5 ms·

>This only works if the bids represent the same work, at the same quality, on the same delivery schedule, with the same feedback pathways and the same risk miti

>This only works if the bids represent the same work, at the same quality, on the same delivery schedule, with the same feedback pathways and the same risk mitigations. Why would this possibly be true? Two groups can bid on the same project with different tradeoffs. Projects are complex, and there are zillions of tradeoffs to make a competitive bid. The group offering the project then evaluates the bids, often with multiple rounds of feedback. And generally then these projects initially got to several competitors, with fewer getting follow-on work, causing them all to try really hard to deliver good work. Future projects are always worth more than current projects, so only an idiot does bad or over-cost work often. Such groups eventually don't get more work. I've worked on such bids for decades. Multiple groups bid, with a statement of work. The other side evaluates the bids. Cost plus simply allows groups, when bidding to not have to use larger multipliers to mitigate risk, since some of the risk goes to the offeror. If you were running a company, and you had two ways to bid a contract, firm fixed price vs cost plus, which do you think provides less risk to you? And how does a company account for risk? Higher prices, end of story. This is simple economics. It's why less risk results in smaller margins throughout pretty much all industries. It allows stable planning.

ClumsyPilot 4y ago
"And how does a company account for risk? Higher prices, end of story. This is simple economics." The job of the company is to manage risk of the project they are delivering, and let the ones that do it well win. What the hell is the point of private sector if the taxpayer pics up the tab every time something goes wrong? I don't know what bids you dealt with, the ones I did looked nothing klike what you describe. For any non-mundane work, that's not like, paving a street, you low-ball the bid, deliver the bare minimum the paperwork allows and then keep milking the government for improvements because what you've delivered is not good enough. If the bid is about new technology, the tradeoffs cannot be understood by non-experts, and are difficult to pinpoint even for experts. The expertiese required to access how good is the bid is the same as the expertiese needed to design the system -> if you have that expertiese on hand, you would not need to outsource the design. The process is insanely time intensive, expensive, and difficult to navigate. Not because government is inefficient, but because taht's the nature of new technology. > Future projects are always worth more than current projects, so only an idiot does bad or over-cost work often. Such groups eventually don't get more work. In UK Capita get work again and again despite fucking it up all the time

ClumsyPilot 4y ago

"And how does a company account for risk? Higher prices, end of story. This is simple economics." The job of the company is to manage risk of the project they are delivering, and let the ones that do it well win. What the hell is the point of private sector if the taxpayer pics up the tab every time something goes wrong? I don't know what bids you dealt with, the ones I did looked nothing klike what you describe. For any non-mundane work, that's not like, paving a street, you low-ball the bid, deliver the bare minimum the paperwork allows and then keep milking the government for improvements because what you've delivered is not good enough. If the bid is about new technology, the tradeoffs cannot be understood by non-experts, and are difficult to pinpoint even for experts. The expertiese required to access how good is the bid is the same as the expertiese needed to design the system -> if you have that expertiese on hand, you would not need to outsource the design. The process is insanely time intensive, expensive, and difficult to navigate. Not because government is inefficient, but because taht's the nature of new technology. > Future projects are always worth more than current projects, so only an idiot does bad or over-cost work often. Such groups eventually don't get more work. In UK Capita get work again and again despite fucking it up all the time