Levy is to be lauded for his pioneering work on this issue yet isn’t it weird that a Patreon supported blogger has done the best work on comparative construction costs mostly using data from newspapers and trade publications? New York plans to spend billions on railway and subway expansion. If better research could cut construction costs by 1%, it would be worth spending tens of millions on that research. So why doesn’t the MTA embed accountants with every major project in the world and get to the bottom of this cost disease? (See previous point). Perhaps the greatest value of Levy’s work is in drawing attention to the issue so that the public gets mad enough about excess costs to get politicians to put pressure on agencies like the MTA.
>So why doesn’t the MTA embed accountants with every major project in the world and get to the bottom of this cost disease?
Like with any organization, follow the incentives. I'm betting the performance reviews in the top half of the MTA are pegged to metrics that don't have to do with service delivered per dollar.
This is just a part of an increasingly serious problem in all areas of human endeavour. Our projects are becoming so big, complex and lengthy that they are effectively unmanageable with the methodologies and expertise we currently have.
In one way being highly ambitious is a good think: if we were always thinking "we'll stick with doing what we know how to do" we would never progress but we need to control our ambition so they don't get completely out of hand.
Oh come on now, really? I have a piece of farmland in the middle of nowhere and let me tell you, even digging a hole out there is harder now than it was 100 years ago because of the things you find buried. Subways in 200+ year old cities? I can't even imagine. What do you do when your borer, designed for medium size rock and dirt runs into a 4ft wide brick and cement wall the city forgot about 40 years ago? This happens! Also, back 100 years ago we were talking brick, cement, some steel, and thats it. Today there is a vast array of engineered materials and machinery that didn't exist back then. It's not 1,000s of unskilled workers with shovels anymore, its hundreds with technology and mostly engineers.
Unskilled workers can dig through rock and concrete just fine, you just give them power tools. We don’t use them anymore not because they aren’t suitable tool for the job, but rather because they got more expensive per hour worked in the meantime, by a factor of 10-20x.
This is completely incorrect. Infrastructure projects in the US not that big or complex compared to other industrialized nations. The subways in Japan and China make ours look utterly primitive, and ours have nowhere near the scale of those in Asia. However, the costs for building this infrastructure in Japan (where the labor rate is generally on par with the US, if not more) are a fraction of ours. Even better, they have bullet trains, which don't exist at all in America.
This isn't a complexity problem; it's a cultural problem.
> In California, the problem is, in two words, Tutor-Perini. This contractor underbids and then does shoddy work requiring change orders, litigated to the maximum. Ron Tutor’s dishonesty is well-known and goes back decades: in 1992 Los Angeles’s then-mayor Tom Bradley called him the change order king. And yet, he keeps getting contracts, all of which have large cost overruns, going over the amount the state or city would have paid had it awarded the contract to the second lowest bidder. In San Francisco, cost overrun battles involving Tutor-Perini led to a 40% cost overrun. This process repeated for high-speed rail: Tutor submitted lowest but technically worst bid, got the contract as price was weighted too high, and then demanded expensive changes. It speaks to California’s poor oversight of contractors that Tutor remains a contractor in good standing and has not been prosecuted for fraud.
Edit: oh, wait, just realized this is from the same blog, so the same body of work.
Could anyone comment on whether or not awarding contacts to the second-lowest bidder (whose bid meets technical merit) has ever been practiced by governments? Or other alternative auction strategies.
I got no source for this, but I've heard about this happening before on European construction projects (lowest 2 bidders being excluded for being too low).
Generally bid that is not "technically complete" .i.e. does not demonstrate a real ability to undertake and complete the project can be rejected. There is some engineering discretion to this.
Most competent contracting doesn't go for lowest-cost bidder. Rather, bids are generally scored for some metric, and a good contracting agency should additionally be evaluating the contractors to figure out if they actually are capable of performing their bid without cost overruns.
One of the contentions of Alon Levy [author of the blog in question] is that the primary reason for inexcusably high costs in the US is the hollowing out of agencies to the point that they can't do this sort of evaluation anymore.
I've heard repeatedly that California in particular does not have enough engineering staff to manage contractors for state projects. That's a result of the US's obsession with neoliberal economics which sees those people are a waste of money and an impediment to getting things done.
