Avoiding Competition with the Private Sector In Reply Refer To: July 7, 1995 Mail Stop 409 WATER RESOURCES DIVISION MEMORANDUM NO. 95.44 Subject: Avoiding Competition with the Private Sector The purpose of this memorandum is to remind ourselves of the appropriate role of the Water Resources Division (WRD) for investigations and data collection activities within the Federal-State Cooperative (Cooperative) Program and Other Federal Agencies (OFA) Program. The need to review WRD's role is very important and most relevant today in light of the changing technical and political environment. The expertise and capabilities of the hydrologic consulting community have improved greatly in recent years. Federal, State and local agencies can and should use the private sector for many kinds of studies which, in the past, may only have been conducted by WRD. Also, our projects are subject to increasing scrutiny by public officials in light of the emphasis for privatizing Federal entities. However, we believe that there are strong justifications for our Federal role in water information. The existance of even a few projects (out of the many hundreds we undertake) for which the justification is weak can undermine our ability to continue to provide the services to the Nation that are our proper mission. Thus, for every study we undertake we must be able to demonstrate that it is an appropriate role for WRD. One key role of WRD in hydrologic investigations under Cooperative and OFA programs is to lead the Nation in providing new understanding, approaches, technology, and research for defining water resources and solving water-resources problems. In order to fulfill this role, WRD must maintain strong partnerships with other agencies who use hydrologic data and the results of our investigations to make decisions regarding the management of water resources. The continued vitality and relevance of our programs depends on our close involvement and responsiveness to these agencies. Internally, strong competence in field techniques and assessments, familiarity with the full range of hydrologic systems, and a strong and relevant research program must be maintained. The data and hydrologic system information gathered from the Cooperative and OFA programs are used in turn by WRD to synthesize regional- and national-scale, water-resources perspectives. Thus, these programs are vital to the overall mission of the WRD. It is no accident that WRD is the principal provider of hydrologic data, theory, research, and new technology for the United States and the world. This competence is maintained by the internal feedback loop among research, the distributed resource-assessment programs, and customer (cooperators and OFA's) input. Without the feedback loop, the WRD program would soon lose its relevance to emerging water-resource issues. Paramount, however, is the need to maintain the longstanding WRD policy not to compete with the private sector. This means that WRD must be responsive to the requests and interests of potential partners, but at the same time set limits on the type of work undertaken on their behalf. Projects undertaken for customers must meet some basic standards. They must provide an enhancement of knowledge or an enhancement of hydrologic methodology that is likely to be useful beyond the immediate needs of the customer. In general, if the project is driven solely by an operational need of the customer to meet some information requirement for a permit or regulation, we should not undertake it. However, if this operational need can be satisfied along with one or more of the following broader goals, then the work may be considered appropriate. These broader goals for WRD work are: 1) advancing knowledge of the regional hydrologic system 2) advancing field or analytical methodology 3) advancing understanding of hydrologic processes 4) providing data or results useful to multiple parties in potentially contentious interjurisdictional conflicts over water resources 5) furnishing hydrologic data required for interstate and international compacts, Federal law, court decrees, and congressionally mandated studies 6) providing water-resources information that will be used by multiple parties for planning and operational purposes 7) furnishing hydrologic data or information that contribute to protection of life and property 8) contributing data to national data bases that will be used to advance the understanding of regional and temporal variations in hydrologic conditions. A critical aspect of each of these goals is that all WRD programs (whether funded by appropriations or by specific customers) take an active role in sharing the results of the investigation either through widely-accessable data bases or through published reports. Further guidelines on our appropriate role are given in WRD Memorandum No. 84.21; this memorandum specifically addresses criteria to be used to decide which hydrologic activities are not appropriately included in the Cooperative Program. The fact that a cooperator or OFA approaches the WRD to undertake the particular study (rather than issuing a request for proposals) is not sufficient evidence that the project is not in competition with the private sector. It must be demonstrated that the proposed work goes significantly beyond what the private sector would do, either in terms of research or innovation, or in terms of contribution to shared hydrologic data or knowledge. There are many instances where the customer's motivations are entirely related to some regulatory requirement for information. It is appropriate for WRD to discuss the customer's needs and see if a broader effort can be undertaken involving enhancements of the data collection methods or analytical approaches or making the information collected more useful for a wide range of uses. However, if the customer's interests are limited to the routine application of standard, pre-existing protocols to satisfy a regulatory or design requirement and do not significantly fulfill any of the 8 goals listed above, then the work should be rejected. On the other hand, if the customer is interested in having the WRD participate in the development of a procedure to be used for some regulatory or design purpose, a project aimed at the development and limited application of the procedure may be appropriate. The issue of potential competition with the private sector is a difficult one, requiring the use of considerable judgment and sensitivity. It is important that WRD stay relevant to customer needs and maintain a balance of data collection, interpretive studies, and research efforts. The WRD would lose its relevance and ability to provide innovations in data collection and interpretation if it removed itself from these routine activities. WRD must be acutely aware of the needs of a wide range of potential customers for hydrologic information. However, WRD must approach these potential customers with the viewpoint that our role is to form true partnerships with our customers. We must provide significant technical leadership and not simply respond to their needs as they perceive them. This means that some potential projects will be rejected as inappropriate for WRD. It also means that many potential projects will be greatly strengthened, from the standpoint of benefits to the customer and to the Nation. Robert M. Hirsch Chief Hydrologist DISTRIBUTION: A, B, DC This memorandum supersedes WRD Memorandum No. 92.56.