18 ms·

Consultants: the real reason it costs so much to build new subways in America

182 points by SirLJ 4y ago

alastair 4y ago
"Consultants, The real reason it costs so much to ____ in _____"
- tstrimple 4y ago
  They wouldn't have called the consultants if they hadn't tried and failed to do _____ multiple times before.
- CamperBob2 4y ago
  "Consulting: If you can't be part of the solution, there's good money to be made by prolonging the problem."
  - hackrnusr 4y ago
    Best quote in the thread. Thanks for reminding us of that important piece of wisdom.
simonw 4y ago
The most interesting thing about this article to me isn't the "spending too much on consultants" bit, it's the bit where the agencies in charge of budgets for these enormous projects no longer have staff that are capable of managing them, having outsourced that institutional capacity to consulting companies for far too long. This seems like a viciously difficult problem to solve to me. How do you hire someone for a city's transport agency who has the ability to manage a multi-billion dollar construction project? Anyone with those skills will surely be able to earn 10x more in the private sector. But without that talent in-house, even the consultants are frustrated (or at least the ones that actually want to deliver projects) because they don't get the answers they need from their customers in order to move ahead with projects.
- Retric 4y ago
  Does managing a 10 billion dollar construction project take dramatically different skills than a 100 million dollar construction project? The government doesn’t need the best of the best for this stuff they just need basic competence.
  - jolux 4y ago
    A 10 billion dollar project is 100x larger. It's definitely more difficult to manage.
    - Retric 4y ago
      Sure it’s more difficult, but the difficulty doesn’t increase linearly with budget. A 100m dollar project isn’t 100x as difficult as a 1m dollar project. I am not saying anyone can make the jump, but promotions often mean handing an order of magnitude larger projects.
      - mooseknees 4y ago
        [dead]
      - kaspern 4y ago
        I'm not sure how you can conclude that for any infrastructure project, complexity scales sublinearly. This feels true in software, but not real world matters IMO. Think of all of the politics & hard choices involved, for instance, in displacing people vs. bending over backwards to accommodate them with the California high speed rail project.
        bobthepanda 4y ago
        If anything, complexity probably increases exponentially as you have to consider ever more permutations of possible project.
        4y ago
Nifty3929 4y ago
The primary goal of the projects is to spend money on well connected government contractors and consultancies. Mission accomplished.
msy 4y ago
Part of this is a second order effect of supression of public sector wages. For a lot of highly paid specialities it's become impossible to recruit to retain real talent in the public sector when they're going to be paid a multiple in the private sector. The net result is the real wages are masked through consultancy arrangements at even higher total cost to avoid having to admit effectively paying public servents more than they're 'allowed to' and everybody loses except for the middle men raking off a profit.
readonthegoapp 4y ago
I thought the conclusion of this study was "everything (is a problem)" -- not, "(just or mostly or primarily) consultants". Governing mag said this almost four months ago -- Nov 2022: https://www.governing.com/finance/why-are-u-s-transit-projects-so-costly-this-group-is-on-the-case https://www.governing.com/finance/why-are-u-s-transit-projec... This month, the Transit Costs Project is planning to publish an overview of its findings. Among them: The United States is the sixth most expensive country in the world when it comes to building rapid rail projects. The reasons why range from the politicization of project management to the expanding role of consultants, the costs of labor, and efforts to limit disruption to normal traffic flow during construction. Six most expensive countries from most expensive: - New Zealand - Qatar - UK - Hong Kong - Singapore - US Time to build at ground-level or above ground instead of underground, and better -- just allow us to ride bikes -- boot the cars, and/or build us bike tracks, and subject terrorists to terror laws, even if they're American, white, etc. I'm in NJ at the moment -- mostly shore area but also south-central -- Middlesex, Monmouth, and Ocean counties -- no sidewalks -- it's incredible. NJ is home to legendary bike freak, Prof John Pucher ( https://bloustein.rutgers.edu/pucher/ https://bloustein.rutgers.edu/pucher/ ), but also the dreaded 'jersey barrier' ( https://en.wikipedia.org/wiki/Jersey_barrier https://en.wikipedia.org/wiki/Jersey_barrier ).
- IIAOPSW 4y ago
  Or, here's the real bold one, build underground but use cut and cover rather than deep tunnel boring machines that only a few international consortiums know how to run. 1. cut up street. 2. lay down tracks. 3. cover up with viaduct but pretend its a normal road. This is how NY originally built the subway and it has so many advantages. Can make use of any local unskilled labor. Cheaper by a lot. Stations are close to surface, not a labyrinth of escalators to hell. You won't have street level tracks cutting the town in half. Its the superior option in literally every way, but it requires making people put up with their street being in a constant state of roadwork while its built. No one has the tenacity to tell certain voters to just put up with things for the greater good anymore. Its easier to spend a billion dollars than do that!
  - lotsofpulp 4y ago
DoreenMichele 4y ago
Not all problems can be laid at the feet of consultant culture. Transit routes picked at the ballot box are bound to be worse than those drawn up by experts; transit’s role as a “job creation” bonanza doesn’t create incentives to be particularly efficient. Yeah, bad political processes are not a good way to get a big project started off on the right foot, that's for sure.
- sofixa 4y ago
  It's funny how "too much democracy" can actually legitimately be a problem. What people want might be going against what people actually need, or what serves better more people. It's a frequent thing in the US, with e.g. transit routes - something might be popular on paper, but that doesn't make it the best solution for most future users, or weird elected positions like sheriff/DA/etc. that have to make promises to get them elected instead of actually doing their job the way they're supposed to according to laws and job description, or school boards where instead of you know, actual education experts deciding what kids will study, parents meddling to ban books because "they're turning the frogs gay!!!!". Another "fun" failure mode is Switzerland, widely hailed for it's direct democracy, and it took until the 1990s for universal women suffrage to be enacted across all levels (and it literally took a federal court enforcing it, voters refused it in the last canton). Balance needs to be found, and that is not easy.
  - DoreenMichele 4y ago
