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Received by KBC News June 2016

Contract No. 16-WC-20-4838

Klamath Project, Oregon-California


Table of Contents

Article No. Title Page No.

Preamble ..................................................................................................................1

Explanatory Recitals ............................................................................................ 1-2

1 Definitions............................................................................................................ 2-3

2 Term of the Contract ................................................................................................3

3 Description of XM Work .........................................................................................3

4 Funds To Be Provided ......................................................................................... 3-4

5 District’s Repayment Obligation ......................................................................... 4-5

6 Limitations ...............................................................................................................6

7 Severability ..............................................................................................................6

8 Environmental Compliance ................................................................................. 6-7

9 Medium for Transmitting Payments ........................................................................7

10 Contracts with Third Parties ....................................................................................7

11 Failure to Complete Work ................................................................................... 7-8

12 Charges for Delinquent Payments ....................................................................... 8-9

13 General Obligation – Benefits Conditioned Upon Payment ....................................9

14 Operation and Maintenance of Transferred Works ........................................... 9-10

15 Examination, Inspection, and Audit of Project Works, Records and

Reports for Determining Adequacy of Operation and Maintenance ............ 10-11

16 Emergency Reserve Fund ............................................................................... 11-12

17 Changes in District’s Organization ........................................................................12

18 Assignment Limited – Successors and Assigns Obligated ....................................12

19 Rules, Regulations, and Determinations ................................................................13

20 Administration of Federal Project Lands ...............................................................13

21 Protection of Water and Air Quality ......................................................................13

22 Contamination or Pollution of Federal Property .............................................. 13-14

23 Clean Air and Water ........................................................................................ 15-16

24 Equal Employment Opportunity ...................................................................... 16-17

25 Compliance with Civil Rights Laws and Regulations ...........................................17

26 Certification of Nonsegregated Facilities ..............................................................18

27 Pest Management ............................................................................................. 18-19

28 Books, Records, and Reports .................................................................................19 Contract No. 16-WC-20-4838

Table of Contents – continued

Article No. Title Page No.

29 Contingent on Appropriation or Allotment of Funds ............................................19

30 Officials Not to Benefit ..........................................................................................19

31 Notices ............................................................................................................. 19-20

32 Contract Drafting Considerations ..........................................................................20

Signature Page .......................................................................................................20

Exhibit A – Annual Payment Schedule




Klamath Project, Oregon-California 4





THIS CONTRACT, made this ______ day of _______________, 2016, is entered 9 into pursuant to the Act of June 17, 1902 (32 Stat. 388) and acts amendatory thereof or 10 supplementary thereto, including but not limited to Section 9603 of the Omnibus Public Land 11 Management Act of March 30, 2009 (Pub. L. 111-11, 123 Stat. 1348, 43 U.S.C. §510b), all 12 collectively hereinafter referred to as Federal Reclamation law, between the UNITED STATES 13 OF AMERICA, hereinafter referred to as the United States, and KLAMATH IRRIGATION 14 DISTRICT, hereinafter referred to as the District, an irrigation district duly organized, existing, 15 and acting pursuant to the laws of the State of Oregon; 16



[1st] WHEREAS, the United States has constructed and is operating the 19 Klamath Project in the States of Oregon and California for the purpose of furnishing water for 20 irrigation and other beneficial uses to lands within the Klamath Project’s service area; and 21

[2nd] WHEREAS, pursuant to Contract No. 14-06-200-3784, dated November 29, 1954, 22 as amended and supplemented, the District accepted the obligation to operate and maintain, on 23 behalf of the United States, certain Klamath Project facilities, including the C Flume; and 24

[3rd] WHEREAS, pursuant to Section 9603 of Public Law 111-11, the Secretary of the 25 Interior, acting through the Bureau of Reclamation, hereinafter referred to as Reclamation, is 26 Contract No. 16-WC-20-4838


authorized to advance the costs incurred by the District in conducting Extraordinary 27 Maintenance (XM) and to negotiate an appropriate contract for the return of reimbursable costs, 28 with interest; and 29

[4th] WHEREAS, Reclamation, in consultation with the District, has determined the 30 need to perform XM work on the C Flume and the District agrees to repay the reimbursable 31 costs, with interest, of XM work performed on the C Flume; 32

NOW, THEREFORE, in consideration of the mutual and dependent covenants 33 herein contained, the parties mutually agree as follows: 34


1. When used herein, unless otherwise distinctly expressed or manifestly 36 incompatible with the intent hereof, the term: 37

(a) "Contracting Officer" shall mean the Secretary of the Interior’s duly 38 authorized representative acting pursuant to this Contract or applicable Federal Reclamation law 39 or regulation; 40

(b) "Existing Contract" shall mean Contract No. 14-06-200-3784, dated 41 November 29, 1954, as amended and supplemented, between the United States and the District; 42

(c) "Extraordinary Maintenance" or "XM" shall mean major nonrecurring 43 maintenance on the C Flume that is intended to ensure the continued safe, dependable, reliable 44 delivery of authorized benefits of the Klamath Project; 45

(d) "Fiscal Year" shall mean the period October 1 through September 30 of the 46 following year; and 47

(e) "Year" shall mean the period January 1 through December 31, both dates 48 inclusive; and 49 Contract No. 16-WC-20-4838


(f) "Transferred Works" shall mean works constructed pursuant to this Contract, 50 as provided in Article 14 and as further described in Article 3. 51


2. This Contract shall become effective on the date first written above and shall 53 remain in effect until the District has fully repaid to the United States its repayment obligation to 54 the United States as described in Article 5 herein. 55


