMP shall be further identified and 

30 provisions for payment made in the NNMP operations agreement identified in 

31 Section 10605(b) of the Navajo Settlement Act. If title is not conveyed, the 
20

1 OM&R responsibilities and the Navajo Nation’s share of OM&R costs 

2 associated with the NNMP shall be further identified and provisions for 

3 payment made in a separate OM&R contract that will be required between 

4 Reclamation and the NNMP operator.

5 (c) The Navajo Nation agrees to pay, in advance, its share of the ALP Fixed and 

6 Variable OM&R costs. Payment of the Navajo Nation’s, or its assignee’s, allocated 

7 OM&R costs shall be made annually in advance, within 60 days of receipt of the annual 

8 charge notice issued by the Project Operator based on the Association’s annual estimate 

9 of ALP OM&R costs. If the Navajo Nation’s allocated OM&R costs exceed the sum 

10 paid in advance, then a supplemental charge notice will be issued and the Navajo Nation 

11 will pay the sum required within 60 days of receipt. If the Navajo Nation’s allocated 

12 OM&R costs are less than the sum advanced, then the Navajo Nation shall receive a 

13 credit for the overpayment upon its next annual charge notice.

14 (d) In the event either the ALP OM&R cost estimate falls short of the actual 

15 costs in any period, or whenever it is anticipated by the Contracting Officer that a deficit 

16 will occur during the year, supplemental notices may be issued by the Contracting Officer 

17 requesting additional funds. OM&R funds not spent during one calendar year will be 

18 carried over for use during the next calendar year with funds required for that year being 

19 reduced accordingly. An itemized statement of actual costs incurred during each year 

20 shall be furnished to the Navajo Nation.

21 (e) Billings from the Contracting Officer or the Project Operator, and payments 

22 by the Navajo Nation of the OM&R costs outlined under this section shall be made on the 

23 basis of Part III Articles 15(b) and 15(c). For project operation purposes, the Navajo 

24 Nation will provide an annual notice to the Contracting Officer, or the Project Operator,

25 identifying the amount of water estimated to be used by the Navajo Nation, the estimated 

26 period and point of diversion for each intended purpose and a listing of all executed 

27 Subcontracts with third parties, including those Subcontracts anticipated to be executed 

28 during the year of applicability. The Navajo Nation shall send this notice on or before 

29 February 1 of the year preceding the year of use described in the notice. Upon receipt of 

30 such notice, the Contracting Officer, or the Project Operator, will bill the Navajo Nation 

31 for payment of costs as prescribed herein. Billing adjustments will be made to correct for 
21

1 differences in the estimated and actual use of water, as well as, the estimated and actual 

2 costs during the preceding year.

3

4 16. TITLE TRANSFER

5 Title to NNMP facilities shall remain in the name of the United States, until 

6 transferred to the Navajo Nation pursuant to Section 10605(b) of the Navajo Settlement 

7 Act.

8

9 17. LIMITED RESPONSIBILITY FOR DISTRIBUTION

10 (a) Upon delivery, as specified under Part III Article 10(a) herein, the Navajo 

11 Nation shall hold the United States, its officers, agents, employees, and successors or 

12 assigns, harmless from every claim for damages to persons or property, direct or indirect, 

13 and of whatever nature, arising out of or in any manner connected with the control, 

14 carriage, handling, distribution or use of such water beyond the point of delivery. Section

15 10605(b) of the Navajo Settlement Act acknowledges the City of Farmington’s role for 

16 the diversion, treatment and conveyance of water made available under this Contract. 

17

18

19 PART IV. NGWSP

20 18. WATER DELIVERY PROVISIONS

21 (a) The United States agrees to deliver, or make available for delivery, to the 

22 Navajo Nation a diversion of not more than 22,650 acre-feet, or the quantity of water 

23 necessary to supply a depletion of 20,780 acre-feet from the San Juan River, whichever is 

24 less, in any one year, water allocated to the Navajo Nation under its water rights for the 

25 NGWSP uses in New Mexico from Navajo Reservoir or from the points of diversion 

26 from the San Juan River as authorized by Section 10603 of the Navajo Settlement Act, 

27 under State Engineer File Nos. 2849 and 3215, subject to the provisions of the Navajo 

28 Settlement Act, the Settlement Agreement, the Partial Final Decree, and this Contract.

29 (b) Nothing in this section is intended to impose on the United States any 

30 obligation to maintain the NGWSP beyond its useful life or to take extraordinary 

31 measures to keep the facilities operating.
22

1 (c) The points of delivery of water made available for use pursuant to this 

2 section from Navajo Reservoir and the San Juan River shall be as specified in Part IV 

3 Article 18(a) unless changed as allowed by the Partial Final Decree and pursuant to 

4 written agreement of the Contracting Officer and the Navajo Nation. 

5 (d) To the extent that delivery of water is made through or from federal 

6 facilities, the Navajo Nation will reimburse costs associated with this delivery in 

7 accordance with the provisions of Part IV Article 26 of this Contract.

8 (e) The Navajo Nation must notify the Contracting Officer, the NIIP Project 

9 Operator, and the NGWSP Project Operator of its scheduled locations, amounts and 

10 timings of anticipated diversions prior to any delivery of water from the NGWSP under 

11 State Engineer File Nos. 2849 and 3215. The requested delivery or change in delivery 

12 shall be made by the Contracting Officer, the NIIP Project Operator, and the NGWSP 

13 Project Operator in a reasonable time within their abilities to manage the operation of 

14 Navajo Dam and the NIIP intake, as appropriate, or as otherwise agreed to between the 

15 Navajo Nation, the Contracting Officer, the NIIP Project Operator, the NGWSP Project 

16 Operator.

17

18 19. NGWSP FACILITIES

19 Subject to the terms and conditions of this and other applicable contracts related 

20 to the NGWSP, the United States will construct the following NGWSP facilities and 

21 appurtenant facilities without being limited by enumeration and within the limit of funds 

22 made available pursuant to the Navajo Settlement Act.

23 (a) The NGWSP facilities consist of two laterals, the San Juan Lateral and the 

24 Cutter Lateral, as generally described in the Navajo-Gallup Water Supply Project Final 

25 Environmental Impact Statement (FEIS) dated July 2009 and subsequent Record of 

26 Decision dated October 1, 2009. 

27 (b) Operation and maintenance facilities will be constructed as determined 

28 necessary by the United States, after Consultation with the Project Construction 

29 Committee, for the required operation and maintenance of NGWSP facilities.

30 (c) As a condition of construction of the facilities authorized under Section 

31 10602 (b) of the Navajo Settlement Act, the Project Participants shall provide all land or 
23

1 interest in land, as appropriate, that the United States identifies as necessary for 

2 acquisition under Section 10602 (c) of the Navajo Settlement Act at no cost to the United 

3 States. 

4 (d) Any additions, changes to, or operation of NGWSP facilities or changes in 

5 use of the water allocations pursuant to Section 10603(b)(1)(B) of the Settlement Act

6 from that stated in the Navajo-Gallup Water Supply Project FEIS dated July 2009 and 

7 subsequent Record of Decision dated October 1, 2009, will, as required by law, be 

8 subject to further compliance with applicable environmental statutes, which shall include 

9 an analysis of potential impacts on other Project Participants.

10 (e) Construction and operation of the NGWSP will be in accordance with the 

11 Environmental Commitments in Chapter VI of the FEIS, which are attached as Exhibit B 

12 to this Contract. 