    There's lots of ways political processes go bad places. Years ago, while taking college classes, I researched the Solano County rail plan. The incorporated cities got together and decided which cities would each get a stop. The military base (largest employer in the county, bringing in a billion dollars annually) had no representation. After they picked which cities would get a rail stop, then they hired a consultant to pick the best sites for each of those cities. Of course, the consultant did what they were paid to do. They aren't the best sites for the people or the county. Only one of the three really makes sense. One of them has already been built, a stop that could potentially cost them Travis AFB due to encroachment on the base. Another is planned for a protected wetland. It will likely never have much development around it and will likely sink into the marsh like Venice.
peepeepoopoo3 4y ago
ctrl+f "regulations" 0 results
- ElfinTrousers 4y ago
  [flagged]
AlbertCory 4y ago
I think the word that's missing from this is: "grifter." From dictionary.com: noun Slang. a person who operates a side show at a circus, fair, etc., especially a gambling attraction. a swindler, dishonest gambler, or the like.
- ElfinTrousers 4y ago
  Sorry, were we not supposed to be assuming that "consultant" was a synonym for "grifter" already?
  - AlbertCory 4y ago
    We were, but I'm not sure the readers were. After all, the word doesn't even appear in that article.
cperciva 4y ago
It sounds to me like a big part of the problem here is public service wage compression. Someone starts their career working in the public service on a subway project earning say $80k/year. Ten years later, they know a lot about building subways, and they're being paid $120k/year... but if they jump to the private sector, they can get $250k/year as a subway building consultant. Surprise surprise, the public sector ends up never having any in-house expertise. If you have a recurring problem of "every time we start a new project we find that everyone with relevant expertise has left", you need to pay your experts more!
- no1groyp 4y ago
  Then what’s the difference? They pay the consulting persons salary either way.
  - cperciva 4y ago
    Sure, but what the consultant gets paid is only a fraction of what the consulting company gets paid.
    - no1groyp 4y ago
      And then the ‘consulting company’ (your friendly feds) raise your taxes even more than they paid the consultant. The solution isn’t obvious
  - archgoon 4y ago
    [dead]
  - enkid 4y ago
    A consultant's incentives are not the same as a government employee's incentives.
    - Schiendelman 4y ago
      And neither of them are aligned with actually moving the most people with good quality service. You only get that from semi private entities like the various Japan Rail.
cm2187 4y ago
Consultants aren't the problem they are the symptom. Some of them deal with issues that need to be dealt with (geological studies, looking at vibrations, etc), many of them are there to help with the massive overregulation which means you need to produce a report that no species of frog or insect is going to be upset by your new infrastructure project. The more regulations, the more consultants you need to deal with them. But my understanding is that the primary source of cost overruns is rather endless appeals and the authorities changing their mind many times over the life of a project.
- bobthepanda 4y ago
  The thing is, the US has abnormally high costs even in comparison to other highly regulated countries. Germany, France, Spain and Italy all have lower costs despite the fact that you could dig a spade and hit an archeological site, and they’re also not environmental or labor pushovers either.
- mschuster91 4y ago
  > Some of them deal with issues that need to be dealt with (geological studies, looking at vibrations, etc), many of them are there to help with the massive overregulation which means you need to produce a report that no species of frog or insect is going to be upset by your new infrastructure project. The thing is, these regulations are all well-known, sometimes decades old. Here in Germany, we have "Machbarkeitsstudien" ("feasibility studies") for that reason - we first look for obvious issues before we make a final decision. Of course, sometimes stuff crops up that hasn't been foreseen (e.g. more WW2-era bombs than expected, something has not been spotted at the time of the initial study), but there is no excuse in not doing the due diligence before starting a new project. Environmental protection is often abused as a scapegoat. Where we have a massive issue is NIMBYism - citizens feel that projects have been ordered "par ordre mufti", i.e. decided without engaging the affected people, and obviously that is an incentive for those people to use all legal tools at their disposal to obstruct a project. Thankfully, since a few years it's become the norm to not do that any more and actively involve affected people and NGOs already during the planning phase or even before, so at least for future projects we can expect less destructive opposition.
- 4y ago
danhor 4y ago
Here in an accompanying blog post by one of the study authors: https://pedestrianobservations.com/2023/02/25/the-issue-of-consultants/ https://pedestrianobservations.com/2023/02/25/the-issue-of-c... They say that it's not just consultants and there are many other problems, although their overuse is a huge issue.
londons_explore 4y ago
"Speed and cost of building a new thing" is a big one of my predictors for which nations will be influential in 50 years. If you can get stuff done quickly and efficiently, then your nation will rise in influence. If you spend 30 years paying consultants to think about building a new subway line before eventually canning the idea, then in 50-100 years time the nation will end up weak and insignificant.
- londons_explore 4y ago
  Today the USA's influence is partly attributable to the high efficiency seen in the early and mid 1900's.
  - meghan_rain 4y ago
    Interesting, can you elaborate more on that?
  - TeMPOraL 4y ago
    Mentioned it elsewhere in the thread, but I wonder if this isn't a different operating regime that's possible only under very high economic growth. A country starts projects that deliver quick and absurdly high returns, allowing them to start more, larger projects for more of absurd returns - all that over couple decades, allowing the expertise to develop and remain in house, always busy, enabling delivering even larger-scale projects quickly. Eventually, the returns start being smaller and smaller, until the government starts getting cautious about starting new projects, slowing things down, leading to evaporation of expertise, increased costs, etc. Kind of like a scramjet engine, or a nuclear reactor, or I guess plenty of other advanced processes (including a technological civilization itself). You may need to boost yourself with a rocket to achieve a velocity at which a scramjet can start operating, but once you get there, you can start going much faster. But, if for some reason, you slow down below the threshold, the scramjet shuts down, and now you're going slow, and can no longer turn the scramjet back on, because you no longer have a rocket to boost you to its minimum operating point. Under this view, USA's influence is attributable to a one-off leap. Seeing another country going through it now doesn't mean they'll overtake the US in the future - instead, they might run out of steam roughly at the same point the US did.
