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Competitive bidding for pipes Demonstrates Significant Local Cost Savings

American cities, adopting the use of advanced technology and better approaches to clean water and sewer are common and often required by law. Cities providing public water delivery have not only grown in population size and in number, but also in their attitudes toward public health, and innovations involving system designs, technologies and accepted practices. In the 19th century cast iron was added to the common use of clay, lead and wooden pipes by cities to convey water and wastewater. In the 20th century, continued innovation carried ductile iron, concrete and cement, and plastic pipes into the market. In the 21st century, new generations of plastics, advanced composites, and other materials are being added to a long list of viable piping materials. Technological advancements in pipe materials have helped to support a growing national population while continuing to improve on cost and performance and achieve public health protection goals to guard against waterborne parasites and toxic contaminants.

Competitive bidding for pipes Demonstrates Significant Local Cost Savings

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THE UNITED STATES CONFERENCE OF MAYORS
SEPTEMBER 2018, WASHINGTON, DC
Municipal Procurement: Competitive
Bidding for Pipes Demonstrates
Significant Local Cost-Savings
By Richard F. Anderson, Ph.D.,
Senior Advisor, Mayors Water Council, USCM
THE UNI
TED ST
ATES CONFERENCE OF MAYORS
Steven K. Benjamin
Mayor of Columbia, SC
President
Bryan K. Barnett
Mayor of Rochester Hills, MI
Vice President
Greg Fisher
Mayor of Louisville, KY
Second Vice President
T
om Cochran
Executive Director and CEO
Municipal Procurement: Competitive
Bidding for Pipes Demonstrates
Significant Local Cost-Savings
By Richard F. Anderson, Ph.D.
Senior Advisor
U.S. Conference of Mayors Water Council
July 2018
TABLE OF CONTENTS
Mayor’s Briefing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Background and Purpose. . . . . . . . . . . . . . . . . . . . . . 5
Local Governments and the Affordability Crisis . . . . . . . . 5
The Magnitude and T
rajectory of Local Investment in
Water and Sewer Pipes. . . . . . . . . . . . . . . . . . . . . . . 6
The Cost of Pipe Procurement . . . . . . . . . . . . . . . . . . . . 7
Pipe Performance Expectations. . . . . . . . . . . . . . . . . . 9
Public Safety and the Environment. . . . . . . . . . . . . . . . 11
Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Discussion Questions . . . . . . . . . . . . . . . . . . . . . . . . 13
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Appendix. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Ohio Communities. . . . . . . . . . . . . . . . . . . . . . . . . . 16
Carolina Communites . . . . . . . . . . . . . . . . . . . . . . . . 16
Michigan Communites. . . . . . . . . . . . . . . . . . . . . . . . 17
Arkansas Communites. . . . . . . . . . . . . . . . . . . . . . . . 17
Page 5
MAYOR’S BRIEFING
In today’s American cities, adopting the use of advanced technology and better
approaches to clean water and sewer are common and often required by law. Cities
providing public water delivery have not only grown in population size and in num-
ber, but also in their attitudes toward public health, and innovations involving system
designs, technologies and accepted practices. In the 19th century cast iron was added
to the common use of clay, lead and wooden pipes by cities to convey water and
wastewater. In the 20th century, continued innovation carried ductile iron, concrete
and cement, and plastic pipes into the market. In the 21st century, new generations of
plastics, advanced composites, and other materials are being added to a long list of
viable piping materials. Technological advancements in pipe materials have helped
to support a growing national population while continuing to improve on cost and
performance and achieve public health protection goals to guard against waterborne
parasites and toxic contaminants.
The daunting challenge cities face today is the urgent need to replace hundreds of
thousands of miles of aging and failing pipe. Pipes are the single most costly water and
sewer capital investment category. Mayors want efficient solutions that make the best
use of limited resources without compromising the performance or safety of their water
systems. One solution that municipalities can no longer afford to overlook is opening-
up their procurement processes so that managers have the freedom to consider all suit-
able project materials. Adopting practices and policies that encourage standardized
comparisons of different pipe materials for water, sewer, and stormwater projects pro-
vides mayors with an opportunity to reduce the local cost of pipes and maintain equal
or better public safety and material performance levels. A review of new information
reveals standardized cost comparisons demonstrate significant price point differences
and updating procurement policies can save as much as 30% of capital costs.
Background and Purpose
In 2013 the Mayors Water Council (MWC) released “Municipal Procurement: Pro-
curement Process ImprovementsYield Cost-EffectivePublicBenefits”,a report examining
procurement practices in the water infrastructure sector. The report made a business
case for considering alternative pipe material so local governments could realize public
benefits (e.g., cost, performance, safety). The report suggested the need to change out-
dated procurement policies, and that the biggest impediment to adopting these chang-
es stemmed from the reluctance of local procurement officials to break from convention.
This report presents information from new research that demonstrates the merits of
adopting open procurement policies and new practices that apply competitive consid-
eration of alternative pipe materials. These policies will help local officials maximize
resources and practice good governance.
There are three critical factors to consider when procuring water and sewer pipes:
cost, materials performance, and public safety. This paper examines each of these fac-
tors relying on new standardized comparisons for alternative pipe material cost, and
recent surveys reporting on pipe performance characteristics. Based on standard cost
comparisons between different pipe materials, it can be estimated that applying such
analysis in an open procurement process can yield substantial cost-savings without
having to sacrifice performance or safety.
Local Governments and the Affordability Crisis
Local governments are struggling to deal with historically high costs to provide water
and sewer infrastructure and services. Census estimates from 2015 suggest that cities
and counties spent over $118 billion in the water and sewer sectors, and recovered $114
billion (or 96 percent) through rates, charges and fees. Despite recent improvement in
customer revenues, the unrelenting increases in total costs are fueling household afford-
ability impacts that are both significant and widespread. Federal and State financial
assistance has been on the wane for over 30 years, but the U.S. Environmental Protec-
tion Agency (EPA) and State regulators continue to require greater levels of local spend-
ing to accomplish national goals by imposing unfunded mandates on local utilities. Cit-
ies are also facing a challenge to add as much as 25 percent to current water and
sewer capacity to service the expected 80 million new Americans the Census predicts
by 2051. These factors converge at the local level where cities are seeking efficiencies,
innovation and other cost-savings measures to take the pressure off rapidly rising rates.