13

14 20. CONSTRUCTION AND OPERATION OF FACILITIES

15 (a) Nothing in this Contract shall be construed to obligate the United States to 

16 construct, install, operate or maintain dams, pumps, pipelines, storage tanks, distribution 

17 lines or other facilities required to take, measure, convey or distribute water for use 

18 beyond agreed upon points of delivery; except, that the United States shall have such 

19 obligations as conferred upon the Secretary by the authorities to construct, maintain and 

20 operate Navajo Dam and Reservoir, the NIIP and the NGWSP in accordance with the 

21 Colorado River Storage Project Act (70 Stat. 105), the Act of June 13, 1962 (76 Stat. 96), 

22 and the Navajo Settlement Act

23 (b) Coordination of construction, operation and maintenance of the NGWSP

24 shall be accomplished through the establishment of a Project Construction Committee

25 which will consist of representatives of the Bureau of Reclamation and the Project 

26 Participants, and may include the State of New Mexico.

27 (i) The Project Construction Committee shall:

28 (A) review cost factors and budgets for construction and operation and 

29 maintenance activities; and

30 (B) improve construction management through enhanced communication; 

31 and
24

1 (C)seek additional ways to reduce overall NGWSP costs.

2 (ii) Failure of the committee to reach common understandings or to 

3 otherwise coordinate with the Bureau of Reclamation on construction, 

4 operation and maintenance of the NGWSP shall in no way nullify or reduce 

5 the obligation of the United States to construct, operate and maintain NGWSP

6 facilities or to deliver water to the Navajo Nation as authorized by the Navajo 

7 Settlement Act, the Settlement Agreement, and this Contract.

8

9 21. WATER SUPPLY AND SHORTAGE

10 (a) Notwithstanding any other provisions of this Contract, during times of 

11 shortage in the Navajo Reservoir water supply to meet demands under contracts for 

12 delivery of water from said supply, taking into account water available from inflows 

13 below Navajo Dam to help meet the demands, the Navajo Nation will share in the 

14 available water supply in the manner set forth in Section 11 of the Act of June 13, 1962 

15 (76 Stat. 96), and Section 10402 (b) of the Navajo Settlement Act.

16 (b) On account of drought or other causes outside the control of the United 

17 States, there may occur at times during any year a shortage in the quantity of water 

18 available for use by the Navajo Nation pursuant to this Contract. In no event shall any 

19 liability accrue against the United States or any of its officers, agents, or employees, for 

20 any damage, direct or indirect, arising out of any such shortage, and payments due the 

21 United States provided for herein shall not be reduced because of such shortage.

22

23 22. NOTIFICATION OF SUBSTANTIAL COMPLETION 

24 When features or reaches of the NGWSP have been declared to be substantially 

25 complete and water can be made available to the Navajo Nation, the United States shall, 

26 after consultation, give the Navajo Nation written notice, referred to herein as the “Notice 

27 of Substantial Completion”. The Notice of Substantial Completion shall contain: (1) a 

28 description of the NGWSP facilities that have been determined to be substantially 

29 complete and can generate water delivery, (2) a list of the feature(s) or reach(es) which are 

30 completed, (3) the effective date of that substantial completion declaration, and (4) the

31
25

1 proportionate share of OM&R costs associated with the completed NGWSP facilities that 

2 are allocated to the Navajo Nation pursuant to Article 26 of this Contract.

3

4 23. BLOCK NOTICE FOR NGWSP WATER AVAILABILITY 

5 (a) When NGWSP water can be made available to the Navajo Nation, the 

6 United States shall, after consultation, give the Navajo Nation written notice, referred to 

7 herein as the “NGWSP Block Notice”. The NGWSP Block Notice shall contain: (1) the 

8 effective date that NGWSP water is made available, (2) the quantity of NGWSP water 

9 available to the Navajo Nation from the block, (3) the designation of the lateral, either 

10 Cutter Lateral or San Juan Lateral, that will be used to convey the available block of 

11 NGWSP water under notice, and (4) a description of the feature(s) or reach(es) which can 

12 receive NGWSP water. 

13 (b) The NGWSP Block Notice and any amendments thereto shall become a part 

14 of this Contract.

15

16 24. CARRIAGE OF NON-PROJECT WATER

17 (a) During the period where Title to NGWSP facilities is held by the United 

18 States, the Secretary may enter into a contract for the treatment and carriage of non19 Project water through the NGWSP if, after consultation with the Navajo Nation, it is 

20 determined that capacity is available without impairing delivery to a Project Participant. 

21 Any contract for treatment and carriage of non-Project water shall include the following 

22 terms:

23 (i) the beneficiary shall pay the OM&R costs associated with treatment 

24 and carriage of the non-Project water; 

25 (ii) the beneficiary shall pay an appropriate fee that may be established by 

26 the Secretary to assist in the recovery of any capital cost allocable to that use; 

27 and

28 (iii) the contract for treatment and carriage of non-Project water shall 

29 terminate if delivery to a Project Participant is impaired.

30 (b) Following transfer of Title to an NGWSP facility to the Navajo Nation 

31 pursuant to Article 27, the Navajo Nation may enter into a contract for the treatment and 
26

1 carriage of non-Project water through that NGWSP facility if capacity is available 

2 without impairing delivery to a Project Participant. Any contract for treatment and 

3 carriage of non-Project water shall include the following terms:

4 (i) the beneficiary shall pay the OM&R costs associated with treatment 

5 and carriage of the non-Project water; 

6 (ii) the beneficiary shall pay an appropriate fee that may be established by 

7 the Secretary to assist in the recovery of any capital cost allocable to that use; 

8 and

9 (iii) the contract for treatment and carriage of non-Project water shall 

10 terminate if delivery to a Project Participant is impaired.

11

12 25. ADDITIONAL CAPACITY

13 (a) During the period where Title to NGWSP facilities is held by the United 

14 States, the Navajo Nation may request of the Secretary the use of additional capacity in 

15 an NGWSP facility for treatment and carriage of water if capacity is available without 

16 impairing delivery to a Project Participant. The Secretary shall approve or disapprove the 

17 request within 180 days of receipt of the request. Prior to use of any additional capacity, 

18 the Navajo Nation must agree to the following terms:

19 (i) pay the OM&R costs associated with the additional capacity to be 

20 used; 

21 (ii) pay any fee established by the Secretary to assist in recovering capital 

22 costs relating to the additional use; and

23 (iii) use of additional capacity shall be terminated if delivery to a Project 

24 Participant is impaired.

25 (b) Following transfer of Title to an NGWSP facility pursuant to Article 27, the 

26 Navajo Nation may request of the owner of the NGWSP reach or facility the use of 

27 additional capacity in an NGWSP facility for treatment and carriage of water if capacity 

28 is available without impairing delivery to a Project Participant. The owner of the NGWSP 

29 reach or facility shall approve or disapprove the request within 180 days of receipt of the 

30 request. Prior to use of any additional capacity, the Navajo Nation must agree to the 

31 following terms:
27

1 (i) pay the OM&R costs associated with the additional capacity to be 

2 used; 

3 (ii) pay any fee established by the owner of the NGWSP reach or facility 

4 relating to the additional use; and

5 (iii) use of additional capacity shall be terminated if delivery to a Project 

6 Participant is impaired.

7

8 26. COST PROVISIONS

9 (a) The Navajo Nation shall pay the United States or its designee if some 

10 organization other than the United States is operating Navajo Dam and Reservoir, the 

