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Why U.S. Infrastructure Costs So Much

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Re: Why U.S. Infrastructure Costs So Much

#101

Post by nradov »

tastyfreeze wrote: post #70
darkwizard42 wrote: post #12

Why aren't contracts to build the projects tightly written to avoid cost ballooning? When a service is to be provided at a certain cost, it should be provided at certain cost. Some contingencies should be built in (if something gets discovered that was unexpected) but how on earth does every municipal project seem to have so much invested in budget oversight and contractors overbilling or needing overtime to make thi…

Moving away from cost-plus contract funding is something that is needed but is an enormous fight. Every government contractor loves cost-plus. Bid low on cost to get the contract then just keep amending the contract with added cost. I agree that all government contracts should be fixed bid. It is wholly the contractor's responsibility to determine if they can be profitable on the contract or not. We should not be on…

It's fine for most infrastructure projects to be firm fixed price (with bonus incentives for early completion or higher quality). But there are other projects for which cost plus is the only viable option. Sometimes there's so much technical risk and uncertainty that no sane contractor would even submit a fixed price bid.

Re: Why U.S. Infrastructure Costs So Much

#102

Post by the-alchemist »

For those interested in a real deep dive, and I mean, deep, check out the blog https://pedestrianobservations.com/construction-costs/. And the comments are super informative!

It makes a lot of complex analyses using the best cost information available, and compares projects across countries, states, geography, politics, etc. I'm impressed by the technical engineering analyses. We IT people could learn a thing or two. ;)

Like, "this subway project in NYC cost $N billion USD, which cannot be compared to this subway project in France, which cost $M billion EUR, because of the diameter of the tunnel used and the composition of the dirt under the ground."

Re: Why U.S. Infrastructure Costs So Much

#103

Post by munk-a »

criddell wrote: post #88
bearjaws wrote: post #45

I am of the opinion that continuing to build out all these long 'runs' of infrastructure to serve a even more spread out populace is a dead end. Where I live we spent tens of billions expanding highway infrastructure, and it has not improved the lives of anyone meaningfully, traffic is as bad as its ever been. We need to spend more money creating better metropolitan areas that people want to live in, rather than usin…

> We need to spend more money creating better metropolitan areas that people want to live in, rather than using tax payer money to support fewer and fewer people. I suspect the current trend is in the opposite direction. If self-driving cars ever become a real thing, it's all over for team urbanization. If there was unlimited money, how would you even start to fix cities? A big part of the attraction to living in the…

> If self-driving cars ever become a real thing, it's all over for team urbanization.

Urbanization is more than just hatred of vehicles - Europe has managed to development walkable cities where cars are significantly less convenient than other modes of transport - even if the cars are automated they're going to continue to be suboptimal compared to well planned and zoned cities. At the heart of the issue is whether a city is oriented toward foot traffic or optimized for car storage - America leans the latter way and it's pretty darn weird since, outside of the central south (Arizona, Texas and such) - most people would prefer a ten minute walk to five minute drive.

Re: Why U.S. Infrastructure Costs So Much

#104

Post by jacobr1 »

intrepidhero wrote: post #34
darkwizard42 wrote: post #12

Why aren't contracts to build the projects tightly written to avoid cost ballooning? When a service is to be provided at a certain cost, it should be provided at certain cost. Some contingencies should be built in (if something gets discovered that was unexpected) but how on earth does every municipal project seem to have so much invested in budget oversight and contractors overbilling or needing overtime to make thi…

Firm fixed contracts seem like the way to go, until you try it. What happens is you get a bunch of contractors in a bidding war trying to undercut each other until the actual bid is below cost. That's not sustainable so what happens then? The winner will cut every possible corner to try to make a profit margin and read the contract in the narrowest way possible so they can hit the government with a fat change order.…

Another model is having a government run project, with all the employees direct hires of the relevant government department. Though that has its own downsides.

One model I haven't heard of, is the government as general contractor, hiring and managing the subs directly. I could imagine a hybrid mode like this could work.

Re: Why U.S. Infrastructure Costs So Much

#105

Post by markus_zhang »

wolverine876 wrote: post #87
InTheArena wrote: post #35

This misses a fundamental point - the goal of this is not to fund infrastructure - it's to fund people who vote for people who vote for infrastructure. There is zero incentive to run on time and on-budget, and every incentive to milk more government cash, so that people in power can get election contributions, that stay in power. If you also deny money to people who didn't vote for you, then all the better as well. S…

I've seen these cynical rants many times, but can you back any of the claims up with anything substantive? For example, that there is no difference between parties? It's important, because it disarms us; if we don't differentiate between the more and less corrupt, we can't improve the situation. There is greed and corruption in the world, but that's not all there is. There are plenty of people who want to do a good j…

Maybe unrelated but there was a report about the construction related corruption in Quebec. I read it back in the year 2015 and there was a lot of interesting information.

