Why do we Sell Water Treatment Equipment?

When I was hectic bidding several projects the week before Christmas while trying to fit in a few out-of-state sales visits before the end of 2017 and barely finding time to get into the holiday spirit I thought to myself, “Why do we sell water treatment equipment”? I talk to a lot of people in sales in my industry at conferences and it seems like we all have a similar hectic life of travelling every other week, frantically catching up when we are in the office and nearly always in that reactive fire-fighting mode.

I think the only other profession that may travel as much as sales people are professional sportspeople. If we got paid as much as sports stars, maybe that would make the travel more worthwhile. But it isn’t just the travel… If you are selling process technology, you have to put in a lot of work educating the engineers and end users on how the technology works, how to design a process incorporating the technology and then helping to pull together specifications. Then after all of this work that may take place over a few years, the engineer lists all your competitors in the bid spec! Then it is just a race to the bottom to see who will bear the lowest margin….

All the sales consultants will tell you to sell on value provided and not the equipment price, but they should look at selling into the municipal capital equipment market where the government entity is required to have a number of bidders and select the lowest priced responsive bidder… In some cases you can get a bid evaluated on lifecycle cost and in some cases the engineer you have helped with the design will let you have input on the competitors listed in the specs, which is great, but if you work in the muni-marketplace, most projects don’t go this way, unless you want to be really selective and as a salesperson in this market, if you do that you may not be in a job too long…

So let me be more specific. "Why do we sell process equipment into the municipal water treatment market when we have to be travelling for most of the time, our life is in a continual frantic state and there is no money to be made"?

Here is my attempt to justify why I stay in this profession:        

• There are a lot of great people in the industry, sales reps, engineers, fellow manufacturers and operators who are a pleasure to work with. Some of these people I have known for almost 20 years and consider good friends.
• I started my career as a consultant and didn’t get a lot of satisfaction designing a small part of a project and not seeing the end result. Granted I was only a junior engineer, but I wanted to work for a manufacturer who makes a product that solves a problem. It is very satisfying to me to visit a water treatment plant where my company has provided a treatment system that is helping the end user to meet a water quality objective. At that point the installing contractor is gone and possibly the engineer is done with the project but our equipment is there treating the water for many years to come.
• I have this competitive instinct in me and I do get a rush from bidding and winning projects (and the opposite from losing them) which probably comes from my track days.

Being a Municipal Salesperson is like being an Amateur Athlete...
I ran track for years and I think selling in our industry is a bit like being an amateur athlete. Why do you do it when the financial gain is minimal compared to the effort you put in? As my dad used to say when I was training 2-3 hours a day, 6-7 days a week, “You can’t eat gold medals” (he thought I should put my efforts into playing Australia Rules football or another sport where I could get paid). But if you love running, you get your reward from improving your times, winning a race or two, comradery with fellow athletes (many who are still good friends), getting ranked, making national championships, etc, even if you don’t make it to the highest level and make any money. Over the years I trained with a number of Olympic athletes and got a lot of satisfaction thinking that in some way I helped them achieve their goals.

In sales we are proud of the projects we win, the size of the plants sold, the number of installations using our products, the introduction of a new technology to solve a new problem and we value the friendships made. The personal financial gain (or company’s financial gain for that matter) may not be great, but there is a lot of personal satisfaction from playing a part in the improvement in the infrastructure for a community.

So after all of that rambling, I think I have justified to myself why I have been selling water treatment equipment in the municipal market for over 20 years…heck, if I could be an amateur track athlete for almost 20 years, this is a piece of cake!

Sippin' the I Pee A

Arizona Pure Water Brew Challenge puts some fun into Water Reuse

Over 25 craft brewers from around Arizona competed in the Arizona Pure Water Brew Challenge for the honor of making the best beer from purified wastewater at the 17^th Annual WateReuse Symposium in Phoenix AZ on September 12. Most of the approx. 480 conference delegates enthusiastically sampled beers and voted for their favorites.  This event was the climax of a 10-month project to build a trailer with high-tech treatment processes and then tour the state treating wastewater to drinking water standards and provide this to breweries to make beer for the Arizona Pure Water Brew Challenge. And while the final tasting competition was a fitting finale to the project the journey to the finale was certainly the highlight.

 The Arizona Pure Water Brew Challenge was conceived by a team led by Pima County as an entrant to the New Arizona Prize: Water Innovation Challenge with the goal of helping change public perception of using reclaimed water to help solve Arizona’s future water needs. The idea was to build a mobile potable reuse treatment facility that would travel through Arizona cities and towns to wastewater treatment facilities where the wastewater would be treated and given to local breweries who would then compete to make the best tasting beer from reclaimed wastewater.

