5 ms·

What makes you so sure "just giving the money to the school and getting them to hire local tradesmen to do the job" would work? aren't they just as corruptible

What makes you so sure "just giving the money to the school and getting them to hire local tradesmen to do the job" would work? aren't they just as corruptible as anyone? I think so, but I cannot imagine a foolproof way to just turn money into valuable structures without parasitism

hugh3 16y ago
The difference being that the school principal actually cares whether his school gets twelve new classrooms or only three, and has the time to evaluate bids on this particular project in detail. There is the potential for direct kickbacks from builder to principal, but that's relatively unlikely for various reasons.
- CWuestefeld 16y ago
  In a situation like this, where it's already been mandated that the job will be done goes a long way to taking away any incentive that the contractor might have to bargain. Only when there's a real possibility that the potential buyer might say "forget it, that's too rich for me" can a real negotiation occur. But as is it, the contractor has a distinct advantage. Of course, there are multiple contractors bidding. But they all know that the bid will be issued, and they know that they all know. With that knowledge, even absent real collusion, you can expect them to act accordingly. Pile on top of this the regulations dictating that it must be done with union labor at the prevailing wage; that ceilings must be of a given height and doorways recessed; etc. ad nauseam. This prevents the contractor from "thinking outside the box" to streamline the process with good ideas or better leverage their own skills. So we've got contractors that are hamstrung as to their approach to the project, but otherwise having the upper hand in negotiation. What do you expect to happen?
  - hugh3 16y ago
    In a situation like this, where it's already been mandated that the job will be done goes a long way to taking away any incentive that the contractor might have to bargain. Only when there's a real possibility that the potential buyer might say "forget it, that's too rich for me" can a real negotiation occur. But as is it, the contractor has a distinct advantage. I thought the suggestion was that we hand a million dollars to the principal of each school and say "here, spend this on building and renovation". (Within certain limits, of course, and with some degree of oversight, to stop 'em from doing anything truly stupid.) Pile on top of this the regulations dictating that it must be done with union labor at the prevailing wage; that ceilings must be of a given height and doorways recessed; etc. ad nauseam. This prevents the contractor from "thinking outside the box" to streamline the process with good ideas or better leverage their own skills. afaik it would currently be totally illegal in Australia for the government to dictate that any labour had to be done by union members. The last government did a pretty good job of limiting union power and I don't think the new mob have managed to regress that far yet.
    - brc 16y ago
      >afaik it would currently be totally illegal in Australia for the government to dictate that any labour had to be done by union members. The last government did a pretty good job of limiting union power and I don't think the new mob have managed to regress that far yet. The new government has actually reversed the laws back about 20 years and dismantled many of the anti-union safeguards, largely as a payback to the unions who funded the bulk of the advertising for the last election campaign. As a result, industrial action has increased by a large amount, and we're back to things like christmas strikes by postal workers and baggage handlers, and increasing amounts of violence in the construction industry. In this case, because the school construction all went to large construction companies, who all have unionised labour, it's a backhanded way of ensuring unionised labour does much of the work, though probably only in metropolitan areas. The rural construction is mostly sub-contracted out to local tradesmen.
- brc 16y ago
  You've got to remember that money is always an issue in schools, and school management generally knows how to make it stretch as far as possible. There are plenty of side-by-side comparisons, where schools had been doing separate fundraising for construction, quite apart from the government funds. The school-administered building generally comes in at 1/2 to 1/3 the cost of the government funded jobs, and is generally done by local construction firms. In this case, the principals couldnt' even say what they wanted. You were given what you got : a new canteen even if you needed another 3 classrooms. The principals and school parent committees were given very little input into the process.
- brc 16y ago
  One more thing is the distributed nature of giving it directly to schools. While you're always going to get some corruption at a principal level, there are already in-built checks and balances via school committees to see this kind of thing. If you hand out the money to 10 construction companies, having just one of those doing dodgy deals means 10% of the deals waste money. If you handed it directly to principals, you'd need a massive number of misbehaving princiapls to get the same level of waste. I know the numbers are made up, but the point is, the further down the chain the money is distributed, the less likely to waste a large percentage of the money you are. In addition, audits could be handed out at the same time to local accounting firms, to check the money was being spent correctly (ie on buildings and not sporting equipment or new cars) - further providing economic benefits to local economies.

hugh3 16y ago

The difference being that the school principal actually cares whether his school gets twelve new classrooms or only three, and has the time to evaluate bids on this particular project in detail. There is the potential for direct kickbacks from builder to principal, but that's relatively unlikely for various reasons.