11 Navajo Nation’s proportionate share of the OM&R costs for Navajo Dam and Reservoir 

12 assignable to the amount of water made available to the Navajo Nation through Part IV 

13 Article 23 of this Contract. The Navajo Nation’s proportionate share of Navajo Dam and 

14 Reservoir OM&R costs will be based upon 100 percent of the water supply available 

15 under NGWSP Block Notice and designated for the Cutter Lateral and 50 percent of the 

16 water supply available under NGWSP Block Notice and designated for the San Juan 

17 Lateral. 

18 (b) The Navajo Nation shall pay the United States or its designee if some 

19 organization other than the United States is operating the NIIP, a proportionate share of 

20 OM&R costs for the NIIP facilities that are used to convey NGWSP water made 

21 available to the Navajo Nation through Part IV Article 23 of this Contract. The 

22 proportionate share of OM&R costs for the NIIP facilities used to convey NGWSP water 

23 shall be identified and provisions for payment made in the OM&R contract that will be 

24 required between Reclamation and the NGWSP operator. The Navajo Nation’s 

25 construction cost obligation for the NGWSP shall be allocated, waived and declared non26 reimbursable by the Secretary.

27 (c) The Navajo Nation’s OM&R cost obligation for the NGWSP shall be paid to 

28 the United States, or its designee if some organization other than the United States is 

29 operating the NGWSP facilities, as follows:

30 (i) For any feature or reach of the NGWSP, declared substantially complete 

31 under Part IV Article 22, through or by which water can only be delivered to 
28

1 the Navajo Nation, the Navajo Nation shall pay all OM&R costs associated 

2 with water delivery, until such time water can be delivered through or by that 

3 feature or reach to other Project Participants, at which time Part IV Article 

4 26(d)(ii) below shall apply.

5 (ii) For any feature or reach of the NGWSP through or by which water 

6 delivery is a benefit to the Navajo Nation and any other Project Participant, 

7 the Navajo Nation’s OM&R cost obligation will be comprised of:

8 (A) the Navajo Nation’s share of Fixed OM&R costs based upon its 

9 proportionate share of the design capacity for all NGWSP facilities, or 

10 reaches of those facilities, which have been declared substantially 

11 complete through Part IV Article 22 of this Contract. 

12 (B) the Navajo Nation’s share of Variable OM&R costs. 

13 (d) Billing and payment for the Navajo Nation’s OM&R cost obligations shall 

14 be conducted as follows:

15 (i) The Navajo Nation’s obligation for Navajo Dam and Reservoir 

16 OM&R, as provided under Part IV Article 26(a) above, shall be paid on the 

17 basis of annual cost estimates made by the Contracting Officer, or its 

18 designee. An estimate from the Contracting Officer will be sent annually to 

19 the Navajo Nation on or before May 1 for the next Federal fiscal year, which 

20 begins October 1 of the same calendar year and ends September 30 of the next 

21 calendar year. The Navajo Nation shall advance its annual share of the 

22 Navajo Dam and Reservoir OM&R costs for the succeeding Federal fiscal 

23 year on or before September 30. The first such billing will be issued based 

24 upon the effective date stated in the NGWSP Block Notice and in the event 

25 this effective date shall be for costs of service of less than a full year, such 

26 costs shall be prorated for the period covered.

27 (ii) Fixed OM&R costs for the NGWSP shall be paid on the basis of 

28 annual cost estimates made by the Contracting Officer, or the NGWSP 

29 Operator, based upon the proportionate share of the design capacity for those 

30 NGWSP facilities which have been declared substantially complete through 

31 Part IV Article 22 of this Contract. An estimate from the Contracting Officer, 
29

1 or the NGWSP Operator, will be sent to the Navajo Nation on or before May 

2 1 for the next Federal fiscal year, which begins October 1 of the same 

3 calendar year and ends September 30 of the next calendar year. The Navajo 

4 Nation shall advance its share of the OM&R costs for each Federal fiscal year 

5 in quarterly payments which will be due on September 30, December 31, 

6 March 31, and June 30 of the Federal fiscal year of applicability. The first 

7 such billing will be issued immediately following a notice of substantial 

8 completion as provided in Part IV Article 22 of this Contract. In the event the 

9 first notice shall be for costs of service of less than a full year, such costs shall 

10 be prorated for the period covered. An itemization of the estimated Fixed 

11 OM&R costs will accompany the billing.

12 (iii) Variable OM&R costs for the NGWSP shall be paid on the basis of an 

13 annual notice provided by the Navajo Nation to the Contracting Officer, or the 

14 NGWSP Operator, on or before May 1 for the next Federal fiscal year, which 

15 begins October 1 of the same calendar year and ends September 30 of the next 

16 calendar year. The annual notice will provide an estimate of the Navajo 

17 Nation’s anticipated water delivery requirements on a quarterly basis. Based 

18 upon these anticipated water delivery requirements, the Contracting Officer, 

19 or the NGWSP Operator, will bill the Navajo Nation quarterly on September 

20 30, December 31, March 31, and June 30 of the Federal fiscal year of 

21 applicability. An itemization of the estimated Variable OM&R costs will 

22 accompany the billing.

23 (e) In the event either the OM&R cost estimates fall short of the actual costs in 

24 any period, or whenever it is anticipated by the Contracting Officer that a deficit will 

25 occur during the fiscal year, supplemental notices may be issued by the Contracting 

26 Officer requesting additional funds. OM&R funds not spent during one fiscal year will 

27 be carried over for use during the next fiscal year with funds required for that year being 

28 reduced accordingly. An itemized statement of actual costs incurred during each year 

29 shall be furnished to the Navajo Nation. Billing adjustments will be made to correct for 

30 differences in the estimated and actual costs at the beginning of the next fiscal year, and 
30

1 in the case of Variable OM&R costs, for differences in the Navajo Nation’s estimated 

2 water delivery requirements and the actual metered flow.

3 (f) The Fixed OM&R costs and Variable OM&R costs of the NGWSP allocated 

4 to the Navajo Nation for the NGWSP facilities that have been determined to be 

5 substantially complete for water delivery under Part IV Article 22 of this Contract, that 

6 the Secretary determines are in excess of the ability of the Navajo Nation to pay, may be 

7 waived and declared non-reimbursable by the Secretary for not more than ten (10) years 

8 from the effective date established by the notice of substantial completion, pursuant to 

9 Sec. 10604(f)(1) of the Navajo Settlement Act. This waiver authority shall terminate on 

10 the date on which title to a facility is transferred to the Navajo Nation pursuant to Sec. 

11 10604(f)(5).

12 (g) OM&R responsibilities and the Navajo Nation’s share of OM&R costs 

13 associated with the NGWSP shall be further identified and provisions for payment made 

14 in the NGWSP operations agreement identified in Section 10602(f) of the Navajo 

15 Settlement Act. If title is not conveyed on a feature or reach, the OM&R responsibilities 

16 and the Navajo Nation’s share of OM&R costs associated with NGWSP features and 

17 reaches shall be further identified and provisions for payment made in a separate OM&R 

18 contract that will be required between Reclamation and the NGWSP project operator. 

19

20 27. CONVEYANCE OF TITLE

21 Title to NGWSP facilities shall remain in the name of the United States, until 

22 conveyed pursuant to Section 10602(f) of the Navajo Settlement Act.