3. The XM work to be performed by the District on the C Flume shall consist of 57 demolition and removal of the original structure, construction of a replacement structure of 58 approximately 4,100 feet of buried pipe, 200 feet of elevated pipe spanning the Lost River 59 Diversion Channel, and other related activities. All XM designs, specifications, and work 60 performed in accordance with this Contract shall be approved in advance and in writing by the 61 Contracting Officer. 62


4. (a) The United States shall provide funds to the District for the XM work 64 described in Article 3 herein in an amount that shall not exceed $7,450,000; Provided, That the 65 District may request additional funds in writing to complete the XM work and the United States 66 may provide such additional funds subject to approval of the Contracting Officer in accordance 67 with Federal Reclamation law and policy. If such additional funds are provided, Exhibit "A" 68 shall be revised accordingly. 69

(b) Funds may be provided to the District in advance of the XM work 70 provided that any such advance of funds shall be released in as many installments as the 71 Contracting Officer deems necessary; Provided further, That the District may request an advance 72 Contract No. 16-WC-20-4838


of funds in particular installments; however, the District must provide the Contracting Officer 73 justification for the immediate need for the funds requested and the Contracting Officer shall 74 have the final determination in how and when installments are transmitted. 75

(c) All funds advanced to the District shall be deposited and maintained in an 76 insured account, until such time as the District applies the funds against the XM work: Provided, 77 That the District shall use the funds solely to finance the XM work: Provided further, That the 78 District shall return any and all unexpended, unobligated, or unencumbered funds within 30 days 79 after the date on which the Contracting Officer determines and notifies the District in writing that 80 the XM work is substantially complete. 81

(d) Funds will no longer be provided once the Contracting Officer determines 82 that: (1) the work described in Article 3 herein is complete; (2) the District no longer requires 83 additional funds to complete said XM work; or (3) the amount stated in subarticle 4(a) of the 84 Contract has been expended. 85


5. (a) The District shall be obligated to repay the entire sum of the funds 87 provided pursuant to Article 4 of this Contract, plus accrued interest, as determined by the 88 Contracting Officer, which total is hereinafter referred to as the Repayment Obligation. 89

(b) The interest rate used for computing interest on XM work in progress and 90 interest on the unpaid balance of the reimbursable costs of XM work in accordance with this 91 Contract is the Department of the Treasury rate as of the beginning of the Fiscal Year in which 92 XM work is commenced, on the basis of average market yields on outstanding marketable 93 obligations of the United States with the remaining periods of maturity comparable to the 94 applicable reimbursement period of the project, adjusted to the nearest 1/8 of 1 percent on the 95 Contract No. 16-WC-20-4838


unamortized balance of any portion of the Repayment Obligation. Interest accrual shall 96 commence on each date funds are advanced by the United States to the District and be computed 97 on an annual basis on the unpaid balance of the reimbursable costs of XM work, as determined 98 by the Contracting Officer. 99

(c) The first installment shall be due and payable on or before January 1, 2019, 100 or on January 1 of the Year following the date on which the Contracting Officer determines and 101 notifies the District in writing that the XM work is substantially complete, whichever comes first. 102

(d) The District will repay the total Repayment Obligation over a period of 103 10 years from the date on which the Contracting Officer determines that the XM work is 104 substantially complete; Provided, That the period may decreased or increased by the Contracting 105 Officer pursuant to Article 5(f) herein; Provided further, That full repayment shall occur within 106 50 years from the first installment provided by the District pursuant to Article 5(c) herein. As 107 soon as practicable following the determination that the XM work is substantially complete, the 108 Contracting Officer shall provide the District with a repayment schedule requiring equal annual 109 installments over a period of 10 years, which schedule(s) shall be incorporated into this Contract 110 as Exhibit "A", which may be updated by the Contracting Officer without further amendment hereof. 111

(e) The District may, at any time, prepay all or a portion of the unpaid Repayment 112 Obligation balance as provided herein without penalty, notwithstanding any interest accrued. 113

(f) The Contracting Officer, within one year of execution of this Contract, will 114 perform a financial analysis to determine the District’s minimum appropriate repayment period. If, 115 in the opinion of the Contracting Officer, the financial analysis indicates that the District’s 116 minimum appropriate repayment period is less than or greater than 10 years, then the Contracting 117 Contract No. 16-WC-20-4838


Officer shall provide the District with a revised Exhibit "A". At any time, the District may, at its 118 sole expense, request that the Contracting Officer perform an updated financial analysis. 119


6. Except as specifically provided herein, the Existing Contract shall continue in full 121 force and effect as originally written and executed. 122


7. In the event that any one or more of the provisions contained herein shall, for any 124 reason, be held to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, 125 or unenforceability shall not affect any other provisions of this Contract, but this Contract shall 126 be construed as if such invalid, illegal, or unenforceable provisions had never been contained 127 herein, unless the deletion of such provisions would result in such a material change so as to 128 cause the fundamental benefits afforded the parties to this Contract to become unavailable or 129 materially altered. 130


8. (a) The District will comply with (1) the applicable environmental measures 132 contained in the environmental document number 2015-EA-008 and (2) the memorandum of 133 agreement between the Bureau of Reclamation and the Oregon State Historic Preservation 134 Officer, dated December 12, 2015; all prepared in connection with the proposed XM work on the 135 C Flume. 136

(b) The District will comply with all Federal, state, local, and tribal law, and 137 requirements imposed for protection of the environment and Indian trust assets, including, but 138 not limited to, the Native American Graves Protection and Repatriation Act (Pub. L. 101-601, 139 Contract No. 16-WC-20-4838


104 Stat. 3048, 25 U.S.C. §3001 et seq.) and the Archaeological Resources Protection Act of 140 1979 (Pub. L. 96-95, 93 Stat. 721, 16 U.S.C. §470aa et seq.). 141