frankreyes 4y ago
In the UK the construction of HS2 doubled in costs, https://www.bbc.co.uk/news/uk-16473296 https://www.bbc.co.uk/news/uk-16473296 Six reasons why HS2 is so expensive, https://www.bbc.co.uk/news/business-51415590 https://www.bbc.co.uk/news/business-51415590
bigbacaloa 4y ago
Corruption has been legalized and institutionalized in the US.
villgax 4y ago
Sadly there is no open source infra focus in most countries even when using tax payer money, no concept of reusing designs etc
timdiggerm 4y ago
Now do the DoD
- acuozzo 4y ago
  Shhh!
muth02446 4y ago
Just like with healthcare it seems unlikely that there is a single reason why things are so expensive in the US. There was an article in the NYTimes last week about the projected cost of the new TSMC plant in Arizona. The upshot was that the cost would be 10x compared to Taiwan and presumably TSMC has a lot of in-house expertise for doing these kinds of projects.
deleted 4y ago
[deleted]
aspergsadd 4y ago
[dead]
WeylandYutani 4y ago
This is hardly just an American thing. Everything costs more in rich countries. Dutch people are crying about housing prices. But it's a fact that they can all get 300k mortgages so prices stay high.
- jefftk 4y ago
  The US is an outlier for transit costs even among rich countries. The report this article is based on (https://transitcosts.com/Final-Report/ https://transitcosts.com/Final-Report/) uses cross-country comparisons as its main tool.
- ElfinTrousers 4y ago
  We also have expensive housing. And our healthcare system is a sick joke, pun intended.
ilikerashers 4y ago
This was a really interesting article on how consultants "jam-up" government projects and prevent in-house expertise/efficiency develop. https://www.ft.com/content/fb1254dd-a011-44cc-bde9-a434e5a09fb4 https://www.ft.com/content/fb1254dd-a011-44cc-bde9-a434e5a09...
jefftk 4y ago
This is a summary and popularization of this report from the Transit Costs Project: https://transitcosts.com/Final-Report/ https://transitcosts.com/Final-Report/ While it's not bad journalism, the original source is quite readable!
bluedino 4y ago
Wouldn't it just take someone to flip the industry over and do it privately? Something like how SpaceX is so much cheaper than NASA.
- ec109685 4y ago
  Florida showed a model that seemed to work with their high speed rail: https://catalyst.independent.org/2022/03/15/florida-company-california-brightline/ https://catalyst.independent.org/2022/03/15/florida-company-... The government provided guarantees for loans and some help building stations, but otherwise the private company drove this to completion.
nemo44x 4y ago
I think a big part of the costs is the labor conditions of today VS 120 years ago. Back then most of the workers were unskilled immigrants and they were paid about $10/hour in today's money. That wouldn't be possible today. They also worked under very dangerous conditions compared to today and although there weren't a lot of deaths (whatever that means), there were more deaths than what we would find OK today. We threw cheap, disposable people at the problem back then. Also, we had to build a whole lot less. The venting system was literally grates in the sidewalk. That's not to code today. There was also no accessibility. Again, that's not to code today. So to build anything today, there's so much more infrastructure that needs to be built making it impossible to build anything. But all it takes is a change in mindset. Treat workers like the military and have parades for them and memorials for the young men that die building. Give their families a bag of cash. Get rid of all the strict building requirements. Seriously, it would be cheaper just giving free taxi rides for life to people that need accessibility than building and maintaining the infrastructure that those people have a legal right to. We may need to be a bit more pragmatic.
lbriner 4y ago
This is not the real reason imho. We use Consultants on all large projects worldwide and even the Contractors can be paid Consultant wages. The reason that reports can't put their finger on it is that the reasons are as complex as the project and in projects of this size, there are so many differences between different ones that is very hard to draw conclusions. Must more obvious problems: 1) All non-agile projects are subject to expensive changes (even if those changes are needed/legit) 2) Almost all large projects are subject to mountains of bureaucracy (arguably some is needed), which wastes time and causes investment to be lost 3) The up-front estimate is usually at least 1 order of magnitude wrong because it is expensive to do things like soil studies, geology surveys etc. One sinkhole in the wrong place, $10M please! 4) Organisations don't scale efficiently. There is some economy of scale to a point, after which a lot of flab, whether it's specialist jobs that are paid full time for 20 hours per week or just how easy it is to slack off the job and not get noticed. The US, it seems, has some sort of unique challenges, firstly with the strength of labor unions but also their more complicated government structure just adds more people to give opinions, to obstruct, to have to sign-off finance. Good luck everyone.
- ausbah 4y ago
  when the US is by far the biggest outlier in the space of construction costs "projects being so different and so complicated so no one knows the issue" is a non-answer, that somewhat ironically, I can imagine a consultant giving. based off this article & similar ones I've seen In privy to the idea of too much government and yet too little. former meaning like you say, giving too many people an opinion in the process through things like needless environmental review. with the latter meaning when the govt does have to do a job they literally don't have the ability to do it due to underfunding. I don't believe the labor union excuse for a second bc compare to Europe where labor unions are notoriously stronger, their construction costs are much lower than here
gersh 4y ago
Could we get the US Army Corps of Engineers to manage transit projects?
- windthrown 4y ago
  In theory, anything is possible with enough funding. But this does not seem like a very efficient option especially when we already have other federal and state agencies with specific rail and transit purviews.
rm_-rf_slash 4y ago
It’s easy to blame expensive consultants that cost a lot of money instead of the burdensome regulatory and process requirements that only the expensive consultants have the extensive institutional knowledge to work through.
epups 4y ago
Person A gets hired in the public sector and acquires relevant expertise on a specific topic but earns a pittance; they are then invited to join a consultancy for 2x their wage. This person's hours now cost 8-10x as before for the government, because the consulting companies are adding a ton of overhead to it. The supposed trade-off is that over the long run (30+ years) we arguably saved money, as keeping this person staffed and paying their pension would have cost even more. One possible solution would be to have federal "consultancy" agencies for this type of project. A subway project is a one-in-a-generation thing for most cities, but not for a nation. We could also pay these federal agents handsomely, at least competitive with consultancy salaries. Each city or state would then pay for their hours to the federal government with a tiny overhead on top.