My dad worked for the government doing management and oversight. It takes a lot of work to evaluate and reject bad low ball bids. Even more work to create bids that you can hold contractors to and to weed out shysters.
If you have to put this much effort into managing contractors and avoiding shysters, at what point does it make more sense to just not use contractors at all, and do it yourself?
This reminds me of when I used to own homes. It was generally easier to just do some home-repair job myself than deal with the hassles of finding a good contractor, and then having to deal with more hassles if the contractor didn't do it right.
If sufficient regulatory oversight is politically infeasible, I would think that the government directly employing construction staff would be politically impossible.
Most large infrastructure projects have a large number of trades for a short amount of time
Contractors have people,experience and equipment that would be cost prohibitive to maintain full time but can be relatively inexpensive when hired for just their needed duration.
The kinds of work that you describe fall more under maintenance and basic repair, which most public agencies have full time employees that perform that roles. For instance the NYC subway has signaling workers for a constant stream of signal work, track workers to maintain track and sign workers for endless lifecycle replacement of signs. New construction work, like tunnels and stations is done by contractors.
I completely understand that dilemma. Outsourcing allows you to tap economies of scale and line up the tasks with contractors experience and capabilities. But you pay for that with another layer of management.
I suspect that there isn't a magic set of incentives that replaces appropriate levels of funding, good faith and sufficient oversight.
Do what they used to do in the old days. You pay 50% now and the rest in X decades, so long as it meets some minimums set in advance. This would eliminate under bidding. It might put financially weak vendors sag a disadvantage but them’s the breaks.
Another way to avoid this is with a Design-Build-Operate contract.
The transit agency is on the hook for the agreed construction cost, and for ridership estimates and minimums. If ridership does not develop, then the contracting agency is responsible for making the operator whole.
The contractor is on the hook for the design, build and operation of the system for N years.
The worst possible way to design a large, complex system is the way most US transit agencies do it: the agency operates as the prime contractor, and it issues an initial design subcontractor, which submits an alignment and maybe a 20% design. Then the agency issues bids for each segment, and the new contractor completes the design.
>The transit agency is on the hook for the agreed construction cost, and for ridership estimates and minimums. If ridership does not develop, then the contracting agency is responsible for making the operator whole.
> The contractor is on the hook for the design, build and operation of the system for N years.
This won't work: the contractor will just declare bankruptcy when things don't work out that great. But the owners will have bags full of money by then.
> In the early 2000s after the collapse of insurance giant HIH, NSW and Victoria abolished some classes of builders' warranty insurance. The governments said it was to try and stabilise the industry and ensure its viability.
>
> So if you're in a new apartment building of more than three storeys, instead of making a claim with an insurer, it's now you versus the builder. You've still got a warranty, but you may need a lawyer.
The rational was builders of that size and above would avoid being put out of business by insurance claims. It had been true up until that point. But from https://www.abc.net.au/news/8403744 :
> Then, in February this year, almost three years after the owners commenced legal action, the developer, Payce Properties, announced that it was being placed into administration.
>
> The parent company, Payce Consolidated, is still trading, and has plans to roll out more than 7,000 more apartments in the next five years.
Surprise, surprise, there has been a rash of shoddily built large buildings with arguments about was footing the bill every since.
> "Another way to avoid this is with a Design-Build-Operate contract."
The linked PDF seems to argue for the opposite. It suggests that "design & build" contracts tend to inflate costs, and countries with lower subway construction costs tend to separate design contracts from construction contracts.
Another way to do this involves a shift from lowest-cost purchasing to best-value purchasing. Under lowest cost guidelines, the agency cannot take any factors but price into consideration, leading to this garbage. With best-value, they can look at the contractor's past performance in making a determination. Slowly, agencies are making the change, but a lot of them are still required by guidelines to go with the lowest bid.
It's true that best value can be gamed, but any system can be gamed.
When buyers can define some evaluation criteria like reviewing the bidder's past performance (delivery on-time vs late, cost overruns) in addition to current bid, they can better assess how smoothly this project will go, and past performance is difficult to game without lying, i.e. submitting a fraudulent bid package.
The procurement field has a number of membership organizations and certifications and these people are largely good and ethical workers who take pride in doing good for their employers. Not all, but the good ones far outnumber the lazy, incompetent, and corrupt. (I'm not one, but worked adjacent to the field for a while, and I think buyers often don't get a fair shake, because the corruption can be shocking when it's visible.)
