The Splash

Do Your Procurement Practices Align with Your Asset Management and Sustainability Goals?

In the recent edition of Opflow magazine, a publication by the American Water Works Association (AWWA), co-authors T.J. Stroebl (Kurita America, AWWA MAC Vice Chair) and Randy Moore (Tnemec Company, AWWA Innovation Initiative Co-Chair) discuss the nexus between asset management and sustainability practices, and how goals related to both can be achieved through a properly structured procurement program.

Having a well-established asset management plan is critical to the bottom line of any business or utility, helping to optimize operating costs in a landscape of uncertainty. Sustainability considerations are just as important to ensure that an operation effects a positive, or at least neutral, impact on social, economic, and ecological factors (i.e. Triple Bottom Line); not only for the benefit of the community, but also to secure an organization’s survival long term. Consequently, many industries have embraced these concepts, with companies setting clear goals around asset management and sustainability.

Key to both concepts is a focus on life cycle, and obtaining an optimal life cycle cost for any system or process will be necessary to achieve asset management and sustainability goals. Often this means that the solution offering the longest life, prolonging costly and disruptive replacement or maintenance projects, will also be the most sustainable and give the lowest overall cost of ownership. However, such a solution may come with a higher price tag and could be overlooked in the pursuit of a perceived cheaper option if the procurement practice is not structured in a way that also considers life cycle cost. In this light, selection of equipment or services based on the lowest bid alone falls short and does not align with asset management and sustainability initiatives.

Innovation is also necessary to keep on top of growing industry challenges brought by water scarcity, expanding regulation, and consumer expectations, among others. Because of this, AWWA launched an Innovation Initiative in 2013 to advance a culture and structure for innovation in the water sector. Initially they identified five major barriers to innovation, one of which was “or equal” procurement practices that select a supplier based solely on the lowest price at the time of bid. The benefits from innovative products and solutions can only be realized if they are ever implemented in the first place, which requires that those same benefits be understood and weighed against the initial capital cost during the selection phase. 

When it comes to water, we all play a part in managing one of the Earth’s greatest assets. However, some of us have more influence than others, whether as part of the water industry, or in representing a significant water user. We must work together and empower each other to manage this resource sustainably. Cutting-edge technology and solutions must be met with equally innovative procurement practices to understand the big picture and create a pathway toward adoption of the most sustainable solutions.

AWWA members can access the Opflow article here: “Align Municipal Procurement Practices with Asset Management and Sustainability Goals” (Moore, Randy, and T.J. Stroebl. Opflow, vol. 47, issue 6, July/August 2021, pp. 8-9).