Common use of Cost of Implementation Clause in Contracts

Cost of Implementation. Some Members of Congress have expressed concerns about the cost to the federal government to implement the agreements.27 Most have assumed that the majority of actions in the KBRA would be federally funded, including the costs for the on-project plan, fisheries restoration, and tribal components of the agreement. A detailed discussion of the estimated costs for the agreements (in particular those for the KBRA) and how they have changed over time is provided below. There have been multiple estimates of the cost to implement the Klamath agreements, and in some cases these have contradicted one another or employed differing assumptions. The original 2010 KBRA estimated $970 million (in 2007 dollars) for the total cost to implement the KBRA over a 10-year window. Most of these costs were assumed to be incurred by the federal government, although the exact split was not specified.28 In 2011, this figure was revised to estimate the federal government’s portion of expenses over a newly extended 15-year window. This estimate indicated that the federal cost to implement the agreement over 15 years would be $795 million (2007 dollars). Thus, there was a reduction in the estimated costs using constant 2007 dollars. The 2011 revision reflected increased state commitments for some activities and altered assumptions in other areas.29 The 2011 estimate also included an estimate of “base” 25 DOI has estimated that dam removal itself will create approximately 1,400 jobs in the one-year timeframe for this project, while other actions under the KBRA will create 4,600 jobs over 15 years, with additional gains to farming and fisheries industries; See Klamath Regional Economics Fact Sheet, available at ▇▇▇▇://▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇/sites/ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇/▇▇▇▇▇/▇▇▇▇.▇▇▇▇.▇▇▇▇▇.▇▇▇▇.▇▇.▇▇▇. 26 ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, “Dewatering Trust Responsibility: the New Klamath River Hydroelectric and Restoration Agreements,” Washington Journal of Environmental Law and Policy, vol. 1, no. 1 (July 2011), p. 60. Available at ▇▇▇▇://▇▇▇▇▇▇▇.▇▇▇.▇▇▇▇▇▇▇▇▇▇.▇▇▇/dspace-law/bitstream/handle/1773.1/1043/1WJELP042.pdf?sequence=1. 27 U.S. Congress, Senate Committee on Energy and Natural Resources, Water Resource Issues in the Klamath River Basin, 113th Cong., 1st sess., June 20, 2013. Statement of Chairman ▇▇▇ ▇▇▇▇▇, ▇▇▇▇://▇▇▇.▇▇▇▇▇▇.▇▇▇▇▇▇.▇▇▇/public/ index.cfm/files/serve?File_id=bf0f660b-1905-4515-9278-c26ddda53a21. 28 Cost estimates for the agreement were originally provided in the KBRA, Appendix C-2, p. C.6. Costs for the agreement were estimated in 2007 dollars.

Cost of Implementation. Some Members of Congress have expressed concerns about the cost to the federal government to implement the agreements.27 Most have assumed that the majority of actions in the KBRA would be federally funded, including the costs for the on-project plan, fisheries restoration, and tribal components of the agreement. A detailed discussion of the estimated costs for the agreements (in particular those for the KBRA) and how they have changed over time is provided below. There have been multiple estimates of the cost to implement the Klamath agreements, and in some cases these have contradicted one another or employed differing assumptions. The original 2010 KBRA estimated $970 million (in 2007 dollars) for the total cost to implement the KBRA over a 10-year window. Most of these costs were assumed to be incurred by the federal government, although the exact split was not specified.28 In 2011, this figure was revised to estimate the federal government’s portion of expenses over a newly extended 15-year window. This estimate indicated that the federal cost to implement the agreement over 15 years would be $795 million (2007 dollars). Thus, there was a reduction in the estimated costs using constant 2007 dollars. The 2011 revision reflected increased state commitments for some activities and altered assumptions in other areas.29 The 2011 estimate also included an estimate of “base” funding already being spent in the basin that could potentially reduce the “new” costs of the 25 DOI has estimated that dam removal itself will create approximately 1,400 jobs in the one-year timeframe for this project, while other actions under the KBRA will create 4,600 jobs over 15 years, with additional gains to farming and fisheries industries; See Klamath Regional Economics Fact Sheet, available at ▇▇▇▇://▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇/sites/ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇/▇▇▇▇▇/▇▇▇▇.▇▇▇▇.▇▇▇▇▇.▇▇▇▇.▇▇.▇▇▇. 26 ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, “Dewatering Trust Responsibility: the New Klamath River Hydroelectric and Restoration Agreements,” Washington Journal of Environmental Law and Policy, vol. 1, no. 1 (July 2011), p. 60. Available at ▇▇▇▇://▇▇▇▇▇▇▇.▇▇▇.▇▇▇▇▇▇▇▇▇▇.▇▇▇/dspace-law/bitstream/handle/1773.1/1043/1WJELP042.pdf?sequence=1. 27 U.S. Congress, Senate Committee on Energy and Natural Resources, Water Resource Issues in the Klamath River Basin, 113th Cong., 1st sess., June 20, 2013. Statement of Chairman ▇▇▇ ▇▇▇▇▇, ▇▇▇▇://▇▇▇.▇▇▇▇▇▇.▇▇▇▇▇▇.▇▇▇/public/ index.cfm/files/serve?File_id=bf0f660b-1905-4515-9278-c26ddda53a21. 28 Cost estimates for the agreement were originally provided in the KBRA, Appendix C-2, p. C.6. Costs for the agreement were estimated in 2007 dollars.