To make the BBQ sauce- In a saucepan combine water, vinegar, tomato paste, mustard, brown sugar, liquid smoke, salt, onion powder, garlic powder, and paprika. Mix well and bring to a boil. Reduce heat and simmer, stirring often for about 45 to 60 minutes until the sauce is thick.
Pre-heat the oven to 300 degrees. Brush BBQ sauce over the surface of each rack of ribs. Wrap each rack tightly with aluminum foil and arrange on a baking sheet with the seam of the foil facing up. Bake for 2 – 2 ½ hours or until the meat on the ribs has pulled back from the cut ends of the bones about a ½ inch.
Pre-heat your grill to medium heat. Remove the ribs from the foil and grill them on the grill for 4 to 8 minutes on each side or until the surface of the ribs is begging to char. Brush the BBQ sauce over both sides of the ribs a few minutes before you remove them from the grill.