Why It Takes Two Years to Close a Deal With a Municipal Utility

I once asked a utility procurement director how long the average technology purchase took from initial awareness to signed contract. He thought about it for a moment and said: “If everything goes well? About two years. If it doesn’t, and it usually doesn’t, longer.”

Two years. For a technology that the utility had already decided it wanted.

That timeline is not an accident, and it is not dysfunction. It is the product of a procurement system designed to serve a very specific set of values: public accountability, financial stewardship, equity, and risk minimization. Understanding why that system exists the way it does is the first step to working with it, rather than against it.

Why utilities buy differently than companies

A private company that wants to purchase new software can, in principle, make that decision in a week. The procurement authority sits with an executive, the budget is discretionary, and the main constraint is whether the economics make sense.

None of that applies to a municipal water utility.

A utility’s money is public money. Its purchasing decisions are subject to public records laws, board oversight, and in many cases state procurement regulations that govern everything from how bids are solicited to how contracts are awarded. The people making these decisions are accountable not to shareholders but to ratepayers and elected officials, a constituency that is much harder to satisfy and much quicker to take notice when something goes wrong.

This accountability structure shapes every aspect of how utilities buy. It explains why procurement processes are formal and documented. It explains why sole-source contracts are difficult to justify and competitive bidding is the default. It explains why the person you are meeting with (the operations manager, the technology director, the engineer) is rarely the person who will ultimately approve the purchase.

It also explains why risk tolerance is low. A private company that buys the wrong software wastes budget and fires the person who made the call. A utility that makes a bad procurement decision may face ratepayer backlash, board scrutiny, and newspaper coverage. The asymmetry of consequences makes caution rational.

The structure of the decision

Most technology purchases at a municipal utility involve at least three distinct layers of decision-making, and understanding each of them is important.

The technical champion. This is usually the person you meet first: an operations manager, an engineer, a technology director. They are evaluating whether your product solves the problem they have. They do not have budget authority, but they have enormous influence over what gets purchased, because nothing gets purchased that does not have their endorsement. Building this relationship is necessary but not sufficient.

The organizational decision-makers. Above the technical champion is a layer of organizational leadership (a director of operations, a general manager, a chief financial officer) whose concerns are broader. They are thinking about implementation risk, total cost of ownership, vendor stability, and how this purchase fits into the utility’s capital plan. They often never see a demo. They rely on the technical champion’s recommendation, filtered through their own risk assessment.

The governing board. Most capital expenditures above a certain threshold, often $25,000 to $100,000 depending on the utility, require board approval. The board is typically made up of elected officials or political appointees. They are not technology experts. They are looking for reassurance that the purchase is prudent, competitively procured, and aligned with the utility’s strategic plan. A clean staff recommendation with documented competitive process makes board approval straightforward. Anything that looks irregular is a problem.

Selling to a utility means building support at all three layers, in sequence. The technical champion can open doors, but they cannot close deals without organizational backing. Organizational leadership will not take a risk the board will reject. The board will not approve a purchase without a clean procurement record.

The procurement process in practice

Most formal procurement processes at utilities follow a recognizable sequence.

It begins with a needs assessment and budget request. The technical champion identifies a problem and makes the case internally for addressing it. This often involves a formal justification document, a preliminary cost estimate, and alignment with the utility’s capital or operating plan. This step can take months, and it often happens before any vendor is formally involved.

If the budget request is approved, the utility may issue a Request for Information (RFI): an informal market survey to understand what solutions exist and what they cost. RFIs are an excellent opportunity for vendors. They are low-stakes for the utility, and responding thoughtfully is a way to educate the technical champion and establish credibility before the formal process begins.

The formal procurement typically begins with a Request for Proposals (RFP) or an Invitation to Bid (ITB). An RFP is used when the utility is buying a solution to a defined problem and wants to evaluate different approaches. An ITB is used when the specifications are fixed and the decision is primarily on price. For technology purchases, RFPs are more common.

The RFP process has formal timelines, often mandated by state law. There are deadlines for submitting questions, periods for the utility to respond, submission deadlines, and evaluation timelines. Missing a deadline disqualifies you. Failing to follow the format specified in the RFP can result in rejection. This is not bureaucracy for its own sake; it is the documentation mechanism that makes the award defensible if a losing bidder challenges it.

Evaluation of proposals is typically done by a committee that includes the technical champion, other relevant staff, and sometimes external reviewers. Proposals are scored against defined criteria, often a combination of technical approach, qualifications, references, and price. The committee’s recommendation goes to organizational leadership and ultimately to the board for approval.

What this means for how you sell

The formal procurement process is the end of the sale, not the beginning. For a tactical breakdown of how to navigate the selling side, see how to sell to water utilities. By the time an RFP is issued, the utility has usually identified the problem, secured the budget, and formed a strong view of what they want. The vendor who wins the RFP most often is the vendor who was present and helpful during the months and years before it was written.

This is the central insight that most technology companies entering the water market miss. They optimize for responding to RFPs — hiring proposal writers, building RFP response templates, tracking solicitation databases. That is table stakes. It is not a strategy.

The strategy is to be the company that shaped what the RFP asks for. That means being present when utilities are doing their needs assessments. It means providing useful technical information during the RFI phase. It means having relationships with the technical champions who will influence the specifications. It means publishing research and speaking at conferences that utility staff attend, not as marketing but as genuine contribution to the knowledge of the sector.

It also means understanding the budget cycle. Utilities plan their capital and operating budgets on annual cycles, often with multi-year capital improvement plans updated every three to five years. If a purchase is not in the plan, it is very difficult to get approved mid-cycle. Knowing when a utility’s budget process happens, and ensuring your solution is on the radar before that process begins, can make a two-year difference in your sales timeline.

The relationships that move deals

Every utility procurement, no matter how formal, is influenced by informal relationships. The engineer who attended your webinar and found it useful. The operations manager who heard you speak at a conference and asked you a question afterward. The utility director who was referred to you by someone they trust.

These relationships do not bypass the procurement process; nothing does, nor should it. But they determine whether you get a fair hearing, whether your proposal is evaluated with genuine interest, and whether the internal champion who likes your product will go to bat for you when it matters.

The most effective way to build these relationships is to be genuinely useful before you ask for anything. Publish technical content that helps utilities make better decisions. Participate in industry working groups. Be honest in your conversations about what your product does and does not do. Refer people to other resources when you are not the right fit.

Utilities have long memories. A vendor who wasted their time with a bad fit leaves an impression that outlasts the conversation. A vendor who was honest, helpful, and technically credible gets remembered, and called when the need they can actually address comes up.

What patience actually looks like

The water utility market rewards patience in a specific way. Once you are in a pilot, the question becomes how to convert it to a contract, a separate challenge worth understanding in advance. The sales cycles are long, but the relationships, once established, are durable. Utilities are not churning vendors every year. When they find a partner they trust, they tend to stay.

The companies that build sustainable businesses in this market are the ones that invest in relationships before they invest in pipelines, and that understand the difference between a procurement timeline and a relationship timeline. The procurement takes two years. The relationship that makes the procurement possible takes longer.

That is a genuine competitive advantage for the companies willing to do the work. Most vendors are not.

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Adam Tank is the founder of HydroKnowledge. He co-founded two VC-backed water technology companies and has spent two decades navigating municipal procurement on both the vendor and advisor side. HydroKnowledge helps water technology companies build go-to-market strategies that work in this market. Get in touch to talk about yours.