Every system is subject to gaming. The current system obviously is. The relevant question is "is the proposed system better than the old system?", not "can the proposed system be gamed?".
Thank you for this. I feel like a lot of people like to shoot down new ideas by coming up with a list of flaws, without considering whether the new idea -- even with the flaws -- is still better than the status quo.
This is basically the problem with IT Contracts in the Netherlands at the moment (though it is getting better due to proper oversight). Lowest bid winners with no technical knowledge on the proposal side to include the technical challenges in the process. Resulting in expensive shoddy work projects which always overrun in cost due to several factors (design change, minimal/poor work, non extensible etc). The problem is that the overruns are by design as they know there are little to no penalties involved which keeps the companies in the loop for far more than the original sum.
Generally speaking this remains true in government contracting as well. Back when I used to work in that sphere the government always went for the lowest bidder. This is usually billed as a way for the government to be fiscally responsible but usually the result is that they get back poor software with the contractor embedding themselves deep into the design and a huge pricetag on actually fixing the damn thing.
That among many other issues is where I realized that the way competition works in this scenario simply doesn't work when the incentive is to keep yourself and your company on the government's payroll rather than write quality software.
Ah, but in what way is the under-bidding contractor the problem?
Who gave the contract to the contractor?
The problem is the process of going for the lowest bidder, or one of the lowest.
Moreover, in this case, incredibly, going for the same low bidder with the knowledge of all the history of the bids from that contractor being unrealistic lowballs and requiring costly change requests.
Don't blame the contractor. They get the job and make their money. From their angle, they are successful. They know that the city is aiming for the bottom and so they adjust their bidding accordingly. If they didn't submit a low bid, the job would go to someone else.
True story: some decades ago. My father was bidding on a contract with the GVRD (Greater Vancouver Regional District). Something in the tens of thousands of dollars, probably. He was out-bid by $5. That was all they cared about. So he pulled out a $5 bill and plonked it on the table.
If you ever drive in Vancouver, Canada and wonder how the roads can be so shitty, remember that story.
> The problem is the process of going for the lowest bidder, or one of the lowest.
As a homeowner I usually try to get three bids on a project and then take the middle. In my experience the lowest bidder usually doesn't understand what you want or has no idea what they're doing.
> The problem is the process of going for the lowest bidder, or one of the lowest.
The phrase "lowest bidder" gets a lot of mileage in jokes and social commentary, but I'm pretty sure that the original idea is "the lowest bidder who fulfills the requirements of the contract." In that context it's a pretty obvious process, not something to be feared or mocked. The contract should be "build X to exactly these specifications," and of course the contract should be given to the lowest bidder who can reasonably be expected to fulfill the contract.
In this case, the contractor is clearly unable (or unwilling, or unincentivized) to fulfill the contract, and thus the contractor's bid should be irrelevant. The contractor should not even be considered. After all, if it's fine to not fulfill the terms of the contract, then I'm confident I could submit an even lower bid.
Certainly CA shares blame for not managing their contracts better (whether due to incompetence or malice).
But it's unethical behavior to be a contractor who intentionally under-bids with the plan to later (repeatedly) charge exorbitant amounts for modifications and fixes.
The government isn't doing its due diligence, but I take a dim view of people who exploit and waste taxpayers' money.
> But it's unethical behavior to be a contractor who intentionally under-bids with the plan to later (repeatedly) charge exorbitant amounts for modifications and fixes.
If the ethical alternatives all ensure that someone else gets the contract, then that particular ethics in that situation is rather good for nothing.
I'll never claim that taking the ethical choice will ensure that others won't choose unethically. But "everyone else is doing it" is not an excuse for unethical behavior.
Suggesting that ethics are good for nothing in this case because of that is... well, even more disappointingly cynical than I'm willing to go.
Lots of places have legal requirements to take low bid contracts. This was largely an anti-corruption measure as it was deemed easier to get work out of a low bid contractor than an accurate accounting out of a corrupt process.
But now there exist a whole class of contractor that exist purely to provide the lowest possible level of compliance with municipal contracts. They spend more on legal defense than construction in many cases.
I think the issue in California is that this particular contractor's M.O. is notorious to state officials, but nobody has completed whatever formal processes are required to establish the contractor as disreputable, permitting officials to readily reject their bids in subsequent projects. There has to be a formal process because the whole point of anti-corruption regulations is to remove discretion from individual officials, but state officials aren't being diligent on the backend of that process.