23

24 28. LIMITED RESPONSIBILITY FOR DISTRIBUTION

25 (a) Upon delivery, as specified under Part IV Article 18(a) herein, the Navajo 

26 Nation shall hold the United States, its officers, agents, employees, and successors or 

27 assigns, harmless from every claim for damages to persons or property, direct or indirect, 

28 and of whatever nature, arising out of or in any manner connected with the control, 

29 carriage, handling, distribution or use of such water beyond the point of delivery. Section 

30 10602(f) of the Navajo Settlement Act acknowledges the City of Gallup’s role for the 

31 conveyance and distribution of water made available under this Contract for the NGWSP.
31

1 PART V. GENERAL

2

3 29. TERM OF CONTRACT

4 The water delivery rights recognized by this Contract shall be perpetual unless 

5 limited by a term of years, canceled, terminated, or rescinded by an Act of Congress. 

6

7 30. TRANSPORTATION LOSSES

8 No conveyance losses beyond the points of delivery as specified in Part II Article 

9 6(a), Part III Article 10(a), and Part IV Article 18 shall be borne by the United States. In 

10 the event that points of delivery are changed, transportation of water from the original 

11 points of delivery to other points of delivery shall be the sole responsibility of the Navajo 

12 Nation, so that no conveyance losses, including channel losses, shall be borne by the 

13 United States.

14

15 31. UNCONTROLLABLE FORCES

16 Neither party shall be considered to be in default in respect to any obligation 

17 hereunder if prevented from fulfilling such obligation by reason of uncontrollable forces. 

18 The term uncontrollable forces shall mean, for the purposes of this Contract, any cause 

19 beyond the control of the party affected, including but not limited to, drought, failure of 

20 facilities, flood, earthquake, storm, lightning, fire, epidemic, war, riot, civil disturbance, 

21 labor disturbance, sabotage, and restraint by court or public authority, which by exercise 

22 of due diligence and foresight, such party could not reasonably have been expected to 

23 avoid. Either party rendered unable to fulfill any obligation by reason of uncontrollable 

24 forces shall exercise due diligence to remove expeditiously such inability.

25

26 32. SUBCONTRACTS

27 (a) When water made available under this Contract is not being used by the 

28 Navajo Nation, the Navajo Nation may subcontract with third parties, subject to the 

29 provisions of the Navajo Settlement Act, the Settlement Agreement, the Partial Final 

30 Decree, and approval of the Contracting Officer in accordance with this section, to supply 

31 water for beneficial use on or off Navajo Lands in the State of New Mexico, subject to 
32

1 and consistent with the same requirements and conditions of State law, and any

2 applicable Federal law, interstate compact, and international treaty as apply to the 

3 exercise of water rights held by non-federal, non-Indian entities. Such Subcontracts shall 

4 not be considered subcontracts for purposes of Articles 44 and 46 of this Contract. 

5 Nothing in this Contract shall be construed to establish, address, or prejudice whether, or 

6 to prevent any party from litigating whether, or to the extent to which, any of the 

7 aforementioned laws do or do not permit, govern, or apply to the use of the Navajo 

8 Nation’s water outside the State.

9 (b) Water identified in this Contract that is transferred or otherwise made 

10 available to entities other than the Navajo Nation shall require a Subcontract.

11 (c) Subcontracts made by the Navajo Nation with third parties shall be subject 

12 to the provisions of the Navajo Settlement Act, the Settlement Agreement, the Partial 

13 Final Decree, and this Contract, and must include terms of use, purchase, measurement, 

14 operations and default. A copy of each proposed Subcontract shall be filed with the New 

15 Mexico Interstate Stream Commission at least 30 days prior to being executed by the 

16 Navajo Nation; provided, that proposed emergency Subcontracts may be filed with less 

17 than 30 days notice. A copy of each executed Subcontract shall be filed with the New 

18 Mexico Interstate Stream Commission.

19 (d) Prior to approving any Subcontract, the Contracting Officer shall comply 

20 with subsection 102(2)(C) of the National Environmental Policy Act (NEPA) of 1969, 42 

21 U.S.C. § 4332(2)(C). The Navajo Nation will furnish any data and information as may 

22 be required by the Contracting Officer for NEPA compliance documentation. The 

23 Contracting Officer has the authority under the Contributed Funds Act of 1921 (43 USC 

24 §395) to charge any Subcontractor for the costs associated with this compliance 

25 documentation. The Contracting Officer will coordinate with the Navajo Nation and the 

26 Subcontractor throughout the NEPA process, including furnishing copies of all related 

27 documentation. 

28 (e) The Contracting Officer shall approve any Subcontract submitted by the 

29 Navajo Nation if the Contracting Officer determines that:

30 (i) the diversion and use of water under the Subcontract would comply 

31 with the Settlement Agreement, the Partial Final Decree, and other applicable 
33

1 law, including any applicable permitting requirements and permit conditions 

2 of the New Mexico State Engineer, and the provisions of this Contract;

3 (ii) the sum of the term of the Subcontractor plus all renewals is no more 

4 than 99 years;

5 (iii) the use of water under the Subcontract is not inconsistent with the 

6 provisions of the Endangered Species Act or other provisions of federal law 

7 designed to protect the environment;

8 (iv) the Subcontract is sufficiently specific as to the amount of water and 

9 points of diversion to enable the Contracting Officer to account for the water 

10 as it is diverted; or, in the alternative, that the Subcontract reserves the 

11 Contracting Officer’s right to review and approve future diversions sought 

12 under the Subcontract, such review and approval to be consistent with this 

13 Contract;

14 (v) the delivery obligations under the Subcontract are not inconsistent 

15 with other obligations of the Contracting Officer to deliver water under 

16 preexisting contracts.

17 (f) The annual OM&R assessments specified in Part III Article 15, and Part IV 

18 Article 26 above shall be charged to the Navajo Nation for all water contracted to third 

19 parties.

20 (g) The Secretary shall approve or disapprove a Subcontract submitted to the 

21 Secretary not later than the later of:

22 (i) the date that is 180 days after the date on which the Subcontract is 

23 submitted to the Secretary; and 

24 (ii) the date that is 60 days after the date on which the Subcontractor 

25 complies with subsection 102(2)(C) of the National Environmental Policy Act 

26 (NEPA) of 1969, 42 U.S.C. § 4332(2)(C) and any other requirement of 

27 Federal law.

28

29 33. SEVERABILITY

30 If any provisions of this contract shall be held, by a court of competent 

31 jurisdiction, to be invalid, illegal, unenforceable or in conflict with the law of any 
34

1 jurisdiction, the parties intend that the validity, legality and enforceability of the 

2 remaining provisions shall not in any way be affected or impaired thereby.

3

4 34. TERMINATION

5 In the event that the Settlement Agreement is terminated pursuant to Section 

6 10701(e)(2) of the Navajo Settlement Act, the parties agree that this Contract terminates 

7 and further agree to reinstate and continue in full force and effect those portions of the 

8 Contract for which separate authority is provided other than pursuant to the Navajo 

9 Settlement Act.

10

11 35. CONTRACT AMENDMENTS

12 Any modifications to this Contract necessitated by future negotiations between 

13 the parties can be accomplished by amending this Contract to the extent such 

14 amendments are consistent with the provisions of the Partial Final Decree and the Navajo 

15 Settlement Act, including any future amendments. 

16

17 36. SAVINGS CLAUSES

18 (a) Nothing in this Contract shall be construed as an admission, or be used by 

19 any party as evidence, that the Navajo Nation is or is not legally entitled to reserved 

20 water rights in the San Juan River stream system.