- larrik 4y ago
  Your first paragraph is actually not really what the article is about. Rather, it's more about the government deciding to "build a subway" or whatever, and then hiring consultants to figure out what the hell that even means in reality.
  - thatfunkymunki 4y ago
    I disagree, how do you think the government gets into a position where it doesn't know what the hell "build a subway" means in reality?
  - danudey 4y ago
    Those consultants need to be hired because the people with the expertise left the public sector to become those consultants, and now no one on-staff knows how to do anything.
- freedrock87 4y ago
  Its only once a life time because of the expense. You can look at cities like Montreal and Toronto which more on going large-scale projects then NYC
  - 4y ago
cratermoon 4y ago
The tired old Reagan era trope, that government is inefficient and private free markets would do better, is used to justify cutting government spending (except for the military) over and over. Then when those government agencies do terrible because they are underfunded, those failures are used by Reaganites to say, "See! Government is terrible, this agency is a waste of money, lets cut the budget." and so on until, as Grover Norquist said in 2001, "I simply want to reduce it to the size where I can drag it into the bathroom and drown it in the bathtub." Europe does so much better because they don't treat each project as a one-off. They have essentially a permanent project of subway and mass transit work. They get better at it because they do it all the time. If you want to make hard things easier, to them more often, not less often with more and bigger attempts to plan, mitigate risk, and control costs for something you don't know how to do in the first place.
- csours 4y ago
  5th Risk by Michael Lewis has a very good discussion of that trope. In brief, some politicians complain that government isn't run like a private business, and then write rules that forbid those agencies from providing services to citizens (weather, tax filing, post office services, read the book for other examples)
  - mrguyorama 4y ago
    Because it is 100% intentional and a desired outcome of those politicians.
  - cratermoon 4y ago
    I know the AccuWeather CEO, Barry Lee Myers, personally worked to try to push the NWS out of providing free weather data.
rhaway84773 4y ago
Sounds like it’s not really consultants, but rather the fact that there is no in house planning team that can actually plan things, or provide direction and guidance for the consultants to use.
zzzbra 4y ago
aka “Neoliberalism and its Discontents” That Boston only had six full-time workers working on its largest capital investment project is astounding to me. A lot of the people who claim we have too much bureaucracy, that government is the problem, and that deregulation is the answer to everything don’t seem to have any type of metric for determining what too much deregulation might look like. In fact, they don’t even seem to understand that there could be failure worse than bureaucratic inefficient past a certain point of deregulation. we might be seeing what that looks like in America right now.
heisenbit 4y ago
Sadly the gutting of OPEX for the sake of CAPEX is not limited to the public world. There ate good reasons to do projects with variable costs but that does not mean the continuing staff organizations should be absolutely prohibited from doing anything constructive.
TimPC 4y ago
I think a lot of the reason it happens is that it is no longer possible to hire for many roles in government. The CTO of the TTC was posted at $150k-$180k Canadian not too long ago. If that’s what they can pay the top technical role you can imagine how much lower the non-leadership technical roles are getting. Do you wait for the $90k/year post that has been open for four years to somehow fill or do you use a consultant at a premium you’re allowed to spend knowing your consulting firm can pay what is actually needed to hire someone?
YesThatTom2 4y ago
I highly recommend this mini-book;: “A Leader's Guide to Working with Consultants" https://myresources.itrevolution.com/id006657127/A-Leaders-Guide-to-Working-with-Consultants https://myresources.itrevolution.com/id006657127/A-Leaders-G... You’ll learn a model for understanding the trap and how to avoid it.
thrownawaylzr 4y ago
imho consulting firms are more the problem than consultants. consultants good: get expeirence from many companies. dont have to pay them when you don't need them. personal reputation and future career always on the line. consulting firms bad: most staff are newbies and have no experience of generating value, only extracting it. when the staff in a consulting firm get good, they leave the firm if they actually want to deliver value (same as govt. workers leave for better pay). consulting firms main goals are to steal your IP and skills, extract as much money as possible and confuse internal staff with jargon to dazzle them. why are there consulting firms on big projects? honestly probably because of a few things lobbying and the ceo playing golf with politicians etc. because of a desire to have a small number of contacts to manage all consultants under umbrellas and because they have may well polished slide decks and put on a big show at sales pitch time, referring to all the work that former employees have done as though anyone in their company can do that. there is no cross check or comparison in these "white paper" e.g. how many times did you fail before it worked, how much did other solutions cost etc. the solution imho is simple.. skip the consulting firms and hire individual consultants when needed. makes sure you have someone on staff, who can send consultants back or a mechanism for doing it that is similar. never accept anyone without independent industry experience from a consulting firm.. they must have actually internally delivered measurable value within a company and been able to provide it.. without an understanding of how your work directly delivers value to the customer then you are not qualified to be a consultant If you only have one employee then they must have two things: vision and the ability to cut through IT bullshit. train up internal staff, they will leave for industry but they are more likely to care if the outcomes are crappy. force consultants to work "two in a box" so their knowledge is always being transferred to you. LISTEN TO YOUR SMEs FFS! consultants are all about appealing to authority, ensure your SME team can talk end-to-end with each other on all processes and make damn sure that leadership has their ear.. However i do wonder if the real underlying cause is that there is a critical mass of decision makers that literally don't care how much government money they waste, so long as its wasted on them.

