Water Design Build Council Blog

Using the RFP Process to Select the Best Design-Builder for Your Project

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This AWWA ACE13 presentation by Mark Alpert will provide participants with a guide to when and how to use the design–build approach for water and wastewater projects.

By Mark Alpert, CH2M HILL’s Senior Vice President for Design-Build

Mark Alpert will present “RFP’s: Selecting the Design-Builder” as part of the Successfully Using Design-Build as a Project Delivery Method for Water Infrastructure Projects session on Monday, June 10 at 3:30 p.m., during the American Water Works Association’s Annual Conference and Exposition (ACE 13), in Denver, Colorado. Learn more about CH2M HILL’s ACE 13 2013 participation and technical sessions.

The goal of this session is to provide participants with a guide to when and how to use the design–build approach for water and wastewater projects.   My co-presenters and I will help participants achieve a better understanding of the perspective of an Owner relative to planning, procurement and project implementation through a series of presentations on specific topics. Additionally we will offer an explanation of the variation of the design–build project delivery approach that includes operations and financial services.

My presentation focuses on identifying the key project elements and evaluation and selection criteria to produce an effective RFP that will lead to the selection of the best possible design-builder.  One of the overarching issues is being cognizant of current state and local procurement laws.  Secondly, it is important to decide which procurement vehicle is the optimal choice.  I will describe both Qualifications Based and Best Value procurement processes and the situations that make one or the other appropriate.  I will focus on each element of the RFP, why it is important, and why each element is appropriate for the specific procurement vehicle.

Finally, I will discuss designing an evaluation process and defining specific selection criteria that will lead to selecting a design-builder with the highest probability of achieving an Owner’s project objectives.

Have a few minutes for another read? Check out my blog post “Design-Build: An Alternative Delivery Model Not to be Ignored.”

Mr. Alpert is CH2M HILL’s Senior Vice President for Design-Build and is responsible for developing and furthering the firm’s design-build business in North America. He is responsible for risk management, project development and team formation for all of the firm’s Water Business Group design-build, design-build-operate, and Construction Management at Risk projects in the United States and Canada. He has managed and negotiated design-build and design build operate project scopes, fees and contracts for the delivery of water, wastewater treatment and sludge processing facilities ranging in value from $1 to $250 million

This article has been republished with permission by CH2M Hill. To view the original article, visit CH2M Hill's blog here.

Developing Sustainable Solutions: Partnerships Are the Model of the Future

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By Stephen Tarallo, Black & Veatch

Louis D. Brandeis, U.S. Supreme Court Justice, famously stated in 1932 that individual states in the U.S. were “laboratories of democracy” for policy experiments – and it would seem this metaphor could also be applied to the sustainability efforts of many municipalities and regions across the globe.

Through innovation, experimentation and “stretch goals,” communities are developing and implementing sustainability programs uniquely suited to their local conditions.As we finalized the inaugural issue of the Black & Veatch “Strategic Directions in the U.S. Water Utility Industry” report, we noted that sustainability is increasingly viewed in the U.S. as a driver for investment and positive returns. Sustainability is evolving into a “value mindset” as opposed to a strictly environmental concept.

More generally, when faced with difficult challenges of asset deterioration, more stringent environmental regulations, declining revenues, increasing operating costs and dwindling capital reserves, many water utilities around the world have made the principles of sustainability foundational to their approach to solving complex problems.

This balancing of the short term with the long term can be difficult to do effectively – it is more a management art than a science. Seeking ways to optimize economic, environmental and community benefits and sustain them over the long term without unintended negative consequences requires innovation and careful planning. This is particularly true when the political, regulatory and economic environments are uncertain and fraught with risk.

One thing is for certain – water is essential to life and there are no substitutes. It is also the lifeblood of society in that it is a critical resource for energy production, food production, mineral production, transportation and recreation. It is this centrality of importance that makes local water-related challenges a good starting point to achieve wider-reaching sustainability goals through partnerships with other industries and stakeholders.

For example, when the water level in Wivenoe Dam was dropping rapidly in Brisbane, Australia, from 2004 through 2007 due to extreme drought conditions, finding an additional water supply was the single driver in implementing reuse. However, the primary end-users for the reclaimed water turned out to be power stations, which were in danger of losing their cooling water source. The implementation of the advanced water treatment plants provided both an increased water supply and a guaranteed, sustainable energy supply for the community.

When Calpine, an independent power producer, required cooling water for a new 300 megawatt (MW) natural gas-fired power station in Mankato, Minn., the city offered the effluent from its wastewater treatment plant. By providing wastewater plant effluent to Calpine, the city was able to address the impending phosphorus restrictions in its discharge permit, and Calpine was able to get the cooling water it needed to generate energy. The water reclamation plant, which opened in 2006, has resulted in significant financial savings for the partners as well as approximately 680 million gallons of freshwater annually through reuse. These types of partnerships between utilities and municipalities should be the model for the future.

