I once chatted with the foreman of a skyscraper construction project who happened to always be standing out on the street near my office where I regularly got coffee, and I got to ask him a bunch of questions about the process. It was a lot of "what's that guy up there doing with that giant temporary platform" and "why do they X" kind of stuff, but when I was asking about the crane that was eventually going to have to be doubled in height when the building got too tall, he blew me away with the precision and confidence about that progress. "That will get jumped up on Memorial Day" he said, and that was several months away. I asked him how he could be so certain, and he explained that they build one floor per week, and the various trades (concrete, framing, electrical, plumbing, finish) each worked on one floor at a time in a pipelined fashion. So while concrete is working on the 19th floor, framing is working on 18, plumbing on 17, etc. When I asked what happens if one of those trades doesn't finish within their week, he looked at me like I was absolutely insane. "That doesn't happen. It can't. They have a week." Sure enough, the crane got taller on Memorial Day. After hearing that explanation it was fascinating to watch the progress and confirm that every tuesday, they'd start pouring concrete on the next floor up.
Coming from a software perspective, I thought this was pretty impressive. When was the last time anyone told you something was going to take a week and it actually took a week? :D
BTW, to answer a question about the crane, there are regulations limiting the crane to a specific height which change once the building gets tall enough to support having the crane bolted to the side of it.
I can say how long my software compile or build time takes fairly accurately. That's the better analogy to use with construction. The rest of the software project is design work, I'm moving walls around, adding more load bearing, and so on.
I’m surprised how often people are wrong about simple things like this. If a build takes five minutes, that’s the absolute least amount of time before you’ll have a binary. The CI tool could have a queuing glitch. You could have a flaky test, you could be failing to isolate multiple integration test runs properly and one could ruin the other.
But that’s just the simple stuff, the stuff without humans. Most of the time if something will take five minutes, we often try to find something to do that will take a few minutes. Well guess what, we always underestimate how long things will take, ususally by a factor of two. So a five minute build can take ten minutes for you to notice if it succeeded. And if it failed thirty seconds in, you might still be looking at fifteen to twenty minutes to the end of the second build (the more failures the lower the likelihood someone will multitask, but for some they only watch the third try closely).
This doubling and tripling is why it’s more important than you might expect for compile and test times to be very fast. An extra minute can turn into three way too often.
the workers in trades in a construction project have plans. they have schematics that say do this here. to this exact dimension. using this exact type of connector. they don’t (usually) say which tools to use or how to do everything, it’s assumed you know
compare this to a software team that has plans (design docs) for everything they want o build. they have schematics (tickets) that say do this here. to this exact interface. they don’t (usually) say which tools to use or how to do everything, it’s assumed you know
i don’t think these scenarios should be that far apart. those people in the skyscraper aren’t moving walls. that would screw over the whole project. they have the output of more planning so they don’t have to. and it paid off during implementation
Similar story: I asked a friend, who ran public comms on a rail extension project, to see her schedule.
Two Fridays away at 11:05 a concrete truck turns up and pours. At 13:10 something is laid by some specialist in the concrete. At 14:50 another thing happens.
I asked her if she was joking and she looked at me like I was mad. Of course not. The concrete needs to be poured and then the truck goes somewhere else. When it hardens a thing has to happen and then the guy who checks the thing turns up and they’ve only got him for half a day and so on and so forth.
My mate says that “if they built bridges like we built IT infrastructure a lot more people would die”.
My mate says that “if they built bridges like we built IT infrastructure a lot more people would die”.
If people regularly died because of IT infrastructure, we'd be regulated and licensed like civil engineers and we certainly wouldn't be writing software in C/C++/nodejs. We'd all be coding in stuff like Ada and Erlang and most of our day wouldn't involve writing logic at all - it would involve filling out documentation and forms around the occasional bit of logic that would get written, probably by someone else.
It makes sense when you consider each floor is essentially identical. I imagine skyscrapers and the like should be pretty predictable once the foundation is set up - it's just rinse-repeat for the next hundred floors (mostly). You don't have to deal with any preexisting limitations either, way up in the sky (unlike ground infrastructure, which has to deal with rights of ways, underground services, etc).