182 points by SirLJ 4y ago

alastair 4y ago

"Consultants, The real reason it costs so much to ____ in _____"

tstrimple 4y ago
They wouldn't have called the consultants if they hadn't tried and failed to do _____ multiple times before.
CamperBob2 4y ago
"Consulting: If you can't be part of the solution, there's good money to be made by prolonging the problem."
- hackrnusr 4y ago
  Best quote in the thread. Thanks for reminding us of that important piece of wisdom.

simonw 4y ago

The most interesting thing about this article to me isn't the "spending too much on consultants" bit, it's the bit where the agencies in charge of budgets for these enormous projects no longer have staff that are capable of managing them, having outsourced that institutional capacity to consulting companies for far too long. This seems like a viciously difficult problem to solve to me. How do you hire someone for a city's transport agency who has the ability to manage a multi-billion dollar construction project? Anyone with those skills will surely be able to earn 10x more in the private sector. But without that talent in-house, even the consultants are frustrated (or at least the ones that actually want to deliver projects) because they don't get the answers they need from their customers in order to move ahead with projects.

Retric 4y ago
Does managing a 10 billion dollar construction project take dramatically different skills than a 100 million dollar construction project? The government doesn’t need the best of the best for this stuff they just need basic competence.
- jolux 4y ago
  A 10 billion dollar project is 100x larger. It's definitely more difficult to manage.
  - Retric 4y ago
    Sure it’s more difficult, but the difficulty doesn’t increase linearly with budget. A 100m dollar project isn’t 100x as difficult as a 1m dollar project. I am not saying anyone can make the jump, but promotions often mean handing an order of magnitude larger projects.
    - mooseknees 4y ago
      [dead]
    - kaspern 4y ago
      I'm not sure how you can conclude that for any infrastructure project, complexity scales sublinearly. This feels true in software, but not real world matters IMO. Think of all of the politics & hard choices involved, for instance, in displacing people vs. bending over backwards to accommodate them with the California high speed rail project.
      - bobthepanda 4y ago
        If anything, complexity probably increases exponentially as you have to consider ever more permutations of possible project.
        4y ago

Nifty3929 4y ago

The primary goal of the projects is to spend money on well connected government contractors and consultancies. Mission accomplished.

msy 4y ago

Part of this is a second order effect of supression of public sector wages. For a lot of highly paid specialities it's become impossible to recruit to retain real talent in the public sector when they're going to be paid a multiple in the private sector. The net result is the real wages are masked through consultancy arrangements at even higher total cost to avoid having to admit effectively paying public servents more than they're 'allowed to' and everybody loses except for the middle men raking off a profit.

readonthegoapp 4y ago

I thought the conclusion of this study was "everything (is a problem)" -- not, "(just or mostly or primarily) consultants". Governing mag said this almost four months ago -- Nov 2022: https://www.governing.com/finance/why-are-u-s-transit-projects-so-costly-this-group-is-on-the-case https://www.governing.com/finance/why-are-u-s-transit-projec... This month, the Transit Costs Project is planning to publish an overview of its findings. Among them: The United States is the sixth most expensive country in the world when it comes to building rapid rail projects. The reasons why range from the politicization of project management to the expanding role of consultants, the costs of labor, and efforts to limit disruption to normal traffic flow during construction. Six most expensive countries from most expensive: - New Zealand - Qatar - UK - Hong Kong - Singapore - US Time to build at ground-level or above ground instead of underground, and better -- just allow us to ride bikes -- boot the cars, and/or build us bike tracks, and subject terrorists to terror laws, even if they're American, white, etc. I'm in NJ at the moment -- mostly shore area but also south-central -- Middlesex, Monmouth, and Ocean counties -- no sidewalks -- it's incredible. NJ is home to legendary bike freak, Prof John Pucher ( https://bloustein.rutgers.edu/pucher/ https://bloustein.rutgers.edu/pucher/ ), but also the dreaded 'jersey barrier' ( https://en.wikipedia.org/wiki/Jersey_barrier https://en.wikipedia.org/wiki/Jersey_barrier ).

IIAOPSW 4y ago
Or, here's the real bold one, build underground but use cut and cover rather than deep tunnel boring machines that only a few international consortiums know how to run. 1. cut up street. 2. lay down tracks. 3. cover up with viaduct but pretend its a normal road. This is how NY originally built the subway and it has so many advantages. Can make use of any local unskilled labor. Cheaper by a lot. Stations are close to surface, not a labyrinth of escalators to hell. You won't have street level tracks cutting the town in half. Its the superior option in literally every way, but it requires making people put up with their street being in a constant state of roadwork while its built. No one has the tenacity to tell certain voters to just put up with things for the greater good anymore. Its easier to spend a billion dollars than do that!
- lotsofpulp 4y ago

DoreenMichele 4y ago

Not all problems can be laid at the feet of consultant culture. Transit routes picked at the ballot box are bound to be worse than those drawn up by experts; transit’s role as a “job creation” bonanza doesn’t create incentives to be particularly efficient. Yeah, bad political processes are not a good way to get a big project started off on the right foot, that's for sure.

