5 ms·

That doesn't always work out cheaper. The sanitation department here needed to replace 80 meters worth of pipes and first went to the in-house construction crew

That doesn't always work out cheaper. The sanitation department here needed to replace 80 meters worth of pipes and first went to the in-house construction crew and was quoted a cost of 250,000 SEK (~$25K USD), then shopped it around town and a contractor could do it for 80,000 SEK (~$8K USD). It usually takes longer too. They replaced a pipe in the street in front of my parents house and it took them one month to complete the job, whereas contractors typically take less than a week start to finish for that length of road.

lumost 6y ago
Those prices are almost an order of magnitude less than what we'd see in the US ( often due to upgrades etc. that accompany such projects ). Right now there isn't much incentive for multiple contractors to setup and be efficient in a given town - heavy equipment is expensive to move, so the TAM of any given construction crew is likely limited to a 1 county radius. Based on the math in this thread it's unlikely that many towns need more than 1-2 crews, and the incentive is minimal for that crew to negotiate a fair price. In the example where there is a public crew for most work the contractor always needs to underbid the public crew, and the city/town has influence on the costs of the public crew as there are no middle men and capex can be amortized over long periods. Most public projects in the US lack this "price ceiling".