The American Water Works Association estimates that it will cost over $1.3 trillion to
replace our nation’s water infrastructure. There are an estimated 240,000 water main
breaks/year, $2.6B wasted on lost water and sewer overflows due to aging pipes, and
at least 17% of potable water lost to leakage.
Residential water rates have gone up by 137% since 2000. A 2017 Michigan State
University study projected that water could be unaffordable for 1/3 of Americans in
five years. A 2016 US Government Accountability Office report surveyed ten mid and
large-sized cities with declining populations and found that the cost for water and
wastewater service is almost twice the affordability threshold for low-income custom-
ers in 40 percent of the cities it reviewed, with further rate increases on the way. To
make matters worse, these communities typically have some the oldest infrastructure
and receive the least amount of funding for infrastructure repair projects.
The Magnitude and Trajectory of Local
Investment in Water and Sewer Pipes
Local government spent over $359 billion between 1993 and 2017 on underground
assets. Material failure and replace/repair programs may be poor to excellent based on
factors such as asset management, implementation of best practices, and budget con-
straints. Cost and performance over time are critical elements of system design decisions,
so the magnitude of local pipe investments invites interest in procurement decisions.
A 25-year period (1993-2017) provides a long-term frame of reference and estimate
of cumulative investment. Construction investment in sewer line and pumps and waste-
water line and drains from 1993 to 2017 was $359 billion, while construction invest-
ments in water and sewer/wastewater plants was $313 billion during that same period.
INDICATOR – PIPES, PUMPS AND DRAINS S
E
W
E
R W
A
T
E
R W
A
S
T
E
W
A
T
E
R T
O
T
A
L
CUMULATIVE25-YEARI
N
VES
T
MENT1993-2017($BILLION) 192.4 127.5 39.2 359.1
2017 INVESTMENT ($ BILLION) 8.0 4.4 1.89 14.29
25-YEARA
VE
RA
G
EANNUALG
R
O
W
T
HRA
T
E(
%
) 4.34 1.76 4.9
2016 TO 2017 GROWTH RATE (%) -21.7 -21.4 -12.6
SOURCE: U.S. Census, State and Local Government Construction Spending
Page 6
T
able 1
Ad

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Competitive bidding for pipes Demonstrates Significant Local Cost Savings

  • 1. THE UNITED STATES CONFERENCE OF MAYORS SEPTEMBER 2018, WASHINGTON, DC Municipal Procurement: Competitive Bidding for Pipes Demonstrates Significant Local Cost-Savings By Richard F. Anderson, Ph.D., Senior Advisor, Mayors Water Council, USCM
  • 2. THE UNI TED ST ATES CONFERENCE OF MAYORS Steven K. Benjamin Mayor of Columbia, SC President Bryan K. Barnett Mayor of Rochester Hills, MI Vice President Greg Fisher Mayor of Louisville, KY Second Vice President T om Cochran Executive Director and CEO
  • 3. Municipal Procurement: Competitive Bidding for Pipes Demonstrates Significant Local Cost-Savings By Richard F. Anderson, Ph.D. Senior Advisor U.S. Conference of Mayors Water Council July 2018
  • 4. TABLE OF CONTENTS Mayor’s Briefing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Background and Purpose. . . . . . . . . . . . . . . . . . . . . . 5 Local Governments and the Affordability Crisis . . . . . . . . 5 The Magnitude and T rajectory of Local Investment in Water and Sewer Pipes. . . . . . . . . . . . . . . . . . . . . . . 6 The Cost of Pipe Procurement . . . . . . . . . . . . . . . . . . . . 7 Pipe Performance Expectations. . . . . . . . . . . . . . . . . . 9 Public Safety and the Environment. . . . . . . . . . . . . . . . 11 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Discussion Questions . . . . . . . . . . . . . . . . . . . . . . . . 13 References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Appendix. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Ohio Communities. . . . . . . . . . . . . . . . . . . . . . . . . . 16 Carolina Communites . . . . . . . . . . . . . . . . . . . . . . . . 16 Michigan Communites. . . . . . . . . . . . . . . . . . . . . . . . 17 Arkansas Communites. . . . . . . . . . . . . . . . . . . . . . . . 17
  • 5. Page 5 MAYOR’S BRIEFING In today’s American cities, adopting the use of advanced technology and better approaches to clean water and sewer are common and often required by law. Cities providing public water delivery have not only grown in population size and in num- ber, but also in their attitudes toward public health, and innovations involving system designs, technologies and accepted practices. In the 19th century cast iron was added to the common use of clay, lead and wooden pipes by cities to convey water and wastewater. In the 20th century, continued innovation carried ductile iron, concrete and cement, and plastic pipes into the market. In the 21st century, new generations of plastics, advanced composites, and other materials are being added to a long list of viable piping materials. Technological advancements in pipe materials have helped to support a growing national population while continuing to improve on cost and performance and achieve public health protection goals to guard against waterborne parasites and toxic contaminants. The daunting challenge cities face today is the urgent need to replace hundreds of thousands of miles of aging and failing pipe. Pipes are the single most costly water and sewer capital investment category. Mayors want efficient solutions that make the best use of limited resources without compromising the performance or safety of their water systems. One solution that municipalities can no longer afford to overlook is opening- up their procurement processes so that managers have the freedom to consider all suit- able project materials. Adopting practices and policies that encourage standardized comparisons of different pipe materials for water, sewer, and stormwater projects pro- vides mayors with an opportunity to reduce the local cost of pipes and maintain equal or better public safety and material performance levels. A review of new information reveals standardized cost comparisons demonstrate significant price point differences and updating procurement policies can save as much as 30% of capital costs. Background and Purpose In 2013 the Mayors Water Council (MWC) released “Municipal Procurement: Pro- curement Process ImprovementsYield Cost-EffectivePublicBenefits”,a report examining procurement practices in the water infrastructure sector. The report made a business case for considering alternative