sofixa 4y ago
It's funny how "too much democracy" can actually legitimately be a problem. What people want might be going against what people actually need, or what serves better more people. It's a frequent thing in the US, with e.g. transit routes - something might be popular on paper, but that doesn't make it the best solution for most future users, or weird elected positions like sheriff/DA/etc. that have to make promises to get them elected instead of actually doing their job the way they're supposed to according to laws and job description, or school boards where instead of you know, actual education experts deciding what kids will study, parents meddling to ban books because "they're turning the frogs gay!!!!". Another "fun" failure mode is Switzerland, widely hailed for it's direct democracy, and it took until the 1990s for universal women suffrage to be enacted across all levels (and it literally took a federal court enforcing it, voters refused it in the last canton). Balance needs to be found, and that is not easy.
- DoreenMichele 4y ago
  There's lots of ways political processes go bad places. Years ago, while taking college classes, I researched the Solano County rail plan. The incorporated cities got together and decided which cities would each get a stop. The military base (largest employer in the county, bringing in a billion dollars annually) had no representation. After they picked which cities would get a rail stop, then they hired a consultant to pick the best sites for each of those cities. Of course, the consultant did what they were paid to do. They aren't the best sites for the people or the county. Only one of the three really makes sense. One of them has already been built, a stop that could potentially cost them Travis AFB due to encroachment on the base. Another is planned for a protected wetland. It will likely never have much development around it and will likely sink into the marsh like Venice.

peepeepoopoo3 4y ago

ctrl+f "regulations" 0 results

ElfinTrousers 4y ago
[flagged]

AlbertCory 4y ago

I think the word that's missing from this is: "grifter." From dictionary.com: noun Slang. a person who operates a side show at a circus, fair, etc., especially a gambling attraction. a swindler, dishonest gambler, or the like.

ElfinTrousers 4y ago
Sorry, were we not supposed to be assuming that "consultant" was a synonym for "grifter" already?
- AlbertCory 4y ago
  We were, but I'm not sure the readers were. After all, the word doesn't even appear in that article.

cperciva 4y ago

It sounds to me like a big part of the problem here is public service wage compression. Someone starts their career working in the public service on a subway project earning say $80k/year. Ten years later, they know a lot about building subways, and they're being paid $120k/year... but if they jump to the private sector, they can get $250k/year as a subway building consultant. Surprise surprise, the public sector ends up never having any in-house expertise. If you have a recurring problem of "every time we start a new project we find that everyone with relevant expertise has left", you need to pay your experts more!

no1groyp 4y ago
Then what’s the difference? They pay the consulting persons salary either way.
- cperciva 4y ago
  Sure, but what the consultant gets paid is only a fraction of what the consulting company gets paid.
  - no1groyp 4y ago
    And then the ‘consulting company’ (your friendly feds) raise your taxes even more than they paid the consultant. The solution isn’t obvious
- archgoon 4y ago
  [dead]
- enkid 4y ago
  A consultant's incentives are not the same as a government employee's incentives.
  - Schiendelman 4y ago
    And neither of them are aligned with actually moving the most people with good quality service. You only get that from semi private entities like the various Japan Rail.

cm2187 4y ago

Consultants aren't the problem they are the symptom. Some of them deal with issues that need to be dealt with (geological studies, looking at vibrations, etc), many of them are there to help with the massive overregulation which means you need to produce a report that no species of frog or insect is going to be upset by your new infrastructure project. The more regulations, the more consultants you need to deal with them. But my understanding is that the primary source of cost overruns is rather endless appeals and the authorities changing their mind many times over the life of a project.

bobthepanda 4y ago
The thing is, the US has abnormally high costs even in comparison to other highly regulated countries. Germany, France, Spain and Italy all have lower costs despite the fact that you could dig a spade and hit an archeological site, and they’re also not environmental or labor pushovers either.
mschuster91 4y ago
> Some of them deal with issues that need to be dealt with (geological studies, looking at vibrations, etc), many of them are there to help with the massive overregulation which means you need to produce a report that no species of frog or insect is going to be upset by your new infrastructure project. The thing is, these regulations are all well-known, sometimes decades old. Here in Germany, we have "Machbarkeitsstudien" ("feasibility studies") for that reason - we first look for obvious issues before we make a final decision. Of course, sometimes stuff crops up that hasn't been foreseen (e.g. more WW2-era bombs than expected, something has not been spotted at the time of the initial study), but there is no excuse in not doing the due diligence before starting a new project. Environmental protection is often abused as a scapegoat. Where we have a massive issue is NIMBYism - citizens feel that projects have been ordered "par ordre mufti", i.e. decided without engaging the affected people, and obviously that is an incentive for those people to use all legal tools at their disposal to obstruct a project. Thankfully, since a few years it's become the norm to not do that any more and actively involve affected people and NGOs already during the planning phase or even before, so at least for future projects we can expect less destructive opposition.
4y ago

danhor 4y ago

Here in an accompanying blog post by one of the study authors: https://pedestrianobservations.com/2023/02/25/the-issue-of-consultants/ https://pedestrianobservations.com/2023/02/25/the-issue-of-c... They say that it's not just consultants and there are many other problems, although their overuse is a huge issue.

londons_explore 4y ago

"Speed and cost of building a new thing" is a big one of my predictors for which nations will be influential in 50 years. If you can get stuff done quickly and efficiently, then your nation will rise in influence. If you spend 30 years paying consultants to think about building a new subway line before eventually canning the idea, then in 50-100 years time the nation will end up weak and insignificant.

londons_explore 4y ago
Today the USA's influence is partly attributable to the high efficiency seen in the early and mid 1900's.
- meghan_rain 4y ago
  Interesting, can you elaborate more on that?
- TeMPOraL 4y ago
  Mentioned it elsewhere in the thread, but I wonder if this isn't a different operating regime that's possible only under very high economic growth. A country starts projects that deliver quick and absurdly high returns, allowing them to start more, larger projects for more of absurd returns - all that over couple decades, allowing the expertise to develop and remain in house, always busy, enabling delivering even larger-scale projects quickly. Eventually, the returns start being smaller and smaller, until the government starts getting cautious about starting new projects, slowing things down, leading to evaporation of expertise, increased costs, etc. Kind of like a scramjet engine, or a nuclear reactor, or I guess plenty of other advanced processes (including a technological civilization itself). You may need to boost yourself with a rocket to achieve a velocity at which a scramjet can start operating, but once you get there, you can start going much faster. But, if for some reason, you slow down below the threshold, the scramjet shuts down, and now you're going slow, and can no longer turn the scramjet back on, because you no longer have a rocket to boost you to its minimum operating point. Under this view, USA's influence is attributable to a one-off leap. Seeing another country going through it now doesn't mean they'll overtake the US in the future - instead, they might run out of steam roughly at the same point the US did.

