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Frankly I'm not sure where the scam has a greater effect: at the estimate or the implementation. Probably a little bit of each, of course, but I think intention
by rhizome 8y ago
Frankly I'm not sure where the scam has a greater effect: at the estimate or the implementation. Probably a little bit of each, of course, but I think intentionally deflated estimates are the worse crime because they are the ideas upon which reality is built. That is, construction and production costs can be renegotiated, clawed back, or otherwise affected by things people can actually do, while estimates are made-up, set in stone, then used to calibrate everything else down the line. This process is not a great human achievement.
- Gpetrium 8y agoTo be fair, a company doesn't need to be doing a scam to fall outside the expected budget. There are many causes for budget fluctuation, for example: Inflation rates, wage changes, cost of materials, disruptions, operational errors, overtime, change requests, etc. Besides, it may not necessarily be a scam in some cases since all parties expect the cost to increase, it becomes a matter of how much of variance is acceptable to stakeholders. Another problem in public policy is that a lot of major infrastructure/work would never be implemented if the public knew the end price tag at the start.
- rhizome 8y agoThe politics of project cost are immaterial and only assuage egos. The fact appears to be that lowest-cost bidding invites this course of events. Contractors simply lie to get the gig.