pipe material so local governments could realize public benefits (e.g., cost, performance, safety). The report suggested the need to change out- dated procurement policies, and that the biggest impediment to adopting these chang- es stemmed from the reluctance of local procurement officials to break from convention. This report presents information from new research that demonstrates the merits of adopting open procurement policies and new practices that apply competitive consid- eration of alternative pipe materials. These policies will help local officials maximize resources and practice good governance. There are three critical factors to consider when procuring water and sewer pipes: cost, materials performance, and public safety. This paper examines each of these fac- tors relying on new standardized comparisons for alternative pipe material cost, and recent surveys reporting on pipe performance characteristics. Based on standard cost comparisons between different pipe materials, it can be estimated that applying such analysis in an open procurement process can yield substantial cost-savings without having to sacrifice performance or safety. Local Governments and the Affordability Crisis Local governments are struggling to deal with historically high costs to provide water and sewer infrastructure and services. Census estimates from 2015 suggest that cities and counties spent over $118 billion in the water and sewer sectors, and recovered $114
  • 6. billion (or 96 percent) through rates, charges and fees. Despite recent improvement in customer revenues, the unrelenting increases in total costs are fueling household afford- ability impacts that are both significant and widespread. Federal and State financial assistance has been on the wane for over 30 years, but the U.S. Environmental Protec- tion Agency (EPA) and State regulators continue to require greater levels of local spend- ing to accomplish national goals by imposing unfunded mandates on local utilities. Cit- ies are also facing a challenge to add as much as 25 percent to current water and sewer capacity to service the expected 80 million new Americans the Census predicts by 2051. These factors converge at the local level where cities are seeking efficiencies, innovation and other cost-savings measures to take the pressure off rapidly rising rates. The American Water Works Association estimates that it will cost over $1.3 trillion to replace our nation’s water infrastructure. There are an estimated 240,000 water main breaks/year, $2.6B wasted on lost water and sewer overflows due to aging pipes, and at least 17% of potable water lost to leakage. Residential water rates have gone up by 137% since 2000. A 2017 Michigan State University study projected that water could be unaffordable for 1/3 of Americans in five years. A 2016 US Government Accountability Office report surveyed ten mid and large-sized cities with declining populations and found that the cost for water and wastewater service is almost twice the affordability threshold for low-income custom- ers in 40 percent of the cities it reviewed, with further rate increases on the way. To make matters worse, these communities typically have some the oldest infrastructure and receive the least amount of funding for infrastructure repair projects. The Magnitude and Trajectory of Local Investment in Water and Sewer Pipes Local government spent over $359 billion between 1993 and 2017 on underground assets. Material failure and replace/repair programs may be poor to excellent based on factors such as asset management, implementation of best practices, and budget con- straints. Cost and performance over time are critical elements of system design decisions, so the magnitude of local pipe investments invites interest in procurement decisions. A 25-year period (1993-2017) provides a long-term frame of reference and estimate of cumulative investment. Construction investment in sewer line and pumps and waste- water line and drains from 1993 to 2017 was $359 billion, while construction invest- ments in water and sewer/wastewater plants was $313 billion during that same period. INDICATOR – PIPES, PUMPS AND DRAINS S E W E R W A T E R W A S T E W A T E R T O T A L CUMULATIVE25-YEARI N VES T MENT1993-2017($BILLION) 192.4 127.5 39.2 359.1 2017 INVESTMENT ($ BILLION) 8.0 4.4 1.89 14.29 25-YEARA VE RA G EANNUALG R O W T HRA T E( % ) 4.34 1.76 4.9 2016 TO 2017 GROWTH RATE (%) -21.7 -21.4 -12.6 SOURCE: U.S. Census, State and Local Government Construction Spending Page 6 T able 1
  • 7. Figure 1 THE COST OF PIPE PROCUREMENT Pipes are one of largest single cost components of water and sewer/wastewater systems (EPA estimates that pipes are 60% of project costs). The continual need for local investments in pipes adds up over time. Spending on pipes can vary widely, (Figure 1 and Table 1), and there is an expectation that a large replacement cost is imminent as existing pipes, especially cast iron pipe, approaches the end of its design life. The pipes provide such a basic service in the community that they must perform with cer- tainty, and that is why the pipe materials in use have undergone dramatic change. For example, in the drinking water market, the pipes in use today (Table 2) have displaced most wooden and lead pipes and cast iron and asbestos cement water mains are phas- ing out. Similar changes have occurred in sewer and storm pipe markets where other materials such as clay were once predominant. “As mayor, it is my responsibility to explore options that will get our rate payers the best bang for the buck. The open procurement process, allowing the bidding of different pipe materials, not only forced suppliers to sharpen their pencils, it ended up saving the city of Burton over $2 million by using PVC pipe instead of ductile iron (DI) pipe on our five-phase $25 million watermain replacement project. Even if we would have chosen to use DI pipe, the open procurement process forced the cost reduction of the DI materials that would have saved about $200,000 in the project.” ~ Burton ( MI ) Mayor Paula Zelenko Page 7
