Water 2025

To prevent crises and conflict over water in the western United States.

The Challenge Grant Program is designed to contribute to this goal by providing 50 percent funding for projects that will conserve water, increase water use efficiency, or enhance water management, using advanced technology,
improvements to existing facilities, and water banks and markets.
Related Programs

Examples of Funded Projects

A total of 68 Water 2025 Challenge Grant projects have been funded to date, including 43 projects by irrigation and water districts and other local entities, and 6 more by western states.

The funded projects include, among others, 28 projects that will save water by eliminating evaporation and seepage by converting a total of 74 miles of dirt canals to pipeline and lining a total of 8.6 miles of dirt canals; 46 projects that will improve the efficiency and control of water deliveries by installing water measurement and SCADA devices, and automating delivery systems; and 10 projects that involve marketing water to other water users in conformance with state laws.

Short descriptions of each project funded under Water 2025 are available at http://www.doi.gov/water2025/grant.html.

Agency - Department of the Interior

The Department of the Interior protects and provides access to the Nation's natural and cultural heritage, including responsibilities to Indian tribes and island communities. Departmental goals include resource protection and usage, overseeing recreational opportunities, serving communities and excellence in management.

Program Accomplishments


Uses and Use Restrictions

To be used for projects that will result in water conservation, more efficient water use, or better management of existing water supplies, which can be completed within 24 months from the date of award.

Types of eligible projects include: (1) use of water banks and water markets; (2) modernization of existing facilities using new technology; (3) canal lining; (4) installation of measuring devices; and (5) the development of analytical tools to better manage water resources.

Financial assistance under this program is limited to 50% of the total project cost, and generally may not exceed $300,000 per project.

Congress may also authorize the Secretary to enter into grants or cooperative agreements with universities or non-profit institutions to fund water use efficiency research.

Eligibility Requirements

Applicant Eligibility

Irrigation and/or water districts, state governmental entities with water management authority (e.g., state agencies, departments, boards, etc), and other entities with water delivery authority, located in the states identified in the Reclamation Act of June 17, 1902, as amended, specifically, Arizona, California, Colorado, Idaho, Kansas, Montana, Nebraska, Nevada, New Mexico, North Dakota, Oklahoma, Oregon, South Dakota, Texas, Utah, Washington, and Wyoming; universities and non-profit research institutions.

Beneficiary Eligibility

The general public,, irrigation or water districts, and state governmental entities with water management authority, located in the states identified in the Act of June 17, 1902.


(1) A detailed written technical proposal including background data regarding the applicant, such as location, total project diversions, and relevant water use efficiency measurements, a detailed scope of work separating the work into major tasks, including any engineering or design work already completed, and describing the conservation measures and/or water banking activities to be undertaken, how the amount of saved water will be estimated, the level of cooperation with other parties involved in the proposal, and how the proposal will reduce conflict over water resources. (2) When applicable, a funding plan showing how the applicant will pay for its 50 percent cost share requirement, and an official resolution adopted by the irrigation or water district's governing board of directors, resolving that, if selected, it will negotiate and execute a grant or cooperative agreement with Reclamation. (3) A detailed project cost proposal, including a budget with the annual estimated project costs, including salaries and wages, fringe benefits, travel, equipment, supplies, contracts, and indirect costs, an estimate of annual operation and maintenance costs, and the value of in-kind contributions of goods and services.

Aplication and Award Process

Preapplication Coordination


This program is excluded from coverage under E.O.


Application Procedures

A request for proposals (RFP) is posted annually by Reclamation at Grants.gov. Submission of a complete technical proposal and a project budget proposal in accordance with the instructions in the RFP is mandatory. In addition, applicants must submit all applicable SF-424 forms, which are referenced in the RFP.

Award Procedures

The number of awards, maximum funding amount per award, and areas of interest for which proposals will be considered, are determined on an annual basis and are dependent upon the annual appropriation from Congress. Proposals received in response to the RFP are reviewed on the basis of a competitive, merit-based review process, and are rated in accordance with the evaluation criteria stated in the RFP. Reclamation will make awards to the highest rated proposals based on the amount of funding available each year. Reclamation reserves the right to prioritize projects based on availability of funds and to ensure balance among the program objectives listed in the RFP.