The Water Innovation Challenge was conceived by the Arizona Community Foundation in partnership with Republic Media and Morrison Institute for Public Policy who host philanthropic prize competitions to attract innovative ideas. Pima County’s Southwest Water Campus team was recognized for developing the most innovative and inventive market-based, technological or entrepreneurial solution to enhancing the sustainability of its water future. The Southwest Water Campus team consisted of Pima County Regional Wastewater Reclamation Department, Tucson Water, Town of Marana, University of Arizona, CH2M, Carollo Engineers, Clean Water Services and WaterReuse. In addition to the $250,000 grand prize, the team also received $50,000 in technical assistance from the WaterNowAlliance to advance the implementation of the project which included an extensive marketing and social media campaign.

The AZ Pure Water Brew Challenge Trailer Touring Arizona

The treatment in the trailer consisted of Ultrafiltration, Reverse Osmosis, UV/Advanced Oxidation, GAC and Chlorination. The actual cost of the trailer was well above $250K, probably around $500K, and could only have happened through generous donations and at-cost contributions from equipment vendors and engineering firms. The schedule was also very challenging requiring the trailer to be designed, built and permitted by the State (remember this was making a product to be consumed by the public) in about 5 months, essentially building and permitting a drinking water facility, while allowing time to tour the local wastewater facilities to treat water so that breweries could brew their beers in time for the Brew Challenge on September 12. Having had a little involvement in the provision of the membrane equipment, I know it took an amazing team effort between vendors, the engineering firms and Pima County’s team to pull this off.

The trailer was not only created to produce purified water for the beer challenge, but was also used as a PR tool to educate the public on the safety and benefits of wastewater reuse. Great attention to detail was put into the layout of the trailer and the educational signage and videos for schools, local residents, public officials and the media who would tour the facility when it was stationed at wastewater facilities and beer tasting events. This helped the Project get a lot of exposure in local newspapers and TV reports.

Launch of the Trailer at the AZ Water Conference in May 2017

After the Brew Challenge the trailer even made a trip to Colorado to CH2M’s Englewood Headquarters for a Reusefest where CH2M clients could taste beer from three local breweries made from recycled water from the trailer, as well as one CH2M employee brewer who came up with the clever name ‘I Pee A’.

Reusefest at CH2M, Englewood, CO

The Arizona Pure Water Brew Challenge was definitely a huge success in helping the public in Arizona understand how reclaimed water can be used to meet future water needs and the Award sponsors, the winning team led by Pima County and all the volunteers who contributed in some way should be congratulated for making this fun project happen.

Most photos from http://www.azpurewaterbrew.org/.

2017 IWA International Conference on Water Reuse and Reclamation Recap

I am not trying to turn this into a conference review blog but I just happen to have been at quite a few conferences this summer. The most recent was the 11th IWA International Conference on Water Reclamation and Reuse held at Long Beach, CA July 23-27. The attendance seemed pretty good considering a lot of local forums for Water Reuse this year, with the pre-show registration list showing 540 attendees, 420 of these from the United States. I was impressed with the number and quality of attendees from the US which shows that despite recent rains on the West Coast, water reuse still has a lot of interest. Although I did hear from one engineer from Northern CA that some of the reuse projects in that region have gone from urgent to a slower schedule.

The technical presentations were very good and I really liked the 20 minute limit which kept the sessions moving and interesting. Each session had a 15-20 minute question period at the end if there was no time left after a specific presentation. My only criticism of the format was some moderators let speakers overrun by 5 minutes because there was the 15-20 minute questions session at the end to make up that time, but if you wanted to jump across to another parallel session, you missed a good part of that presentation.

Horses for Courses for Technology Selection

Without counting papers, it seemed like the majority of current research is on advanced oxidation and biofiltration treatment while the case studies for full-scale reuse projects were mostly around low and high pressure membrane processes. I don’t know if this means that we will see more AOP and biofiltration projects implemented on the full scale in the future at the expense of membrane projects or if there is just more research money for AOP/biofiltration where membranes are seen as a more mature technology with less areas left to research. I suspect a bit of both.

While I mostly went to the membrane related presentations, skimming the abstracts (I was very impressed with the Conference App that allowed you to easily review abstracts) there is certainly a horses for courses approach, with focus on AOP/biofiltration focused mostly on inland areas where disposal of membrane concentrates is difficult while membrane solutions are predominantly on the coasts with access to outfalls for waste disposal.

If you went to the conference to see the exhibits, you would have been disappointed. There were only 20 or so exhibitors and no booths really popped with anything new. Even so, the breaks in the exhibit area were very well attended and a great opportunity to mingle and network with attendees. Most people who go to this sort of conference aren’t really there for the exhibits anyway.