9. (a) All payments from the District to the United States under this Contract 143 shall be by the medium requested by the United States on or before the date payment is due. The 144 required method of payment may include checks, wire transfers, or other types of payment 145 specified by the United States. 146

(b) Upon execution of this Contract, the District shall furnish the Contracting 147 Officer with the District’s taxpayer’s identification number (TIN). The purpose for requiring the 148 District’s TIN is for collecting and reporting any delinquent amounts arising out of the District’s 149 relationship with the United States. 150


10. (a) The District shall advertise each construction (as "construction" is defined 152 in the Federal Acquisition Regulations (FAR) at 48 C.F.R. §2.101), equipment, or supply 153 contract exceeding $25,000 (twenty-five thousand dollars) for competitive bidding. Any action 154 proposed by the District other than making the award to the lowest responsible bidder shall be 155 subject to the Contracting Officer’s approval. 156

(b) For all construction contracts exceeding $100,000 (one hundred thousand 157 dollars), the District shall require construction contractors to furnish performance and payment 158 bonds, each in amounts equal to at least 100 percent of the contract price. For construction 159 contracts exceeding $30,000 (thirty thousand dollars), but not exceeding $100,000 (one hundred 160 thousand dollars), the Contracting Officer shall select at least two of the payment protections set 161 forth in the FAR at 48 C.F.R. §28.102-1(b)(1), and the District shall require the construction 162 contractor to secure one of the selected protections. Supply and equipment contractors may be 163 required to furnish performance bonds on supply or equipment contracts exceeding $100,000 164 (one hundred thousand dollars) when the contract calls for substantial progress payments before 165 delivery of end items. 166

(c) The United States shall not be a party to or obligated in any manner by 167 contracts entered into between the District and other parties pursuant to this Contract. 168


11. (a) In the event that the District fails to complete the work to be performed 170 pursuant to this Contract for any reason other than the failure of the United States to appropriate 171 and allocate funds, the District shall, upon receipt of written notice from the Contracting Officer, 172 suspend payment on all current contracts and return to the United States any unexpended balance 173 of funds advanced by the United States and contributed by the District in such amounts as 174 determined to be equitable by the Contracting Officer. Following delivery of the notice, the 175 Contracting Officer may adopt either of the following two alternatives: 176 Contract No. 16-WC-20-4838


(1) Perform, or cause to be performed, all or any part of the work remaining 177 under this Contract and within the limits of the funds provided herein by the 178 United States and by the District for the project, as well as operate and maintain 179 the project concurrently. The District shall transfer to the United States custody 180 and use of all equipment, materials, and supplies used or useful in the 181 performance of the work; permit the United States, its contractors, and its agents 182 ingress to and egress from lands, project works, and facilities of the District for 183 the performance of such work; and assign to the United States the District’s 184 interest in any contract for the performance of work or the supplying of 185 equipment or material in connection with such work where requested by the 186 United States and agreed to by the other contracting party; or 187

(2) Declare the project substantially complete within the provisions of this 188 Contract by giving written notice to the District that (a) the construction work on 189 a feature is substantially complete, or (b) the feature is providing benefits and 190 services for the intended purpose(s), or (c) the feature is generating revenue, 191 where applicable. Repayment of the loan obligation shall be carried out in 192 accordance with the provisions of this Contract; Provided, That the first annual 193 payment shall become due in the Year following the Year in which the District is 194 notified of such declaration of completion. 195

(b) In the event the United States shall proceed as provided in (a)(1) of this 196 Article, the United States may, at any time and regardless of the progress of work performed 197 thereunder, declare the XM work substantially complete by giving written notice thereof to the 198 District, in which event the provisions of (a)(2) of this article shall apply; Provided, That the loan 199 obligation shall not exceed the limitation specified in this Contract, including all expenditures 200 made pursuant to provisions of (a)(1) of this Article. 201

(c) Upon giving written notice of substantial completion to the District as 202 provided above, the United States shall have the right, without further notice, to take over the 203 care, operation, and maintenance of the XM work. 204


12. (a) The District shall be subject to interest, administrative, and penalty 206 charges on delinquent payments. If a payment is not received by the due date, the District shall 207 pay an interest charge on the delinquent payment for each day the payment is delinquent beyond 208 the due date. If a payment becomes 60 days delinquent, the District shall pay, in addition to the 209 interest charge, an administrative charge to cover additional costs of billing and processing the 210 delinquent payment. If a payment is delinquent 90 days or more, the District shall pay, in 211 addition to the interest and administrative charges, a penalty charge for each day the payment is 212 delinquent beyond the due date, based on the remaining balance of the payment due at the rate of 213 6 percent per year. The District shall also pay any fees incurred for debt collection services 214 associated with a delinquent payment. 215

(b) The interest rate charged shall be the greater of either the rate prescribed 216 quarterly in the Federal Register by the Department of the Treasury for application to overdue 217 Contract No. 16-WC-20-4838


payments, or the interest rate of 0.5 percent per month. The interest rate charged will be 218 determined as of the due date and remain fixed for the duration of the delinquent period. 219

(c) When a partial payment on a delinquent account is received, the amount 220 received shall be applied first to the penalty charges, second to the administrative charges, third 221 to the accrued interest, and finally to the overdue payment. 222


13. (a) The obligation of the District to pay the United States as provided in this 224 Contract is a general obligation of the District notwithstanding the manner in which the 225 obligation may be distributed among the District’s water users and notwithstanding the default of 226 individual water users in their obligations to the District. 227

(b) The payment of charges becoming due pursuant to this Contract is a 228 condition precedent to receiving benefits under this Contract. The United States shall not make 229 water available to the District through Project facilities during any period in which the District is 230 in arrears to the United States for any payment due under the terms of this Contract. The District 231 shall not deliver water under the terms and conditions of this Contract for lands or parties that are 232 in arrears more than 12 months in the payment of charges required for the District to repay its 233 repayment obligation, as levied or established by the District. 234