DC Water (District of Columbia) has recently undertaken a biosolids management program at its Blue Plains Advanced Wastewater Treatment Plant. The program will include thermal hydrolysis, anaerobic digestion and combined heat and power (CHP). The program will reduce the use of diesel trucks for biosolids hauling, offset the purchase of natural gas and electricity, and produce a biosolids product that can be used as fertilizer. The 15 MW CHP project is being delivered through a contract with Pepco Energy Services, which will operate the facilities for 15 years.

All of these examples are great models for sustainability. And there is a strong economic component to each one. Water resources and infrastructure across the water cycle are indispensible contributors to global sustainability, and their roles are set to expand greatly well into the future.

This article has been republished with permission by Black & Veatch. To view the original article, visit Black & Veatch's Solutions Magazine.

Water Continues to Rise on Asia’s Agenda

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Dr. Glen Daigger has been traveling through Asia discussing water issues and solutions, and shares a travelogue of his journey which showcases the continued growing focus on water and environmental protection technology, and how the global community is coming together to address the complex challenge of sustainable water management. His trip included stops in China at the Yixing Environmental Science and Technology Park, Korea for the kick-off of preparations for the 7th World Water Forum, and Thailand for the Asia-Pacific Water Forum.

By Dr. Glen Daigger, International Water Association President and CH2M HILL Senior Vice President and Chief Water Technology Officer

May 10: Burgeoning Water Industry in China

Earlier this week I had the pleasure to be in Yixing, China, at the Yixing Environmental Science and Technology Park.  Yixing is in South Central China, West of Shanghai and South of Nanjing.  It is a community of about 1 million people.  Once a center of heavy industry, this manufacturing base has been moved because it was polluting the regional lake system.  Obviously the negative economic impact was substantial.  Beginning in 1972, the first environmental protection companies were founded there, which began a trend leading to Yixing becoming the environmental protection technology capital of China.  Environmental companies are springing up all around China.  But, in 1992 a State-sponsored industrial park focusing on environmental protection was founded in Yixing, which has grown to now occupy a 212 km² site with over 1,500 companies employing about 30,000. It is by far the largest in China.

We are all aware of the environmental challenges facing China.  But, China is beginning to address these problems and is building the capacity to do so.  Companies in the Yixing Park are focused on the array of environmental issues, but especially wastewater treatment which represents about 70 percent of their business in aggregate.  Industrial wastewater treatment is a particular focus as it represents a serious problem that must be addressed.  Significantly, the objective of many of these companies is to “leap frog” the existing technology by developing and commercializing the next generation of technology.  Partnering with the outstanding engineering universities in China, such as the Harbin Institute of Technology and Tonji University, and with the best on a global basis, these companies are proceeding to do this.  There is also a significant focus on resource recovery, thereby achieving not only environmental protection but also economic benefits. We need to keep our eye on what develops because these companies not only have the focus but also the market size to develop and evolve world leading technology.

May 17: Kick-off of Preparations for 7^th World Water Forum

I am in the second week of my Asian trip and have just participated in the kick-off of the preparations leading up to the 7^thWorld Water Forum (WWF) to be held April, 2015 in Daegu, Korea.  This global event, organized by the World Water Council, is held every three years and brings together national governmental and policy leaders from around the world to address water issues.  The previous (6^th) WWF was held in Marsailles, France, last year and focused on identifying solutions to the world’s water problems.  The Daegu forum will focus on implementation.

The program for the WWF is organized around “commissions,” which are really a whole series of events which lead up to the program at the forum itself.  There are four commissions:  (1) regional, (2) policy, (3) thematic, and (4) science and technology.  For example, the regional commission consists of a more than year-long series of events in the various regions of the world to ensure that regional issues and differences are identified, characterized, and addressed at the forum.  TheInternational Water Association has been tasked with leading the science and technology commission, and I have specifically been appointed co-chair of this commission along with a Korean counterpart.  We are just at the beginning point planning the activities of the commission, but I can tell you that this is both an extremely interesting and exciting opportunity for me, and one with significant potential.  It provides a unique opportunity for the scientific and practice professional community to consolidate our message to policy-makers, and to deliver this consolidated message to them.  As we all know, the best science and technology is irrelevant unless we have aligned and implemented policies.  You will be hearing more from me on this as the activities of the commission are defined during the next few months and the program is executed.  But, I feel blessed by this opportunity, and humbled by it.

May 20: Asia-Pacific Water Forum

I am coming to the conclusion of the 2-1/2 week trip to Asia that I have been reporting on and am on the way home from my last stop at the Asia-Pacific Water Forum in Chiang-Mai, Thailand.  I had not been in Thailand for some time, and it was a pleasure to be there again as the Thai people are very friendly and quite hospitable.  Chiang Mai is in the uplands and is not as hot and humid as locations like Bangkok, although it was still near 90^o F during the day.  The evenings were lovely, though.

