Water Utilities Suppt^ Chain
Challenges and Case Studies:

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NORTHEAST/MERRIMACK VALLEY CHEMICAL CONSORTIUM

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Northeast/Merrimack Valley
Chemical Consortium

The Northeast/Merrimack Valley Chemical Consortium
is a group of over 70 water and wastewater
utilities joined together to help negotiate best
possible prices with water treatment chemical and
laboratory supply vendors through bulk purchasing.
The consortium also streamlines purchasing
procedures for all its members, which includes
utilities from Massachusetts and New Hampshire.

The consortium's role in bulk purchasing has been
beneficial since its creation in the late 1990's but has
been even more helpful to its members during the
COVID-19 pandemic where utilities encountered
various supply chain challenges brought on by
global shortages. The Acton Water District (MA)
ran into difficulties procuring citric acid. The City
of Concord (NH) received a force majeure notice
from its C02 supplier. The Town of Salem Utilities
(NH) was having issues with its ammonium sulfate
deliveries. The City of Peabody (MA) began to
run out of sodium fluoride. However, with the
established network of member utilities through
the consortium, these challenges were addressed
more effectively.

Northeast/Merrimack Valley Chemical Consortium
utilities highly value the consortium and its
membership. Most notably, the consortium provides
group buying power for its members that may have
previously purchased supplies on an as-needed

Northeast/Merrimack Valley

Chemical Consortium	^

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basis. For example, one consortium member believes
it saves up to $40,000 per year by participating in
the consortium. In addition to the value of group
buying power and the ability to be a priority customer
instead of a "spot" buyer, the consortium has value
for utilities in several other ways:

1. The consortium has a streamlined procurement
process, in many cases simpler than municipal
purchasing processes. Procurement also goes
through an annual bidding process, resulting
in the best costs. This differs from many local
and state bidding processes that are on a two-,
three- or even five-year cycle which can result in
higher prices as vendors must predict changing
market conditions over time. The consortium is
considering moving to a six-month cycle based
on current market conditions.

Why Coordinate with Local
Utilities?

'Cooperation Breeds	

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2. The consortium also provides the opportunity for more reliable delivery - vendors can schedule a single
truck to spend an entire day delivering to consortium members rather than having to wait to add a
single utility's small delivery to a large delivery for a client such as a beverage producer. This benefit has
been extremely valuable when combatting truck and driver shortages.

How does the consortium work?

Typically, one utility member will serve as the host or point of contact for the consortium, and
another volunteer will serve as the Liaison/Bidding Agent. This agent develops the bid package,
manages the consortium's website where all information is housed for bidding purposes,
and coordinates with vendors during the life of the contract. The agent also helps to manage
challenges as they arise, such as force majeure notices from participating suppliers.

A bid package is drafted annually that includes the treatment chemical and laboratory supplies
needed, quantities, and delivery specifications submitted by the member utilities. After all
terms are agreed upon between the consortium and responding vendors, each utility within
the consortium is then responsible for executing its own contract with the selected vendors.
The overall terms prevent utilities from pursuing vendors outside of the consortium.

3.	Members warn each other of issues in advance. Once one member utility experiences a delivery delay
or force majeure notice, that utility emails all other member utilities which results in better advance
planning by all, such as adjusting purchasing windows.

4.	The consortium also serves as a mutual aid
network when one utility is running low on
supplies. For example, the Acton Water District
(MA), running low on supplies of liquid citric acid,
knew that the Littleton Electric Light & Water
Departments (MA), another consortium member,
used granular citric acid. Littleton was willing to
split its most recent delivery of granular citric
acid with Acton. At that point, Acton purchased a
mixer, a tank, and a transfer pump so that it could
create the liquid citric acid solution needed for
the utility's treatment process by mixing both
water and the borrowed granular citric acid.

5.	Consortium membership also means easy
access to a network of other water operators and
an exchange of information on a variety of topics,
not just chemicals and supplies. Members have
discussed salaries and cross connection control
programs among other far-reaching topics that
affect utility operations. Pre-COVID, the group
met in person regularly at different member
utilities to swap ideas and advice.

These advantages make each member utility more
resilient in the face of hazards, including chemical
challenges.

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Lessons Learned

In addition to the membership advantages above,
consortium members are also instituting individual
operational changes to better combat supply chain
vulnerabilities:

•	Turning to private sector entities who rely
on water services for their own operations to
share their chemicals. For example, with C02,
this includes a chocolate factory and beverage
producers.

•	Identifying substitute chemicals as possible in
consultation with state regulatory agencies,

such as a diluted hydrochloric acid solution
instead of citric acid.

Being flexible on when deliveries will be
accepted; at this point, most of the utilities will
take a delivery at any time and date.

Increasing on-site storage for both liquid and
granular chemicals. For example, the City of
Peabody (MA) now makes sure to stockpile extra
sodium fluoride when it can. In cases where
liquid chemical storage cannot be increased,
members are ordering these chemicals much
earlier than before (sometimes four to five weeks
in advance versus one to two weeks).

Striking deals with vendors on payments As

treatment chemical costs have soared, some
utilities are using payment plans to help spread
purchasing costs over a longer time which helps
with budgeting.

Treatment chemical shortages and other critical supply shortages can be unforeseen and occur with little
notice. While no utility can predict future global events and the resultant supply chain disruptions, joining
together to pool resources and to help each other can only make utilities more resilient. The Northeast/
Merrimack Valley Chemical Consortium proves that the concept works.

Additional Resources

You can find more information on using supply
chain management best practices and preparing
for supply chain challenges at https://www.eDa.aov/
waterutilitvresDonse/water-and-wastewater-sector
suDPlv-chain-resilience.

Office of Water (4608T)

EPA 817-F22-003

July 2022


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