Contract Operations

Partnerships with NAWC member companies come in many forms, running the spectrum from the full transfer of ownership to a more targeted contract operations partnership. 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. Click below to read about the most common models of contract operations partnerships:

The benefits of partnering with a Contract Operator include:

Strong environmental compliance. When municipalities face Clean Water Act (CWA) and Safe Drinking Water Act (SDWA) compliance issues, experienced contract operators can provide the expertise and solutions to ensure compliance. Improving environmental stewardship is among the most often-cited reasons municipalities establish a partnership with a contract operator. Contract operators can help communities resolve their environmental compliance issues quickly and cost effectively.

Experienced and 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.

Reduced 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.

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.

Updated technology and industry practices. 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.

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.

Overview of Models:

Operations & Management
Public partner contracts with a private partner to operate and/or maintain a water system, while the public partner retains ownership of the system, rate setting authority and overall management.
• Click here for an overview of the O&M model and case studies.

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.
• Click here for an overview of the DBO model and case studies.

Concessions
A private partner operates the system and finances and implements any required capital improvements for a designated period of time, and then transfers the system to the public partner at the end of the specified time.
• Click here for an overview of the Concessions model and case studies.

Federal Utility Privatization
This model ensures military installations have safe and reliable water systems by partnering with a contract operator, freeing the federal government from the burden of operating the installation’s water infrastructure.
• Click here for an overview of the Federal Utility Privatization model and case studies.

2018 Contract Operations Market Report

Data around contract operations has not been consistently collected or analyzed in the past. NAWC, through its Contract Operations Committee, is filling that gap by hiring Mazars USA to assist with the administration of the survey and the presentation of its results. This report compiles survey data on the contract operations of water and wastewater utilities during the 2018 calendar year, with the goal of looking at current trends in the marketplace, measuring growth, and the performance of the private sector involved in these operations.

The Market Report provides a powerful new tool for understanding the state of this subsector, supporting its development and showing the value provided by current market participants. It is not meant to be a scorecard or provide an industry ranking. The numbers reported are completely confidential, with all respondents providing 17 data points that were checked for consistency and aggregated by Mazars to paint a market overview.

There is a lot new this year. The most important development is our ability to compare the latest data to our 2017 findings, better demonstrating trends and sector performance.

Click here to download the 2018 Contract Operations Market Report