Despite Lawsuit, MMSD Picks New Private Operator

Milwaukee Metropolitan Sewerage District (MMSD) Headquarters, 260 W. Seeboth St. Photo taken Jun 8, 2026 by Graham Kilmer.

The Milwaukee Metropolitan Sewerage District Commission (MMSD) approved a new wastewater treatment operator for the first time in nearly two decades.

The commission voted to award a new 10-year operations contract to Jacobs Solutions, a Dallas-based engineering services firm, which was competing for the contract against Veolia Water Milwaukee. Veolia, part of a French transnational corporation, has operated the district’s two sewage treatment plants since 2008.

Jacobs is a massive engineering services firm with approximately 55,000 employees across 40 countries. The next 10-year contract is valued at approximately $700 million. The current operator, Veolia, has previously noted that MMSD’s operation is the largest private operations and management contract in the United States.

Both bidders have proven controversial options for the district.

In April, Common Ground launched a campaign calling for a third-party audit of Veolia’s operations, alleging mismanagement of the sewerage plants. In June, the commission approved an audit.

Jacobs has faced criticism for contracting with the data analytics and artificial intelligence firm Palantir, which also provides services for U.S. Immigration and Customs Enforcement and whose co-founders include the right-wing billionaire Peter Thiel.

Jacobs’ bid received initial approval in August from an ad hoc committee of former MMSD commissioners, largely due to its pricing for maintenance and labor costs. Veolia responded to the ad-hoc committee’s selection of Jacobs by filing a lawsuit in federal court, alleging MMSD did not follow its own procurement rules, unfairly favored Jacobs’ lower bid and allowed the community organization Common Ground to manipulate the contracting process.

The commission voted unanimously to confirm the committee’s recommendation, authorizing MMSD staff to finalize an agreement with the firm, but commissioners questioned the veracity of the firm’s bid, which came in $54 million lower than Veolia’s, wondering whether it was too good to be true.

Jacobs agreed to eliminate Palantir from its contract bid. Chairman and CEO Bob Pragada said the company started using Palantir’s technology in 2022 because the company offered superior data analytics and AI models. Today, Palantir is no longer far ahead of its competition and Jacobs has more options for these services, Pragada said.

Pragada and Kevin Dahl, vice president of operations for the U.S. and Canada, also faced questions about price estimates in their bid and their plans for the sewerage district’s unionized labor force.

“I want to be sure that we’re not getting hit with extra charge after extra charge after extra charge,” Ald. Mark Chambers, Jr. said. 

Jacobs’ ability to save clients money is driven by “efficiencies,” Pragada said. Jacobs is “confident” in its approach to sewer cleaning — one area where the Jacobs and Veolia bids diverged, Dahl said. And in response to questioning by Commissioner JoAnna Bautch, Dahl said Jacobs is confident in its bid pricing, saying the long solicitation period “significantly reduced” the firm’s need to rely on assumptions, or estimates, when developing a proposal.

“With regards to our proposal, we stand behind those elements and those commitments that we put in our proposal,” Pragada said.

The contract is expected to be flexible and variable from year to year due to a new maintenance management process that gives MMSD authority and the ability to negotiate price on all maintenance needs at the plants, MMSD Executive Director Kevin Shafer told the commission.

The Jacobs bid also faced scrutiny for its labor cost estimates. Part of the cost savings comes from Jacobs bringing sewer cleaning work “in-house,” said MMSD Commission and LIUNA Local 113 Business Agent José Ramón Ramírez. Currently, Veolia does not have an agreement with the union workers — represented by LIUNA 113 — who perform the work, but instead subcontracts the work to companies that have labor agreements. Sewer cleaning is “jurisdictional work” for LIUNA 113, Ramírez said.

“I just want to make clear that part of that $54 million savings is not being made on the backs of the members of Labor’s Local 113,” Ramirez said.

Dahl said savings would not come at the expense of union labor. “We’re open to discussions on how that all gets worked out,” he said.

Jacobs provided the commission with letters “with commitments both to us and to all the union leadership who runs the plants,” said Commission Chair Corey Zetts, adding that the commission needs to make sure Jacobs sticks to its assurances regarding the union workforce.

Before the final vote, Commissioner Ald. Milele A. Coggs, a long-serving member of the Milwaukee Common Council, expressed lingering skepticism about the Jacobs bid.

“In my 18 years of service, I’ve never seen a gap so big between competitive bids,” Coggs said. “And I know it’s been explained to us… But it’s still in the back of my head that it’s something that we don’t know, and maybe nobody knows right now, that’s driving that huge gap.”

The new contract will not take effect until 2028, and MMSD has agreed not to sign a new agreement until Veolia’s federal lawsuit has been resolved.

Veolia Responds to Commission Vote

“Veolia is disappointed with things today, but unfortunately not surprised,” said Adam Lisberg, senior vice president for external communications. “We have been warning the district since the spring that they were taking steps that were not following the established competitive rules, placing Veolia at a disadvantage, and that’s exactly what’s come to pass.”

With its lawsuit filed Sept. 11, Veolia is asking a federal court to order MMSD to restart the competitive bidding process.