Utility managers and equipment manufacturers’ sales reps have a familiar relationship, but instead of continuing the same old song and dance, there is knowledge both can bring to the table to advance the conversation — and the water/wastewater industry on the whole. The two sides met recently to discuss value, opportunity, and expectations.
By Bill King, Water Online
Three water and wastewater managers representing utilities of varying size and scope met with water and wastewater equipment manufacturers on Thursday, April 25, 2013. In a lively session at the Water and Wastewater Equipment Manufacturer’s (WWEMA’s) 40th Washington Forum, the utilities asked the manufacturers to bring information about their products and strategies to help inform and educate their respective cities on the need for additional infrastructure funding and to hold their consultants’ “feet to the fire.”
Chretien Voerg, superintendent of the Town of Colonie, NY, discussed the difficulty he faces in convincing his customers to pay more. Currently, the suburb of Albany in the heart of New York’s Capital Region and Tech Valley with a daytime population of 150,000 people, charges less than $200 per family on an annual basis for clean water. Voerg spoke eloquently about access to safe water and sanitation being a historical public health achievement and discussed a number of the concepts his municipality is using to show users that their annual supply of treated water costs less than their cable bill, or even a family night out at an upscale restaurant.
Don Howard, water reclamation manager for the City of Greensboro, NC, spoke of a $105 million unfunded mandate and specifically to new state total maximum daily loads (TMDLs) to implement by 2016. Looking to the future, Howard suggested that pressure to keep staffing resources down will require greater automation to serve the 400,000 people in the Piedmont area of central North Carolina that he serves.
Much of the manufacturers’ interest in talking to the utility representatives was to understand how to avoid “low bid” projects and move collectively towards value-based procurement. Seen as a win for both the equipment manufacturer and the utility, value-based procurement looks beyond the initial cost of the product to factor in life-cycle maintenance and reduced energy costs. Perhaps more importantly, value-based procurement drives technological innovation, as manufacturers feel greater confidence to invest in new technology knowing that the utility will not simply look for the cheapest solution.
Art Shapiro, chief engineer for the City of Baltimore (MD) Department of Public Works, Bureau of Water and Wastewater, acknowledged that the Baltimore charter requires low bid. Shapiro suggested the manufacturers have their reps work on educating both the utility’s staff and the consultants they work with. “We hire a lot of consultants, and consultants have favorites — which is not a bad thing,” said Shapiro. “But we are taking steps to open up our doors to newer consultants. We sometimes like the smaller firms over the larger ones because they often live within our communities, know our government officials, and understand the local landscape.” Shapiro spoke of a role the manufacturers could play in arming his staff with the data needed to challenge the consultants to evaluate more value-based products for projects. “Educate us so that we can hold the consultants’ feet to the fire,” said Shapiro. By doing this, Shapiro suggested they can together build a rock-solid case for more value-based projects to go to council for approval.
Howard noted that despite the constraints of low bid, he was been able to push through a couple of projects recently based on value. Given some latitude under the banner of “you make the bed you lie in,” Howard discussed a recent project where he sole-sourced high-powered blowers based on life-cycle analysis rather than working through a general contractor. He also pointed to a $100,000 coatings project where two firms were selected based on their superior coatings expertise over general painting contractors.
Shapiro listed Baltimore’s top challenges as aging infrastructure, regulatory mandates, consent decrees, stormwater management, balancing Capital Improvement Program (CIP) projects, and the affordability of rates. Unlike Voerg, who needs to convince his customers to pay more, Shapiro is faced with dense populations in low-income neighborhoods where double-digit rate increases are unfeasible. Instead, Shapiro is working with the U.S. EPA on an “integrated planning framework,” whereby the city’s CIP projects are methodically evaluated and ranked to allow Baltimore to balance mandates with asset management and continue to operate effectively in providing clean water to its citizens.
All three utility managers were asked for their opinions when it came to manufacturers working with their organizations. Shapiro said that Baltimore is working hard to avoid “atrophy in place” by implementing project management training and encouraging staff to meet with manufacturers reps so that they begin to think beyond “project completes.” In helping his staff understand new products and services, Shapiro cautioned manufacturers not to focus on simply “beating up the competition,” but to bring, “rational, fact-based, methodical approaches.”
Howard echoed that sentiment. “Don’t worry about what your competitor can or can’t do,” he said. “Let me figure that out. Teach your reps to focus on why your product is the best one out there.” Voerg also suggested that manufacturers who bring creative solutions that share the liability with the utility for new product introductions will be well received. He also asked manufacturers to respect the final decision that each utility manager has to make, indicating that the decision is often influenced as much by legal and financial considerations outside of the manager’s control as by the product itself.