21 (b) Nothing contained in this Contract shall be construed to alter, amend, repeal, 

22 construe, interpret, modify, or be in conflict with the provisions of: the Boulder Canyon 

23 Project Act (45 Stat. 1057); the Boulder Canyon Project Adjustment Act (54 Stat. 774); 

24 the Colorado River Compact, proclaimed on June 25, 1929 (46 Stat. 3000); the Upper 

25 Colorado River Basin Compact (63 Stat. 31); the 1944 Treaty with the United Mexican 

26 States, Treaty Series 994 (59 Stat. 1219); the Act of June 13, 1962 (76 Stat. 96); the 

27 Colorado River Basin Project Act (82 Stat. 885); the Colorado River Storage Project Act 

28 (70 Stat. 105); the Animas-La Plata Project Compact (82 Stat. 898); the Jicarilla Apache 

29 Tribe Water Rights Settlement Act (106 Stat. 2237); the Colorado Ute Settlement Act 

30 Amendments of 2000 (114 Stat. 2763A-258); or the Navajo Settlement Act.
35

1 (c) The uses of water in the State of New Mexico through works constructed 

2 under the authority of the Colorado River Storage Project Act (70 Stat. 105), the Act of 

3 June 13, 1962 (76 Stat. 96), the Colorado Ute Settlement Act Amendments of 2000 (114 

4 Stat. 2763A-258) and the Navajo Settlement Act shall be subject to and controlled by the

5 Colorado River Compact, the Upper Colorado River Basin Compact, the Animas-La 

6 Plata Project Compact, the Boulder Canyon Project Act, the Boulder Canyon Project 

7 Adjustment Act, the Colorado River Storage Project Act, the Colorado River Basin 

8 Project Act, the Mexican Water Treaty (Treaty Series 994), the Colorado Ute Settlement 

9 Act Amendments of 2000 and the Navajo Settlement Act, and shall be included within 

10 and shall in no way increase the total quantity of water to the use of which the State of 

11 New Mexico is entitled under said compacts, statutes, and treaty.

12 (d) Nothing in this Contract shall be construed in any way to quantify or 

13 otherwise adversely affect the land and water rights, claims or entitlements to water of 

14 any Indian tribe or community other than those of the Navajo Nation in, to and from the 

15 San Juan River Basin in New Mexico; except, that the right of the Navajo Nation to use 

16 water under water rights it may have in other river basins in New Mexico shall be 

17 forborne only so long as and to the extent that the Navajo Nation supplies the uses for 

18 which said water rights may exist by diversions of water from the San Juan River Basin 

19 under this Contract consistent with subparagraph 9.11 of the Settlement Agreement.

20

21 37. ENVIRONMENTAL COMPLIANCE AND COORDINATION

22 (a) The Navajo Nation, the United States Fish and Wildlife Service, the Bureau 

23 of Reclamation and the Bureau of Indian Affairs agree to cooperate and coordinate in the 

24 planning and construction of projects, diversions and changes in water management 

25 associated with the water made available to the Navajo Nation under the terms of this 

26 agreement as required by federal law, including, but not limited to, the Bald and Golden 

27 Eagle Protection Act, the Fish and Wildlife Coordination Act, the Endangered Species 

28 Act, the Clean Water Act, and the National Environmental Policy Act.

29 (b) The Navajo Nation and the Department of the Interior agree to work with the 

30 State of New Mexico and affected water users to assure that Navajo Dam and Reservoir, 
36

1 the NIIP, the ALP and the NGWSP are operated in compliance with applicable laws 

2 while meeting water delivery obligations. 

3 (c) Any modifications to project works, changes in operation of project works,

4 or changes in use of the water from that stated in the respective NEPA documents of the 

5 three projects identified in this Contract, as well as the Final Environmental Impact 

6 Statement for Navajo Reservoir Operations dated April, 2006 shall be subject to the 

7 review and approval of the Contracting Officer for the sole purpose of ensuring that such 

8 uses are consistent with the operational capacities of the respective projects and all 

9 applicable laws, including ensuring that appropriate environmental review has been 

10 conducted.

11

12

13 PART VI. STANDARD ARTICLES

14

15 38. AIR AND WATER POLLUTION CONTROL

16 The Navajo Nation agrees that in taking delivery of water under this contract, it 

17 will comply with federal air and water pollution control laws, now or hereafter in force, 

18 that may be applicable or relevant to the use being made of the water. Also, the Navajo 

19 Nation agrees that any subcontract it may enter into for the furnishing of water pursuant 

20 to this contract will contain similar air and water pollution control provisions including 

21 state and local requirements, where applicable. The Navajo Nation further agrees that 

22 any such subcontract it may enter into will require that its designs and plans for air and 

23 water pollution control facilities or equipment which are necessary parts of any design, 

24 facility, plant or process which utilizes water delivered pursuant to this contract will be 

25 submitted to the Secretary for his review and written comments prior to contracting for 

26 said facilities, their installation or major modification thereof.

27

28 39. ADMINISTRATION OF FEDERAL PROJECT LANDS

29 The lands and interests in lands acquired, withdrawn, or reserved and needed by 

30 the United States for the purposes of care, operation, and maintenance of Federal project 

31 works may be used by the Navajo Nation for such purposes. The Navajo Nation shall 

32 ensure that no unauthorized encroachment occurs on Federal project lands and rights-of33 way needed for the care, operation, and maintenance of Federal project works that the 

34 Navajo Nation has responsibility for. The Nation does not have the authority to issue any 

35 land-use agreement or grant that conveys an interest in Federal real property, nor to lease 

36 or dispose of any interest of the United States.

37

38 40. BOOKS, ACCOUNTS AND RECORDS

39 The Navajo Nation shall furnish to the Contracting Officer, as requested, 

40 information pertaining to land use and crop census, water supply, water use, changes in 

41 project works, and to other matters relating to the NIIP, the ALP, the NGWSP, and other 
37

1 projects that may utilize the Navajo Nation’s water rights supplied under this contract for 

2 miscellaneous municipal, industrial, commercial and domestic uses. The Secretary and 

3 the Navajo Nation shall jointly establish and maintain accounts and other books and 

4 records such as are necessary to enable the Secretary to operate the subject facilities. 

5 Reports thereon shall be furnished to the Contracting Officer in such form and on such 

6 date or dates as the Contracting Officer may require. Subject to applicable Federal laws

7 and regulations, each party shall have the right during office hours to examine and make 

8 copies of the other party’s books and records relating to matters covered by this contract. 

9 Records of diversions of water for use by the Navajo Nation pursuant to this contract 

10 shall be supplied to the New Mexico State Engineer.

11

12 41. CONTAMINATION OR POLLUTION OF FEDERAL PROPERTY

13 (a) The Navajo Nation shall not allow contamination or pollution of Federal 

14 project lands, project waters, or project works of the United States or administered by the 

15 United States and for which the Navajo Nation has the responsibility for care, operation, 

16 and maintenance by its employees or agents. The Navajo Nation shall also take 

17 reasonable precautions to prevent such contamination or pollution by third parties.

18 (b) The Navajo Nation shall comply with all applicable Federal laws and 

19 regulations and Reclamation policies and instructions existing, or hereafter enacted or 

20 promulgated, concerning any hazardous material that will be used, produced, transported, 

21 stored, released, or disposed of on or in Federal project lands, project waters, or project 

22 works.