14. (a) Upon substantial completion of the XM work, or as otherwise determined 236 by the Contracting Officer, and following written notification, the care, operation, and 237 maintenance of any or all of Project works constructed pursuant to this Contract may be 238 transferred to the District. Title to the Transferred Works will remain in the name of the United 239 States, unless otherwise provided by the Congress of the United States. 240

(b) The District, without expense to the United States, shall care for, operate, 241 and maintain the Transferred Works in full compliance with the terms of this Contract and the 242 Existing Contract and in such a manner that the Transferred Works remain in good and efficient 243 condition. 244

(c) Necessary repairs of the Transferred Works shall be made promptly by the 245 District. In case of unusual conditions or serious deficiencies in the care, operation, and 246 maintenance of the Transferred Works threatening or causing interruption of water service, the 247 Contracting Officer may issue to the District a special written notice of those necessary repairs. 248 Except in the case of an emergency, the District will be given 60 days to either make the 249 necessary repairs or submit a plan for accomplishing the repairs acceptable to the Contracting 250 Officer. In the case of an emergency, or if the District fails to either make the necessary repairs 251 or submit a plan for accomplishing the repairs acceptable to the Contracting Officer within 60 252 days of receipt of the notice, the Contracting Officer may cause the repairs to be made, and the 253 cost of those repairs shall be paid by the District as directed by the Contracting Officer. 254 Contract No. 16-WC-20-4838


(d) The District shall not make any substantial changes in the Transferred 255 Works without first obtaining written consent of the Contracting Officer. The District shall 256 ensure that no unauthorized encroachment occurs on project land and rights-of-way. 257

(e) The District agrees to indemnify the United States for, and hold the United 258 States and all of its representatives harmless from, all damages resulting from suits, actions, or 259 claims of any character brought on account of any injury to any person or property arising out of 260 any act, omission, neglect, or misconduct in the manner or method of performing any 261 construction, care, operation, maintenance, supervision, examination, inspection, or other duties 262 of the District or the United States on Transferred Works required under this Contract, regardless 263 of who performs those duties. The District does not agree to indemnify the United States for any 264 damages arising from intentional torts or malicious actions committed by employees of the 265 United States. 266

(f) In the event the District is found to be operating the Transferred Works or 267 any part thereof in violation of this Contract or the District is found to be failing any financial 268 commitments or other commitments to the United States under the terms and conditions of this 269 Contract, then upon the election of the Contracting Officer, the United States may take over from 270 the District the care, operation, and maintenance of the Transferred Works by giving written 271 notice to the District of such election and the effective date thereof. Thereafter, during the period 272 of operation by the United States, upon notification by the Contracting Officer the District shall 273 pay to the United States, annually in advance, the cost of operation and maintenance of the works 274 as determined by the Contracting Officer. Following written notification from the 275 Contracting Officer the care, operation, and maintenance of the works may be transferred back to 276 the District. 277

(g) In addition to all other payments to be made by the District under this 278 Contract, the District shall reimburse to the United States, following the receipt of a statement 279 from the Contracting Officer, all miscellaneous costs incurred by the United States for any work 280 involved in the administration and supervision of this Contract. 281


15. (a) The Contracting Officer may, from time to time, examine the following: 284 the 285

District’s books, records, and reports; the Project works being operated by the District; the 286 adequacy of the operation and maintenance; the reserve fund; and the water conservation 287 program including the water conservation fund, if applicable. Notwithstanding title ownership, 288 where the United States retains a financial, physical, or liability interest in facilities either 289 constructed by the United States or with funds provided by the United States, the 290 Contracting Officer may examine any or all of the Project works providing such interest to the 291 United States. 292

(b) The Contracting Officer may, or the District may ask the Contracting 293 Officer to, conduct special inspections of any Project works being operated by the District and 294 special audits of the District’s books and records to ascertain the extent of any operation and 295 Contract No. 16-WC-20-4838


maintenance deficiencies to determine the remedial measures required for their correction and to 296 assist the District in solving specific problems. Except in an emergency, any special inspection 297 or audit shall be made only after written notice thereof has been delivered to the District by the 298 Contracting Officer. 299

(c) The District shall provide access to the Project works, operate any mechanical 300 or electrical equipment, and be available to assist in the examination, inspection, or audit. 301

(d) The Contracting Officer shall prepare reports based on the examinations, 302 inspections, or audits and furnish copies of such reports and any recommendations to the District. 303

(e) The costs incurred by the United States in conducting operation and 304 maintenance examinations, inspections, and audits and preparing associated reports and 305 recommendations related to high- and significant-hazard dams and associated facilities shall be 306 nonreimbursable. Associated facilities include carriage, distribution, and drainage systems; 307 pumping and pump-generating plants; powerplant structures; tunnels/pipelines; diversion and 308 storage dams (low-hazard); Type 2 bridges which are Reclamation-owned bridges not located on 309 a public road; regulating reservoirs (low-hazard); fish passage and protective facilities, including 310 hatcheries; river channelization features; rural/municipal water systems; desalting and other 311 water treatment plants; maintenance buildings and service yards; facilities constructed under 312 Federal loan programs (until paid out); and recreation facilities (reserved works only); and any 313 other facilities as determined by the Contracting Officer. 314

(f) Expenses incurred by the District, as applicable, in participating in the 315 operation and maintenance site examination will be borne by the District. 316