  • 8. Piping is remarkably inter-changeable and many of today’s modern water systems use a variety of materials. However, many systems restrict themselves to a single mate- rial for all uses (e.g. “all storm pipes must be concrete”) or some categories of use (e.g. “all water pipes 12” and larger must be ductile iron”). These restrictions are often written into a city or county specification or ordinance and prevent engineers and contractors from considering otherwise acceptable materials. These restrictions create a ‘closed’ system, while expanding old standards to include alternative materials pro- vides for ‘open’ competition. A sensible local procurement approach can take advantage of changes in pipe materials not only on a cost basis, but also on their performance characteristics. This section summarizes several consultant studies recently released that examine cost dif- ferentials of the major pipe materials based on pipe size and length. Source: Folkm an, Steven Ph.D., P .E., ( March 2018) These studies have found that communities with open procurement policies have been able to lower their costs for purchasing pipes even in cases where the same material is used. In fact, going from a closed to open policy on average can save local governments 30 percent in capital costs on pipe, or roughly $100,000/mile. BCC Research and Datahawks reviewed bid documents and interviewed local water officials in 14 communities (cities and counties). They looked at the use and cost of dif- ferent pipe materials and different lengths of pipe commonly used by cities, notably ductile iron and plastic pipe (primarily HDPE and PVC). Here is what the research found: t AO FTUJNBUFE 78% P GTZTUFNT B M M P XG P SP O M ZPOF UZQFP GNBUFSJBMJOD F S U B J OB Q Q M JD B - tions (“closed competition”) leading to virtual monopolies. t 5IF BWFSBHF D P T UU PS F Q M B D F ESJOLJOH XBUFS QJQFT JOBO iPQFO D P N Q F U J U J P O w TZTUFN is 26% per mile less expensive than in “closed competition” regions. t FPS TUPSNXBUFS, UIF T B W J O H TGSPN iPQFO D P N Q F U J U J P O w BWFSBHF 39% QFS NJMF. t /BUJPOBMMZ, iPQFO D P N Q F U J U J P O w D P VM ET B W F BO FTUJNBUFE $20.5 C J M M J P OG P S ESJOLJOH water and $22.3 billion for storm water in pipe material costs alone over the next 10 years. Researchers found evidence of the added cost ‘closed’ procurement policies impose on local governments. The costs result not from any difference of materials, but rather from a difference of procurement policy: “Furthermore, ductile iron pipe of the same diameter was found to be less costly in open bid cities than in closed bid cities: 8-inch ductile iron pipe cost, on average, $71.69per foot in Port Huron (closed) and $62,39 in Grand Rapids T able 2 WHAT KIND OF WATER PIPES ARE UNDERGROUND IN YOUR CITY? Folkman(2018)estimates thatfour types of pipe materials make up 91 percentof water mains t $J U JFTP G U FOV U J M J[F UIFN JOD PNCJ O BU JPO Page 8 The four commonly used pipes: t D BT UJ S PO ($* ) 28 % t EVD U J M F JS PO (% * )28% t QPM Z W J O ZM DIM PS JEF (17$) 22%t BT CFT U PTD FNFO U (A$) 13% The remaining 9%of pipes used t IJHI EFO T J U Z QPM Z FU IZM FO F () % 1& ) t T U F F M t NPM FD VM BS M ZPSJFO U FE 17$ (17$0 ) t D POD S FU F T U FFM DZM J O EFS($4$) t PU IFSNBU FS JBM T
  • 9. Page 9 (closed), in comparison to $58.60 in Livonia (open) and 55.64 in Monroe (open). Therefore, even when ductile iron is considered by itself, 8-inch pipe costs in closed bid cities were up to $16.05 higher than in open bid cities, equivalent to a pipe cost inflation of up to 29%,”(BCC 2017). A summary table included in the appendix presents selected information for each of the research reports. The key information includes: pipe material, annual installation in linear feet, pipe diameter and cost per foot, and while the information presented in the studies covers 2013 to 2015, we focus on the 2015 cost per foot information, the latest year of report availability. Reevaluating the status quo and conducting cost comparisons can lead to choices that yield benefit to the community and system users. These findings should be of great interest to local officials that are looking for better options to upgrade their water sys- tems, stretch resources and keep rates down. Because the savings accrue at the project level, competition will speed the upgrad- ing of water infrastructure and enable innovation to help provide clean, safe water and reduce ongoing maintenance costs. Pipe Performance Expectations The American Water Works Association (AWWA) and the American Society for Testing of Materials (ASTM) established outer diameter wall thickness standards for pipes made of Cast Iron (CI), Ductile Iron (DI), Poly Vinyl Chloride (PVC), High Density Polyethylene (HDPE) and Molecularly Oriented Poly Vinyl Chloride (PVCO). The stan- dards establish a threshold of performance that all pipes are expected to meet. Thus, pipes that meet these mechanical performance criteria, regardless of pipe material, satisfy the standards. The standards are broken down by grouping pipe diameter sizes. The AWWA standards have governed outer diameter (OD) sizes for pipes used in municipal water systems since the 1970s. OD pipe size standardization for water systems enable compatibility with connections for valves, hydrants, services and fittings for different pipe materials and assures complete interchangeability with a minimal amount of inventory required for operations and maintenance activities. The outer wall diameter (wall thickness) is the most direct metric of pipe suitability for a project and includes consideration of hydrostatic design stress (psi). T able 3 NUMBER OF REPORTED BREAKS NUMBER OF CITIES PERCENTAGE OF CITIES 1-25 101 35.8 26-50 54 19.1 51-100 47 16.7 101-200 42 14.9 201-300 7 2.5 301-500 11 3.9 > 500 20 7.1 TOTAL 282 100 SOURCE: Anderson, R. 2007, US Conference of Mayors
  • 10. Page 10 These standards address many concerns such as meeting firefighting requirements: “Fire flow standards require a minimum residual water pressure of 20 pounds per square inch gauge (psig) during flow. It is common practice to maintain pressures of 60 to 75 psig in industrial and commercial areas and 30 to 50 psig in residential areas. Distribution system mains and pipes must be designed to withstand these pressures.” (/BUJPOBM ADBEFNJFT 1SFTT (64), 1982). Why are pipes failing despite established standards for performance? Standards describe the mechanical performance necessary for an application, or in the case of the A/4*//4F 61 4UBOEBSE, UIBUUIF QJQF DPNQMJFTXJUI B M MIFBMUI SFHVMBUJPOTG P SNBUFSJBMT that contact drinking water. But pipe standards do not specify what pipe to procure or the environmental factors that may cause a pipe to fail prematurely such as the local soil corrosivity, seismic conditions, or use. For existing pipe, age is also an important