CWuestefeld 16y ago
In a situation like this, where it's already been mandated that the job will be done goes a long way to taking away any incentive that the contractor might have to bargain. Only when there's a real possibility that the potential buyer might say "forget it, that's too rich for me" can a real negotiation occur. But as is it, the contractor has a distinct advantage. Of course, there are multiple contractors bidding. But they all know that the bid will be issued, and they know that they all know. With that knowledge, even absent real collusion, you can expect them to act accordingly. Pile on top of this the regulations dictating that it must be done with union labor at the prevailing wage; that ceilings must be of a given height and doorways recessed; etc. ad nauseam. This prevents the contractor from "thinking outside the box" to streamline the process with good ideas or better leverage their own skills. So we've got contractors that are hamstrung as to their approach to the project, but otherwise having the upper hand in negotiation. What do you expect to happen?
- hugh3 16y ago
  In a situation like this, where it's already been mandated that the job will be done goes a long way to taking away any incentive that the contractor might have to bargain. Only when there's a real possibility that the potential buyer might say "forget it, that's too rich for me" can a real negotiation occur. But as is it, the contractor has a distinct advantage. I thought the suggestion was that we hand a million dollars to the principal of each school and say "here, spend this on building and renovation". (Within certain limits, of course, and with some degree of oversight, to stop 'em from doing anything truly stupid.) Pile on top of this the regulations dictating that it must be done with union labor at the prevailing wage; that ceilings must be of a given height and doorways recessed; etc. ad nauseam. This prevents the contractor from "thinking outside the box" to streamline the process with good ideas or better leverage their own skills. afaik it would currently be totally illegal in Australia for the government to dictate that any labour had to be done by union members. The last government did a pretty good job of limiting union power and I don't think the new mob have managed to regress that far yet.
  - brc 16y ago
    >afaik it would currently be totally illegal in Australia for the government to dictate that any labour had to be done by union members. The last government did a pretty good job of limiting union power and I don't think the new mob have managed to regress that far yet. The new government has actually reversed the laws back about 20 years and dismantled many of the anti-union safeguards, largely as a payback to the unions who funded the bulk of the advertising for the last election campaign. As a result, industrial action has increased by a large amount, and we're back to things like christmas strikes by postal workers and baggage handlers, and increasing amounts of violence in the construction industry. In this case, because the school construction all went to large construction companies, who all have unionised labour, it's a backhanded way of ensuring unionised labour does much of the work, though probably only in metropolitan areas. The rural construction is mostly sub-contracted out to local tradesmen.
brc 16y ago
You've got to remember that money is always an issue in schools, and school management generally knows how to make it stretch as far as possible. There are plenty of side-by-side comparisons, where schools had been doing separate fundraising for construction, quite apart from the government funds. The school-administered building generally comes in at 1/2 to 1/3 the cost of the government funded jobs, and is generally done by local construction firms. In this case, the principals couldnt' even say what they wanted. You were given what you got : a new canteen even if you needed another 3 classrooms. The principals and school parent committees were given very little input into the process.
brc 16y ago
One more thing is the distributed nature of giving it directly to schools. While you're always going to get some corruption at a principal level, there are already in-built checks and balances via school committees to see this kind of thing. If you hand out the money to 10 construction companies, having just one of those doing dodgy deals means 10% of the deals waste money. If you handed it directly to principals, you'd need a massive number of misbehaving princiapls to get the same level of waste. I know the numbers are made up, but the point is, the further down the chain the money is distributed, the less likely to waste a large percentage of the money you are. In addition, audits could be handed out at the same time to local accounting firms, to check the money was being spent correctly (ie on buildings and not sporting equipment or new cars) - further providing economic benefits to local economies.