ELR Citation: ELR 20209
No(s). 05-168L (Fed. Cl. Oct 2, 2006)

The court held that the U.S. Bureau of Reclamation did not breach its repayment contract with a municipal water district concerning a water reclamation project on the Ventura River in California when it required the district to build a $9.1 million fish passage facility and to relinquish a portion of the project's water supply to assist the migratory passage of steelhead trout in the river. The contract provided that the water district would repay, over a period of 40 years, the U.S. construction costs, which would be capped off at $30.9 million. The contract also provided that the district would assume all operation and maintenance costs of the project from the time of its completion. Because the costs at issue here were not incurred in the performance of work deemed necessary for completion of the project, they do not fall within the cost reimbursement limitations of the contract. Rather, these costs are more appropriately regarded as operation and maintenance expenditures for which the district is contractually responsible. Nor did the contract impose a duty on the government to guarantee the district's water supply. Any reduction in that supply was the result of compliance with the Endangered Species Act—a sovereign act for which the government in its role as a contractor is not responsible.