23 (c) “Hazardous material” means (1) any substance defined as hazardous, a 

24 pollutant, or a contaminant under the Comprehensive Environmental Response, 

25 Compensation and Liability Act (CERCLA), 42 U.S.C. § 9601 (14) and (33); (2) oil as 

26 defined by the Clean Water Act, 33 U.S.C. § 1321 (a) and the Oil Pollution Act, 33 

27 U.S.C. § 2701 (23); (3) thermal pollution, refuse, garbage, sewage effluent, industrial 

28 waste, mine or mill tailings, mineral salts, pesticides, and other solid waste, and (4) any 

29 other substance regulated as hazardous or toxic under Federal or Navajo Nation law.

30 (d) Upon discovery of any event which may or does result in contamination or 

31 pollution of Federal project lands, project water, or project works, the Navajo Nation

32 shall immediately undertake all measures necessary to protect public health and the 

33 environment, including measures necessary to contain or abate any such contamination or 

34 pollution and shall report such discovery with full details of the actions taken to the 

35 Contracting Officer. Reporting shall be within a reasonable time period but shall not 

36 exceed 24 hours from the time of discovery if it is an emergency and the first working 

37 day following discovery in the event of a non-emergency. 

38 (e) If violation of the provisions of this Article occurs and the Navajo Nation

39 does not take immediate corrective action as determined by the Contracting Officer, the 

40 Navajo Nation may be subject to remedies imposed by the Contracting Officer, which 

41 may include termination of this contract.

42 (f) The Navajo Nation shall be liable for any response action or corrective 

43 measure necessary to protect public health and the environment or to restore Federal 

44 project lands, project waters, or project works that are adversely affected as a result of 

45 such violation, and for all costs, penalties or other sanctions that are imposed for violation 

46 of any Federal or Tribal laws and regulations concerning hazardous material. At the 
38

1 discretion of the Contracting Officer, the United States may also terminate this Contract 

2 as a result of such violation. 

3 (g) The Navajo Nation shall defend, indemnify, protect and save the United 

4 States harmless from and against any costs, expenses, claims, damages, demands, or 

5 other liability arising from or relating to Navajo Nation’s violation of this article. 

6 (h) Reclamation agrees to provide information necessary for the Navajo Nation, 

7 using reasonable diligence, to comply with the provisions of this Article.

8

9 42. CLEAN AIR AND WATER

10 (a) The Navajo Nation agrees as follows:

11 (i) To comply with all the requirements of Section 114 of the Clean Air 

12 Act, as amended (42 U.S.C. 7414), and Section 308 of the Federal Water 

13 Pollution Control Act, as amended by Public Law 92-500 (33 U.S.C. 1318), 

14 respectively, relating to inspection, monitoring, entry, reports, and 

15 information, as well as other requirements specified in Section 114 of the Air 

16 Act and Section 308 of the Water Act, respectively, and all regulations and 

17 guidelines issued thereunder before the execution of this contract.

18 (ii) That no portion of the work required by this contract will be performed 

19 in a facility listed on the Environmental Protection Agency List of Violating 

20 Facilities on the date when this contract was executed unless and until the 

21 Environmental Protection Agency eliminates the name of such facility or 

22 facilities from such listing.

23 (iii) To use its best efforts to comply with clean air standards and clean 

24 water standards at the facility where the contract work is being performed.

25 (iv) To insert the substance of the provisions of this article into any 

26 nonexempt subcontract, including this paragraph (a)(4).

27 (b) The terms used in this article have the following meanings:

28 (i) The term “Air Act” means the Clean Air Act, as amended 

29 (42 U.S.C. 7401 et seq.).

30 (ii) The term “Water Act” means the Federal Water Pollution Control Act, 

31 as amended (33 U.S.C. 1251 et seq.).

32 (iii) The term “clean air standards” means any enforceable rules, 

33 regulations, guidelines, standards, limitations, orders, controls, prohibitions, or 

34 other requirements which are contained in, issued under, or otherwise adopted 

35 pursuant to the Air Act or Executive Order 11738, an applicable 

36 implementation plan as described in Section 110 of the Air Act (42 U.S.C. 

37 7410), an approved implementation procedure or plan under Section 111(c) or 

38 Section 111(d), respectively, of the Air Act (42 U.S.C. 7411(c) or (d)), or an 

39 approved implementation procedure under Section 112(d) of the Air Act (42 

40 U.S.C. 7412(d)).

41 (iv) The term “clean water standards” means any enforceable limitation, 

42 control, condition, prohibition, standard, or other requirement which is 

43 promulgated pursuant to the Water Act or contained in a permit issued to a 

44 discharger by the Environmental Protection Agency or by a state under an 

45 approved program, as authorized by Section 402 of the Water Act 

46 (33 U.S.C. 1342), or by local government to ensure compliance with 
39

1 pretreatment regulations as required by Section 307 of the Water Act 

2 (33 U.S.C. 1317).

3 (v) The term “comply” means compliance with clean air or water 

4 standards. Comply shall also mean compliance with a schedule or plan 

5 ordered or approved by a court of competent jurisdiction, the Environmental 

6 Protection Agency, or an air or water pollution control agency in accordance 

7 with the requirements of the Air Act or Water Act and regulations issued 

8 pursuant thereto.

9 (vi) The term “facility” means any building, plant, installation, structure, 

10 mine, vessel or other floating craft, location, or site of operations owned, 

11 leased, or supervised by a contractor or subcontractor to be utilized in the 

12 performance of a contract or subcontract. Where a location or site of 

13 operations contains or includes more than one building, plant, installation, or 

14 structure, the entire location or site shall be deemed to be a facility except

15 where the Director, Office of Federal Activities, Environmental Protection 

16 Agency, determines that independent facilities are collocated in one 

17 geographical area.

18

19 43. PEST MANAGEMENT

20 The Navajo Nation shall take appropriate steps to prevent the introduction and 

21 spread of, and to otherwise control undesirable plants and animals, as defined by the 

22 Contracting Officer, on Federal project lands, project waters, and project works for which 

23 the Navajo Nation has operation and maintenance responsibility. The Navajo Nation is 

24 responsible for inspecting its vehicles and equipment for reproductive and vegetative 

25 parts, foreign soil, mud or other debris that may cause the spread of weeds, invasive 

26 species and other pests, and for removing such materials before moving its vehicles and 

27 equipment onto any Federal land or out of any area on Federal project land where work is 

28 performed. Where decontamination is required prior to entering Federal project land, it 

29 shall be performed at the point of prior use, or at an approved offsite facility able to 

30 process generated cleaning wastes. Upon the completion of work, decontamination shall 

31 be performed within the work area before the vehicles and equipment are removed from 

32 Federal project lands. Programs for the control of these undesirable plants and animals 

33 on Federal project lands, project waters, and project works for which the Navajo Nation

34 has operation and maintenance responsibility will incorporate Integrated Pest 

35 Management (IPM) concepts and practices. IPM refers to a systematic and 

36 environmentally compatible program to maintain pest populations within economically 

37 and environmentally tolerable levels. In implementing an IPM program, the Navajo 

38 Nation will adhere to applicable Federal and State laws and regulations and Department 

39 of the Interior and Bureau of Reclamation policies, directives, guidelines, and manuals.