I attended the official part of the forum, along with IWA Executive Director Dr. Ger Bergkamp, where the official delegations from the Asia-Pacific countries were present.  Quite a bit of protocol.  The first keynote address on the second day was given by the Prime Minister of Thailand, and a number of other heads of State were present.  The size of the countries present was astounding, ranging from small Pacific Ocean island-states up to China.  The location in Thailand allowed several to emphasize the increasing occurrence of extreme weather events as the severe flooding in Thailand at the end of 2011 is well known.  In fact, the Forum was initially scheduled for that timeframe but was postponed due to the flooding occurring then.  Sea level rise was very much a topic for the Pacific Ocean countries, and of course the provision of water and sanitation along with environmental degradation were other topics.  One astounding statistic was that it was reported that the water quality in 80% of the rivers in Southeast Asia are in poor condition.

Water is definitely rising on the world’s agenda – recognition of the adverse impacts of poor water management.  I wish that the negative economic consequences were better understood so that the question, “how are we going to afford good water management?” would go away as policy makers would recognize that good water management pays for itself through the economic benefits provided.  My official comment at the forum was to recommend that we “tell the whole story of water, and tell it honestly.”  For example, we continue to talk about how to implement “water reuse.”  In fact, all water is reused.  Throughout Asia (and other locations), untreated wastewater is discharged into waterways and subsequently taken back out (downstream) and used again.  What we need to do is to improve the safety and effectiveness of reuse.  Making progress, but more to do.

This article has been republished with permission by CH2M Hill. To view the original article, visit CH2M Hill's blog here.

Carollo Engineers Supports California Direct Potable Reuse Initiative

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WDBC member Carollo Engineers, a California-based, water-focused consulting engineering firm, recently announced a pledge of $150,000 toward a new Direct Potable Reuse (DPR) research initiative, led by the WateReuse Research Foundation (WRRF). Since July of 2012, the WRRF has raised more than $2.7 million toward the California DPR Initiative, which exists to help California meet its legislative and state-mandated DPR initiatives by 2016.

DPR is a new approach to potable reuse. Indirect Potable Reuse (IPR), through augmentation of aquifers and surface water supplies, has been successfully implemented for more than 30 years. With the support of the industry, WRRF has taken measured steps to conduct detailed research of appropriate treatment and water management approaches to protect the environment and public health when implementing IPR.

Carollo has made significant contributions to the body of IPR research by serving as lead investigators for the use of membranes for trace pollutant removal (WRRF 06-019), the use of advanced oxidation processes to destroy pathogens and EDCs (WRRF 02-009), and the use of soil aquifer treatment (SAT) to remove pathogens (WRRF 10-10). Though IPR is a viable and safe method for potable reuse, it has large cost impacts and implementation issues.

Recently the industry has begun examining DPR – which is the treatment and reuse of water for potable use without the use of an environmental buffer such as a groundwater basin or lake. WRRF is already at the forefront of this research initiative, with several DPR projects exploring how to properly modify IPR treatment and monitor approaches to deem DPR equally safe and reliable.

“Through our extensive history with IPR and our commitment to advancing DPR within the industry, we are dedicated to supporting California’s water reuse goals,” said Andrew Salveson, Water Reuse Chief Technologist and Associate Vice President with Carollo Engineers. “With WRRF’s multi-million dollar research agenda on track to characterize DPR issues and treatment needs, Carollo is proud to be a partner on such a vital industry initiative. We look forward to contributing to the safe, affordable, and reliable implementation of DPR to help address California’s water resource needs.”

Today, Carollo is leading the way with key projects within the DPR initiative. These include: working with NASA and other scientiststo reduce risk for DPR projects(WRRF 11-10), defining alternative treatment technologies for both IPR and DPR to lower treatments costs (WRRF 11-02), demonstrating the benefits of engineered direct potable reuse – compared to unintended indirect potable reuse (WRRF 11-05), and properly designing engineered storage and monitoring for DPR (WRRF 12-06).

About Carollo Engineers

For 80 years, Carollo Engineers has provided a full range of innovative planning, design and construction management services to meet the water and wastewater needs of municipalities, public agencies, private developers and industrial firms. To learn more about how Carollo is Working Wonders With Water®, call (800) 523-5826 or visit www.carollo.com.

Balancing Water Demands In Vietnam

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By Christina Hartinger, Director of Projects, North Asia Pacific, Black & Veatch’s Global Water Business

The Phuoc Hoa Water Resources Project is enabling sustainable water use in rapidly developing areas around Ho Chi Minh City.

Vietnam is prospering. For almost 20 years, its growth rate has stood firm at around 7 percent annually. During the first decade of this century, its gross domestic product tripled, and its exports quadrupled.

