How to Maximize the Generational Infrastructure Funding by Innovating Procurement Practices to Align with Asset Management and Sustainability Goals

How to Maximize the Generational Infrastructure Funding by Innovating Procurement Practices to Align with Asset Management and Sustainability GoalsAbstractThe passage of the Infrastructure Investment and Jobs Act (IIJA) also known as the Bipartisan Infrastructure Act on November 6, 2021 is offering the water sector a significant generational opportunity to restore our declining infrastructure. There is over $50 Billion in funding over the next five years to help make up the shortfall in funding the water sector has been struggling with for many years. To make the most of this new funding it is imperative to innovate municipal procurement practices to get the 'biggest bang for the buck'! The American Water Works Association (AWWA) has been leading the water sector by educating and assisting municipalities and utilities with implementation of asset management and sustainability best practices leading to new and innovative ways to maintain infrastructure. Maintaining assets in a well-designed asset management program allows utilities to optimize their Capital Expenditures (CapEx) and achieve their sustainability goals. However, many municipalities and utilities haven't updated their procurement practices to align with their stated asset management and sustainability goals. This presentation will explain how and why municipalities and utilities should align their procurement practices with their asset management and sustainability goals drawing from an AWWA Opflow 'Industry Insights' column published in July/August 2021 written by Randy Moore, AWWA Vice President & Chair of the AWWA Innovation Committee and T.J. Stroebl, Chair of the AWWA Manufacturers & Associates Council. This column launched and educational initiative within AWWA to assist with this needed procurement innovation. The core concept of asset management states the key objective is the 'optimization of life-cycle costs'. Most municipalities and utilities make purchasing decisions based on awarding to the lowest initial CapEx costs rather than on the lowest life-cycle costs. This 'low initial CapEx bid' approach doesn't necessarily offer the lowest life-cycle cost or the most sustainable option due to differences in service life. AWWA's Innovation Committee and the Manufacturer's & Associates Council are striving to advance a culture and structure for innovation to address the challenges facing the water industry. Learning Objectives: 1)Understanding of the AWWA definitions for asset management and sustainability and the interesting nexus between them. 2)Understanding the differences between low initial CapEx costs and life-cyle costing. 3)Understand how extending the service life of an asset often results in the lowest life-cycle cost and most sustainable solution and yielding the 'biggest bang for the buck'. 4)Learn how to innovate procurement documents by changing language to bid 'low life-cycle costs' instead of lowest initial CapEx bid. 5)Learn how to innovate procurement documents by including language around seeking the most sustainable solution. 6)Learn how to innovate procurement documents by requiring bidders to furnish the necessary data and case histories to validate service life estimates so associated life-cycle costs can be accurately determined.This paper was presented at the WEF/AWWA Utility Management Conference, February 13-16, 2024.SpeakerMoore, RandyPresentation time09:00:0009:30:00Session time08:30:0010:00:00SessionOptimizing Business PracticesSession number15Session locationOregon Convention Center, Portland, OregonTopicBusiness Practice Optimization / Change ManagementTopicBusiness Practice Optimization / Change ManagementAuthor(s)Moore, RandyAuthor(s)R. Moore1, T. Stroebl2Author affiliation(s)Tnemec Company, Inc. 1; Kurita America Inc. 2;SourceProceedings of the Water Environment FederationDocument typeConference PaperPublisherWater Environment FederationPrint publication date Feb 2024DOI10.2175/193864718825159272Volume / Issue Content sourceUtility Management ConferenceWord count20