Contract Operations

Partnerships with NAWC member companies can come in many forms, running the spectrum from transfer of ownership to contract operations partnerships. The  benefit of a contract operations approach is that these agreements can be scaled and customized to meet a community’s unique water and wastewater needs – there is no one size fits all approach. 

Contract Operations

The models of contract operations partnerships include:

Operations & Maintenance (O&M). Public partner contracts with a private partner to provide a specific service but public partner retains ownership, rate setting authority and overall management.

Design-Build-Operate. A single private partner designs, builds and operates a facility, while ownership remains with the public partner, who also finances the project.

Concessions. A private partner operates the system and finances and implements any required capital improvements for a designated period of time, and then transfers it to the public partner at the end of the specified time.

Federal Utility Privatization. This model ensures military installations have safe and reliable water systems through a partnership with a water company, freeing the federal government from the burden of operating the installation’s water infrastructure.

Other Municipal Partnership Models. Partnerships can be customized based on a community’s needs and don’t always fall within one of the categories listed above.

Partnering with an NAWC member company offers many benefits and data shows that communities that partner with a water company are overwhelmingly satisfied, evidenced by the 97% contract renewal rate.

The benefits include:

    • Expertise to deliver tailored, innovative solutions. Even with adequate funds, many communities are unable to design and/or implement infrastructure upgrades on their own. A tailored solution from a water contract operator can help meet a community’s unique needs.
    • Access to qualified staff. In today’s workplace, many municipalities struggle to attract and retain qualified and certified operations staff. Water contract operators offer unique career opportunities and training and recruiting programs that develop and retain staff.
    • Access to updated technology, industry practices and expertise. Contract operators monitor regulations closely, follow developing technology and apply best practices that benefit their clients.
    • Access to capital. Water contract operators generally have ready access to capital that can help municipalities design, build and finance their water infrastructure projects.
    • Economies of scale. As systems become increasingly complex and costlier to own and operate, smaller public water systems may find it challenging to meet certain regulatory requirements. Water contract operators can centralize and share costs to achieve economies-of-scale for services like billing, customer service and water testing and for equipment, tools, chemicals and other materials.
    • Lower water system operating costs. Water contract operators have strong incentives to operate as efficiently as possible. Public-private partnerships have been shown to lower a water system’s costs by 24 percent on average.
    • Decreased liability. In many municipalities, significant operational, financial and environmental risks go along with managing water and wastewater systems. By transferring those risks to a contract partner, municipalities can reduce their own liability.
    • Strong Clean Water Act (CWA), Safe Drinking Water Act (SDWA) and environmental compliance records. When municipalities face CWA and SDWA compliance issues, water contract operators can provide the expertise and solutions to ensure compliance. Further, improving environmental stewardship is among the most often-cited reasons municipalities establish public-private partnerships. Contract partners can help communities resolve their environmental compliance issues quickly and cost effectively.