The underbidding contractor is at least one half of the problem because they're serial fraudulent bidders--they have it down to a science. IMO they're flat out the problem from an ethical standpoint. You don't get to cheat somebody just because you've figured out how to exploit a victim's infirmity (the infirmity in this case being the state's bidding rules). You can't shift your blame to the victim; whatever blame the victim is due is independent.
The hot thing in Finland at the moment is the alliance project model. I'm not an experienced expert in the field so I cannot explain it to detail. The newspaper explanation is that the buyer (city council or similar) form a common organisation and share risks and costs. I must admit I was sceptical when it first came up and assumed that either they end up in quarrel or they will find common excuses for the 3-fold costs in the end. But so far I have been wrong. A road tunnel was completed about in time and only exceeding the budget by a relative small percentage (which they explained with added requirements during project lifetime). A tramway project is not complete yet, but so far there have heen only good news about the progress and budget, which is not typical for such a project.
The observation about station costs resonated for me. I've always been startled by the scale and ostentation of Westlake Station [1] in Seattle, which is relatively modern (1990), but feels like it was built in the 20s, it's huge and complicated and serves only two platforms. A practical station design would be a fraction of the size
Boston's light rail system (Green Line) is built in a very utilitarian, un-ostentatious way. The second it becomes feasible, the trains emerge from tunnels and ride above ground. Many of the stops are nothing more than a painted stretch of pavement. I've always found it ugly, but perhaps there was wisdom in keeping it simple.
Aww, come on - the green line can be really pretty. Go check out the Longwood stop and take a walk in the park along the tracks in the summer, it's almost surreal how beautifully the ironwork and old stone bridges and greenery mesh together.
Fascinating, thanks for the history lesson - I guess that's part of Boston's charm. They say that cows and horses designed the street layout more than people did, although I'm sure that's not true anymore :)
For a little more of a history lesson: Much of the core of Boston is artificial land added at various times throughout history.
The seemingly crazy street layouts and orientations (especially in the Downtown/North End areas) make much more "sense" when you realize how the original landmass was shaped, which was a peninsula only connected to the mainland by a single very narrow road out to the south/southwest.
You can find more detail and scope elsewhere, but here's a quick image that illustrates most of it: http://i.imgur.com/dWSGEjQ.jpg
What's the opportunity cost of areas like the bay area, where average commute time is 32min, and some people are closer to one hour, where mass transit isn't as robust as somewhere like NYC or Toronto.
Actually if you read the presentation it shows that corrupt countries have lower costs than the AngloSphere, and is not a sufficient explanatory factor. Many less-corrupt (in public infrastructure) countries also have low costs (Switzerland for example).
The notion that the Anglosphere, especially the US, is less corrupt requires further examination. Local governments, and their special purpose entities like MTA, have complex relationships between politicians, officials, bonding firms, consultants, engineering firms, contractors, unions, suppliers, etc. The corruption is not typically overt, involving envelopes stuffed with cash handed over in New Jersey diners, but is more like a constellation of tacit mutual self interest among the parties.
I agree with you and very well said. The US seems to be especially rife with these revolving doors tacit relationships, also often cemented through family or kinship.
Yep, I mean as a non-american I could also point out at how weird it looks something like super PACs exist, as it seems from the outside just a legal way to bribe elected gov officials, same thing goes with how Healthcare works over there, or that some states in america are de facto high earning first choice to move their dirty money from abroad and keep it safe and secret, not even in switzerland now, only in america lol
I was always impressed by Berlin's subway. Some parts of it are very accessible, with the rails literally 20ft below the street. For example: https://youtu.be/42EV-9G9vjo?t=230
Also, no fare gates (there are occasional ticket checks on the trains, and heavy fines for non-payers).
> "In DC, max is 10 days, and we’re getting rid of even that."
you seem to say this as if it's a bad thing. it's silly to think fare evasion is worth jailing someone, nevermind paying the administrative and enforcement costs of doing so. even holding someone for an hour is more than enough punishment (which is typically what happens anyway due to bureaucracy involved).