A better software analogy would be "how long will it take to deploy the next Kubernetes cluster?" which can be fairly accurately predicted if you know the number of nodes etc. and how long it took to deploy previous clusters.
If you're interested in learning more the term to search is "takt-time planning", specifically as it relates to lean construction methodology rather than manufacturing.
I've never been on anything that tight, but I'll say that the projects I've been on where we used Gantt charts and had a dedicated project manager got done with a lot more precision than anything managed by an agile process.
Maybe it's just me, but having my reputation staked on my estimates with an easy to read chart of dependencies and deadlines helps me 'servo' my effort(i.e. work overtime) and come in closer to the estimate.
I wouldn't suggest that for everyone, but some of us like that sort of pressure and the feeling that comes with nailing it. Then again, I don't have kids.
Never once got someone with a hardon for Gantt charts to make an honest graph of what depended on what, so I have nothing but bad, borderline traumatic experiences with Gantt charts.
Management always tried to ride them like it was sheet music for an orchestra. This has to be done before this, so we’re going to schedule one to start the day after the other finishes. Sure. This whole scheduling process is a farce so I’m now entirely checked out, so it’s just going to get worse as the meeting goes on.
Bruh stop being a bootlicker; even if you enjoy doing unpaid work, you're undermining your colleagues who probably don't. When the work takes longer than estimated, that's a problem with the estimate, not a reason you should be giving more hours of your life to rich owners.
IIRC this falls into classic fallacy where teams set low goals so as to always exceed them. The better way is to have people estimate and bet money on delivery.
> Coming from a software perspective, I thought this was pretty impressive. When was the last time anyone told you something was going to take a week and it actually took a week? :D
If you are asked to write the same exact piece of code (like each floor) 18 times you'd probably have no problem meeting schedule.
And, crucially, the entire project is preplanned. That preplanning is the software phase equivalent - the construction is running the code. (Or at least, the preplan is defining all the necessary function definitions and connecting them confidently, and construction is just writing each implementation.)
I can tell you with great precision how long it will take me to build software that has requirements as precise as a skyscraper's. The problem is that most of the time the software to be built has nebulous requirements
> "That doesn't happen. It can't. They have a week."
Maybe it didn't happen that time, or maybe it did and they remediated somehow (at higher cost), but I have a dataset that says it happens all the time. And that "it can't happen" attitude is part of why it actually happens- nobody is looking ahead at uncertainty.
This could be because construction (civil engineering?) is a fairly mature field that's been around for hundreds of years. Of course there's new materials and designs and everything but there are also established methodologies and standard practices.
Add things generally go according to plan in Western countries so I'm not surprised.
(I'm from a non-Western country where long term planning of anything is futile — too much entropy and chaos).
Computers, software etc is a very young field in comparison. By the year 4723 things would hopefully be standardized (and possibly build themselves).
While the maturity of the field is surely part of it, the fact remains that a typical piece of computer software almost certainly has a lot more unique complexity and functionality than a typical building. It's pretty rare a building is expected to provide the ability to do something that no other building has ever done before, yet we expect this sort of thing of software all the time. Nor is a building expected to perform complex logical and arithmetical operations while in use, or if it is (e.g. software controlling the elevators or climate control system), it's using more-or-less off-the-shelf componentry to do so.
I studied the financing aspect of large building construction in a law school class. It works in a similar fashion. The development money is doled out on a very structured basis, sometimes literally one floor at a time. There are numerous milestones and you have to stick to the schedule or the money stops.
One thing to consider is that when you're building up into the air instead of digging into the ground, you have much fewer opportunities for unknowns to affect you.
To contrast that, in the last few days I have spent 14h that I never considered in the schedule to wrangle TypeScript issues and bugs (4 to be precise).
> A contractor with a proven track record of rebuilding damaged freeways (most notably the Santa Monica Freeway after the 1994 Northridge earthquake) well ahead of schedule, C. C. Myers, Inc., submitted a winning bid of $876,075 to repair the damage to the I-580 connector. The bid was estimated to cover only one-third of the cost of the work, but the firm counted on making up the shortfall with an incentive of $200,000 per day if the work was completed before June 27, 2007.
