3 ms·

It partly has to do with the bidding process - the drive to get the lowest bid. Competent companies know the cost won't work and are unwilling to put up the su

by ww520 4y ago

It partly has to do with the bidding process - the drive to get the lowest bid. Competent companies know the cost won't work and are unwilling to put up the surety bonds to take on a project. It leaves with the boldest incompetent company to make the lowest bid who gets their foot in the door and then jack up the cost overrun later on. Often the project failed due to cost overrun or sheer incompetence. At the end the cost of doing business go up for all parties involved. I've seen transit projects with hundreds of millions budget fell apart with nothing to show at the end, and have seen a transit project that doubled the cost and tripled the schedule to get to completion, and that was a good project.

wongarsu 4y ago
Reform of the bidding process is probably the most actionable change that can be done. Even if we keep the core principle of a "lowest bidder" process, there are bound to be lessons to be learned from how other countries implement the process.
legitster 4y ago
Also, the US bidding process is long, arbitrary, and favors rent-seeking. Only a small subset of local firms will bother to play in them. The way a private company would solve the problem would be hire a bunch of experts and in-house a lot of the technical design and procurement work.
SECProto 4y ago
Where I am (a Canadian municipality) transit and other municipal-led projects have several features that tend to keep them on budget and schedule (or at least closer to it): - Unit price contracts (much easier to track growth in cost, helps to identify and mitigate issues earlier) - Vendor performance management (Contractors and consultants are given a score after project completion, shapes how bids are evaluated on future projects) - Qualified bidders (contractors and consultants are evaluated beforehand, only allowed to bid on projects if they've done something of a similar scope/content before - ties in with the point above, smaller projects will allow bidding by contractors with less history/lower scores) The system isn't perfect (since it relies on vendor history, it only works well with projects of scope and type that they do regularly - i.e. roads and sewers mainly), but it's a lot better than a simplistic "lowest bid wins"

by ww520 4y ago

wongarsu 4y ago

Reform of the bidding process is probably the most actionable change that can be done. Even if we keep the core principle of a "lowest bidder" process, there are bound to be lessons to be learned from how other countries implement the process.

legitster 4y ago

Also, the US bidding process is long, arbitrary, and favors rent-seeking. Only a small subset of local firms will bother to play in them. The way a private company would solve the problem would be hire a bunch of experts and in-house a lot of the technical design and procurement work.

SECProto 4y ago

Where I am (a Canadian municipality) transit and other municipal-led projects have several features that tend to keep them on budget and schedule (or at least closer to it): - Unit price contracts (much easier to track growth in cost, helps to identify and mitigate issues earlier) - Vendor performance management (Contractors and consultants are given a score after project completion, shapes how bids are evaluated on future projects) - Qualified bidders (contractors and consultants are evaluated beforehand, only allowed to bid on projects if they've done something of a similar scope/content before - ties in with the point above, smaller projects will allow bidding by contractors with less history/lower scores) The system isn't perfect (since it relies on vendor history, it only works well with projects of scope and type that they do regularly - i.e. roads and sewers mainly), but it's a lot better than a simplistic "lowest bid wins"