factor. There is a growing body of information that characterizes the general decline of infrastructure, and more specifically, breaks in water mains and sewer pipes. The AWWA (2012) released a landmark report on underground infrastructure (pipes) that unveiled the extent of decline and the urgency of addressing it. An AWWA follow-up survey expressed this, “The top concern in the AWWA surveys for 2016 and 2017 is ‘renewal and replacement (R&R)’ of aging water and wastewater infrastructure”, (AWWA 2017). Additionally, the American Society of Civil Engineers (ASCE) has opined that water and wastewater infrastructure in America gets a D- grade in 2009, (ASCE 2009); and a slight improvement to a D grade in 2017, (ASCE 2017). The EPA has similar findings. Two surveys provide local-government oriented findings: a 330-city survey conduct- ed by the Conference of Mayors, (2007); and, a more recent survey of 308 utilities conducted by Utah State University, (2018). The Conference of Mayors released results of a 330-city survey examining the status of asset management and condition assessments of water and sewer pipes and pipe failures (Anderson, 2007). The findings demonstrate that pipe breaks are common (See Table 3). Asset management programs were more likely to be found in larger systems. Utah State University recently reported results from a survey of water main breaks, (Folkman, March 2018). The survey included 308 drinking water utilities in the USA and Canada with details from 281 on water main break data covering 170,569 miles of pipe. This survey is an important contribution to the literature because it provides estimates of pipe performance by type of pipe material. Among the major findings of the Utah State University survey, several are important because they directly address pipe performance in general and performance by pipe material (adapted from Folkman, March 2018): t 8BUFS NBJO CSFBL S B U F TIBWFJODSFBTFE 27% GSPN2012 U P2018; SBJTJOHGSPN11 U P 14 breaks on average for every 100 miles of pipe per year. t 5IF 308 XBUFS T V Q Q M ZTZTUFNT TVSWFZFE GPVOE U I B U82% P GD B T UJSPO ($*) QJQFT BSF more than 50 years old and experiencing a 46% increase in break rates. t ANPOH UIF V U J M J U J F TTVSWFZFE, J UXBT GPVOEU I B UVTJOHB T T F UNBOBHFNFOUBOE PQFSB- tions optimization (for example, pressure reduction and leak detection), help extend the useful asset life. t 0OMZ 45% P G6 U J M J U J F TDPOEVDUDPOEJUJPOBTTFTTNFOU P GXBUFS NBJOT. t 17$ QJQFIBE UIF M P X F T UG B J M V S FS B U FJOUIF TVSWFZFE V U J M J U J F TDPNQBSFE U PD B T UJSPO, ductile iron, concrete, steel and asbestos cement pipes. t $BTUJSPOBOE E V D U J M FJSPOQJQFTFYQFSJFODF IJHI G B J M V S FS B U F TJOD P S S P T J W FT P J M T . t MPTUV U J M J U J F TIBWF NPEFSBUF U PIJHI T P J MDPSSPTJPOSJTL. A substantial portion of the current pipe inventory is cast iron and it is nearing the end of its design life. Water and sewer system managers regularly consider whether to repair or replace pipes. If repair, how, where, and for what linear measure? If doing a replacement, also consider what pipe material has the best value.
  • 11. Page 1 1 The local government utility surveys confirm the constancy of breaks. Earlier in this report we noted that even with a downturn in pipe expenditures by local government, pipes, the underground infrastructure, and their immediate system connectedness, drains, lines, etc., continue to be among the top annual construction expenditures in the public water and sewer sectors. The repetitive nature of the repair and replace procurement activity adhering to entrenched or convenient procurement policies is a direct impediment to cost-savings by stifling innovation. Mayors should instead view it as an opportunity to try new approaches and new pipe materials. If different pipe materials meet recommended mechanical standards, then they should also have equal consideration in an open bid process. This will introduce competition and should result in lower prices, even for incumbent materials. There are many claims and counterclaims about the efficiency, durability and safety of pipes. Local procurement officials can obtain reliable information by contacting vari- ous industry trade associations and state and federal agency resources. Officials can also rely on consulting engineers for information. PUBLIC SAFETY AND THE ENVIRONMENT Advances in drinking water treatment technologies have been tremendous since 1900, but the public health benefits are sometimes diminished with pipe failure. Cit- JFT XJUI NBjPS VSCBO ESJOLJOH XBUFS TZTUFNT M J L F +FSTFZ $JUZ, /+, BBMUJNPSF, M% BOE Louisville, KY implemented best practices in the early 1900s – filtration and chlorination – and achieved an immediate decline in infant and childhood morbidity and mortality related to parasitic water borne pathogens. Since then, the invention and incorpora- tion of many new treatment technologies in the late 1900s has further enhanced pub- lic safety. Yet breakage, which includes corrosions and leaks, of any pipe, regardless of material, has the potential to reintroduce waterborne pathogens to the consumer through infiltration of the pipe. Similarly, breaking sewer pipes and wastewater pipes are a concern for the environment and potential human impact (basement backups and contaminated streams). Chronic health impacts are important to recognize, and they may be associated with broken or fully functional pipes. Chronic health impacts have been related to chemicals or contaminants in drinking water that may be carcinogenic. For example, some of the drinking water treatments applied can result in potential public health impacts. The EPA sets drinking water standards that regulate the allowable levels of substances of concern; and, the EPA has an action-forcing mechanism to consider new substances for regulation on a regular basis. The literature on acute and chronic public health impacts from contaminated water is well established and not the primary concern of this report. While somewhat dated, B /BUJPOBM 3FTFBSDI $PVODJM QVCMJDBUJPO QSPWJEFT B HPPE GPVOEBUJPO JO M J T U J O HBOE describing some of these adverse health impacts and their drinking water causes, (/BUJPOBM 3FTFBSDI $PVODJM (64) 4BGF %SJOLJOH 8BUFS $PNNJUUFF. 8BTIJOHUPO (%$): 1982). Drinking water safety is important, and it is local government that provides some of the safest drinking water to hundreds of millions of people daily. Providing 24-hour service all the time is an expensive proposition and local government invested over $65 billion in 2015, and still it is a challenge to ensure uninterrupted service. Until the late 1980s, EPA was responsible for testing and certifying that materials were safe to be used for both drinking water and waste water pipes. Following a decision by the EPA to no longer do this work, the EPA (through a regulatory process) QBTTFE UIF SFTQPOTJCJMJUZU PUIF /BUJPOBM 4BOJUBUJPO FPVOEBUJPO (/4F). 4JODF UIFO UIF /4F IBT EPOF B M MP G UIF U F T U J O H BOE SFUFTUJOH P G QJQJOH NBUFSJBMT UIBU HP JOUPXBUFS
