Infrastructure & Cities

American Water contractor digs up a solution

February 15, 2012

February 15, 2012
Brian Gardner

Managing editor, EMEA

Brian Gardner is a managing editor for The Economist Intelligence Unit's thought leadership division in EMEA. His research has covered a range of business strategy issues focused primarily on energy and sustainability or financial services. Prior work has included consulting and research work concerning energy systems and regulatory frameworks. He holds an MBA from HEC Paris, a master’s degree in urban planning from Columbia University in New York City and a bachelor’s degree in international relations from American University in Washington, DC.

Contact

In one recent project American Water faced considerable push-back from a Kentucky community over traffic disruption caused by the installation of a 30-mile underground water transmission line. The utility company’s contractor ultimately found a solution that saved everyone time and money.

When construction began, project teams found a heavy layer of limestone in the ground that would have slowed the excavation process substantially, causing locals to complain about a long-term disruption. The utility brought the contractor to local meetings, involved it in brainstorming solutions and ultimately supported its idea to bring in massive trenching equipment, which could cut through the limestone much faster than backhoes.

“It’s so much easier to identify the best alternatives when the contractor is part of the discussions,” says Stephen Schmitt, vice president of engineering and operations service for American Water. The contractor agreed to cover the substantial upfront mobilisation cost for the trenchers, and in exchange American Water promised to expedite easements and local improvements so they could work continuously, rather than hop-scotching from site to site, which would have been prohibitively expensive. The contractor was able to make up the upfront cost by reusing the limestone as backfill for the roads rather than trucking in new material.

American Water invested additional man-hours and resources to secure the easements and thanks to this approach, the final project came in on
time and on budget, with 100% acceptance from the utility commission, Mr Schmitt says. “The up-front cost was more, but the ultimate cost of the project and the impact to the community were less.”

He argues that the only way to achieve such equitable, cost effective solutions is by treating contractors as partners and involving them in these decision-making processes. “If you come up with solutions without getting the contractor’s input, you often can unknowingly introduce means for dispute.”

Enjoy in-depth insights and expert analysis - subscribe to our Perspectives newsletter, delivered every week