Kelly agrees that capitalizing on lower available costs requires a public agency to do its homework.
“We have to be sure we have good, clear documents and respond well to questions to avoid the potential of low-ball bids that are made up with change orders,” Kelly says. “Still, we're looking at $150 million in additional program contingency funds.”
Utilities are also taking advantage of states' increasing acceptance of alternative project delivery methods. The San Francisco PUC added the $111- million, 315-mgd Tesla ultraviolet treatment facility to its inventory using design-build, while Tallahassee is using a modified form of construction manager-at-risk for its wastewater treatment improvements.
“Using this model, the city was able to obtain input from the [construction manager-at-risk] during the design phase, reduce the overall project delivery time and provide more certainty in price without incurring significant risk premiums,” says Rob McGarrah, Tallahassee program director for underground utilities.
Wood notes that construction manager-at-risk enabled the Central Weber Sewer Improvement District to fulfill its goal of creating more opportunities for Utah's construction community. “Going with a single contractor would have limited participation to just a few companies in the state,” he explains. “With a [construction manager-at-risk], we could keep work in smaller packages that more firms could bid on. We could also pass more of the project management responsibilities to the construction manager, eliminating the need to increase our staff.”
Even when use of alternative project delivery systems is still limited by state law, utilities are learning all they can.
“We want to have as many tools available as possible, depending on the project,” says Mallon, whose agency is testing design-build with several small projects to gain experience with the process. “When the opportunity arises to fast-track a major project, we'll be more familiar with how to do it,” she adds.
Putting Indianapolis' water and sewer systems in the hands of Citizens Energy Group—which does not face the same procurement restrictions as a public utility—also opens the door to more design-build and other innovative practices, such as cost-effective advance procurement of materials—for example, piping. That should prove to be a welcome benefit for customers, says Nielsen, a former Indianapolis city engineer given a 2025 deadline for fulfilling the requirements of its CSO consent decree.
“We also have a tremendous backlog of water projects, such as plant upgrades, disinfection improvements and service extensions,” Nielsen says. “We now have the opportunity to find cross-synergies with Citizens Energy's other functions that will allow us to meet regulations and keep rate increases low.” Along with Citizen Energy's current priorities, there is always the need to manage expenses and resources better. “Everyone has a heightened awareness of cost control,” Mallon says. “We're looking for innovative ideas to help us achieve … the same quality infrastructure at a lower price.”