Overall I am very glad I attended to get the chance to see a lot of interesting presentations and do some great networking. Next conference is the 2017 Annual WateReuseSymposium in Phoenix AZ, September 10-13. I will be interested to see if the IWA Conference lowers the attendance this year or if there is enough momentum in Water Reuse to allow people to go to both shows.

 

ACE17 Wrap

Here is my belated and brief wrap up of the 2017 AWWA Annual Conference and Exposition. I didn’t have high expectations for ACE17 in Philadelphia being a memorable conference because the location didn’t excite me and I thought attendance would be down, but I was pleasantly surprised. With the conference hotels close to the convention center it was easy to get around and the market and downtown restaurants were also conveniently close by. 

In the exhibit hall the traffic seemed pretty good although I can’t quantify if it was better or worse than recent years. There were a few more larger exhibitors missing this year but I like the way the AWWA has moved the bookstore into the hall and made a stage area for presentations, etc, perhaps because of the room left by a few less large exhibitors, so that you can browse these areas as you go through the hall.

I attended a few of the wastewater reuse sessions as these presentations were of specific interest to me, and they were lightly attended overall – I am not sure if this was indicative of other sessions or if wastewater reuse has been flogged a lot lately with sessions at the Membrane Technology Conference earlier in the year and separate WateReuse conferences dedicated to the subject. Unfortunately I did not get to other presentations as I was tied up in the exhibit hall.

Overall I thought it was a pretty good ACE with a strong technical program and a pretty large exhibition despite a few larger players missing. There was certainly some buzz about ACE18 in Vegas next year, and I heard a few of the prodigal sons will be back exhibiting (hopefully they have dropped down the site selection pecking order as punishment for their absence). I am sure ACE18 will be one of the biggest ACE’s in some time!

Taking the Easy Road and Wasting Ratepayers' Money

Just when I thought the Big Three mindset in the MF/UF market was finally dead I see a Statement of Qualifications Request that gets my blood boiling….

 This SOQ request for MF/UF suppliers for a drinking water system less than 10 MGD has a minimum qualification requirement of 200 MGD of installed capacity of pressurized municipal membrane systems. Give me a break! If this engineer just wants to install a Pall system, why not sole source them and stop wasting everyone’s time…. How would any other company qualify? Is the engineer trying to create a façade that he is providing a competitive bidding situation for the client to get good pricing? I don’t know how he can do that if he only gets one bidder….

If the owner really only wants a Pall system why can’t they sole source them? The premium they will pay from sole sourcing is probably less than the engineering costs to run through the SOQ process, then conduct some pilots if there is more than one qualified (which can only happen if they don’t stick to the minimum requirements), then have a bidding process between those who piloted, then pick Pall anyway. Or is it the engineer who feels safe using a Pall system due to its track record and from having worked with Pall on projects in the past – and don’t get me wrong, Pall’s MF systems have a great record and looked really good against GE/Zenon and Siemens/Evoqua several years ago when they had all their membrane integrity issues.

Granted this is a small engineering firm who may not have a lot of membrane experience and feels safer working with a company like Pall, but the specific engineer in question previously worked with a large national firm and should know better… The SOQ is all about membrane integrity which suggests to me somebody is stuck in the pre-2010 years when Pall was the only show in town without integrity issues.

This engineer owes it to his client, to keep up with the times and realize that there are new membranes on the market with over 6-7 years of continuous operating data showing minimal membrane fiber breakages, to ensure his client makes the best use of its ratepayers’ money. Do some homework before putting out such a farcical SOQ and see if there are alternative OEMs to Pall in the past 7 years that have good performing MF/UF systems and provide some more realistic qualification requirements to allow a competitive bid for the client. That is the least I would expect of a consultant that is getting paid good money to help a City put its ratepayers' heard earned money to the best use.

OEMs are not sitting around waiting for your bid.....

They can't bid everything!



 

An engineer recently expressed to me his disappointment that after working on a bid specification for over a year and involving a number of OEMs in reviewing the specifications, when it finally came out to bid he had only 2 bidders. I feel for the engineer who put a lot of work into the specification and felt shunned by some of the OEMs. But on the other hand, engineers and owners have to realize that equipment manufacturers are working on many other projects and sometimes have to be selective on where they allocate their limited engineering resources, especially if several projects are bidding at once.

Here are a number of reasons why an OEM may not choose to bid a project even though the project seems like a good fit:

Timing: If there is a flood of bids due at the same time, an OEM may not have engineering resources available to chase all of these and has to pick and choose which projects it has the best chance of winning and/or are potentially the most profitable. Also, if the project has a tight submittal and delivery schedule that overlaps an already busy production schedule, the OEM may have to pass on the project to minimize the risk of liquidated damages and chase projects that better fit into the engineering and factory schedule.