> On the evening of Thursday, May 24, the I-580 connector re-opened, just before the busy Memorial Day weekend. The deadline to finish the project was beaten by over a month, with the contractor earning the $5 million bonus for early completion. The entire reconstruction project was completed only 26 days after the original accident.
There wasn't a negotiation. Caltrans wanted it done before Memorial Day weekend and saw that the economy was losing money from the extra costs of not having that part of the maze in place and so created a structure that had very large bonuses and very large penalties.
> The collapsed section of Interstate 580 will be rebuilt and reopened to traffic within 50 days under a Caltrans plan to speed up repairs on the MacArthur Maze, officials announced Thursday.
> Nine construction companies have been given the weekend to prepare proposals to do the work, which Caltrans Director Will Kempton said should cost less than $20 million. Caltrans will choose one of the companies by Monday evening, rushing a bidding process that normally would take months.
> The firms must repair the collapsed freeway by June 29 or face $200,000 a day in penalties from the state. But should they finish the work ahead of schedule, they'll earn a $200,000-a-day bonus for each day they were ahead of the deadline, Kempton said.
> "There is absolutely no question in my mind that any incentives paid to achieve early opening is money well spent," he said at a news conference in Sacramento.
> The clock starts running Tuesday morning, Kempton said, and the contractor is expected to start work immediately.
> ...
> Kempton said that the bonus money offered to open the freeway before June 29 is based on what officials estimate the closures are costing the state. Caltrans will pay for the project initially from a highway safety account, but federal officials have said they will reimburse California for the repairs.
that supports at least part of the thesis of this video though, that unknown factors in the design contribute to cost overruns - if you're rebuilding an exising piece of infrastructure in essentially the same way it was before it was damaged, you've got a lot fewer unknowns to work with.
To be fair, a 26-day project is far more easier to manage (to be on-time and not over the budget) than a multiple-year project, despite the former could be more technically impressive.
> A state projection concluded that the connector collapse had cost $90 million, based on a $6 million per day economic impact estimate. This includes a $491,000 loss in toll revenue for the Oakland Bay Bridge.
$200,000 per day bonus vs $6M per day economic impact seems like a incentive that was priced very well for the state.
Our small Maine city recently replaced an entire bridge in a couple days, https://verandaplan.org/
It worked great. They shut down the road for a couple hours, literally moved the newly built bridge from beside the road into place, and then were ready for rush hour in a couple days. I had a friend who worked the project.
America can build great things if we were willing, but the past 70 years has seen strong anti-government rhetoric (weirdly after the most successful big government projects seen probably in our history) has helped hollow out local governments and remove any chance they had to cultivate internal talent that could get more efficient at doing things.
Imagine having the pay of a local grocer, the turnover of Amazon warehousing, and the public animosity of Google and Facebook combined, with an entire TV channel watched by 60 million daily screaming that your very existence hurts the country, and plenty of grandmas taking that to heart. Government is overtly attacked every single day. Is it any wonder it often struggles?
It’s bizarre to point to criticism of the government to justify the failures of the government. What exactly are people supposed to do in response to public services that are over budget and don’t serve their needs?
Surely the solution to criticism of government inefficiency is for government to operate well. If visiting San Francisco was like going to Tokyo or Copenhagen—clean, efficient, convenient—Fox News would lose credibility. At some point, people in Missouri would point to San Francisco and be like “that’s great, why don’t we do that here?”
Sure, but to operate well you need to be able to hire top talent (and therefore pay top dollar) and you need to give them the freedom to do what they think best without being micromanaged, both things that require a level of public trust. This seems to be one of those "multiple stable equilibria" problems - a government that is trusted can be effective and justify that trust, a government that is mistrusted will be ineffective and justify that mistrust.
>It’s bizarre to point to criticism of the government to justify the failures of the government.
I think that would be a fair statement to make in the global context, but Americans' distrust and paranoia around anything the Government does really is exceptional.
I would always choose San Francisco over Missouri. Every day of the week. St Louis' crime rate dwarfs san francisco, and the economy is much weaker. You can cherry pick stats that support your cause all day.
The fact is people in other states have infrastructure that some of my taxes went to. I will never use those roads. Perhaps we should all be selfish and just take more and more for ourselves?