(g) Requests by the District for consultations, design services, or modification 317 reviews, and the completion of any operation and maintenance activities identified in the formal 318 recommendations resulting from the examination (unless otherwise noted) are to be funded as 319 Project operation and maintenance and are reimbursable by the District to the extent of current 320 Project operation and maintenance allocations. 321

(h) Site visit special inspections that are beyond the regularly scheduled 322 operation and maintenance examinations conducted to evaluate particular concerns or problems 323 and provide assistance relative to any corrective action (either as a follow up to an operation and 324 maintenance examination or when requested by the District) shall be nonreimbursable. 325

(i) The Contracting Officer may provide the state(s) an opportunity to 326 observe and participate in, at its (their) own expense, the examinations and inspections. The 327 state(s) may be provided copies of reports and any recommendations relating to such 328 examinations and inspections. 329


16. (a) Commencing on execution of this Contract, the District shall accumulate 330 and maintain a reserve fund or demonstrate to the satisfaction of the Contracting Officer that 331 other funds are available for use as an emergency reserve fund. The District shall establish and 332 maintain that emergency reserve fund to meet costs incurred during periods of special stress 333 Contract No. 16-WC-20-4838


caused by damaging droughts, storms, earthquakes, floods, or other emergencies threatening or 334 causing interruption of water service. 335

(b) The District shall accumulate the reserve fund with annual deposits or 336 investments of not less than $10,000 to a Federally insured, interest- or dividend-bearing account 337 or in securities guaranteed by the Federal Government: Provided, That money in the reserve 338 fund, including accrued interest, shall be available within a reasonable time to meet expenses for 339 such purposes as those identified in paragraph (d) herein. Such annual deposits and the 340 accumulation of interest to the reserve fund shall continue until the basic amount of $100,000 is 341 accumulated. Following an emergency expenditure from the fund, the annual deposits shall 342 continue from the year following the emergency expenditure until the previous balance is 343 restored. After the initial amount is accumulated or after the previous balance is restored, the 344 annual deposits may be discontinued, and the interest earnings shall continue to accumulate and 345 be retained as part of the reserve fund. 346

(c) Upon mutual written agreement between the District and the Contracting 347 Officer, the basic reserve fund or the accumulated reserve fund may be adjusted to account for 348 risk and uncertainty stemming from the size and complexity of the project; the size of the annual 349 operation and maintenance budget; additions to, deletions from, or changes in project works; and 350 operation and maintenance costs not contemplated when this Contract was executed. 351

(d) The District may make expenditures from the reserve fund only for 352 meeting routine or recurring operation and maintenance costs incurred during periods of special 353 stress, as described in paragraph (a) herein; or for meeting unforeseen extraordinary operation 354 and maintenance costs; or for meeting unusual or extraordinary repair or replacement costs; or 355 for meeting betterment costs (in situations where recurrence of severe problems can be 356 eliminated) during periods of special stress. Proposed expenditures from the fund shall be 357 submitted to the Contracting Officer in writing for review and written approval prior to 358 disbursement. Whenever the reserve fund is reduced below the current balance by expenditures 359 therefrom, the District shall restore that balance by the accumulation of annual deposits as 360 specified in paragraph (b) herein. 361

(e) During any period in which any of the Project works are operated and 362 maintained by the United States, the District agrees the reserve fund shall be available for like 363 use by the United States. 364

(f) On or before March 15 of each Year, the District shall provide a current 365 statement of the principal and accumulated interest of the reserve fund account to the 366 Contracting Officer. 367


17. While this Contract is in effect, no change may be made in the District’s 368 organization, by inclusion or exclusion of lands or by any other changes which may affect the 369 respective rights, obligations, privileges, and duties of either the United States or the District 370 under this Contract including, but not limited to, dissolution, consolidation, or merger, except 371 upon the Contracting Officer’s written consent. 372 Contract No. 16-WC-20-4838



18. The provisions of this Contract shall apply to and bind the successors and assigns 374 of the parties hereto, but no assignment or transfer of this Contract or any right or interest therein 375 by either party shall be valid until approved in writing by the other party. 376


19. (a) The parties agree that the delivery of water or the use of Federal facilities 378 pursuant to this Contract is subject to Federal Reclamation law, as amended and supplemented, 379 and the rules and regulations promulgated by the Secretary of the Interior under Federal 380 Reclamation law. 381

(b) The Contracting Officer shall have the right to make determinations 382 necessary to administer this Contract that are consistent with its provisions, the laws of the 383 United States, and the rules and regulations promulgated by the Secretary of the Interior. Such 384 determinations shall be made in consultation with the District. 385


20. The lands and interests in lands acquired, withdrawn, or reserved and needed by 387 the United States for the purposes of care, operation, and maintenance of Project works may be 388 used by the District for such purposes. The District shall ensure that no unauthorized 389 encroachment occurs on Federal Project lands and rights-of-way. The District does not have the 390 authority to issue any land-use agreement or grant that conveys an interest in Federal real 391 property, nor to lease or dispose of any interest of the United States. 392


21. (a) Project facilities used to make available and deliver water to the District 394 shall be operated and maintained in the most practical manner to maintain the quality of the 395 water at the highest level possible as determined by the Contracting Officer: Provided, That the 396 United States does not warrant the quality of the water delivered to the District and is under no 397 obligation to furnish or construct water treatment facilities to maintain or improve the quality of 398 water delivered to the District. 399

(b) The District shall comply with all applicable water and air pollution laws 400 and regulations of the United States and the State of Oregon; and shall obtain all required permits 401 or licenses from the appropriate Federal, state, or local authorities necessary for the delivery of 402 water by the District; and shall be responsible for compliance with all Federal, state, or local 403 water quality standards applicable to surface and subsurface drainage and/or discharges 404 generated through the use of Federal or District facilities or Project water provided by the 405 District within the District’s service area. 406

