Largest Water Infrastructure Growth in a Generation
On October 23, 2018, the US signed into law the America’s Water Infrastructure Act of 2018 which will see the allocation of $1.5 trillion towards mostly water infrastructure projects over the next ten years.
Most of these projects will be “drinking and wastewater systems, waterways, water resources, energy, rural infrastructure, public lands, veterans’ hospitals, and Brownfield and Superfund sites.”
$200 billion of this amount will come from the federal government with the balance coming from state and local governments which opens the possibility of widespread use of the Public-Private Partnership (P3) approach, where companies have a financial stake in the success of these projects. And using P3s would entail companies wanting a greater say in all aspects of the project, which means most P3s would be Design-Build-Finance-Operate-Maintain (DBFOM).
The owners (that is, the Feds, State, or local government) of these infrastructure projects would want the DBFOM model since the profile of the project’s interface and integration risks are passed onto the contractor.
Busy Years for State and Municipal Water Infrastructure RFPs, RFIs, RFQs
What this means is 2019 is going to be a very busy year for all branches of the government and will see many state and municipal authorities scrambling to put together proposals to secure government funding for their projects before other states, cities, and towns empty the $200 billion fund. The ones who’ve read the situation properly will be engaging the subject matter expert engineering firms to function as their “Owner Engineers” to provide the justification for their funding requests, which will prevent the most skilled and experienced firms from being used by rival government groups.
As the funds start being disbursed to the early risers in late 2019 to early 2020, they or their Owner Engineers will be issuing Request for Qualifications to identify the candidate contractors who are interested in pursuing the opportunities.
The Water Infrastructure RFP Response Preparation Process Begins Now
The RFP process for the new infrastructure projects now begins for the vendor. Those who know how to write RFPs will be engaged to develop them while those who know how to respond to RFPs will be responding to them. $1.5 trillion worth.
Respondents who’ve been paying attention to the development of projects they’re interested in would have the teaming agreements in place with their ideal Joint Venture partners or subcontractors and will have assigned internal resources (or engaged external consultants) to pre-format and pre-fill with generic information their RFP response or proposal templates for the type of project they’re interested in pursuing.
They will have secured arrangements of maximum surety amounts for different types of projects, update the resumes of their proposed staff, and modernize the information in their past experience project sheets. They will also notify the project manager or someone with first-hand knowledge of the past project that they may be asked to provide additional information that is relevant to the new opportunity. They will also make sure their references and reference letters are up to date and ready to be used at the drop of a hat. They will have their graphics and photos ready for insertion and will be canvassing internal as well as external resources to help with their pursuit.
In this manner, a contractor can have a proposal ready in the wings that can be quickly aligned to the RFP after its deliverable requirements have been identified.
Massive Opportunity for Contractors Who are Ready
Given the limited number of top tier providers who cannot be everywhere at once, this $1.5 trillion pie opens the door to thousands of contractors who don’t have multi-billion-dollar resources backing them up. They will be able to compete as part of a Joint Venture where they can provide surety letters of sufficient size to credibly pursue the mega projects, while also holding their own with the infrastructure pursuits of the $10 to $50 million range.
The sooner the contractor prepares and positions themselves for the largest US infrastructure construction growth in a generation; the better their win rates will be.
Edward Watson is based in Calgary, Alberta. Ed loves complex documentation, and is equally comfortable writing RFI/RFP/RFQ responses to developing thousand-page project execution plans to creating user manuals and even writing poetry!