For example, many construction projects are given to favored parties and government engineers who take care of those projects will make sure that outsiders do not get the tender offer. Occasionally someone from outside of the circle makes a competent bid so there are multiple stages to persuade such party to withdraw the bid: 1) The engineer in charge phones the party, 2) Shady characters riding on motorcycles throw garbage at the door of the said party, 3) I forgot what the 3rd stage is.

Here is the document if anyone is interested:

https://www.apigq.qc.ca/wp-content/uploads/2021/04/rapport_f...

Re: Why U.S. Infrastructure Costs So Much

#106

Post by notreallyserio »

dymk wrote: post #74
intrepidhero wrote: post #34

Earlier quoted context omitted.

Firm fixed contracts seem like the way to go, until you try it. What happens is you get a bunch of contractors in a bidding war trying to undercut each other until the actual bid is below cost. That's not sustainable so what happens then? The winner will cut every possible corner to try to make a profit margin and read the contract in the narrowest way possible so they can hit the government with a fat change order.…

Where's the evidence that contractors will bid below-cost? Even if some do, they'll just go out of business, and the contractors who know how to do basic math will live another day.

Meanwhile you end up with a bridge half-built because the cheapest contractor went bust.

(I don't know if contractors bid below cost.)

Re: Why U.S. Infrastructure Costs So Much

#107

Post by [deleted] »

munk-a wrote: post #99
DennisP wrote: post #85

Earlier quoted context omitted.

From the article, Istanbul gets things built a lot cheaper, partly because: > Whereas Boston might only build one new transit line every few decades, Istanbul builds dozens. Seems like building dozens of times as much would even more effectively "fund people who vote for people who vote for infrastructure." So why aren't we like Istanbul?

The more regular an activity is the more likely you're going to have people specialized in it - you'll have much more accurate estimates around costs and time to deliver since people will have more recent experience getting it done and you'll have infrastructure around building infrastructure. When these projects are rarer it becomes infeasible for a company to dedicate itself to the labour so you end up with residen…

[deleted]

Re: Why U.S. Infrastructure Costs So Much

#108

Post by GhettoComputers »

wolverine876 wrote: post #87
InTheArena wrote: post #35

This misses a fundamental point - the goal of this is not to fund infrastructure - it's to fund people who vote for people who vote for infrastructure. There is zero incentive to run on time and on-budget, and every incentive to milk more government cash, so that people in power can get election contributions, that stay in power. If you also deny money to people who didn't vote for you, then all the better as well. S…

I've seen these cynical rants many times, but can you back any of the claims up with anything substantive? For example, that there is no difference between parties? It's important, because it disarms us; if we don't differentiate between the more and less corrupt, we can't improve the situation. There is greed and corruption in the world, but that's not all there is. There are plenty of people who want to do a good j…

There is only one political party, you can see it in effect of their governance. Locally they might do things differently, the “land/city” way regardless of their party.

Re: Why U.S. Infrastructure Costs So Much

#109

Post by danny_codes »

carabiner wrote: post #93

How was China able to blanket their entire country in high-speed rail in less time than it'll take to a build a single line in California? Is it just more manpower?

No, it's entirely politics and policy.

California has an extremely cumbersome legal baggage that drags against public projects. Strong public unions, poorly implemented environmental protection laws, and a legal code that enables rampant NIMBYism are, IMO, the main limiting factors for Californian growth.

We could today pass legislation that circumvented all of this nonsense, and we would see HSR rapidly built across CA.

I would guess that for these sorts of projects the actual building part is relatively cheap and simple: it's the endless legal battles, plan changes, and political maneuvering that balloons cost.

China doesn't have this problem. If the CCP is unified on some policy, no local protectionist politicians can slow them down.

Re: Why U.S. Infrastructure Costs So Much

#110

Post by throw0101a »

InTheArena wrote: post #35

This misses a fundamental point - the goal of this is not to fund infrastructure - it's to fund people who vote for people who vote for infrastructure. There is zero incentive to run on time and on-budget, and every incentive to milk more government cash, so that people in power can get election contributions, that stay in power. If you also deny money to people who didn't vote for you, then all the better as well. S…

> This misses a fundamental point - the goal of this is not to fund infrastructure - it's to fund people who vote for people who vote for infrastructure.

You say this like wanting to repair/replace infrastructure is a bad thing. Are collapsing bridges a good thing?

* https://fox23maine.com/news/i-team/ask-the-i-team-cars-still...

* https://www.commercialappeal.com/story/news/2021/07/28/i-40-...

* https://www.arkansasonline.com/news/2021/sep/08/county-sets-...

Or perhaps locks on the Mississippi so that goods can be transported:

* https://wnax.com/news/180081-grassley-wants-corps-to-priorit...

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