frankreyes 4y ago

In the UK the construction of HS2 doubled in costs, https://www.bbc.co.uk/news/uk-16473296 https://www.bbc.co.uk/news/uk-16473296 Six reasons why HS2 is so expensive, https://www.bbc.co.uk/news/business-51415590 https://www.bbc.co.uk/news/business-51415590

bigbacaloa 4y ago

Corruption has been legalized and institutionalized in the US.

villgax 4y ago

Sadly there is no open source infra focus in most countries even when using tax payer money, no concept of reusing designs etc

timdiggerm 4y ago

Now do the DoD

acuozzo 4y ago
Shhh!

muth02446 4y ago

Just like with healthcare it seems unlikely that there is a single reason why things are so expensive in the US. There was an article in the NYTimes last week about the projected cost of the new TSMC plant in Arizona. The upshot was that the cost would be 10x compared to Taiwan and presumably TSMC has a lot of in-house expertise for doing these kinds of projects.

deleted 4y ago

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aspergsadd 4y ago

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WeylandYutani 4y ago

This is hardly just an American thing. Everything costs more in rich countries. Dutch people are crying about housing prices. But it's a fact that they can all get 300k mortgages so prices stay high.

jefftk 4y ago
The US is an outlier for transit costs even among rich countries. The report this article is based on (https://transitcosts.com/Final-Report/ https://transitcosts.com/Final-Report/) uses cross-country comparisons as its main tool.
ElfinTrousers 4y ago
We also have expensive housing. And our healthcare system is a sick joke, pun intended.

ilikerashers 4y ago

This was a really interesting article on how consultants "jam-up" government projects and prevent in-house expertise/efficiency develop. https://www.ft.com/content/fb1254dd-a011-44cc-bde9-a434e5a09fb4 https://www.ft.com/content/fb1254dd-a011-44cc-bde9-a434e5a09...

jefftk 4y ago

This is a summary and popularization of this report from the Transit Costs Project: https://transitcosts.com/Final-Report/ https://transitcosts.com/Final-Report/ While it's not bad journalism, the original source is quite readable!

bluedino 4y ago

Wouldn't it just take someone to flip the industry over and do it privately? Something like how SpaceX is so much cheaper than NASA.

ec109685 4y ago
Florida showed a model that seemed to work with their high speed rail: https://catalyst.independent.org/2022/03/15/florida-company-california-brightline/ https://catalyst.independent.org/2022/03/15/florida-company-... The government provided guarantees for loans and some help building stations, but otherwise the private company drove this to completion.

nemo44x 4y ago

I think a big part of the costs is the labor conditions of today VS 120 years ago. Back then most of the workers were unskilled immigrants and they were paid about $10/hour in today's money. That wouldn't be possible today. They also worked under very dangerous conditions compared to today and although there weren't a lot of deaths (whatever that means), there were more deaths than what we would find OK today. We threw cheap, disposable people at the problem back then. Also, we had to build a whole lot less. The venting system was literally grates in the sidewalk. That's not to code today. There was also no accessibility. Again, that's not to code today. So to build anything today, there's so much more infrastructure that needs to be built making it impossible to build anything. But all it takes is a change in mindset. Treat workers like the military and have parades for them and memorials for the young men that die building. Give their families a bag of cash. Get rid of all the strict building requirements. Seriously, it would be cheaper just giving free taxi rides for life to people that need accessibility than building and maintaining the infrastructure that those people have a legal right to. We may need to be a bit more pragmatic.

lbriner 4y ago

This is not the real reason imho. We use Consultants on all large projects worldwide and even the Contractors can be paid Consultant wages. The reason that reports can't put their finger on it is that the reasons are as complex as the project and in projects of this size, there are so many differences between different ones that is very hard to draw conclusions. Must more obvious problems: 1) All non-agile projects are subject to expensive changes (even if those changes are needed/legit) 2) Almost all large projects are subject to mountains of bureaucracy (arguably some is needed), which wastes time and causes investment to be lost 3) The up-front estimate is usually at least 1 order of magnitude wrong because it is expensive to do things like soil studies, geology surveys etc. One sinkhole in the wrong place, $10M please! 4) Organisations don't scale efficiently. There is some economy of scale to a point, after which a lot of flab, whether it's specialist jobs that are paid full time for 20 hours per week or just how easy it is to slack off the job and not get noticed. The US, it seems, has some sort of unique challenges, firstly with the strength of labor unions but also their more complicated government structure just adds more people to give opinions, to obstruct, to have to sign-off finance. Good luck everyone.

ausbah 4y ago
when the US is by far the biggest outlier in the space of construction costs "projects being so different and so complicated so no one knows the issue" is a non-answer, that somewhat ironically, I can imagine a consultant giving. based off this article & similar ones I've seen In privy to the idea of too much government and yet too little. former meaning like you say, giving too many people an opinion in the process through things like needless environmental review. with the latter meaning when the govt does have to do a job they literally don't have the ability to do it due to underfunding. I don't believe the labor union excuse for a second bc compare to Europe where labor unions are notoriously stronger, their construction costs are much lower than here

gersh 4y ago

Could we get the US Army Corps of Engineers to manage transit projects?

windthrown 4y ago
In theory, anything is possible with enough funding. But this does not seem like a very efficient option especially when we already have other federal and state agencies with specific rail and transit purviews.

rm_-rf_slash 4y ago

It’s easy to blame expensive consultants that cost a lot of money instead of the burdensome regulatory and process requirements that only the expensive consultants have the extensive institutional knowledge to work through.

