By Sergio Pino-Jelcic
Back in April I had the opportunity to attend the Design-Build for Water/Wastewater Conference in Cincinnati. I am a regular attendee of this conference, and this year I gladly noticed clear growth with respect to previous years. The exhibit hall was noticeably larger, the sessions were crowded, and the keynote speakers attracted hundreds of people. This enthusiasm is consistent with the 2018 Annual Market Research Report recently released by the Water Design-Build Council confirming that collaborative delivery is widely accepted and used by the nation’s public utilities. A strong 10.3 percent compound annual growth rate was reported for projects under the format of Design-Build (DB) or Construction Management at-Risk (CMAR). The forecast for 2021 is that approximately $6.1 billion of water/wastewater capital expenditure will be spent in collaborative delivery methods.
I also noticed at this conference that more specialized equipment suppliers are exhibiting. This reflects strong interest in the value a technology partner can bring to a project team in either a DB or CMAR delivery. Some manufacturers have specialized in unique treatment technologies beyond traditional standard process designs and commodity equipment. Strong process expertise and experience reside in these manufacturers that have exceled in developing niche technologies. This wealth of process knowledge housed in technology providers can certainly serve today’s complex water and wastewater projects well. Looking at the positive trend of projects being developed and delivered in a collaborative framework, it is encouraging to see project teams engaging more often with technology providers in the early design phase of projects. Tapping into this collective expertise helps the whole project team navigate an increasingly complex set of solutions and technologies.
The early input of a technology partner during the design phase can address a broad spectrum of topics:
- Construction Costs: More technologies are available nowadays with the ability to increase plant capacity and improve water quality within an existing facility’s assets. The implementation of high-rate technologies or process intensification in existing infrastructure or in smaller new tanks can reduce construction costs significantly. As the saying goes… “the cheapest concrete is the one you already own.” Likewise, with aging equipment, restoring new life into an old unit operation has become the norm in plant upgrades. Ease of constructability in retrofit projects can be addressed early on with the right technology partner to optimize construction costs.
- Risk Management: The general practice when developing a risk allocation matrix is to assign a risk component to the party in the best position to manage it and therefore take responsibility. A technology partner can participate in the risk matrix by assuming responsibility over the output of a system or piece of equipment designed and supplied by the manufacturer. Performance guarantees as well as extended warranties and services are often included in the offering from many technology providers. With the early input from a technology partner, moneys for risk contingencies can also be allocated more efficiently for better control of the overall contingency reserves. In addition, to mitigate risk exposure, pilot programs can be conducted with equipment suppliers to validate technologies. A technology partner can be a valuable resource to identify, prevent, control, and cover the process risk components of a project.
- GMP Development: The guaranteed maximum price (GMP) is a critical piece of many collaborative delivery projects. It is developed throughout the design phase by the delivery firm that ultimately commits to it upon agreement with the owner. A technology partner can play a fundamental role in GMP development by committing to support the project team with transparent price progression as the design and scope definition advance. For the delivery firm, this approach reduces the risk of non-conforming costs, which is critical once the final GMP has been negotiated. Technology pre-selections conducted early on have been successful in incorporating effectively the inputs of a technology provider into the GMP development. The early selection and procurement of key technology packages also allow the project team to optimize the constructability of unit operations by engineering the system integration and thus minimize unknown variables. Likewise, opportunities to optimize the overall project schedule can be identified with a technology partner during the GMP development.
- Operator’s Input: The utility’s operators and maintenance crew represent an essential group for the success of a project. A good practice of collaborative delivery projects is that the plant staff is part of the project definition. Operators can recommend valuable design features based on the multiple scenarios they have experienced over the years at this or other facilities. Along these lines, the early engagement of operators with technology providers can only provide positive results. During the design phase, plant staff can offer valuable inputs to customize the control system with the right tools for them, recommend preferred materials of construction, and help define equipment layouts for better access. As the operators become familiar with the selected technology in early stages, the actual process startup, training, and equipment operation during commissioning become an enhanced and rewarding experience.
- Value-Added Opportunities: Sustainability and asset management are regular components of collaborative delivery projects. A technology partner can provide opportunities that encompass the economic, environmental, and social aspects of a project. For instance, the idea of turning plants into resource recovery facilities is certainly gaining traction in the industry, and it is even fostering social advocacy. Technologies are key to facilitate the extraction of resources such as reclaimed water and energy. Likewise, more efficient and modern technologies are helping to reduce energy, consumables, and waste byproducts. New opportunities have also emerged for project teams with the rapid advancements of intelligent equipment developed by technology providers. In addition, a revenue stream for a utility with a sustainable business model can be implemented by selecting the right technology package.
The five topics described above represent the core values a technology partner can bring to the table for a collaborative delivery project. Most of the engineers and contractors that have partnered with a technology provider understand and appreciate the spectrum of opportunities that an equipment supplier can deliver with an early involvement in the project. Furthermore, owners are more often embracing best-value procurement practices, considering economic and non-economic criteria for selecting key technology packages. This is the space in our industry where many equipment suppliers can excel and thus contribute to execute successful projects. These are certainly times in our industry when the traditional way to solve our problems is no longer viable. But the exciting part is that the collective expertise from subject matter experts, particularly gathered and fostered in a DB or CMAR framework, is taking us to places we could not reach in the past. I have been in the water sector for 20 years, and I can say that in the last five years I have seen the most rapid pace of technology advancements introduced to the market. The invitation is then to keep building bridges across the table connecting owners, engineers, contractors, manufacturers, academia, and regulators, among other players in our industry. I am confident that we will be writing the next chapter with the 21st century approach — that is, with collaboration and knowledge-sharing.
Sergio Pino-Jelcic is a Sales Manager at Evoqua Water Technologies and serves on the Water and Wastewater Equipment Manufacturers Association (WWEMA) Board of Directors. Since 1908, WWEMA has been the voice of water and wastewater technology manufacturers and related service providers by advocating, informing, and connecting our members to key leaders in the industry. For more information about WWEMA, go to www.wwema.org. Interested in becoming a WWEMA member? Contact WWEMA Executive Director, Vanessa Leiby at email@example.com.