Principled, fiscal responsibility is a great thing and what I would champion - but these bad faith arguments are not fiscal responsibility. We need some level of service and infrastructure. Even if costs overrun, we still need highways.
>> It’s bizarre to point to criticism of the government to justify the failures of the government.
This is precisely the conservative game plan though: starve the government of funds, force it to outsource as much as possible to the private sector, then when projects end up delayed and overbudget (or failing), point to lack of government efficiency and competence to justify further funding cuts.
This has been happening since basically the Reagan era.
>> Surely the solution to criticism of government inefficiency is for government to operate well.
No organization can operate well if it doesn't have necessary levels of funding, and the government is no exception. Said lack of funding is the primary cause of the inefficiencies, which often times manifest as lack of inhouse expertise that can provide strict analysis of and oversight for projects outsourced to the private sector.
>If visiting San Francisco was like going to Tokyo or Copenhagen—clean, efficient, convenient
A lot of the positive traits of these cities come from the citizens themselves. It's them as much as the government of these places that want that - therefore they create a system that achieves what they want - 'the government', and are willing to cooperate with it to get what they want.
If all San Franciscans wanted a clean, efficient and convenient city, I'm more than convinced that all citizens working towards that goal could readily achieve it, and would make a government tasked with those goals.
Governments I would argue, since they're usually made up of the local people, reflect the goals of these people. And if 'good enough' is OK for them, then that's what they get.
Fox news can openly tell a court that it knowingly lied to its audience and lose only ten percent or so of its audience. They faced bigger backlash being critical of Trump. Meanwhile there are 49 other states, some of which that do things well, but fox news doesn't talk about that because they don't run positive stories about government because of their ideology.
The time it took to place the bridge has almost no indication of whether this project was on time or on budget.
This bridge project started December 2017! So 5+ years of work for a weekend of final execution. On top of this, while the bridge may be in a small city in Maine, the initiative is run by the Maine DOT, which is likely substantially larger as an organization.
The best construction hustle I've ever seen is Georgia's relatively recent repair of a bridge over I-85.
I-85 is an interstate highway serving a central economic corridor through Atlanta. A portion of the bridge collapsed when a homeless person lit a fire next to highly flammable plastics stored under the bridge, which later grew into a bridge-melting inferno.
The state of Georgia provided incentives for contractors to finish the project early due to the incredible economic damage it was causing. The loss of the bridge took out all travel on I-85 - it was a devastating and crippling loss that gave many Atlanta area knowledge workers their first taste of "work from home" (or five hour commutes).
The incentives provided absolutely made the contractors hustle. There was work ongoing 24/7 for the entire period, and they completed ahead of time and budget. I don't think I've ever witnessed something happen so fast.
It was a marvelous feat, and it's too bad we don't see more like it. It's what happens when the correct incentives and pressures are put in place.
It has a bearing on the cost associated with road closures, which can't be insignificant.
Anyway, some quick looking found:
> Gov. Janet Mills toured the Veranda Street site of the new bridge being installed along Interstate 295 in Portland on Saturday afternoon and said she was pleased with the rapid progress of the project.
> “I’m thrilled with the technology, thrilled that it’s going on time and on budget,” Mills said. “Three days’ time, and this bridge will be done. It’s amazing. It’s like giant Legos going together.”
Do you think the complaints about government come unfairly out of the blue while it busily provides efficient and timely service with a friendly smile to its constituents?
No. However, consider that since the 40's there has been a concerted effort by a variety of actors, such as Rothbard and other people backed by institutes such as the Volker fund, the AEI, Federalist Society, Murdochs, etc. to sap both the perceived effectiveness of government and the actual effectiveness of government.
"Government doesn't work - elect me and I'll prove it!"
I guess the better question is, are the complaints limited to those that provide a poor service? Or are they fairly evenly distributed regardless of how good or bad the government in question performs?
