Capital Plans: Find Biddable Projects Early in the U.S. Water and Wastewater Markets

The Infrastructure Investment and Jobs Act signed last month by President Biden contains $55 billion in funding to expand access to clean drinking water, $17 billion for port infrastructure and waterways, and more than $60 billion to harden the nation’s infrastructure against floods and other events made more likely and severe by climate change.

That means companies that provide water infrastructure engineering services will have a wealth of projects to bid on — provided they know where to look for them.

Among the places they should look are the capital plans put out by municipalities, water and transit authorities, states, and federal authorities throughout the country. Consisting of capital improvement plans or programs, called CIPs, and statewide transportation improvement programs, called STIPs, these documents contain the major capital projects that hundreds of local and state government entities are planning, typically over their next four or five fiscal years.

This article helps you master your public sector market by understanding these valuable, open-source planning documents. You’ll approach and educate public agencies about your solutions BEFORE the bid is issued, when there is still time to offer value on the specifications.

What Are CIPs and STIPs?

Capital plans are put out by every government entity that uses public money to construct and maintain such things as buildings, sewer and water lines, and bridges and highways. Their issuers include municipal and county governments; regional organizations such as transit agencies and port authorities; and state departments and governments.

Basically, all agencies except for state departments of transportation that put out capital plans call them CIPs, while state DOTs call them STIPs.

CIPs are generally considered to be working blueprints for building and maintaining the publicly funded infrastructure of the entities that put them out. They identify the capital improvement projects the entities are planning to undertake, the probable sources of funding for them and how long they likely will take to complete.

The time spans that CIPs cover varies, but they’re typically from three to seven years. CIPs usually contain their issuers’ intended capital spending for the first year and their expected capital spending for the rest of the time period they cover.

The size of CIPs also varies, with small ones only containing as few as 50 pages and large ones containing as many as 5,000 pages.

A STIP is basically a type of CIP that states are federally mandated to develop in cooperation with the local and regional organizations within their borders that do transportation planning, such as Metropolitan Planning Organizations, Regional Transportation Planning Organizations, and public transit authorities.

STIPs are required to cover periods of at least 4 years and be updated at least that often. While a few states have STIPs as long as 10 years, most keep them to 4 years, as the bar chart below shows. How frequently states update their STIPs depends in part on how much work they do on their transportation infrastructure. New York, for example, last approved its most recent STIP, which covers the 2019-2023 federal fiscal years, in October 2019, but it makes information on the projects in its STIP available for download on a monthly basis.

How Can Engineering Professionals Review CIPs and STIPs?

CIPs and STIPs contain thousands of opportunities to sell engineering goods and services. The key is knowing how to navigate them.

As with most things, the best place to start is the beginning, which typically contains an overview of the CIP or STIP that includes the categories of projects listed in it; how much funding each category is slated to receive for at least the current fiscal year and often for all the years covered by the plan; and where to find the descriptions of the individual projects in each category.

As a result, someone looking for water-related projects for his or her company to bid on can usually see from looking at the first few pages of a municipality’s CIP whether the municipality is spending enough on those kinds of projects to bother reading further, and, if it is, where the descriptions of those projects are located.

For example, the City of Oxnard, California’s 2021-2026 CIP has a pie chart on page three that shows the city’s planned capital spending in six categories, including three that are water-related: seawalls; transportation & drainage; and utilities. The plan goes on to provide summaries of the spending in each category and a list of all the projects slated to receive funding. It also has a section titled, “Unfunded Capital Needs,” which summarizes some things on which Oxnard would like to spend money, including “Stormwater System Upgrades.”

CIPs put out by water authorities, of course, contain nothing but water-related projects. Still, not all the projects will be relevant to all firms, so they need to be analyzed, too. There’s an example of a project from a water entity’s CIP in the following section.

Finding relevant projects in STIPs can be much harder than finding them in CIPs because they often aren’t categorized as clearly. A lot depends on the size of the STIP and/or CIP.

What Are the “Gold Nuggets” in Capital Plans?

For several years we’ve collected CIPs and STIPs from across the country as they are issued and have converted the information into a searchable data repository that includes project descriptions, as well as the amount of funding each project is scheduled to receive, broken down by years.

We make a habit of categorizing them by business area. We have four business areas that relate to water — stormwater and flood control; water, which involves drinking water; wastewater, which involves wastewater treatment; and sewer, which involves the pipes that carry wastewater.

To give you a sense of magnitude, we’ve collected 10,000s of projects in those four business areas. The 500 largest capital plans, which contain more than 120,000 pages, have projects worth more than $100 billion in those areas that are slated to start in 2022 or 2023. Those projects present thousands of opportunities to sell large quantities of engineering products and services.

While that information is interesting, much of what CIPs and STIPs contain can be actionable for near-term sales opportunities.

For example, in the District of Columbia, the Washington Suburban Sanitary Commission is planning a huge continuation of its Large Diameter Water Pipe & Large Valve Rehabilitation Program, according to page 64 of its 2023-2028 CIP. Across the district’s more than 1,000 miles of water main ranging from 16-inches to 96-inches in diameter, there are 1,500 large diameter valves and vaults. The commission plans to spend more than $540 million on this program over the next five years.

Another large example of a combined water and wastewater market civil infrastructure project, with substantial engineering, construction, and materials elements, is in San Diego. The City of San Diego’s most recent CIP lists the Pure Water Program, which is being implemented in two phases, with funding allocations of nearly $1.5 billion. Major project elements include a 30 million gallon per day (mgd) Pure Water Facility, expansion of the existing North City Water Reclamation Plant from 30 mgd to 52 mgd, and major conveyance systems to move clean water and wastewater to operating treatment and reclamation facilities.

What Can You Do Next?

In short, don’t wait for the RFPs to be issued by public agencies. They are publishing roadmaps of their strategic plans, well in advance, so that your team can be involved early.

A cold RFP is a reactive RFP, and you’ll be miserable if you are always reacting. Study the market, using a bottom-up approach, and you’ll find biddable projects early.

You can do the review and analysis of capital plans yourself. Or, data aggregation companies offer services to make the hard work of curating this type of data easier. Either way, don’t stay in a reactive mode when a proactive approach is achievable today.