If you don't have any real penalty for fare evasion, what keeps people from doing it all the time? That's the whole reason we put people in jail for mere shoplifting, even if it's for something low-cost.
it is a real penalty. there's usually a fine as well.
but for the sake of argument, an hour lost would mean being late to work, to an appointment, or to another likely time-sensitive activity. additionally, there's the embarassment of being caught evading the fare (why is everyone staring? how do you explain your tardiness to family/friends/coworkers?). most people would avoid these penalties in and of themselves.
regardless, the penalty isn't what deters most fare evasion (or shoplifting) except at the margins. mostly, adherence (that is, paying fares) is due to social cohesion, self-image, and social responsibility.
that's why berlin, LA, and other transit systems have open transit gates. the cost of enforcement at the margins isn't worth it.
further, most people who fare-evade (or shoplift) do so because they're desperate. jail time doesn't deter behavior for those cases nor does enforcement provide additional revenue (couldn't pay in the first place).
no need to punish such folks more with jail time because they're already being punished by circumstance. being detained and fined is more than enough additional punishment here.
> further, most people who fare-evade (or shoplift) do so because they're desperate.
Next time you’re in the store in a less than perfectly clean and safe area, look at what kind of stuff is specially protected against shoplifting. In my experience, it’s usually washing liquid, shaving razors and hair products. Hardly the domain for the most desperate.
You have quite a pollyanish view on society, where there are no wrongdoers: shoplifters never do this for profit, they are just desperate people forced by circumstance. This doesn’t match my experience.
There's no need to evade when many/most employers give their staff free/discounted passes, the aged get discounted passes, students get discounted passes and the disadvantaged get free/discounted passes.
There's heavy motivation for employers since it's not a taxable benefit.
The economist in me doesn't like unlimited passes for transit, but if it doesn't bog down their system, then it's hard to argue against them.
It is more reasonable to compare this with stealing parking. For example over-staying the time on a meter, skipping paying at all for a "quick" stop or parking in a no-parking zone is about the same as skipping a fare. Now if one wants to argue parking meter violations should result in jail time, that would be different...
I don't read him saying that it's a bad thing, but rather that it's a policy choice that has implications for the cost of designing and building a station.
Note that not all U trains in Berlin are like that, some are deeper (with a mezzazine) and some are partly on elevated tracks or outside the city they go overground just like normal trains.
> If you're building on marsh (and I think Berlin largely is?)
Yep:
The name Berlin has its roots in the language of West Slavic inhabitants of the area of today's Berlin, and may be related to the Old Polabian stem berl-/birl- ("swamp").
these kind of thing are not helpful. what we need is a spreadsheet with all costs. i bet you will get something like a spreadsheet of medical costs in the us where it is realized that bandaids are costing something like 10 dollars for one.
I thought I would dislike this analysis, but I actually found it pretty reasonable. One of the biggest takeaways for me: California and the US aren't exceptional. Because so many of us on HN live in California, it often seems that California is uniquely bad at infrastructure, but cost overruns are just as much of a problem in the rest of the US, as well as Canada, the UK, and Australia.
>it often seems that California is uniquely bad at infrastructure, but cost overruns are just as much of a problem in the rest of the US, as well as Canada, the UK, and Australia.
California is not uniquely bad within the US. NYC is utterly infamous for their ridiculous construction costs, caused by a huge amount of graft, terrible unions that require 4x as many workers as necessary, etc.
Thing is, NYC is made up of grids. Effective bus service can do a better job of last-mile than it can in London.
Dunno if that's true, but the theory works out.
Toronto is finally considering making more and more roads transit-only instead of mixing streetcars and buses with general traffic. If London did/does that, it wouldn't/doesn't improve speeds as much.
Though I like how London runs different lines/routes into stations so you can get to your destination without transferring by getting on the right train in the first place.
This thing of learning only from other English speaking countries is so true when looking at buildings in Australia. Streets of red brick terrace houses copied from some northern mining town in England with tiny windows that you cant even fully open in a country were the temperatures rise up to 40 degrees celsius. You would think they will learn anything after all this years but the new apartment blocks seems to get built as heat traps, although at some stage they have figured out that a balcony might be a good idea in such a sunny country.
You can't really compare costs and ignore the level of corruption. In e.g. Russia the only reason why subway costs $500M/km is because at least two thirds of that money immediately vanishes into the various off-shore companies owned by the various oligarchs, government officials, and cronies thereof. Same with highway construction. Someone once jokingly "calculated" that it's cheaper to pave the roads with foie gras there.