epups 4y ago

Person A gets hired in the public sector and acquires relevant expertise on a specific topic but earns a pittance; they are then invited to join a consultancy for 2x their wage. This person's hours now cost 8-10x as before for the government, because the consulting companies are adding a ton of overhead to it. The supposed trade-off is that over the long run (30+ years) we arguably saved money, as keeping this person staffed and paying their pension would have cost even more. One possible solution would be to have federal "consultancy" agencies for this type of project. A subway project is a one-in-a-generation thing for most cities, but not for a nation. We could also pay these federal agents handsomely, at least competitive with consultancy salaries. Each city or state would then pay for their hours to the federal government with a tiny overhead on top.

larrik 4y ago
Your first paragraph is actually not really what the article is about. Rather, it's more about the government deciding to "build a subway" or whatever, and then hiring consultants to figure out what the hell that even means in reality.
- thatfunkymunki 4y ago
  I disagree, how do you think the government gets into a position where it doesn't know what the hell "build a subway" means in reality?
- danudey 4y ago
  Those consultants need to be hired because the people with the expertise left the public sector to become those consultants, and now no one on-staff knows how to do anything.
freedrock87 4y ago
Its only once a life time because of the expense. You can look at cities like Montreal and Toronto which more on going large-scale projects then NYC
- 4y ago

cratermoon 4y ago

The tired old Reagan era trope, that government is inefficient and private free markets would do better, is used to justify cutting government spending (except for the military) over and over. Then when those government agencies do terrible because they are underfunded, those failures are used by Reaganites to say, "See! Government is terrible, this agency is a waste of money, lets cut the budget." and so on until, as Grover Norquist said in 2001, "I simply want to reduce it to the size where I can drag it into the bathroom and drown it in the bathtub." Europe does so much better because they don't treat each project as a one-off. They have essentially a permanent project of subway and mass transit work. They get better at it because they do it all the time. If you want to make hard things easier, to them more often, not less often with more and bigger attempts to plan, mitigate risk, and control costs for something you don't know how to do in the first place.

csours 4y ago
5th Risk by Michael Lewis has a very good discussion of that trope. In brief, some politicians complain that government isn't run like a private business, and then write rules that forbid those agencies from providing services to citizens (weather, tax filing, post office services, read the book for other examples)
- mrguyorama 4y ago
  Because it is 100% intentional and a desired outcome of those politicians.
- cratermoon 4y ago
  I know the AccuWeather CEO, Barry Lee Myers, personally worked to try to push the NWS out of providing free weather data.

rhaway84773 4y ago

Sounds like it’s not really consultants, but rather the fact that there is no in house planning team that can actually plan things, or provide direction and guidance for the consultants to use.

zzzbra 4y ago

aka “Neoliberalism and its Discontents” That Boston only had six full-time workers working on its largest capital investment project is astounding to me. A lot of the people who claim we have too much bureaucracy, that government is the problem, and that deregulation is the answer to everything don’t seem to have any type of metric for determining what too much deregulation might look like. In fact, they don’t even seem to understand that there could be failure worse than bureaucratic inefficient past a certain point of deregulation. we might be seeing what that looks like in America right now.

heisenbit 4y ago

Sadly the gutting of OPEX for the sake of CAPEX is not limited to the public world. There ate good reasons to do projects with variable costs but that does not mean the continuing staff organizations should be absolutely prohibited from doing anything constructive.

TimPC 4y ago

I think a lot of the reason it happens is that it is no longer possible to hire for many roles in government. The CTO of the TTC was posted at $150k-$180k Canadian not too long ago. If that’s what they can pay the top technical role you can imagine how much lower the non-leadership technical roles are getting. Do you wait for the $90k/year post that has been open for four years to somehow fill or do you use a consultant at a premium you’re allowed to spend knowing your consulting firm can pay what is actually needed to hire someone?

YesThatTom2 4y ago

I highly recommend this mini-book;: “A Leader's Guide to Working with Consultants" https://myresources.itrevolution.com/id006657127/A-Leaders-Guide-to-Working-with-Consultants https://myresources.itrevolution.com/id006657127/A-Leaders-G... You’ll learn a model for understanding the trap and how to avoid it.

thrownawaylzr 4y ago

imho consulting firms are more the problem than consultants. consultants good: get expeirence from many companies. dont have to pay them when you don't need them. personal reputation and future career always on the line. consulting firms bad: most staff are newbies and have no experience of generating value, only extracting it. when the staff in a consulting firm get good, they leave the firm if they actually want to deliver value (same as govt. workers leave for better pay). consulting firms main goals are to steal your IP and skills, extract as much money as possible and confuse internal staff with jargon to dazzle them. why are there consulting firms on big projects? honestly probably because of a few things lobbying and the ceo playing golf with politicians etc. because of a desire to have a small number of contacts to manage all consultants under umbrellas and because they have may well polished slide decks and put on a big show at sales pitch time, referring to all the work that former employees have done as though anyone in their company can do that. there is no cross check or comparison in these "white paper" e.g. how many times did you fail before it worked, how much did other solutions cost etc. the solution imho is simple.. skip the consulting firms and hire individual consultants when needed. makes sure you have someone on staff, who can send consultants back or a mechanism for doing it that is similar. never accept anyone without independent industry experience from a consulting firm.. they must have actually internally delivered measurable value within a company and been able to provide it.. without an understanding of how your work directly delivers value to the customer then you are not qualified to be a consultant If you only have one employee then they must have two things: vision and the ability to cut through IT bullshit. train up internal staff, they will leave for industry but they are more likely to care if the outcomes are crappy. force consultants to work "two in a box" so their knowledge is always being transferred to you. LISTEN TO YOUR SMEs FFS! consultants are all about appealing to authority, ensure your SME team can talk end-to-end with each other on all processes and make damn sure that leadership has their ear.. However i do wonder if the real underlying cause is that there is a critical mass of decision makers that literally don't care how much government money they waste, so long as its wasted on them.