With factors including greater political stability and reform, and 1 million young people arriving on the job market every year, investment persists. Many dramatic social and economic changes have resulted, and the question of how this emerging modern nation grows is just as important as by how much.

Agriculture remains a fundamental kernel of the economy. Sustainability is vital to Vietnam for many reasons. The country is one of the world’s major rice, coffee and rubber exporters. Three out of four Vietnamese citizens also live in the countryside. Any sustainable development in Vietnam must consider the realities of these demographics and balance growth between city and countryside – or in other words, industry and agriculture.

Competing needs of industry and agriculture in times of rapid development have been brought to a head during periods of water shortages in recent years. In 2000, power cuts were ordered across Ho Chi Minh City as drought threatened hydroelectric production. In 2005, following another period of drought, a power shortfall of 854 million kilowatt-hours (kWh) occurred across 11 hydroelectric dams as water was diverted for agriculture. Similarly in 2008, water shortages in Hanoi led to the release of 2.2 billion cubic meters of water (equivalent to 430 million kWh of electricity) from three hydroelectric dams, again for agricultural use.

Holistic planning of the country’s water resource, therefore, plays a significant role in the long-term development of Vietnam. Balancing the competing agriculture needs of rural areas with the emerging and consuming needs of burgeoning cities and industry is key if Vietnam is to strike the right long-term path for the country.

VIEWING WATER RESOURCES REGIONALLY

The Phuoc Hoa Water Resources Project sets out to plan for more efficient use and availability of water supplies for agricultural and industrial development in the southern portion of Vietnam, as well as increased municipal and domestic water demand. First conceived in the 1980s, the project takes a true regional view of the available water resource across the Dong Nai – Sai Gon Basin. It plans the long-term allocation of the supply across five provincial boundaries (Ho Chi Minh City, Binh Duong, Binh Phouc, Tay Ninh and Long An), including some of the country’s largest urban and industrial development areas. These areas in particular continue to expand, and their water demands will continue to increase.

“The master plan aims to approach water resource planning in a sustainable fashion for the people of Vietnam. It will make an important impact to the lives of the 9 million people, improving the water supply and salinity control in the region,” said Alan Man, Vice President and Managing Director of Black & Veatch’s North Asia Pacific water business.

Man pointed out that more importantly, the Phuoc Hoa Water Resources Project will directly increase agricultural income and employment opportunities for approximately 140,000 people currently not experiencing the fruits of Vietnam’s modernization progress.

A MONUMENTAL EFFORT

After a series of studies, the project got under way in 2004 with funding from the Asian Development Bank (ADB), Agence Francaise de Developpement (AFD), the Vietnamese government and project beneficiaries. It is a monumental effort.

Central to the project is the transfer of water from Phuoc Hoa Reservoir to Dau Tieng Reservoir and the subsequent reallocation of water for irrigation to two new irrigation areas at Tan Bien and Duc Hoa.

“These areas cover some 29,000 hectares of land, mostly paddy fields which are more remote from the effects of modernization,” said Nguyen Xuan Hung, Black & Veatch Deputy Team Leader of the project. “They are poorer, less developed areas compared to downstream Ho Chi Minh City. This really is a balanced, sustainable water plan with diverse economic benefits at the heart of the solution.”

The transfer of water will intensify crop yields, thanks to increased and more effective irrigation. AFD said studies have shown that agricultural income could increase by 100 to 250 percent for some land. The drinking water supply in villages will also advance hygiene conditions, and improved drainage from irrigation will mitigate against flooding.

In addition, increased flows during the dry seasons in the Vam Co Dong and Saigon rivers will boost the supply of bulk water for Ho Chi Minh City and, importantly, control saline intrusion. Saline control is essential to the water supply for industry, as well as for municipal and domestic use. The increased flows also help mitigate effects of rising sea levels – a concern on every sustainable blueprint in Vietnam, which boasts 3,444 km (2,066 miles) of coastline.

COMPLETION OF PHASE ONE

Black & Veatch, involved in the original feasibility studies, has been working closely with the Investment and Construction Management Board 9 of the Ministry of Agriculture and Rural Development to review, design and construct the project since 2006. The first phase was completed in 2011 with the delivery of infrastructure, including the Phuoc Hoa Barrage (with a capacity of 18.5 million cubic meters) and a 40 kilometer transfer canal (with a flow of 55 cubic meters per second). Together the structures develop the water supply from the Be River and transfer it to the Dau Tieng Reservoir, conveying this surplus water resource toward the stressed Saigon (directly) and Vam Co Dong (indirectly) rivers.

The Tan Bien main canal was also constructed in Phase One, joining the existing Dau Tien West Canal, in preparation of the development of the new irrigation area at Tan Bien. Phase Two of the project is due for completion in 2014 and will see the development of the new irrigation areas as well as the Duc Hoa main canal – in preparation for the second new irrigation area at Duc Hoa.

