Federal Contract Awards $67.7 Million for Navajo, Gallup Water Project

The U.S. Bureau of Reclamation awarded a $67.7 million contract to Ames Federal Contracting Group, LLC to construct the San Juan Lateral Intake and River Pumping Plant in northwest New Mexico, completing the raw water capture sequence that underpins the entire Navajo-Gallup Water Supply Project's delivery timeline.

The new structure will sit at the Hogback Diversion Channel on the San Juan River, between Farmington and Shiprock, pulling river water directly into the Frank Chee Willetto Reservoir. From there, a second pumping plant, also awarded to Ames Federal under a separate $62 million contract in November 2025, will push stored water to the San Juan Lateral Water Treatment Plant before treated water enters the distribution network. Bart Deming, Construction Engineer and Manager for the Bureau of Reclamation's Four Corners Construction Office, has described the project's momentum in direct terms: "The Navajo Gallup Water Supply Project is now more than 70 percent complete. Once completed, the project will provide opportunities by addressing the critical lack of drinking water in these areas. It will ensure a reliable and clean water supply for homes and businesses and foster economic growth."

The urgency behind that language is measurable. Gallup's groundwater levels have fallen roughly 200 feet over the past decade. On the Navajo Nation, four in 10 families still haul water, often covering long distances to reach any supply at all. The project, authorized by Congress in 2009 as a central commitment of the Navajo San Juan Indian Water Rights Settlement, was designed specifically to break that dependence by diverting 37,376 acre-feet annually from the San Juan River Basin and treating it to Safe Drinking Water Act standards.

The San Juan Lateral follows the U.S. Highway 491 corridor south from Shiprock through Naschitti, Tohatchi, Crownpoint, and Yatahey before reaching Gallup. A sublateral to Coyote Canyon, designated Reach 10.1.1, broke ground in February 2025 and is expected to wrap up in 2026, positioning those McKinley County chapter communities among the first to receive San Juan River water. Deming has said connections are being made continuously rather than waiting for full project completion: "We are hooking up Navajo communities as we're building the pipeline, so this water will go to all Navajo communities." Once treated water arrives at connection points, the Navajo Tribal Utility Authority takes over final distribution into homes, schools, and businesses.

At full buildout, the project will serve more than 43 Navajo Nation chapters, the Teepee Junction area of the Jicarilla Apache Nation, and the city of Gallup, with an estimated reach of 250,000 people. For the tens of thousands of Navajo families currently hauling water, active pipe connections in chapter communities will mean the end of that burden. For Gallup municipal customers, the shift from rapidly depleting groundwater to a regulated surface water supply removes the long-term pressure on a system already stressed by decades of drawdown, though final rate implications will track the operating cost agreements tied to water delivery.

With the San Juan Lateral at 70 percent completion and first deliveries targeted for late 2028, the intake plant contract brings the project's most consequential missing piece into the construction queue.