  • 12. Page 12 infrastructure projects. It is important to note that all materials, from the new and inno- vative to the traditional, are tested and retested to ensure their safety. 5IF A/4*//4F 61 4UBOEBSE FOTVSFT UIBUESJOLJOH XBUFS QJQFT BSF TBGF G P SVTF BOE that all pipes are tested for safety equally. The materials are tested before the pipes are used commercially, by subjecting them to multiple tests, including if the pipes leach chemicals or other substances into the water. Once the materials are certified, the test- ing does not stop. Materials used in pipes are continuously tested throughout produc- UJPO CZ /4F. 5IFTF BVEJUT BSF EPOF SBOEPNMZ UXJDF FBDI ZFBS BOE BMTP FOTVSF UIBU quality control tests are being done by the manufacturer. The Conference of Mayors adopted policies urging cities to consider environmental impacts using life cycle analysis (LCA) when available and appropriate. LCAs have become more widely available, and the Conference of Mayors provided an example in relation to pipe materials (Anderson, 2013). It is important for mayors to weigh public safety (including environmental externalities) as well as cost and performance of pipes. Typically, an LCA considers several stages: production/extraction, construction pro- cess, use, and end of life. Each stage of an LCA identifies inputs and outputs to assess energy use, wastes, emissions and their environmental impact. The LCA provides “… transparent disclosure of environmental impact and is used to standardize industry comparisons” (Sustainable Solutions Corporation, Royersford, PA). Standardized com- parisons provide a good tool to assess competing product claims technically and ana- lytically. Local procurement officials may have authority to request the results of an LCA for a single pipe material or multiple pipe materials. This report will not address the claims and counterclaims on pipe material environmental impacts. However, we encourage local officials to consider LCAs when making water infrastructure decisions. The pipe industry is moving towards providing more transparent and higher-quality information on their environmental performance that may be of use to local officials. For example, Uni-Bell PVC Pipe Association commissioned an LCA on potable water, gravity storm water, and sanitary sewer pipe systems that was reviewed in accordance with ISO 14044 (a standardized review protocol ensuring the accuracy of an LCA). The LCA led to a PVC pipe Environmental Product Declaration (EPD), which complies with *40 14025 TUBOEBSETBOE XBT JOEFQFOEFOUMZDFSUJGJFECZ /4F * O U F S O B U J P O B M . There are many good resources that local officials can use to determine the safety of piping materials and whether or not they are appropriate for their specific project. These safety standards are based on data collected over long periods of time and are reliable. CONCLUSION We reported in our 2013 review of local government water and sewer pipe pro- curement practices that closed procurement that prohibits competition among different pipe materials is prone to inefficiencies and the potential for substantial lost opportunity costs. Cities invest significant resources in water and sewer pipes, then and now. The case for considering alternative pipe materials that might perform as good or better than conventional pipes used today, and cost less, is compelling. In the 2013 report several communities provided anecdotal cases where alternative (PVC) pipe materials were chosen, and cost savings were achieved. A business case approach made pos- sible through open bid procurement was suggested to compare competitive pricing and overall value, and the local procurement official could find assistance from knowl- edgeable consulting engineers, or develop the tools needed to make accurate cost and performance comparisons. Five years later, 2018, the case for open competition is stronger. Closed procurement and low bid policies may be state law in some cases but there is often an opportunity for exception. Whether state law or local policy, the fact is that new information (both knowledge and analytic tools) on cost, performance, public health and environmental
  • 13. impact is readily available. Mayors and their departments can use this information to lower or stabilize their pipe capital costs while meeting safety and performance requirements. A standardized cost per foot analytical tool such as the BCC and Datahawks research used is of practical utility to local officials who make procurement decisions and seek efficiencies and cost savings. The AWWA reports and Folkman’s survey make a compelling case for the magnitude of the challenge to maintain and upgrade the underground infrastructure. Folkman specifically emphasizes the increasing number of local systems making decisions about replacing legacy pipes, such as cast iron, that are aging out and the importance of comparing pipe cost, performance and environmental impacts when procuring new pipes. These decisions will have a 50 to 100-year design life expectation. Public health impacts are substantially mitigated when potable water pipes are maintained and operated properly. The potential for health impacts increases when pipes fail, and sometimes when treatment and/or biofilm protocols are changed or modified. Pipe failure can result in the introduction of waterborne parasites and inor- ganic elements to the tap. Testing frequently detects organic contaminants in pipes with no- or interrupted-flow. For example, stalled water and residual chlorine in drinking water pipes broken by an earthquake have resulted in detection of tri-halo-methane (THMs) at the tap when service continued. Asset management best practices as well as detection technology can effectively address pipe failure. Public safety includes environmental impacts as well as public health. Reports and testing results on all materials used in water infrastructure for public