Visit the Department of the Interior Water 2025 website, http://www.doi.gov/water2025/, for current information on any upcoming RFP dates and deadlines, or contact Reclamation.


Energy and Water Development Appropriations Act, 2006, Title II, Section 205, Public Law 109-103.

Range of Approval/Disapproval Time

Contact Reclamation for the range of time when proposals are approved or disapproved.


Not applicable. Reclamation will, however, provide all applicants with information on why their proposals were not selected.


Continuation of funding for the Program from one fiscal year to the next is at the discretion of Congress. Yearly solicitation is made for projects of 24 months in duration or less, although multi-year projects may be considered if annual accomplishments can be demonstrated.

Assistance Considerations

Formula and Matching Requirements

The Federal share of the cost of a project or activity carried out under the Program shall not exceed 50 percent of the total cost of the project or activity. Costs of operation, maintenance, repair and rehabilitation of facilities funded under the authority for this Program shall be nonfederal responsibilities. When funding is available to universities and nonprofit institutions for research projects, the 50% cost share may not be applicable.

Length and Time Phasing of Assistance

Proposals are requested for projects of 24 months in duration or less. However, funding for multi-year projects may be considered if annual accomplishments can be demonstrated.

Post Assistance Requirements


The recipient must furnish quarterly and final financial reports; quarterly, annual and final performance reports; and significant development reports as needed.


In accordance with the provisions of OMB Circular A-133 (Revised, June 27, 2003), "Audits of States, Local Governments, and Nonprofit Organizations," nonfederal entities that expend $500,000 or more a year in Federal awards will have a single or a program-specific audit conducted for that year. Nonfederal entities that expend less than $500,000 a year in Federal awards are exempt from Federal audit requirements for that year, except as noted in OMB Circular A-133.


The recipient shall maintain project records in accordance with applicable OMB Circular requirements.

Financial Information

Account Identification



(Cooperative Agreements) FY 07 $9,200,000; FY 08 est $11,000,000; and FY 09 est $14,475,000.

Range and Average of Financial Assistance

Challenge Grant Program ranges from $19,338 to $300,000; averages $140,331. Water Efficiency Research averages $1,000,000.

Regulations, Guidelines, and Literature

43 CFR 12, http://www.access.gpo.gov/nara/cfr/cfr-table-search.html#page1; OMB Circulars, http://www.whitehouse.gov/omb/grants/grants_circulars.html; Standard Forms, http://www.whitehouse.gov/omb/grants/grants_forms.html; Program information, http://www.doi.gov/water2025/. Documents may also be obtained by contacting Reclamation.

Information Contacts

Regional or Local Office


Headquarters Office

Technical/Program Information: Bureau of Reclamation, Office of Program and Policy Services, Attn: Avra Morgan, Mail Code: D-5500, P.O. Box 25007, Denver Federal Center, Denver, CO 80225. Telephone: (303) 445-2906. Fax: (720) 544-4207. E-mail: aomorgan@do.usbr.gov. Solicitation documents: Available through Grants.gov at www.grants.gov .

Criteria for Selecting Proposals

Evaluation factors may include, but are not limited to the following: (1) inclusion of water banking or marketing elements; (2) amount of water conserved as a percent of normal supplies; (3) reasonableness of the costs for the benefits gained ; (4) the degree to which conserved water contributes toward an established or new water market or bank; (5) documentation of the projected results (i.e. identified the number of acre-feet to be managed, conserved or marketed), and tracking of the post-project results; (6) consistency with applicable water plan(s); (7) ability to pay for project cost and any increase in operation and maintenance costs; (8) costs are reasonable and appropriate for work proposed (including consideration of the percentage of the proposal used for capital improvements); (9) whether more than 50% non-federal funding was proposed; and (10) the relevance to Water 2025, including, the degree of stakeholder involvement and likeliness of reducing conflict, whether the project is in a hot spot, and whether the project is "in a basin with connections to Reclamation project activities."

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Edited by: Michael Saunders

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