Integral to the sustainability of this holistic water resource project have been other important development aspects. A resettlement program for affected living areas was delivered as well as environmental management programs to minimize the works’ impacts. Black & Veatch continues to provide support to develop capacity within government institutions, irrigation management companies and water user groups.

This article has been republished with permission by Black & Veatch. To view the original article, visit Black & Veatch's Solutions Magazine.

Parsons Awarded San Antonio Water System Brackish Water Desalination Program

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Water Design-Build Council member firm Parsons recently announced that it, along with a joint venture (JV) partner, has been selected by the San Antonio Water System (SAWS) to serve as the construction manager at-risk (CMAR) for its critical brackish groundwater desalination program. This $86 million CMAR contract includes preconstruction phase collaboration with the SAWS program management and design teams, construction of all program components, and 6 months of treatment plant operations.

The scope of work includes 13 raw water production wells, raw and finished water conveyance, residual conveyance, three deep injection wells, a 10-MGD reverse osmosis membrane water treatment plant, a 7.5-MGD finished water storage reservoir, chemical treatment systems, supervisory and data acquisition controls, and a new administration building that incorporates a public tour route, pilot plant, and training facility.

“Parsons is pleased to be collaborating on this important project that advances SAWS’ sustainable water supply strategy by preserving potable groundwater aquifers and employing reverse osmosis membrane technology to desalinate previously untapped brackish groundwater,” said Virginia Grebbien, Parsons Group President.

Parsons is amongst the world's largest engineering and construction firms, and is a leader in many diversified markets with a focus on transportation, environmental/infrastructure, defense/security, and resources. Parsons delivers design/design-build, program/construction management, and other professional services packaged in innovative alternative delivery methods to federal, regional, and local government agencies, as well as to private industrial customers worldwide. For more about Parsons, please visit www.parsons.com.

[Image credit]

Report from the Water Infrastructure Summit

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By Linda Hanifin-Bonner, Water-Design Build Council

This past week, presentations sponsored by numerous national organizations at the Water Infrastructure Summit (Reinvest/Rebuild/Revive) focused on the role that the water infrastructure industry has in the jobs market. In fact, the Water Environment Federation (WEF), catalyst for this forum, has established a "Waterforjobs" website (www.waterforjobs.org) that advocates messages for creating jobs, innovation, and safeguarding public health. The business case presented is, “Federal investment in water and wastewater leverages enormous benefits nationally and for our local economies. Each public dollar invested in water infrastructure increases private long-term Gross Domestic Product output by $6.35. It is estimated that a $1 billion invested in water and wastewater infrastructure can create over 26,000 jobs.”

Speakers at the Summit included representatives from four major water/wastewater utilities, together with presentations from Navigant Economics and the American Society of Civil Engineers (ASCE), an organization that annually produces a “Report Card on the Status of the Nation’s Infrastructure.” While the speakers' messages were well presented with a somewhat new tone, one core topic that still exists is, how do municipalities and utilities obtain the vitally needed financial resources to repair and advance their water and wastewater systems?A second topic, that was not mentioned in any of the presentations, is the ability of municipalities and utilities to pursue a design-build delivery approach for improvements and replacements that can provide both costs and time savings.

Presenting an economic perspective, speaker George Schrink of Navigant Economics believes that 90% of the jobs within the water infrastructure are defined as “sustainable". The challenge he noted, as many of us know all too well, is that funding shortfalls jeopardize this progress. He further cited EPA’s estimates for these shortfalls over the next decade as $288 billion for wastewater and $320 billion for the water infrastructure.

Howard Neukrug, Commissioner of the Philadelphia Water Department, states that their philosophy for this complex system of providing services to the area since the 1880’s is essentially that it “cannot fail” in its responsibilities. In examining funding options, Philadelphia projects a 25 year horizon in which rate increases would be used to fund needed improvements, while examining other options. He also cites the management of storm water as a significant challenge to the area (as it is for most US cities). For this issue, Philadelphia is aggressively pursuing innovative and green options (for non-structural solutions) as compared to constructing expensive storm water sewers. Philadelphia’s message to its users is “One Water” and therefore the City has adopted an inclusive, integrated planning approach to these challenges.

General Manager of the San Francisco Public Utilities Commission, Harland Kelly, stated that while he believes there is currently a good grade in the level of service and improvements within the service area, public officials cannot relax. This city took to heart the lessons learned from the 1989 earthquake, when much of its water infrastructure was seriously damaged, and immediately began a new program to continuously fund system improvements with rate increases; beginning first with $4.6 Billion for the water infrastructure and now focusing on $7 billion for wastewater.