(c) This Article shall not affect or alter any legal obligations of the Secretary 407 to provide drainage or other discharge services. 408 Contract No. 16-WC-20-4838



22. (a) The District shall not allow contamination or pollution of Federal Project 410 lands, Project waters, or Project works of the United States or administered by the United States 411 and for which the District has the responsibility for care, operation, and maintenance by its 412 employees or agents. The District shall also take reasonable precautions to prevent such 413 contamination or pollution by third parties. 414

(b) The District shall comply with all applicable Federal, state, and local laws 415 and regulations and Reclamation policies and instructions existing, or hereafter enacted or 416 promulgated, concerning any hazardous material that will be used, produced, transported, stored, 417 released, or disposed of on or in Federal Project lands, Project waters, or Project works. 418

(c) "Hazardous material" means (1) any substance falling within the 419 definition of "hazardous substance," "pollutant or contaminant," or "hazardous waste" under the 420 Comprehensive Environmental Response, Compensation and Liability Act (42 U.S.C. 421 §9601(14), (29), and (33)); (2) oil, as defined by the Clean Water Act (33 U.S.C. §1321(a)) and 422 the Oil Pollution Act (33 U.S.C. §2701(23)); (3) thermal pollution, refuse, garbage, sewage 423 effluent, industrial waste, mine or mill tailings, mineral salts, pesticides, and other solid waste, 424 and (4) any other substance regulated as hazardous or toxic under federal, state, local or tribal 425 law . 426

(d) Upon discovery of any event which may or does result in contamination or 427 pollution of Federal Project lands, Project water, or Project works, the District shall immediately 428 undertake all measures necessary to protect public health and the environment, including 429 measures necessary to contain or abate any such contamination or pollution, and shall report 430 such discovery with full details of the actions taken to the Contracting Officer. Reporting shall 431 be within a reasonable time period but shall not exceed 24 hours from the time of discovery if it 432 is an emergency and the first working day following discovery in the event of a non-emergency. 433

(e) If violation of the provisions of this Article occurs and the District does 434 not take immediate corrective action, as determined by the Contracting Officer, the District may 435 be subject to remedies imposed by the Contracting Officer, which may include termination of 436 this Contract. 437

(f) The District shall be liable for any response action or corrective measure 438 necessary to protect public health and the environment or to restore Federal Project lands, Project 439 waters, or Project works that are adversely affected as a result of such violation, and for all costs, 440 penalties or other sanctions that are imposed for violation of any Federal, state, local or tribal 441 laws and regulations concerning hazardous material. At the discretion of the Contracting 442 Officer, the United States may also terminate this Contract as a result of such violation. 443

(g) The District shall defend, indemnify, protect and save the United States 444 harmless from and against any costs, expenses, claims, damages, demands, or other liability 445 arising from or relating to District’s violation of this Article. 446 Contract No. 16-WC-20-4838


(h) The Contracting Officer agrees to provide information necessary for the 447 District, using reasonable diligence, to comply with the provisions of this Article. 448


23. (a) The District agrees as follows: 450

(1) To comply with all the requirements of section 114 of the Clean Air 451 Act, as amended (42 U.S.C. §7414), and section 308 of the Clean Water Act (33 U.S.C. 452 §1318), relating to inspection, monitoring, entry, reports, and information, as well as 453 other requirements specified in those sections, and all applicable regulations and 454 guidelines issued thereunder. 455

(2) That no portion of the work required by this Contract will be 456 performed in a facility listed on the Environmental Protection Agency List of Violating 457 Facilities on the date when this Contract was executed unless and until the Environmental 458 Protection Agency eliminates the name of such facility or facilities from such listing. 459

(3) To use its best efforts to comply with clean air standards and clean 460 water standards at the facility where the contract work is being performed. 461

(4) To insert the substance of the provisions of this article into any 462 nonexempt subcontract, including this subparagraph (a)(4). 463

(b) The following definitions apply for purposes of this article: 464

(1) The term "Clean Air Act" means the Act enacted by Pub. L. 88-206 of 465 Dec. 17, 1963, and amendments thereto, as codified at 42 U.S.C. §7401 et seq. 466

(2) The term "Clean Water Act" means the Act enacted by Pub. L. 92- 500 467 of Oct. 18, 1972, and amendments thereto, as codified at 33 U.S.C. §1251 et seq. 468

(3) The term "clean air standards" refers to all enforceable rules, 469 regulations, guidelines, standards, limitations, orders, controls, prohibitions, and other 470 requirements which are contained in, issued under, or otherwise adopted pursuant to the 471 Clean Air Act or Executive Order 11738, an applicable implementation plan as described 472 in section 110 of the Clean Air Act (42 U.S.C. §7410), an approved implementation 473 procedure or plan under subsection 111(c) or subsection 111(d) of the Clean Air Act 474 (42 U.S.C. §7411(c) or (d)), or an approved implementation procedure under subsection 475 112(d) of the Clean Air Act (42 U.S.C. §7412(d)). 476

(4) The term "clean water standards" refers to all enforceable limitations, 477 controls, conditions, prohibitions, standards, and other requirements which are 478 promulgated pursuant to the Clean Water Act or contained in a permit issued to a 479 discharger by the Environmental Protection Agency or by a state under an approved 480 program, as authorized by section 402 of the Clean Water Act (33 U.S.C. §1342), or by 481 local government to ensure compliance with pretreatment regulations as required by 482 section 307 of the Clean Water Act (33 U.S.C. §1317). 483 Contract No. 16-WC-20-4838


(5) The term "comply" refers to compliance with clean air or water 484 standards. It also refers to compliance with a schedule or plan ordered or approved by a 485 court of competent jurisdiction, the Environmental Protection Agency, or an air or water 486 pollution control agency in accordance with the requirements of the Clean Air Act or 487 Clean Water Act and regulations issued pursuant thereto. 488