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[ 3.3 ms ] story [ 92.4 ms ] threadLevy is to be lauded for his pioneering work on this issue yet isn’t it weird that a Patreon supported blogger has done the best work on comparative construction costs mostly using data from newspapers and trade publications? New York plans to spend billions on railway and subway expansion. If better research could cut construction costs by 1%, it would be worth spending tens of millions on that research. So why doesn’t the MTA embed accountants with every major project in the world and get to the bottom of this cost disease? (See previous point). Perhaps the greatest value of Levy’s work is in drawing attention to the issue so that the public gets mad enough about excess costs to get politicians to put pressure on agencies like the MTA.
[1] https://marginalrevolution.com/marginalrevolution/2019/12/wh...
Like with any organization, follow the incentives. I'm betting the performance reviews in the top half of the MTA are pegged to metrics that don't have to do with service delivered per dollar.
The construction lobby is a frequent large donor to political campaigns in New York.
"It is difficult to get a man to understand something when his salary depends upon his not understanding it."
For an example, see the Bosphorus tunnel in Istanbul (https://www.theguardian.com/world/2006/jan/25/turkey.iantray..., https://en.wikipedia.org/wiki/Marmaray#Delays)
A huge find, unfortunately on the location where a terminal was planned.
This isn't a complexity problem; it's a cultural problem.
This tidbit is particularly infuriating:
> In California, the problem is, in two words, Tutor-Perini. This contractor underbids and then does shoddy work requiring change orders, litigated to the maximum. Ron Tutor’s dishonesty is well-known and goes back decades: in 1992 Los Angeles’s then-mayor Tom Bradley called him the change order king. And yet, he keeps getting contracts, all of which have large cost overruns, going over the amount the state or city would have paid had it awarded the contract to the second lowest bidder. In San Francisco, cost overrun battles involving Tutor-Perini led to a 40% cost overrun. This process repeated for high-speed rail: Tutor submitted lowest but technically worst bid, got the contract as price was weighted too high, and then demanded expensive changes. It speaks to California’s poor oversight of contractors that Tutor remains a contractor in good standing and has not been prosecuted for fraud.
Edit: oh, wait, just realized this is from the same blog, so the same body of work.
Dismissing a very low bid must be dismissed, giving good arguments that the bid is not realistic is something completely else.
One of the contentions of Alon Levy [author of the blog in question] is that the primary reason for inexcusably high costs in the US is the hollowing out of agencies to the point that they can't do this sort of evaluation anymore.
My dad worked for the government doing management and oversight. It takes a lot of work to evaluate and reject bad low ball bids. Even more work to create bids that you can hold contractors to and to weed out shysters.
This reminds me of when I used to own homes. It was generally easier to just do some home-repair job myself than deal with the hassles of finding a good contractor, and then having to deal with more hassles if the contractor didn't do it right.
The kinds of work that you describe fall more under maintenance and basic repair, which most public agencies have full time employees that perform that roles. For instance the NYC subway has signaling workers for a constant stream of signal work, track workers to maintain track and sign workers for endless lifecycle replacement of signs. New construction work, like tunnels and stations is done by contractors.
I suspect that there isn't a magic set of incentives that replaces appropriate levels of funding, good faith and sufficient oversight.
The transit agency is on the hook for the agreed construction cost, and for ridership estimates and minimums. If ridership does not develop, then the contracting agency is responsible for making the operator whole.
The contractor is on the hook for the design, build and operation of the system for N years.
The worst possible way to design a large, complex system is the way most US transit agencies do it: the agency operates as the prime contractor, and it issues an initial design subcontractor, which submits an alignment and maybe a 20% design. Then the agency issues bids for each segment, and the new contractor completes the design.
> The contractor is on the hook for the design, build and operation of the system for N years.
This won't work: the contractor will just declare bankruptcy when things don't work out that great. But the owners will have bags full of money by then.
> In the early 2000s after the collapse of insurance giant HIH, NSW and Victoria abolished some classes of builders' warranty insurance. The governments said it was to try and stabilise the industry and ensure its viability. > > So if you're in a new apartment building of more than three storeys, instead of making a claim with an insurer, it's now you versus the builder. You've still got a warranty, but you may need a lawyer.
