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Alon Levy and the transit costs project are a great source of actual hard analysis on this- https://pedestrianobservations.com/2023/02/25/the-issue-of-consultan

Alon Levy and the transit costs project are a great source of actual hard analysis on this- https://pedestrianobservations.com/2023/02/25/the-issue-of-consultants/ https://pedestrianobservations.com/2023/02/25/the-issue-of-c... has a great concise breakdown, pasted here because no one will click through: Based on around 100 interviews and many diagrams and reports, we managed to decompose the New York construction cost premium over low-cost countries, which is about a full order of magnitude, into the following items: The stations are overbuilt by a factor of 3, which contributes an overall factor of 2 cost premium The systems are not standardized, which contributes a factor of about 2.3 cost premium for the systems and 1.35 overall Labor costs (including supervisors and other white-collar workers) are 50% of hard costs in New York where they should be about 25%, contributing a factor of 3 premium on labor costs and 1.5 overall Procurement problems including the privatization of risk, change order risk, agency micromanagement of contractors, general red tape, and profit stemming from too little competition double overall costs Soft costs are depending on what one counts either 21% on top of hard costs where they should be 7%, or 46% where they should be 20%

zdragnar 4y ago
I can't speak too much to the first several points, but noting - agency micromanagement of contractors - general red tape is very fitting and a direct contribution to - too little competition I worked with a startup company ~8 years ago that wanted to go after government contracts. According to the owners, everyone they demo'd the product to said it was very clearly superior to what they were currently using. Unfortunately, the people who would use it are not the people that sign off on paying for it. Those people had checklists of irrelevant requirements, slow response times, almost certainly pressure to select "certain" vendors (i.e. those who threw money into lobbying the right folk). It got to the point where they seriously considered hiring a consulting company whose sole purpose was to help others navigate all the red tape that gets thrown in your way when you try to get government contracts. In the end, they realized that they were better off pivoting entirely to the private sector instead of doing a half and half approach. I seem to recall a similar tale with the lead pipe retrofitting in Flint, MI... contractors to do the job were picked not necessarily by speed and capability, but by other qualities. Regardless of how they were chosen, though, the city failed to deliver. Despite the crisis starting in April 2014, residents and activists had to sue the city in 2017 to actually get the work completed, and it still isn't done. Mostly done, but not completely... 8 years later.
- nine_k 4y ago
  > the people that sign off on paying for it. Those people had checklists of irrelevant requirements, slow response times, almost certainly pressure to select "certain" vendors This reads like a lack of democratic influence and even direct corruption. That is, these "stakeholders" are not concerned that the voters would be unhappy with their performance, and would fire them (directly or through an action of a newly elected official). They seem to be conveniently shielded from feedback of the population which they nominally are hired to serve.
  - eru 4y ago
    I'm not sure. Too me it reads like why too much democracy..
    - wildrhythms 4y ago
      How do you figure that?
      - eru 4y ago
        See https://richardhanania.substack.com/p/why-is-everything-liberal https://richardhanania.substack.com/p/why-is-everything-libe... Political control (ie democratic control) is not value neutral. Though the actual important bit is actually a quote from https://astralcodexten.substack.com/p/book-review-the-new-sultan https://astralcodexten.substack.com/p/book-review-the-new-su...
  - zdragnar 4y ago
    There is very little democratic influence in the bureaucracy of most governments. Most functions aren't political, and most politicians don't actually have any direct authority to manage a random government employee's job performance.
- megablast 4y ago
  > According to the owners, everyone they demo'd the product to said it was very clearly superior to what they were currently using. And owners have never lied about the superiority of their product, or what other people think. Except that is pretty much all they do.

zdragnar 4y ago

I can't speak too much to the first several points, but noting - agency micromanagement of contractors - general red tape is very fitting and a direct contribution to - too little competition I worked with a startup company ~8 years ago that wanted to go after government contracts. According to the owners, everyone they demo'd the product to said it was very clearly superior to what they were currently using. Unfortunately, the people who would use it are not the people that sign off on paying for it. Those people had checklists of irrelevant requirements, slow response times, almost certainly pressure to select "certain" vendors (i.e. those who threw money into lobbying the right folk). It got to the point where they seriously considered hiring a consulting company whose sole purpose was to help others navigate all the red tape that gets thrown in your way when you try to get government contracts. In the end, they realized that they were better off pivoting entirely to the private sector instead of doing a half and half approach. I seem to recall a similar tale with the lead pipe retrofitting in Flint, MI... contractors to do the job were picked not necessarily by speed and capability, but by other qualities. Regardless of how they were chosen, though, the city failed to deliver. Despite the crisis starting in April 2014, residents and activists had to sue the city in 2017 to actually get the work completed, and it still isn't done. Mostly done, but not completely... 8 years later.

nine_k 4y ago
> the people that sign off on paying for it. Those people had checklists of irrelevant requirements, slow response times, almost certainly pressure to select "certain" vendors This reads like a lack of democratic influence and even direct corruption. That is, these "stakeholders" are not concerned that the voters would be unhappy with their performance, and would fire them (directly or through an action of a newly elected official). They seem to be conveniently shielded from feedback of the population which they nominally are hired to serve.
- eru 4y ago
  I'm not sure. Too me it reads like why too much democracy..
  - wildrhythms 4y ago
    How do you figure that?
    - eru 4y ago
      See https://richardhanania.substack.com/p/why-is-everything-liberal https://richardhanania.substack.com/p/why-is-everything-libe... Political control (ie democratic control) is not value neutral. Though the actual important bit is actually a quote from https://astralcodexten.substack.com/p/book-review-the-new-sultan https://astralcodexten.substack.com/p/book-review-the-new-su...
- zdragnar 4y ago
  There is very little democratic influence in the bureaucracy of most governments. Most functions aren't political, and most politicians don't actually have any direct authority to manage a random government employee's job performance.
megablast 4y ago
> According to the owners, everyone they demo'd the product to said it was very clearly superior to what they were currently using. And owners have never lied about the superiority of their product, or what other people think. Except that is pretty much all they do.