For the water and wastewater utility industry in the U.S., it is now the time to modernise procurement
In the United States (U.S.), the estimated 70,000 water and wastewater systems sprawled across the nations show a mostly locally-owned and operated arena of separate utilities that are run by individual bodies and frequently funded with local taxpayer dollars.
On one hand, this system has created a sense of empowerment for local communities in regards to their water or wastewater utilities. On the other hand, this fragmented arena has a number of drawbacks that are financially heavy on the local communities and utilities.
But the place where costs are felt the most acutely is in procurement, where an approximate US$45 billion is annually spent on contracting construction projects, services, and software. Often, public utilities place major infrastructure contracts out for bid, but it is not easy for a potential bidder to come to know of these opportunities, as it is near impossible to keep track of the thousands of water utilities in the nation. As a result, many bidders let opportunities slide because they are simply unaware of where the bid is, or where the request for proposal (RFP) was posted.
And this is only one of the issues facing the system. Other problems that can be traced to the inefficient nature of the industry include reduced transparency, limited competition and new technologies, and may even drive prices of water up. And recently, various elected officials have even been convicted on the charges of corrupt activities that involve the awarding of water and wastewater contracts. For instance, former Mayor of Detroit, Kwame Kilpatrik, is currently serving 28 years in prison for corruption that involved sewer and water contracts.
There is, however, a solution, though it has not been brought to the water and wastewater arena. An exchange, or marketplace, has been used for millennia to create an efficient platform for commerce, and lately, AQUAOSO is looking to unify the U.S.’s fragmented water market. In other words, an exchange is a tried-and-tested method for bringing largely disparate groups of buyers and sellers together to conduct business on an efficient ground.
Now, with technology, an exchange can more efficiently bring water and wastewater utilities together with vendors and contractors while still allowing utilities to retain their autonomy even as they reap the benefits of being part of an exchange.