(6) The term "facility" means any building, plant, installation, structure, 489 mine, vessel or other floating craft, location, or site of operations owned, leased, or 490 supervised by a contractor or subcontractor to be utilized in the performance of a contract 491 or subcontract. Where a location or site of operations contains or includes more than one 492 building, plant, installation, or structure, the entire location or site shall be deemed to be a 493 facility except where the Director, Office of Federal Activities, Environmental Protection 494 Agency, determines that independent facilities are collocated in one geographical area. 495


24. During the performance of this Contract, the District agrees as follows: 497

(a) The District will not discriminate against any employee or applicant for 498 employment because of race, color, religion, sex, disability, or national origin. The District will 499 take affirmative action to ensure that applicants are employed, and that employees are treated 500 during employment, without regard to their race, color, religion, sex, disability, or national 501 origin. Such action shall include, but not be limited to the following: employment, upgrading, 502 demotion, or transfer; recruitment or recruitment advertising; layoff or termination; rates of pay 503 or other forms of compensation; and selection for training, including apprenticeship. The 504 District agrees to post in conspicuous places, available to employees and applicants for 505 employment, notices to be provided by the Contracting Officer setting forth the provisions of this 506 nondiscrimination clause. 507

(b) The District will, in all solicitations or advertisements for employees 508 placed by or on behalf of the District, state that all qualified applicants will receive consideration 509 for employment without regard to race, color, religion, sex, disability, or national origin. 510

(c) The District will send to each labor union or representative of workers 511 with which it has a collective bargaining agreement or other contract or understanding, a notice, 512 to be provided by the Contracting Officer, advising the labor union or workers’ representative of 513 the District’s commitments under Section 202 of Executive Order 11246 of September 24, 1965 514 ("EO 11246"), and shall post copies of the notice in conspicuous places available to employees 515 and applicants for employment. 516

(d) The District will comply with all provisions of EO 11246, and of the rules, 517 regulations, and relevant orders of the Secretary of Labor. 518

(e) The District will furnish all information and reports required by EO 11246, 519 and by the rules, regulations, and orders of the Secretary of Labor, or pursuant thereto, and will 520 permit access to his books, records, and accounts by the Contracting Agency and the Secretary of 521 Labor for purposes of investigation to ascertain compliance with such rules, regulations, and orders. 522 Contract No. 16-WC-20-4838


(f) In the event of the District’s noncompliance with the nondiscrimination 523 clauses of this Contract or with any of such rules, regulations, or orders, this Contract may be 524 canceled, terminated or suspended in whole or in part and the District may be declared ineligible 525 for further Government contracts in accordance with procedures authorized in EO 11246, and 526 such other sanctions may be imposed and remedies invoked as provided in EO 11246 or by rule, 527 regulation, or order of the Secretary of Labor, or as otherwise provided by law. 528

(g) The District will include the provisions of paragraphs (a) through (g) in 529 every subcontract or purchase order unless exempted by the rules, regulations, or orders of the 530 Secretary of Labor issued pursuant to Section 204 of EO 11246, so that such provisions will be 531 binding upon each subcontractor or vendor. The District will take such action with respect to 532 any subcontract or purchase order as may be directed by the Secretary of Labor as a means of 533 enforcing such provisions, including sanctions for noncompliance: Provided, however, That in 534 the event the District becomes involved in, or is threatened with, litigation with a subcontractor 535 or vendor as a result of such direction, the District may request the United States to enter into 536 such litigation to protect the interests of the United States. 537


25. (a) The District shall comply with Title VI of the Civil Rights Act of 1964 539 (Pub. L. 88-352; 42 U.S.C. §2000d), the Rehabilitation Act of 1973 (Pub. L. 93-112, Title V, as 540 amended; 29 U.S.C. §§791 et seq.), the Age Discrimination Act of 1975 (Pub. L. 94-135, Title III; 541 42 U.S.C. §§6101 et seq.), Title III of the Americans with Disabilities Act of 1990 (Pub. L. 101-336; 542 42 U.S.C. §§12181 et seq.), and any other applicable civil rights laws, and with the applicable 543 implementing regulations and any guidelines imposed by the U.S. Department of the Interior 544 and/or Bureau of Reclamation. 545

(b) These statutes prohibit any person in the United States from being excluded 546 from participation in, being denied the benefits of, or being otherwise subjected to discrimination 547 under any program or activity receiving financial assistance from the Bureau of Reclamation on the 548 grounds of race, color, national origin, disability, or age. By executing this Contract, the District 549 agrees to immediately take any measures necessary to implement this obligation, including 550 permitting officials of the United States to inspect premises, programs, and documents. 551

(c) The District makes this agreement in consideration of and for the purpose 552 of obtaining any and all Federal grants, loans, contracts, property discounts, or other Federal 553 financial assistance extended after the date hereof to the District by the Bureau of Reclamation, 554 including installment payments after such date on account of arrangements for federal financial 555 assistance which were approved before such date. The District recognizes and agrees that such 556 federal assistance will be extended in reliance on the representations and agreements made in this 557 article and that the United States reserves the right to seek judicial enforcement thereof. 558

(d) Complaints of discrimination against the District shall be investigated by 559 the Contracting Officer’s Office of Civil Rights. 560 Contract No. 16-WC-20-4838