40

41 44. INDIAN EMPLOYMENT - EQUAL EMPLOYMENT OPPORTUNITY

42 (a) In accordance with the provisions of Title 42 U.S.C. 2000-e-2(i), the Navajo 

43 Nation shall, during the performance of this contract, give preference in employment to 

44 Indian members of the Navajo Nation Indian Reservation. The Bureau of Indian Affairs 

45 Office of Employment Assistance shall be notified of employment opportunities 48 hours 

46 before any positions are advertised to the general public. Nothing in this section shall be 
40

1 read as prohibiting the Navajo Nation from giving preferential employment to members 

2 of the Navajo Nation.

3 (b) Except as provided above, during the performance of this contract the 

4 Navajo Nation agrees as follows: 

5 (i) The Navajo Nation will not discriminate against any employee or 

6 applicant for employment because of race, color, religion, sex, disability, or 

7 national origin. The Navajo Nation will take affirmative action to ensure that 

8 applicants are employed, and that employees are treated during employment, 

9 without regard to their race, color, religion, sex, disability, or national origin. 

10 Such action shall include, but not be limited to the following: employment, 

11 upgrading, demotion, or transfer; recruitment or recruitment advertising; 

12 layoff or termination; rates of pay or other forms of compensation; and 

13 selection for training, including apprenticeship. The Navajo Nation agrees to 

14 post in conspicuous places, available to employees and applicants for 

15 employment, notices to be provided by the Contracting Officer setting forth 

16 the provisions of this nondiscrimination clause.

17 (ii) The Navajo Nation will, in all solicitations or advertisements for 

18 employees placed by or on behalf of the Navajo Nation, state that all qualified 

19 applicants will receive consideration for employment without regard to race, 

20 color, religion, sex, disability, or national origin.

21 (iii) The Navajo Nation will send to each labor union or representative of 

22 workers with which it has a collective bargaining agreement or other contract 

23 or understanding, a notice, to be provided by the Contracting Officer, advising 

24 the labor union or workers’ representative of the Navajo Nation’s 

25 commitments under Section 202 of Executive Order 11246 of September 24, 

26 1965, and shall post copies of the notice in conspicuous places available to 

27 employees and applicants for employment.

28 (iv) The Navajo Nation will comply with all provisions of Executive Order 

29 No. 11246 of September 24, 1965, and of the rules, regulations, and relevant 

30 orders of the Secretary of Labor.

31 (v) The Navajo Nation will furnish all information and reports required by 

32 Executive Order 11246 of September 24, 1965, and by the rules, regulations, 

33 and orders of the Secretary of Labor, or pursuant thereto, and will permit 

34 access to his books, records, and accounts by the Contracting Agency and the 

35 Secretary of Labor for purposes of investigation to ascertain compliance with 

36 such rules, regulations, and orders.

37 (vi) In the event of the Navajo Nation's noncompliance with the 

38 nondiscrimination clauses of this contract or with any of such rules, 

39 regulations, or orders, this contract may be canceled, terminated or suspended 

40 in whole or in part and the Navajo Nation may be declared ineligible for 

41 further Government contracts in accordance with procedures authorized in 

42 Executive Order 11246 of September 24, 1965, and such other sanctions may 

43 be imposed and remedies invoked as provided in Executive Order 11246 of 

44 September 24, 1965 or by rule, regulation, or order of the Secretary of Labor, 

45 or as otherwise provided by law.
41

1 (vii) The Navajo Nation will include the provisions of paragraphs (i) 

2 through (vii), modified to refer to the party to be bound, in every subcontract 

3 or purchase order unless exempted by the rules, regulations, or orders of the 

4 Secretary of Labor issued pursuant to Section 204 of Executive Order 11246 

5 of September 24, 1965, so that such provisions will be binding upon each 

6 subcontractor or vendor. The Navajo Nation will take such action with 

7 respect to any subcontract or purchase order as may be directed by the 

8 Secretary of Labor as a means of enforcing such provisions, including 

9 sanctions for noncompliance: Provided, however, that in the event the Navajo 

10 Nation becomes involved in, or is threatened with, litigation with a 

11 subcontractor or vendor as a result of such direction, the Navajo Nation may 

12 request the United States to enter into such litigation to protect the interests of 

13 the United States.

14

15 45. COMPLIANCE WITH CIVIL RIGHTS LAWS AND REGULATIONS

16 (a) The Navajo Nation shall comply with Title VI of the Civil Rights Act of 

17 1964 (42 U.S.C. 2000d), Section 504 of the Rehabilitation Act of 1973 (P.L. 93-112, as

18 amended), the Age Discrimination Act of 1975 (42 U.S.C. 6101, et seq.), Americans with 

19 Disabilities Act of 1990, as applicable, and any other applicable civil rights laws, as well 

20 as with its respective implementing regulations and guidelines imposed by the U.S. 

21 Department of the Interior and/or Bureau of Reclamation.

22 (b) These statutes require that no person in the United States shall be excluded 

23 from participation in, be denied the benefits of, or be otherwise subjected to 

24 discrimination under any program or activity receiving financial assistance from the 

25 Bureau of Reclamation on the grounds of race, color, national origin, disability, or age. 

26 By executing this contract, the Navajo Nation agrees to immediately take any measures 

27 necessary to implement this obligation, including permitting officials of the United States 

28 to inspect premises, programs, and documents.

29 (c) The Navajo Nation makes this agreement in consideration of and for the 

30 purpose of obtaining any and all Federal grants, loans, contracts, property discounts, or 

31 other Federal financial assistance extended after the date hereof to the Navajo Nation by 

32 the Bureau of Reclamation, including installment payments after such date on account of 

33 arrangements for Federal financial assistance which were approved before such date. 

34 The Navajo Nation recognizes and agrees that such Federal assistance will be extended in 

35 reliance on the representations and agreements made in this article and that the 

36 United States reserves the right to seek judicial enforcement thereof.

37 (d) Complaints of discrimination against the Navajo Nation shall be investigated 

38 by the Contracting Officer’s Office of Civil Rights.

39

40 46. CERTIFICATION OF NONSEGREGATED FACILITIES

41 The Navajo Nation hereby certifies that it does not maintain or provide for its 

42 employees any segregated facilities at any of its establishments and that it does not permit 

43 its employees to perform their services at any location under its control where segregated 

44 facilities are maintained. It certifies further that it will not maintain or provide for its 

45 employees any segregated facilities at any of its establishments and that it will not permit 

46 its employees to perform their services at any location under its control where segregated 
42

1 facilities are maintained. The Navajo Nation agrees that a breach of this certification is a 

2 violation of the Equal Employment Opportunity clause in this contract. As used in this 

3 certification, the term "segregated facilities" means any waiting rooms, work areas, rest 

4 rooms and wash rooms, restaurants and other eating areas, time clocks, locker rooms and 

5 other storage or dressing areas, parking lots, drinking fountains, recreation or 

6 entertainment areas, transportation, and housing facilities provided for employees which 

7 are segregated by explicit directive or are in fact segregated on the basis of race, creed, 

8 color, or national origin, because of habit, local custom, disability, or otherwise. The 

9 Navajo Nation further agrees that (except where it has obtained identical certifications 

10 from proposed subcontractors for specific time periods) it will obtain identical 

11 certifications from proposed subcontractors prior to the award of subcontracts exceeding 

12 $10,000 which are not exempt from the provisions of the Equal Employment Opportunity 

13 clause; that it will retain such certifications in its files; and that it will forward the 

14 following notice to such proposed subcontractors (except where the proposed 

15 subcontractors have submitted identical certifications for specific time periods):

16

17 47. NOTICE TO PROSPECTIVE SUBCONTRACTORS OF REQUIREMENT FOR 

18 CERTIFICATIONS OF NONSEGREGATED FACILITIES

19 A Certification of Nonsegregated Facilities must be submitted prior to the award 

20 of a subcontract exceeding $10,000 which is not exempt from the provisions of the Equal 

21 Employment Opportunity clause. The certification may be submitted either for each 

22 subcontract or for all subcontracts during a period (i.e., quarterly, semiannually, or 

23 annually). Note: The penalty for making false statements in offers is prescribed in 

24 18 U.S.C. 1001.

