Flatland Energy Services Wins $75.5M HDD Contract for Navajo-Gallup Water Supply Pipeline
According to Trenchless Technology, the U.S. Bureau of Reclamation has awarded a $75.5 million contract to Flatland Energy Services LLC for horizontal directional drilling (HDD) construction on the Block 2-3 Pipeline segment of the Navajo-Gallup Water Supply Project (NGWSP) in northwest New Mexico.
The award brings the total contracts issued to advance the NGWSP this year to over $143 million. “With this contract, Reclamation has awarded more than $143 million in contracts to advance construction of the Navajo Gallup Water System this year,” said Assistant Secretary for Water and Science Andrea Travnicek.
Scope of Work
Flatland Energy Services will install nearly 10,000 ft of new water supply pipeline using HDD, including four critical underground crossings through sensitive terrain and Navajo traditional cultural sites:
- Shumway Arroyo crossing
- San Juan River crossing
- Nenahnezad Hill bore — featuring a 250-ft elevation change
- Chaco River crossing
Pipe diameters range from 36 to 42 inches. Individual pipeline sections run from roughly 2,000 to 3,300 ft. The pipeline runs from the Frank Chee Willetto Reservoir, approximately 17 miles east of Shiprock, NM, to the San Juan Lateral Water Treatment Plant currently under construction.
“This work includes some of the most complex horizontal directional drilling installations performed to date on the NGWSP, including the San Juan River crossing and Nenahnezad Hill bore, which includes a 250-foot elevation change,” said Bart Deming, Reclamation’s Western Colorado Area Office Manager overseeing the Four Corners Construction Office. The HDD method allows the pipeline to cross beneath rivers and challenging terrain without disturbing surface features or culturally significant sites.
Project Timeline and Scale
Construction under this contract is expected to begin in summer 2026 and conclude in fall 2028. The overall NGWSP encompasses approximately 300 miles of pipeline, two water treatment plants, 19 pumping plants, and multiple water storage tanks — a system authorized under the Navajo Nation Water Rights Settlement in the San Juan River Basin. Construction began in 2012.
The San Juan Lateral is more than 70 percent complete. Initial water deliveries are slated for late 2028, with final project completion by end of 2029. The project will serve communities across the Navajo Nation in New Mexico and eastern Arizona, plus Gallup, NM — where more than one in three residents currently lack indoor plumbing and must haul drinking water to their homes.
What It Means for Subcontractors
This contract is a direct signal for HDD specialists and underground utility subcontractors in the US Southwest:
- High-complexity HDD opportunity: The San Juan River crossing and Nenahnezad Hill bore are described as the most complex HDD installations on the entire NGWSP to date. Contractors bidding future NGWSP phases should position specialist HDD crews now.
- Federal water infrastructure is active: The Bureau of Reclamation is accelerating federal water project construction in the Southwest. The NGWSP alone has now awarded $143M+ in 2026 contracts, with more segments still to come on a 300-mile system.
- Federally required environmental protection adds premium work: Installing 36-42” pipe beneath rivers and culturally significant sites without surface disturbance requires rigorous HDD planning and specialty equipment — typically commanding higher margins than open-cut alternatives.
- Multi-year duration: A summer 2026 to fall 2028 window creates sustained field operations for the winning prime and its subs, particularly in pipeline inspection, horizontal boring, and civil support trades.
Field service contractors working federal infrastructure in New Mexico, Arizona, and adjacent Southwest markets should track the remaining NGWSP phases — the Bureau of Reclamation continues to issue contracts as the project approaches its late-2028 delivery window.