As Commissioner of the New York City Deptartment of Environmental Protection, probably the nation’s largest purveyor, Carter Strictland emphasized the need to embrace changing the way systems are managed through innovate approaches both to storm water and creating a green environment, and by looking at the value of wastewater as a resource. In addition, he notes the work force is changing, with older generations leaving, often resulting in a skills and experience gap with new workers in their 30‘s and 40’s. But at the same time, a new diversity of thinking and ideas is emerging towards applying innovative approaches.

Eloquent as always, George Hawkins, the new General Manager for DC water, emphasized that his agency is not only one of the largest employers in the area, but also is a major economic driver. “Without water and wastewater services, businesses and industry would be unable to exist.” He views the significant value of the 360 mgd treatment facility (Blue Plains) as producing “enriched water” that needs to be used. If this product has to be clean enough to discharge into one of the nation’s largest estuaries, then it also needs to be good enough for significant reuse throughout the nation’s capital and suburban areas. As with the other speakers, Hawkins also is an advocate for the use of “green innovative strategies” such as rain gardens, and the use of grey water for golf courses and landscaping. But Hawkins also raises another point for consideration, posing a critical question on the regulations linked to innovative solutions for reducing costs. As an example, nutrient removal is a major issue for treatment facilities. However, funding being applied to agricultural practices is on a different scale.

Again a familiar theme occurred with the speakers, that the public does not value water – and that a greater understanding and becoming more knowledgeable about these issues needs to occur. One speaker also noted that within the “public sector” it is not only the average customer who takes these services for granted (because they are out of sight/out of mind), it is also many of our public officials who are responsible for making decisions on financial options for the infrastructure. These comments, while highlighting the challenges currently occurring, also raised other questions.

If there is validity to the message (stated at the Summit) that the “Rate of Return on Investment” in the water infrastructure is greater than that of transportation infrastructure, then a more serious issue is how we are going to be able to convince those decision-makers to support innovative funding strategies such as the WIFIA proposal? In addition, if changes to the tax codes occur, with resulting impacts on the bond market, that affect the ability of municipalities and utilities to gain financing for their system, then we have to ask, how will these basic needs be met? The question that then emerges is, where and who are the decision-makers that are the champions for our water infrastructure?

In the past two decades, numerous organizations have dedicated serious financial resources to producing educational materials focusing on the value of water and the need for new methods of financing needed improvements and repairs to our nation’s infrastructure. As a result, there has been a change in the public’s attitude about water. But we are still not where we were in the 1980’s, when there were vocal advocates championing for a change in regulations and financing options. Where are these advocates today?

In her closing message to the audience of water infrastructure supporters, Karen Pallansch, Chief Executive Officer of the Alexandria Renew Enterprises (formerly the Alexandria Sanitation Authority), challenged us to keep the narrative fresh, compelling and constant in order to make a difference, not only with agency customers but with public officials as well. She also cited that other tools to survive are partnerships with economic development. Not only does a reliable and safe water infrastructure system relate directly to good health and sanitation; it also has a significant impact on jobs.

Perhaps the takeaway message from the Summit is that Jobs for Water may offer a new approach to capturing the attention of public officials who have a decision-making role when it comes to infrastructure financing options. But is this message strong enough to galvanize the changes needed to get policy officials to adopt and provide the financial resources for our water and wastewater infrastructure? And, isn’t there a missing piece to this message – that the use of design-build delivery is an important financial component to achieving the intended goals of a reliable water infrastructure and effectively managing those resources?

The Call to Action

We need your voice! Help educate decision makers that Water Puts America to Work – Investment in Water Infrastructure Creates Jobs, Drives Innovation, and Safeguards Public Health.  Ask elected officials what they intend to do to address our nation’s water infrastructure crisis. Ask them to put America to work by making water a top priority. Use social media to deliver the campaign message and visit WaterForJobs.org for more information on how you can support this effort.

Is Your Utility Making the Business Case?

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By Dan Pitzler, member of CH2M HILL’s Asset Management team

This post is one of an ongoing series of Access Water posts about asset management best practices. Read the first few and stay tuned for more asset management insights over the coming weeks.

McGraw-Hill Construction’s recently released study of asset management practices of US and Canadian water utilities, a CH2M HILL-sponsored research project, examined the extent to which water utilities have adopted 14 leading asset management practices, and which of these practices are of most value to implementers. One practice, the use of business cases (BCs) to make choices between competing investment alternatives, has proven to be an invaluable tool to best practice implementers of asset management.  This was confirmed in case studies presented in the study, as well as in interviews with five leaders (also cited in the study) of best practices organizations.

Interestingly, the study indicates that BC methods have not been widely adopted by water utilities, although 90% of advanced practitioners of asset management are using this practice. This could be due to the perceived complexity of preparing BCs, a shortage of in house staff to perform them, or the belief of many water utility leaders and staff that BCs can’t inform or improve upon the professional judgment and expertise they use to make decisions.  Utilities in North America, Australia and other countries have proven these views to be mistaken. The benefits of implementing a BC program are well documented (see below) and internal staff can be trained to prepare good BCs with a modest amount of training.