The rational was builders of that size and above would avoid being put out of business by insurance claims. It had been true up until that point. But from https://www.abc.net.au/news/8403744 :
> Then, in February this year, almost three years after the owners commenced legal action, the developer, Payce Properties, announced that it was being placed into administration. > > The parent company, Payce Consolidated, is still trading, and has plans to roll out more than 7,000 more apartments in the next five years.
Surprise, surprise, there has been a rash of shoddily built large buildings with arguments about was footing the bill every since.
For a successful example, look to the Canada Line in Vancouver.
https://en.wikipedia.org/wiki/Canada_Line
The linked PDF seems to argue for the opposite. It suggests that "design & build" contracts tend to inflate costs, and countries with lower subway construction costs tend to separate design contracts from construction contracts.
And corruption can affect it evaluating the value too
When buyers can define some evaluation criteria like reviewing the bidder's past performance (delivery on-time vs late, cost overruns) in addition to current bid, they can better assess how smoothly this project will go, and past performance is difficult to game without lying, i.e. submitting a fraudulent bid package.
The procurement field has a number of membership organizations and certifications and these people are largely good and ethical workers who take pride in doing good for their employers. Not all, but the good ones far outnumber the lazy, incompetent, and corrupt. (I'm not one, but worked adjacent to the field for a while, and I think buyers often don't get a fair shake, because the corruption can be shocking when it's visible.)
That among many other issues is where I realized that the way competition works in this scenario simply doesn't work when the incentive is to keep yourself and your company on the government's payroll rather than write quality software.
Who gave the contract to the contractor?
The problem is the process of going for the lowest bidder, or one of the lowest.
Moreover, in this case, incredibly, going for the same low bidder with the knowledge of all the history of the bids from that contractor being unrealistic lowballs and requiring costly change requests.
Don't blame the contractor. They get the job and make their money. From their angle, they are successful. They know that the city is aiming for the bottom and so they adjust their bidding accordingly. If they didn't submit a low bid, the job would go to someone else.
True story: some decades ago. My father was bidding on a contract with the GVRD (Greater Vancouver Regional District). Something in the tens of thousands of dollars, probably. He was out-bid by $5. That was all they cared about. So he pulled out a $5 bill and plonked it on the table.
If you ever drive in Vancouver, Canada and wonder how the roads can be so shitty, remember that story.
As a homeowner I usually try to get three bids on a project and then take the middle. In my experience the lowest bidder usually doesn't understand what you want or has no idea what they're doing.
The phrase "lowest bidder" gets a lot of mileage in jokes and social commentary, but I'm pretty sure that the original idea is "the lowest bidder who fulfills the requirements of the contract." In that context it's a pretty obvious process, not something to be feared or mocked. The contract should be "build X to exactly these specifications," and of course the contract should be given to the lowest bidder who can reasonably be expected to fulfill the contract.
In this case, the contractor is clearly unable (or unwilling, or unincentivized) to fulfill the contract, and thus the contractor's bid should be irrelevant. The contractor should not even be considered. After all, if it's fine to not fulfill the terms of the contract, then I'm confident I could submit an even lower bid.
But it's unethical behavior to be a contractor who intentionally under-bids with the plan to later (repeatedly) charge exorbitant amounts for modifications and fixes.
The government isn't doing its due diligence, but I take a dim view of people who exploit and waste taxpayers' money.
If the ethical alternatives all ensure that someone else gets the contract, then that particular ethics in that situation is rather good for nothing.
Suggesting that ethics are good for nothing in this case because of that is... well, even more disappointingly cynical than I'm willing to go.
But now there exist a whole class of contractor that exist purely to provide the lowest possible level of compliance with municipal contracts. They spend more on legal defense than construction in many cases.
The underbidding contractor is at least one half of the problem because they're serial fraudulent bidders--they have it down to a science. IMO they're flat out the problem from an ethical standpoint. You don't get to cheat somebody just because you've figured out how to exploit a victim's infirmity (the infirmity in this case being the state's bidding rules). You can't shift your blame to the victim; whatever blame the victim is due is independent.
This is the marketing explanation by the contractor: https://www.yitgroup.com/en/media/why-is-the-alliance-contra...
[1] https://en.m.wikipedia.org/wiki/Westlake_station_(Sound_Tran...
