The Open and Fair Competition Act for Water and Wastewater Projects Exposed

The Open and Fair Competition Act for Water and Wastewater Projects is listed under ALEC's Commerce, Insurance and Economic Development Task Force. An updated version of this bill is posted on ALEC.org, listed below the original in bold, was approved by the Board of Directors on October 18, 2012, re-approved on June 29, 2015. (Accessed on 3/29/2016).

ALEC Bill Text

Summary

It is the intention of this Act to ensure that all proven and acceptable piping materials must be included in all bids for water and wastewater projects. This promotion of free competition will ensure limited government resources are being used to the greatest advantage.

Model Legislation

{Title, Enacting clause, etc.}

Be it enacted by the legislature of the state of [insert state].

Section 1. {Definitions}

(A) Governmental agency refers to any state agency, state district, city, county, city and county, including a chartered city or county, school district, community college district, public district, county board of education, joint powers authority, water or sewer district, special district, or any other public or municipal corporation.

(B) A piping material is considered proven and acceptable if it meets current and recognized standards as issued by the American Society for Testing and Materials (ASTM) and the American Water Works Association (AWWA) and other recognized standards and certification agencies. The goal is to construct a project at the best price and best value for system customers and taxpayers.

(C) Best price and best value refers to a combination of project quality, sustainability, durability, corrosion resistance, price and outcomes that taken together provides the most benefit to taxpayers for long-term asset management.

Section 2. {Findings}

(A) The nation’s water and sewer infrastructure is deteriorating and is corroding at an alarming rate. At the same time, complying with the Safe Drinking Water Act and Clean Water Act requires extensive upgrades of many water and sewer systems/utilities.

(B) According to a 2002 congressional study, corrosion is a drag on the U.S. economy, costing U.S. drinking water and wastewater systems more than $50.7 billion annually. Corroding piping materials have also contributed to the decline of water quality and are responsible for a staggering amount of water loss each year. All told, leaking, corroding pipes lose some 2.6 million gallons of drinking water every year or 17 percent of all water pumped in the United States.1 44

(C) The majority (60 percent) of replacement costs are for water transmission and distribution and sewer pipes. Building and replacing water and sewer lines alone will cost some $600 billion to $1.1 trillion over the next 20 years.

(D) The easiest way for water and sewer utilities to reduce costs, drive innovation and more effectively manage their underground infrastructure is to ensure all approved piping materials and technologies get considered in bidding processes.

(E) Considering all approved piping materials and technologies will maximize scarce federal and state funding for state revolving funds and other grants provided to localities.

(F) Sound infrastructure asset management principle should be applied, which will ensure that only the longest lasting and most efficient pipe is used with the lowest operations and maintenance costs.

Section 3. {Application}

(A) It is the intent of the Legislature that:

(1) State and local government agencies have the authority to engage in open competitive bidding to study, plan, design, construct, develop, finance, maintain, rebuild, improve, repair, or operate water and wastewater utilities.

(2) When or where any state or local taxpayer dollars/grants are used to fund, for example through State Revolving Funds (SRFs), any water or wastewater project, all procurement transactions for piping and other materials shall be conducted in a manner that provides for maximum open and free competition. All proven and acceptable piping materials must be included in all bids

(3) This Act creates no new governmental agencies.

(4) This Act specifically prohibits practices that may result in unlawful activity including, but not limited to, rebates, kickbacks, or other unlawful considerations, and prohibits government entity employees from participating in the selection process when those employees have a relationship with private entities seeking a contract under this Act or as proscribed by existing state or local contracting law.

1 CC Technologies Laboratories, Inc. Sponsored by the Office of Infrastructure Research and Development, Federal Highway Administration. (September 30, 2001). Corrosion Cost and Preventative Strategies in the United States Retrieved February 28, 2012.

(5) This Act serves to ensure that open procurement procedures are utilized in the selection of piping materials for water and wastewater infrastructure projects undertaken by state or local agencies where state funding is used.

Section 4. {Severability clause}

Section 5. {Repealer clause}

Section 6. {Effective date}

Summary

This Act ensures that all proven and acceptable piping materials are included in all bids for water and wastewater projects. All pipe materials should be qualified and selected based on sound engineering principles. The language in the Act continues to allow autonomy for design engineers, but simply requires the decisions to be governed by established technical standards. By allowing contractors to bid on alternate pipe materials that meet technical performance criteria, the state will instill accountability in the procurement process, which will reduce costs, improve quality and foster innovation in the form of new products and services, spurring economic growth.

Model Policy

{Title, Enacting clause, etc.}

Be it enacted by the legislature of the state of [insert state].

Section 1. {Legislative Findings}

(A) According to the Environmental Protection Agency (EPA), underground piping represents 60 percent of the total spending for water and wastewater infrastructure. Updating procurement policies for water and sewer piping could help [insert state] and its political subdivisions realize significant costs savings and ensure that state funding for underground infrastructure is more cost-effective.

Section 2. {Definitions}

(A) “Governmental Agency” refers to any state agency, state district, county government, municipality, and including a school district, public district, county board of education, joint powers authority, water or sewer district, special district, or any other public or municipal corporation.

(B) “Acceptable Piping Material” refers to piping material that meets current and recognized standards as issued by the American Society for Testing and Materials (ASTM) and the American Water Works Association (AWWA)..

(C) “Project” refers to any water or wastewater utility service improvement project funded through loans or grants provided by Clean Water State Revolving Funds (CWSRF) or Drinking Water State Revolving Funds (DWSRF).

Section 3. {Procurement Procedures for Water and Wastewater Piping}

(A) Government agencies shall engage in open competitive bidding to study, plan, design, construct, develop, finance, maintain, rebuild, improve, repair, or operate water and wastewater utilities; and

(B) All procurement transactions for piping material shall be conducted in a manner that provides for maximum open and free competition.

(C) Unlawful restrictions on competition include, but are not limited to specifying only a brand name product or particular type of material instead of either allowing an equal product to be offered, or describing the performance of the relevant requirements of the procurement.

(D) The specifications for a public works project must provide that all acceptable piping materials may be acquired for and used in the project.

(E) The Governmental Agency and design engineers shall have the autonomy to set technical material performance criteria based on specific project conditions.

(F) This Act specifically prohibits government agency employees from participating in the selection process when those employees have a relationship with private entities seeking a contract under this Act or as proscribed by existing state or local contracting law.

(G) All procurement transactions, regardless of whether by sealed bids or by negotiation and without regard to dollar value, shall be conducted in a manner that provides maximum open and free competition. Procurement procedures shall not restrict or eliminate competition.

(H) In addition, the Governmental Agency shall consider acceptable piping material to be suitable for the project only if the use of that material is commensurate with sound engineering practices and project requirements.

(I) The use of any particular pipe material shall not be mandated, nor shall the ability of project engineers to use any piping material that meets specifications be restricted.

Section 4. {Severability clause}

Section 5. {Repealer clause}

Section 6. {Effective date}