Establishing contract between PE's

As we know that PE are supported by private and public firms in their day to day tasks. There is likelihood of PE to contract various services such utilities like water, electricity and the like to be contracted to public owned city or municipal water services. In our country you could find most of utility companies are PE’s henceforth one PE require to make a new installation for water services for example LGA want to connect water services to new constructed government schools. When LGA contact water utility company are required to pay in fully before implementation of the services since utility company is among non-profit making companies hence they cannot set aside funds to implement project like this one before being paid so as to have funds to implement the same

Can you advice what is contractual obligation for utility company against such project and PE on such scenario? As far as contract for procurement is concern and given the fact all water authority have exclusive rights