health are widely B W B J M B C M FG P SSFWJFX GSPN BDDSFEJUFE UIJSE QBSUJFT,JODMVEJOH/4F. 8 F TUBUFEJO2013, and restate here, the use of Life Cycle Analysis helps differentiate the environmental impacts of pipe materials according to a standard method of comparison. Some pipe providers seek additional differentiation through an Environmental Product Declaration, which requires third party verification of ISO certification. This sets a high bar for com- paring environmental impacts. Discussion Questions As this paper points out there is plenty of evidence to show that open procurement and bid processes are the future of “good government.” The big question is why is there still substantial local resistance to making any change? Is the resistance due to a lack of information and training of local procurement officials? Are consulting engineers being allowed to share new ideas or are they limited by the existing norms or local/state ordi- nances or laws? Are the cost, performance and safety information presented in a way that is amenable to local procurement processes? Changing behavior relies on changing attitudes, and the transparent and account- able processes of open bid competition can lead the way. Mayors are strategically positioned to play the leading role. Page 13
  • 14. Page 14 REFERENCES American Water Works Association, 2012, Buried No Longer: Confronting Ameri- ca’s Water Infrastructure Challenge, Denver, CO. American Water Works Association, 2017 State of the Water Industry Report, AWWA, 2017, available from: https://www.awwa.org/publications/opflow/abstract/ articleid/65762696.aspx. American Society of Civil Engineers (ASCE), “2009 Infrastructure Report Card,” available from: https://www.infrastructurereportcard.org/2009/sites/default/files/ RC2009_drinkwater.pdf American Society of Civil Engineers (ASCE), “2017 Infrastructure Report Card,” available from: http://www.asce.org/reportcard/ Anderson, R., March 2013, Municipal Procurement Process ImprovementsYield Cost- Effective Public Benefits, Untied States Conference of Mayors, Washington, DC. Anderson, R., September 2007, National City Water Survey 2007 – The Status of Asset Management Programs in Public Water and Sewer Infrastructure in America’s Major Cities, U.S. Conference of Mayors, Washington, DC. BCC Research, February 15, 2016, Special Research Study: Comparison of Pipe- line Installation Lengths and Costs in Two Cities, prepared for the American Chemistry Council, (BCC Research, 49 Walnut Park, Wellesley, MA). BCC Research, April 23, 2016, Special Research Study: Comparison of Water Main Pipe Installation Lengths and Costs in North and South Carolina: Raleigh, Charlotte, and Spartanburg/Greenville, prepared for the American Chemistry Council, (BCC Research, 49 Walnut Park, Wellesley, MA). B$$ 3FTFBSDI, /PWFNCFS 3, 2016, Special Research Study: Comparison of Water Pipe Installation Lengths and Costs in Michigan: Port Huron, Grand Rapids, Monroe, and Livonia, prepared for the American Chemistry Council, (BCC Research, 49 Walnut Park, Wellesley, MA). Datahawks, LLC, December 31, 2016, Special Research Study: Comparison of 8” and 12” Water Main Pipe Installation Lengths and Costs in Closed Competition and Open Bidding Arkansas Communities,(Datahawks, LLC, 4119 Lee Ave., Little Rock, AR). BCC Research, February 24, 2017, Special Research Study: Nationwide Pipe Length and Cost Savings Evaluation, prepared for the American Chemistry Council, (BCC Research, 49 Walnut Park, Wellesley, MA). Folkman Ph.D., P.E., Steven, (March 2018), Water Main Break Rates In the USA and Canada: A Comprehensive Study - An Asset Management Planning Tool for Water Utilities Water Main Break Rates Inthe USA and Canada. Mack EA, Wrase S (2017) A Burgeoning Crisis? A Nationwide Assessment of the Geography of Water Affordability in the United States. /BUJPOBM ADBEFNJFT 1SFTT (64), 1982, Drinking Water and Health Volume 4. /BUJPOBM 3FTFBSDI $PVODJM (64) 4BGF %SJOLJOH 8BUFS $PNNJUUFF. 8BTIJOHUPO (%$): *4B/ -10: 0-309-03198-2 /4F * O UFS O B U JP O BM ,2015, Product Potable Water, Gravity Storm Water, and Sanitary Sewer Pipe Systems Date of Issue May 15, 2015 Period of Validity 5 Years Declaration /VNCFS &1%10047 &1%1SPHSBN 0QFSBUPS /4F * O U F S O B U J P O B M789 / . %JYCPSP3E. AOO ASCPS M* 48105 USA www.nsfsustainability.org. Sustainable Solutions Corporation, Evaluating Life Cycle Assessments for Under- ground Infrastructure, Royersford, PA, www.sustainablesolutionscorporation.com. United States Government Accountability Office, September 2016, Water Infra- structure: Information on Selected Midsize and Large Cities with Declining Populations. GAO 16-785.
  • 15. Page 15 APPENDIX: BCC RESEARCH AND DATAHAWKS SUMMARY FINDINGS Ohio Communities The two Ohio communities with closed bid systems paid average cost 32%-35% higher per foot for pipe ($51.83), compared to the one open bid county that had a near even blend of DI and plastic pipe ($33.33). Carolina Communities The one open bid community procured a near even blend of DI and plastic and had categorically lower cost except for Spartanburg/Greenville 4” to 6” pipe. For 12” pipe, closed systems paid an additional 50% markup ($57.73 per foot compared to $28.21). Michigan Communities Two open bid communities in Michigan utilized DIand plastic blends, and where the blend was near even the cost was considerably lower than the two no bid communities using DI only. The report also found clear evidence of the added cost ‘closed’ procure- ment policies impose on local governments: “Furthermore, ductile iron pipe of the same diameter was found to be less costly in open bid cities than in closed bid cities: 8-inch ductile iron pipe cost, on average, $71.69 per foot in Port Huron (closed) and $62,39 in Grand Rapids (closed), in com- parison to $58.60 in Livonia (open) and 55.64 in Monroe (open). Therefore, even when ductile iron is considered by itself, 8-inch pipe costs in closed bid cities were up to $16.05 higher than in open bid cities, equivalent to a pipe cost inflation of up to 29%.” Michigan also demonstrated similar savings, with closed systems paying 27% to 34%more in capital costs. Arkansas Communities Arkansas communities exhibit some cost complexity. The one open bid community procured plastic pipe, but DI pipe in one of the closed bid communities was slightly less costly. The other two closed communities procuring DI pipe had a cost nearly twice that of plastic, except for 8” pipe procured in Hot Springs.
