MANAGE YOUR SERVICE PROVIDERS AND SAVE BIG BUCKS IN THE PROCESS (A CASE STUDY OF ONE FACILITY THAT SAVED MORE THAN $200,000 PER YEAR)

摘要

Does outsourcing operations and maintenance services to a service contractorrnalways cut costs and save the rate payer money? Not necessarily! In certain cases,rncontracting for the operations and maintenance of your facility may even be costingrnyou more money than if you operated it yourself. The byword is to analyze an outsidernvendor's costs just as carefully as you scrutinize your internal costsrnBeginning in 1995, the Orange County Sanitation District (District) conducted arndetailed review of treatment plant operating costs to determine cost effectiveness. ThernDistrict participated in a Tri-Agency Benchmarking study with two other large districtsrnin order to compare operating costs with similar facilities. One of this study'srnconclusions was that the Orange County's cost for the production of pure oxygen gasrnfor use in secondary treatment was high. In fact, the District's costs appeared to bern30% to 40% higher than the two other agencies in the study. Those agencies userninternal personnel to operate and maintain their pure oxygen production facilities,rnwhile the District uses an outside service provider.rnRealizing that the District was not the most cost efficient in producing pure oxygen,rnDWG ASSOCIATES, specialists in oxygen wastewater technologies, was contractedrnto conduct a detailed analysis of the District's oxygen plant. Based on DWGrnASSOCIATES recommendations, the existing operating and maintenance contractrnwas re-negotiated, lowering the annual cost of oxygen production by 29%. This savesrnthe District in excess of $200,000 per year for each of the remaining 7 contract years.rnThis paper will present the approach used to reduce these costs, as well as identifyrnkey contract provisions that allow for cost reductions based on advancing technology.rnThe paper will be of interest to public and private plant operations personnel chargedrnwith minimizing plant operation and maintenance expenditures.