What does a good business case require, and when should you consider using BC methods? More sophisticated BCs generally have eight major elements:

Problem Description & Background: A thorough description of the problem to be addressed, including background and a history of the issue.

Service Levels: A description of the organization’s relevant adopted service levels, with an explanation of why those levels are not or will not be met if the problem at hand is not addressed.

Project Description and Objectives:  A description of the project, focused on the technical and performance requirements (objectives and desired outcomes) of the solution required, rather than specific details of possible solutions.

Options Considered (Including the Do-Nothing Option):  A description of each option considered, including design and performance characteristics of each. Options considered should always include the “do-nothing” option, which serves as a baseline for comparing alternatives. Organizations that utilize business case methods on a frequent basis sometimes find that the do nothing option is preferable to feasible alternatives, because the costs, relative to the performance gains offered by alternatives do not justify any alternative but the status quo.

Economic Analysis of Alternatives:  A detailed economic analysis of each alternative that compares the net present value of each alternative. The best examples of BCs capture direct financial costs (capital and operating costs), environmental costs, social costs, and risk costs. This is approach is widely referred to as “triple bottom line” analysis, or “TBL” for short. If the analysis doesn’t warrant a full TBL analysis, it should still consider direct financial and risk costs. 

Non-Monetary Considerations:  A description of non-monetary considerations that are relevant to the choice between alternatives. These could be the specific social policies adopted by the organization, difficult to quantify environmental impacts, or such things as aesthetic benefits of each alternative. Attached is business case prepared by Seattle Public Utilities (Rock Creek Fishway) that incorporates a full TBL analysis of alternatives, and well as a formal analysis of how non-monetary factors were weighed in choosing a recommended alternative.

Recommendations: A comparison of the key performance characteristics of each alternative, comparative quantifiable cost and benefits of each, and a comparison of other factors considered in arriving at a recommendation.  These comparisons are often presented in a tabular format to make comparison simple.

Follow Up Actions including Budget and Schedule: A description of follow up actions, the budget and schedule for the chosen alternative, and other “to do’s”. This section insures that there is clarity and specificity about what option was selected; scope, schedule and budget; and, other expectations for how the project is executed.

The process described above is appropriate for larger projects, but can be scaled to be used on much smaller ones. Most organizations that have implemented BC methods set a dollar threshold (minimum dollar amount), above which full BCs are required.  But projects below the threshold may only require an abbreviated BC, or are required only on a case by case basis. 

Portland Water Bureau and Columbus Department of Public Utilities are examples of organizations that have implemented BC programs; the following papers describe the benefits they have achieved.

- Portland Water Bureau’s BC for the Taylor’s Ferry Pump Station Rehabilitation

- Portland Water Bureau’s BC for Soapstone Slide Risk Management

- Portland Water Bureau’s BC for a UV Facility Backup Generator

- Columbus DPU’s Asset Management Program Achieves Ground Breaking ROI

Both utilities cite the fact that the BC process has forced them to use fact  based analysis of alternatives, including the quantification of risk costs, full life cycle costs of alternatives (including future O&M, repair, replacement and disposal costs), and non-monetary costs. Organizations that have implemented a BC process have also stated that the process has forced staff to think “out of the box” because they know that decision makers will question the choice of alternatives considered.

CH2M HILL offers business case training for many of our clients, either as a standalone service or as part of larger asset management engagement, and we are happy to provide assistance in preparing BCs where an organization requires help. Read this Public Works Magazine article for an example of how CH2M HILL supported Clean Water Services in Hillsboro, Oregon, with its BC.

Contact us to learn more.

Dan Pitzler has more than 25 years of experience helping clients create value by making better decisions about infrastructure assets and managing risk. He works for both private and public sector clients in multiple industries, with particular expertise in business case development, risk assessment and management, monte carlo simulation, facilitation, and decision analysis. In executing this work, he develops sophisticated financial models that incorporate environmental and social impacts, develops and facilitates structured decision and risk management processes with stakeholder groups, and applies decision tools such as scenario planning, influence diagrams, decision trees, strategy tables, and multi-objective decision analysis.

This article has been republished with permission by CH2M Hill. To view the original article, visit CH2M Hill's blog here.

Progressive Design-Build Provides Long and Short-Term Water Project Benefits

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Water utilities have quickly realized the pressures of delivering quality product to consumers in a changing environment. The potable water needs of society have begun to stress the infrastructure that has served consumers sufficiently for many years. Water utility companies now face solutions that have become influenced by changing regulations, a growing population and greater technical challenges.

Current Water/Wastewater Solutions Are More Challenging

With those issues as a backdrop, the water/wastewater industry has found progressive design-build (PDB) a good fit in delivering capital project solutions. The current landscape of water/wastewater projects provides a multitude of examples of how PDB leads to better outcomes.