26. The District hereby certifies that it does not maintain or provide for its employees 562 any segregated facilities at any of its establishments and that it does not permit its employees to 563 perform their services at any location under its control where segregated facilities are 564 maintained. It certifies further that it will not maintain or provide for its employees any 565 segregated facilities at any of its establishments and that it will not permit its employees to 566 perform their services at any location under its control where segregated facilities are 567 maintained. The District agrees that a breach of this certification is a violation of the Equal 568 Employment Opportunity clause in this Contract. As used in this certification, the term 569 "segregated facilities" means any waiting rooms, work areas, rest rooms and wash rooms, 570 restaurants and other eating areas, time clocks, locker rooms and other storage or dressing areas, 571 parking lots, drinking fountains, recreation or entertainment areas, transportation, and housing 572 facilities provided for employees which are segregated by explicit directive or are in fact 573 segregated on the basis of race, creed, color, or national origin, because of habit, local custom, 574 disability, or otherwise. The District further agrees that (except where it has obtained identical 575 certifications from proposed subcontractors for specific time periods) it will obtain identical 576 certifications from proposed subcontractors prior to the award of subcontracts exceeding $10,000 577 which are not exempt from the provisions of the Equal Employment Opportunity clause; that it 578 will retain such certifications in its files; and that it will forward the following notice to such 579 proposed subcontractors (except where the proposed subcontractors have submitted identical 580 certifications for specific time periods): 581


A Certification of Nonsegregated Facilities must be submitted prior to the award of a subcontract 584 exceeding $10,000 which is not exempt from the provisions of the Equal Employment 585 Opportunity clause. The certification may be submitted either for each subcontract or for all 586 subcontracts during a period (i.e., quarterly, semiannually, or annually). Note: The penalty for 587 making false statements in offers is prescribed in 18 U.S.C. §1001. 588


27. (a) The District is responsible for complying with applicable Federal, state, 590 and local laws, rules, and regulations related to pest management in performing its 591 responsibilities under this Contract. 592

(b) The District is responsible for effectively avoiding the introduction and 593 spread of, and for otherwise controlling, undesirable plants and animals, as defined by the 594 Contracting Officer, on or in Federal Project lands, Federal Project waters, and Federal Project 595 works for which and to the extent that the District has operation and maintenance responsibility. 596 The District is responsible for exercising the level of precaution necessary in meeting this 597 responsibility, including inspecting its vehicles and equipment for reproductive and vegetative 598 parts, foreign soil, mud or other debris that may cause the spread of weeds, invasive species and 599 other pests, and removing such materials before moving its vehicles and equipment onto any 600 Federal land or out of any area on Federal Project land where work is performed. 601 Contract No. 16-WC-20-4838


(c) Where decontamination is required prior to entering Federal Project land, 602 it shall be performed at the point of prior use, or at an approved offsite facility able to process 603 generated cleaning wastes. Upon the completion of work, the District will perform any required 604 decontamination within the work area before moving the vehicles and equipment from Federal 605 Project lands. 606

(d) Programs for the control of undesirable plants and animals on Federal 607 project lands, and in Federal Project waters and Federal Project works for which the District has 608 operation and maintenance responsibility will incorporate Integrated Pest Management (IPM) 609 concepts and practices. IPM refers to a systematic and environmentally compatible program to 610 maintain pest populations within economically and environmentally tolerable levels. In 611 implementing an IPM program, the District will adhere to applicable federal and state laws and 612 regulations and Department of the Interior and Bureau of Reclamation policies, directives, 613 guidelines, and manuals, including but not limited to, the Department of the Interior Manual, 614 Part=609 Weed Control Program, the Plant Protection Act of June 20, 2000 (Pub. L. 106 224), 615 and Executive Order 13112 of February 3, 1999. 616


28. The District shall establish and maintain accounts and other books and records 618 pertaining to administration of the terms and conditions of this Contract, including the District’s 619 financial transactions; water supply data; Project operation, maintenance, and replacement logs; 620 Project land and rights-of-way use agreements; land-leasing, and water-use data; and other 621 matters that the Contracting Officer may require. Reports shall be furnished to the Contracting 622 Officer in such form and on such date or dates as the Contracting Officer may require. Subject 623 to applicable Federal laws and regulations, each party to this Contract shall have the right during 624 office hours to examine and make copies of the other party’s books and records relating to 625 matters covered by this Contract. 626


29. The expenditure or advance of any money or the performance of any obligation of 628 the United States under this Contract shall be contingent upon appropriation or allotment of 629 funds. Absence of appropriation or allotment of funds shall not relieve the District from any 630 obligations under this Contract. No liability shall accrue to the United States in case funds are 631 not appropriated or allotted. 632


30. No Member of or Delegate to the Congress, Resident Commissioner, or official of 634 the District shall benefit from this Contract other than as a water user or landowner in the same 635 manner as other water users or landowners. 636


31. Any notice, demand, or request authorized or required by this Contract shall be 638 deemed to have been given, on behalf of the District, when mailed, postage prepaid, or delivered 639 Contract No. 16-WC-20-4838


to the Area Manager, Klamath Basin Area Office, 6600 Washburn Way, Klamath Falls, Oregon 640 97603, and on behalf of the United States, when mailed, postage prepaid, or delivered to office 641 of the District, 6640 KID Lane, Klamath Falls, Oregon, 97603. The designation of the addressee 642 or the address may be changed by notice given in the same manner as provided in this Article for 643 other notices. 644


32. This Contract has been negotiated and reviewed by the parties hereto, each of 646 whom is sophisticated in the matters to which this Contract pertains. Articles 1 through 8 of this 647 Contract have been drafted, negotiated, and reviewed by the parties, and no one party shall be 648 considered to have drafted the stated articles. 649

IN WITNESS WHEREOF, the parties hereto have executed this Contract as of 650 the day and year first above written 651


By: ____________________________________ 653

Regional Director, Mid-Pacific Region 654

Bureau of Reclamation 655


By: ______________________________________ 657

President, Board of Directors



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