The ironwork, old stone bridges and stationhouses and such are very nice, but are thanks to the Boston and Albany RR in the late 1800s/early 1900s.
It was bought by the government and converted over to a light rail line in the late 1950s.
The seemingly crazy street layouts and orientations (especially in the Downtown/North End areas) make much more "sense" when you realize how the original landmass was shaped, which was a peninsula only connected to the mainland by a single very narrow road out to the south/southwest.
You can find more detail and scope elsewhere, but here's a quick image that illustrates most of it: http://i.imgur.com/dWSGEjQ.jpg
If so, it seems to have been at least somewhat succesful. That Wikipedia article: "the station's mezzanine became sought as an events venue”
Also, no fare gates (there are occasional ticket checks on the trains, and heavy fines for non-payers).
In Germany, fare evasion can in theory carry up to one year in jail. (In DC, max is 10 days, and we’re getting rid of even that.)
you seem to say this as if it's a bad thing. it's silly to think fare evasion is worth jailing someone, nevermind paying the administrative and enforcement costs of doing so. even holding someone for an hour is more than enough punishment (which is typically what happens anyway due to bureaucracy involved).
but for the sake of argument, an hour lost would mean being late to work, to an appointment, or to another likely time-sensitive activity. additionally, there's the embarassment of being caught evading the fare (why is everyone staring? how do you explain your tardiness to family/friends/coworkers?). most people would avoid these penalties in and of themselves.
regardless, the penalty isn't what deters most fare evasion (or shoplifting) except at the margins. mostly, adherence (that is, paying fares) is due to social cohesion, self-image, and social responsibility.
that's why berlin, LA, and other transit systems have open transit gates. the cost of enforcement at the margins isn't worth it.
no need to punish such folks more with jail time because they're already being punished by circumstance. being detained and fined is more than enough additional punishment here.
Next time you’re in the store in a less than perfectly clean and safe area, look at what kind of stuff is specially protected against shoplifting. In my experience, it’s usually washing liquid, shaving razors and hair products. Hardly the domain for the most desperate.
You have quite a pollyanish view on society, where there are no wrongdoers: shoplifters never do this for profit, they are just desperate people forced by circumstance. This doesn’t match my experience.
Fare evasion was 5%, or about $4m per year on the pre-existing ungated rail-portion of the system.
And certainly fare evasion didn't go to zero after the install.
Not a great ROI.
Because Germany.
There's no need to evade when many/most employers give their staff free/discounted passes, the aged get discounted passes, students get discounted passes and the disadvantaged get free/discounted passes.
There's heavy motivation for employers since it's not a taxable benefit.
The economist in me doesn't like unlimited passes for transit, but if it doesn't bog down their system, then it's hard to argue against them.
Some nice pictures about this: https://de.wikipedia.org/wiki/Unterpflasterbahn
Note that not all U trains in Berlin are like that, some are deeper (with a mezzazine) and some are partly on elevated tracks or outside the city they go overground just like normal trains.
A lot of this has to do with construction techniques. If you cut and cover, this is manageable.
But when you tunnel, you need to go as deep as you need to get tunnelable ground conditions.
If you're building on marsh (and I think Berlin largely is?), tunnelling may be totally impractical.
Yep:
The name Berlin has its roots in the language of West Slavic inhabitants of the area of today's Berlin, and may be related to the Old Polabian stem berl-/birl- ("swamp").
https://en.wikipedia.org/wiki/Berlin
California is not uniquely bad within the US. NYC is utterly infamous for their ridiculous construction costs, caused by a huge amount of graft, terrible unions that require 4x as many workers as necessary, etc.
https://www.boringcompany.com/lvcc
Interesting comparisons could probably be made to:
https://en.wikipedia.org/wiki/Central_Subway
Hmm. Perhaps Pat Foye should compare this map:
https://nycmap360.com/carte/pdf/en/nyc-rail-map.pdf
To this one:
https://www.nationalrail.co.uk/London_South_East_expanded-09...
Dunno if that's true, but the theory works out.
Toronto is finally considering making more and more roads transit-only instead of mixing streetcars and buses with general traffic. If London did/does that, it wouldn't/doesn't improve speeds as much.
Though I like how London runs different lines/routes into stations so you can get to your destination without transferring by getting on the right train in the first place.
On macOS you can open it using Preview.app and then select View -> Slideshow.