  • 16. LOCAL UNIT OPEN-BID CITY PIPE MATERIAL 2015 AVERAGE COST PER FOOT PIPE DIAMETE R (INCHES”) COLUMBUS, OH N O DUCTILE IRON $26.73 4” TO 6” $4.6 MILLION INVESTMENT $53.39 6” TO 12” 80,621 FEET OF PIPE INSTALLED $82.98 OVER 12” DELAWARE COUNTY, OH YE S DUCTILE IRON 44% $15.23 4” TO 6” INCLUDES:DELAWARE,DUBLIN,WESTERVILLE,&P O W E L L PLASTIC 56% $33.65 6” TO 12” $7.9 MILLION INVESTMENT $80.83 OVER 12” 150,700 FEET OF PIPE INSTALLED DAYTON, OH N O DUCTILE IRON 90% $31.49 4” TO 6” $1.8 MILLION INVESTMENT WITH PLASTIC PIPE PLASTIC 10% $51.71 6” TO 12” 37,033 FEET OF PIPE INSTALLED EXCEPTIONS IN $122.73 OVER 12” N EIG H BO R H O O D S Reference - BCC, February 15, 2016 Page 16 OHIO COMMUNITIES LOCAL UNIT OPEN-BID CITY PIPE MATERIAL 2015 AVERAGE COST PER FOOT PIPE DIAMETE R (INCHES”) C HA R LOT T E ,N C YE S DUCTILE IRON 47% $22.15 4” TO 6” $1.2 MILLION INVESTMENT PLASTIC 53% $25.18 6” TO 12” 37,800 FEET OF PIPE INSTALLED $65.87 OVER 12” RALEIGH,N C N O DUCTILE IRON $29.77 4” TO 6” $1.76 MILLION INVESTMENT $57.73 6” TO 12” 30,021 FEET OF PIPE INSTALLED $127.11 OVER 12” SPARTANBURG/GREENVILLE,S C N O DUCTILE IRON 98.6% $19.98 4” TO 6” $4.6 MILLION INVESTMENT PLASTIC 1.4% $33.68 6” TO 12” 185,443 FEET OF PIPE INSTALLED $85.28 OVER 12” Reference - BCC, February 15, 2016 CAROLINA COMMUNITIES
  • 17. LOCAL UNIT OPEN-BID CITY PIPE MATERIAL 2015 AVERAGE COST PER FOOT PIPE DIAMETE R (INCHES”) LIVONIA, MI $1.5 MILLION INVESTMENT YE S DUCTILE IRON 6% PLASTIC 94% $57.37 N/A 8” 12” 26,000 FEET OF PIPE INSTALLED MONROE, MI YE S DUCTILE IRON 44% $29.77 8” $1.76 MILLION INVESTMENT PLASTIC 56% $57.73 12” 30,021 FEET OF PIPE INSTALLED GRAND RAPIDS, MI N O DUCTILE IRON $70.88 8” $0.69 MILLION INVESTMENT $74.39 12” 9,779 FEET OF PIPE INSTALLED PORT HURON, MI N O DUCTILE IRON $104.33 8” $2.8 MILLION INVESTMENT 27,075 FEET OF PIPE INSTALLED $107.74 12” Reference – BCC Research, Novem ber 3, 2016 MICHIGAN COMMUNITIES PIPEMA T E R IAL 2015A V E RA G EC O ST PE RFO O T PIPED IAM ET E R (INCHES”) HOT SPRINGS, AR N O DUCTILE IRON $32.23 8” $236,080 MILLION INVESTMENT (2014 & 26,000 FEET OF PIPE INSTALLED 2015) $122.60 12” CENTRAL ARKANSAS WATER: N O DUCTILE IRON $119.41 8” $161.71 12” L I T T L EROCK,N O R T HL I T T L EROCK,SHERWOOD,M A U M E LLE $1.76M IL L IO NINV E ST M E NT 30,021FE E TO FPIPEINST A L L E D SPRINGDALE, AR N O DUCTILE IRON $35.77 8” $0.38 MILLION INVESTMENT $58.16 12” 7,655 FEET OF PIPE INSTALLED FAYETTEVILLE, AR N O PLASTIC $38.40 8” $109,069 MILLION INVESTMENT 1,825 FEET OF PIPE INSTALLED $61.02 12” ARKANSAS COMMUNI TI ES LO C ALUN IT O PE N-BIDC IT Y Page 17
  • 18. The Mayors Water Council The Mayors Water Council (MWC) assists local governments in providing high quality water resources in a cost-effective manner. MWC provides a forum for local governments to share information on water technology, management methods, operational experience, and financing of infrastructure development. MWC monitors and responds to federal legislative, regulatory or policy proposals affecting the delivery of municipal water services. MWC also provides a forum toassistlocal governments in exploring competition and public-private partnership approaches, and alternative methods of financing water infrastructure development. Mayors Water Council Co-Chairs 2018 Mayor Jill T echel, City of Napa CA Mayor David Berger, City of Lima OH
  • 19. THE UNITED STATES CONFERENCE OF MAYORS 1620 Eye Street, NW Washington, DC 20006 T el: 202-293-7330 Fax: 202-293-2352 usmayors.org