So what is it about PDB that makes it such an attractive delivery method to owners within the water/wastewater industry? Simply put, PDB allows customers to realize both short-term and long-term life-cycle cost benefits. 

The Progressive Design-Build Process

The PDB process inherently provides a continual set of check points actively involving owners as the project progresses. Here are the steps in the PDB delivery model:

• Evaluate Options – Evaluation includes costs, efficacy of solutions and long-term results. Customers determine what’s “best” based upon their specific needs.
• Isolate the Ideal Solution – A list of options affords customers the opportunity to understand implementation details and how they relate to their overall objectives. This includes considering the approved budget and available resources moving forward.
• Optimize the Solution – Once the solution has been chosen, the contractor incorporates what they’ve learned about the customer and their needs during the evaluation phase. Customers get an opportunity to approve final costs and maintain the ability to pursue alternative options.
• Deliver the Solution – The contractor completes the project with a much more certain understanding of customer expectations.

Haskell assisted JEA in overcoming challenges to the Jacksonville water supply with an environmentally friendly solution. View the project details »

JEA: An Example of Progressive Design-Build Benefits

JEA utilized the PDB delivery model with its Main Street Water Treatment Plant. The utility wanted to ensure that they could continue to provide the highest quality potable water to its service area. Particularly, JEA wanted to remove hydrogen sulfide from the water supply. Hydrogen sulfide causes an unpleasant odor, tarnishes copper and silver and can cause staining to laundry.

As the design-builder, Haskell investigated viable options for hydrogen sulfide odor control. In the process, they determined that a novel use of existing ozone filtration technology could solve the problem. Selecting ozone technology − normally used as an oxidant − would in this instance provide superior results in controlling odor. In addition, the benefits could be provided at an ideal cost that improved the overall life-cycle costs of the solution.

Does Design-Build Meet Your Water Project Needs?

Wondering if PDB delivery can benefit your water/wastewater project? Take a moment to talk with one of Haskell’s industry experts. You can contact Bryan Bedell via email or call him direct at 904.791.4662.

This article has been republished with permission by Haskell. To view the original article, visit Haskell's blog here.

New Research: Design-Build Saves Time and Money, Improves Project Quality

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According to the results of the newly released 2012 Municipal Owners Customer Satisfaction Survey of Water Design-Build Projects, the vast majority of municipalities across the United States are satisfied with their use of design-build (DB) and construction management-at-risk (CMAR) project delivery methods; and, nearly all plan to use these methods again for future water and wastewater projects. The Survey was commissioned by the Water Design-Build Council.

“The results of this survey confirm what the members of the Water Design-Build Council have experienced at the project level,” commented Water Design-Build Council President and CDM Smith Vice President Pat Gallagher. “Design-Build and CMAR deliver real results for municipalities in terms of cost savings, project quality, and overall efficiency.”

The objective of the 2012 Municipal Owners Satisfaction Survey is to gauge the level of satisfaction that owners have experienced from using design-build or CMAR delivery approaches for water and wastewater infrastructure projects. The survey was emailed to 455 individuals and followed up with reminder phone calls. Survey participants were primarily managers and members of the project staff of local and regional governmental units (such as utilities, municipalities, and water/wastewater districts), as well as a few policy-makers. More than a third (34%)—from 15 different states—responded.

The major findings of the research include:

• The vast majority of respondents are satisfied with their use of DB and CMAR delivery—with high levels of satisfaction for design involvement, project quality, and the communication process that occurred.
• Nearly all (91%) state they will use DB and CMAR delivery again.
• Respondents indicate that the major impediments to the broader use of DB or CMAR delivery include lack of familiarity with the process, owners’ perception of risk, and resistance to change.
• A large majority (82%) agree that the use of DB and CMAR delivery results in fewer claims and disputes during the construction phase of projects.
• An even greater number (89%) state that the use of innovative ideas saves money, time and improves quality.
• Respondents also expressed significant satisfaction with the transition to operation of projects when using DB and CMAR delivery.
• Among the top reasons owners give for using DB and CMAR delivery are the advantages of keeping projects on schedule, achieving better quality and controlling costs.
• A majority of respondents report using a two-step procurement process (an RFQ to generate a short list, followed by an RFP) and to select a firm based on best value (evaluating both non-price and price factors).

Overall, the data confirms that the use of DB and CMAR delivery enables owners to achieve quality projects by employing innovative practices that result in timely schedules and cost-effective methods. Given the many benefits and positive experiences reported, it is expected that the use of DB and CMAR delivery will continue to increase.

The Survey was performed by Drs. Pramen P. Shrestha and Jacimaria Batista of the Department of Civil & Environmental Engineering and Construction at the University of Nevada, Las Vegas in partnership with The Cannon Survey Center at the University of Nevada, Las Vegas.