25

26 48. COMPLIANCE WITH RECLAMATION LAWS

27 The parties agree that the delivery of irrigation water or the use of federal 

28 facilities pursuant to this contract is governed by applicable Reclamation law, except that 

29 this delivery or use is not subject to the Reclamation Reform Act of 1982, as amended.

30

31 49. RULES, REGULATIONS, AND DETERMINATIONS

32 (a) The United States or its assigns shall take all prudent and ordinary measures 

33 to operate and maintain all existing facilities necessary to this contract, but nothing in this 

34 section shall be construed to require the United States to operate such facilities beyond 

35 the useful life of the existing facilities. These facilities will be operated for multiple 

36 benefits of the project in accordance with project authorization and contracts, including 

37 this contract. The Contracting Officer, in consultation with the Navajo Nation, shall have 

38 the right to make determinations necessary to administer this contract that are consistent 

39 with the express and implicit conditions of this contract, the laws of the United States and 

40 rules and regulations promulgated by the Secretary of the Interior.

41 (b) Where the terms of this contract provide for action to be based upon the 

42 opinion or determination of either party to this contract, whether or not stated to be 

43 conclusive, said terms shall not be construed as permitting such action to be predicted 

44 upon arbitrary, capricious, or unreasonable opinions or determinations.

45

46
43

1 50. GENERAL OBLIGATION – BENEFITS CONDITIONED UPON PAYMENT

2 (a) The obligation of the Navajo Nation to pay the United States as provided in 

3 this contract is a general obligation of the Navajo Nation notwithstanding the manner in 

4 which the obligation may be distributed among the Navajo Nation’s water users and 

5 notwithstanding the default of individual water users in their obligation to the Navajo 

6 Nation.

7 (b) The payment of charges becoming due hereunder is a condition precedent to 

8 receiving benefits under this contract. The Navajo Nation shall not have the right to the 

9 use of water supplied from any project facilities during any period in which the Navajo 

10 Nation may be in arrears in the payment of any operation, maintenance, and replacement 

11 charges due the United States or in arrears for more than 12 months in the payment of 

12 any construction and interest installments due the United States. The Navajo Nation shall 

13 not deliver water under the terms and conditions of this contract for lands or parties that 

14 are in arrears in the advance payment of water rates or OM&R charges or in arrears more 

15 than 12 months in the payment of construction charges as levied or established by the 

16 Navajo Nation.

17

18 51. MEDIUM FOR TRANSMITTING PAYMENTS 

19 All payments from the Navajo Nation to the United States under this contract 

20 shall be by the medium requested by the United States on or before the date payment is 

21 due. The required method of payment may include checks, wire transfers, or other types 

22 of payment specified by the United States.

23

24 52. CHARGES FOR DELINQUENT PAYMENTS

25 (a) The Navajo Nation shall pay penalty charges on delinquent installments or 

26 payments. When payment is not received by the due date, the Navajo Nation shall pay an 

27 interest charge for each day the payment is delinquent beyond the due date. When a 

28 payment becomes 60 days delinquent, the Navajo Nation shall pay an administrative 

29 charge to cover additional costs of billings and processing the delinquent payment. When 

30 a payment is delinquent 90 days or more, the Navajo Nation shall pay an additional 

31 penalty charge of 6.0 percent per year for each day the payment is delinquent beyond the 

32 due date. Further, the Navajo Nation shall pay any fees incurred for debt collection 

33 services associated with the delinquent payment.

34 (b) The interest charge rate shall be the greater of the rate prescribed quarterly in 

35 the Federal Register by the Department of the Treasury for application to overdue 

36 payments or the interest rate of 0.5 percent per month prescribed by section 6 of the 

37 Reclamation Project Act of 1939, 53 Stat. 1191. The interest charge rate shall be 

38 determined as of the due date and remain fixed for the duration of the delinquent period.

39 (c) When a partial payment for a delinquent account is received, the amount 

40 received shall be applied first to the penalty, second to the administrative charges, third to 

41 the accrued interest and finally to the overdue payment.

42

43 53. WATER QUALITY

44 The operation and maintenance of project facilities shall be performed in such 

45 manner as is practicable to maintain the quality of raw water made available through such 

46 facilities at the highest level reasonably attainable, as determined by the United States. 
44

1 The United States does not warrant the quality of water and is under no obligation to 

2 construct or furnish water treatment facilities to maintain or better the quality of water; 

3 except as provided for by Section 10602 of the Navajo Settlement Act.

4

5 54. WATER CONSERVATION

6 Prior to the delivery of water to the Navajo Nation provided from or conveyed 

7 through federally constructed or federally financed facilities pursuant to this contract, the 

8 Navajo Nation shall develop an effective water conservation program which shall contain 

9 definite water conservation objectives, appropriate economically feasible water 

10 conservation measures, and time schedules for meeting those objectives. At subsequent 

11 three-year intervals, the Navajo Nation shall submit a report on the results of the program 

12 to the Contracting Officer for review. Based on the conclusions of the review, the 

13 Contracting Officer and the Navajo Nation shall consult and agree to continue or to revise 

14 the existing water conservation program. This paragraph shall be included in all 

15 subcontracts, and such measures shall be required for all water purchasers.

16

17 55. CONTINGENT UPON APPROPRIATIONS OR ALLOTMENTS OF FUNDS

18 The expenditure of any money or the performance of any obligation by the United 

19 States under this contract shall be contingent upon appropriations or allotments of funds. 

20 Absence of appropriation or allotment of funds shall not relieve the Navajo Nation from 

21 any obligations under this contract. No liability shall accrue against the United States in 

22 case funds are not appropriated or allotted.

23

24 56. NOTICES

25 Any notice, demand, or request authorized or required by this contract shall be 

26 deemed to have been given on behalf of the Navajo Nation when mailed, postage prepaid, 

27 or delivered to the Regional Director, Upper Colorado Region, Bureau of Reclamation, 

28 125 South State Street, P.O. Box 11568, Salt Lake City, Utah 84111, and on behalf of the 

29 United States when mailed, postage prepaid, or delivered to the President, Navajo Nation, 

30 Post Office Box 9000, Window Rock, Navajo Nation (Arizona) 86515, and the Director 

31 of Water Resources, Navajo Nation, Post Office Box 678, Fort Defiance, Arizona 86504. 

32 The designation of the addressee or the address may be changed by notice given in the 

33 same manner as provided in this section for other notices.

34

35 57. OFFICIALS NOT TO BENEFIT

36 No Member of or Delegate to Congress or Resident Commissioner or official of 

37 the Navajo Nation shall benefit from this contract or any subcontract other than as a 

38 water user or landowner in the same manner as other water users or landowners.

39