U.S. Wastewater Contract Operations and Structures: Dollars and Sense?

As wastewater and water utility contract operations become more mature, our ability to evaluate the cost and performance of these types of operations has similarly reached its prime. Public officials continue to have limited information available to them when contracting for operations or renewing contracts. What is the range of going rates for wastewater operations in different size plants? What advantages or disadvantages of contracting have surfaced recently? Have the structures of these types of contracts improved over time? Budget and schedule limitations may limit the public officials ability to answer these questions. This paper seeks to unlock the mysteries surrounding both the costs and performance of utility contract operations. George Mason University, in cooperation with Black and Veatch Management Consulting, has conducted a nation wide survey of contract operations of over 200 plants. Building upon the results of two previously conducted surveys, this study has expanded the state-of- knowledge significantly. By including an analysis of the renewal (or more importantly non-renewal) of contracts and contract structure changes, this new survey addresses many previously unanswered questions. More is now known about the level of effort associated with contract management. The results of the survey provide valuable insights into contract terms, staffing, new approoaches to repair and replacement responsibilty and capital renewal, innovative incentives and other trends over the last six years. The comprehensive nature of the study provides municipal governments with the information necessary to achieve operational cost saving goals relative to the size and scope of operation.