Bid Requirements: So the engineering firm has spent 12 months in pulling the specifications together, then gives the OEMs 4 weeks or less to review a 1000 page specification, do a detailed cost estimate, provide P&IDs, General Arrangement drawings, Layout drawings and I even saw a spec recently where bids had to provide electrical drawings! You get the impression the engineers think the OEMs are just sitting waiting for the bid to come out with nothing else to do…. I had three projects due within 2 weeks this spring where we were required to provide this much information with our proposal. Typically the same firms are invited to bid these projects so they all have the same work load and therefore they are all going to pick and choose what to bid. In some cases, if one proposal requires a lot more work, that one may end up having the least bidders.

Too Much Competition: One thing that really pisses me off is when I help an engineer pull together a specification, estimate electrical loads, prepare drawings to help him with building sizing etc, do iterations on all of this, then the final bid spec comes out and he has listed every possible competitor, including some known to provide inferior, low cost equipment… So you gained no benefit from helping the engineer and to win the project you will have to be at a low margin with no way to recoup the significant engineering work already provided. This is not always what happens and there are many cases where your assistance is rewarded by a specification that somehow gives you an advantage in the bidding process.

Commercial Terms: OEMs all have different levels of risk tolerance, financial resources, insurance coverage, etc. Bigger public firms have deeper pockets and wider insurance coverage and more readily accessible financial data but also have large teams of lawyers which will not budge on some T&Cs. Larger bureaucratic firms may also not be able to meet tight schedules. Smaller firms and private firms may not be willing to share financial data and not be able to do every project that is bidding due to more limited resources but they can be a lot more flexible on T&Cs and if work load is light, can deliver on tighter schedules.

How do you ensure a competitive bid?
In summary, engineers and owners have to realize that there are many other projects bidding and OEMs do not have unlimited engineering resources to bid everything that hits the street as well as do submittals and build equipment they already have orders for. As an OEM, you are better to focus on a few bids and do them well and win some of them rather than try bid everything and win nothing…

So how do engineers ensure they get as many good quality bids as possible? First of all, I suggest giving advanced notice (say a month) when a bid will be advertised so the OEM can perhaps get a head start on some of the proposal requirements and costing based on draft specs they have reviewed. During the spec review process, I would also not only show the equipment specs, but get feedback on the commercial terms and information required to be submitted with the bid. Often this information is not shared prior to the bid, but it can help flush out concerns of OEMs that may prevent them from bidding so these can either be addressed, or you accept you won’t have as many bidders in advance.

Many times when I have asked for an extension of the bid date the engineer has said it is not possible due the tight schedule to deliver the project. It seems stupid to me that the engineer spent so much time agonizing over every detail of the specs for a year, often in a vacuum, and then gives the OEMs a fixed 3-4 week schedule to bid with no flexibility – it would make a lot more sense to leave some slack in the bid schedule to give OEMs more time if needed and ensure more bids and better quality bids!

2017 AWWA/AMTA Membrane Technology Conference Wrap

No major highlights but still worth attending

It was mentioned to me at the Membrane Technology Conference in Long Beach last month that I should write shorter posts, but do them more frequently, so I am going to give that a try. One thing that stood out to me at this year’s MTC is that nothing really stood out… The attendance was good, the number of exhibitors was typical and the technical program was very interesting but nothing jumped out at me as an exciting new development or trend.

There were certainly a lot of presentations on the use of membranes in wastewater reuse applications, particularly in California where the drought has driven the need for alternative water sources and in the past few years this has probably been the biggest growth areas for membranes. But with a lot of recent rain in California, will the reuse projects start to dry up? Along the same lines, there was interesting discussion on getting pathogen log removal credits for MBRs which could simplify the treatment trains required for direct potable reuse – see my post from the 2016 WateReuse Symposium for more details on this topic.

I didn’t get much time to walk the exhibit hall floor but I didn’t see any new players in the market and nothing caught my eye as being ground breaking. A few companies who have exhibited in previous years just chose to just walk the floor this year. Lanxess looks to be making a bigger push into the membrane market with the largest booth this year and IDE had a lot of exposure as the major sponsor as they look to become a major player in the US reuse and desalination market.

Not that I thought the show was not worth attending. Quite the opposite. With a lot of big projects bidding or about to bid and the owners and engineers for these projects attending and some presenting, there was a lot of valuable information to be gleaned and business to be done.  I think the venue this year wasn’t as conducive to after show networking as other years with delegates split between a number of hotels. But if you work in the membrane field it was still a show you could not afford to miss.