The point isn't the government services are currently high quality. The point is that the current environment foster low quality service. In some cases voting in politicians that drove top-down management changes would help. And that would require the populace to value such changes. We might need to structure the incentives for government employees, contractors, or the regulatory environment to better align with delivering good service. That might mean more pay, which means either higher taxes or strong prioritization of efforts. We can't do that intelligently if nobody cares, or is skilled enough to drive these large institutions. Because it is hard. We almost certainly are using the wrong tradeoffs: some things privatized and outsourced should be done by government agencies. Some functions should be privatized or just regulated on the open market. Some things are better handled at regional levels that today are handled at local or national levels. The mix of tradeoffs is wrong. Incremental work to fix this requires a society-wide agreement to make progress. Not necessarily agreement on any particular (and even when there is agreement, we are going to get it wrong a bunch) but agreement on the project of bettering our society and social collaboration. That seems like it is missing and thus progress is made only in fits in starts, in a hostile environment. A hard-one deregulation here, a new bill to fund a project there, contested on ll sides, and undermined before the initiatives get started.
Anti-government rhetoric? In New York State, construction projects have been notoriously delayed and gone over budget ever since the days of Boss Tweed, which historians have generally linked to corruption and graft.
At least with major projects this is 100% the case. Had a buddy involved in a state legislature said one of the reasons there is so much road work and construction going on all the time is because it is one of the easiest ways to disguise corruption and embezzlement.
As an example in a 5 year project for a new overpass you can have literally 1000s of different contractors involved in the work and it becomes very difficult to notice and prove that Joe's Cement company never showed up to pour the liminal substrate pylons like they were paid $10k to do.
> with an entire TV channel watched by 60 million daily screaming that your very existence hurts the country, and plenty of grandmas taking that to heart
Just say the name next time, I think it's obvious whom you are referring to. It's also obvious replies to your assertions are off topic in part because of this part of your reply.
So here's my list of what the article suggests cause large construction projects to go over budget.
> SUMMARY:
> It’s a tale as old as civil engineering: A megaproject is sold to the public as a grand solution to a serious problem. Planning and design get underway, permits issued, budgets allocated (that took a lot longer than we expect), construction starts, and then there are more problems! Work is delayed, expenses balloon, and when all the dust settles, it’s a lot less clear whether the project’s benefits were really worth the costs.
> REASONS:
> underestimation
> limit in design prevents accurate overall estimation
> subcontracting availability
> subcontracting sufficiency
> subcontracting estimation (bids)
> missed pre-construction costs
> inflation of labor and materials
> course correcting takes longer on big projects
> stakeholder compromises
> not taking exploratory work into account
> opportunistic greed
> ...but that's not nearly as common as: "just too darned optimistic and short-sighted"
The suggested solution from the source, as the author points out, is to spend more time in design and planning.
As far as software, that suggests waterfall like planning could give you a better estimation on total project expenditure. But delivery has won that battle, I think. Maybe as our industry contracts (layoffs and svb) we'll see a push towards that kind of project estimation too?
More time in design and planning? That phase can already often take a decade. I realize most of that is probably political horsetrading around which backyard is going to be torn up and which budget the money will come from, but long planning phases are already a problem.
[This is good natured ribbing] Small? Small Maine City? I clicked this expecting to see Machias or Limestone, but I get your biggest city? Sure, it's small by comparison to other cities, but it is your biggest!
Tone is difficult to convey online, so please understand this is all in jest. :-) I grew up in DownEast Maine (Machias was my local 'small city') - so I actually was expecting some small city I'd never heard of. Jokes aside, that is very cool about the bridge, and you make good points in your last 2 paragraphs.
> Imagine having the pay of a local grocer, the turnover of Amazon warehousing, and the public animosity of Google and Facebook combined, with an entire TV channel watched by 60 million daily screaming that your very existence hurts the country, and plenty of grandmas taking that to heart. Government is overtly attacked every single day. Is it any wonder it often struggles?
Right. Completely nothing to do with underdelivering while bending the knee to whoever corporation brib... I mean lobbied more.
There are MILLIONS of people who work in government that aren't politicians and are just trying to do the best with the purposeful obstruction that is handed to them.
I was happy to see the author mention optimism bias.
One part I didn’t see is how project managers may deliberately underestimate to take advantage of the sink cost bias. If competing for funds, a PM may intentionally low-ball an estimate to get their project selected, knowing it’s easier to continually ask for more money later rather than a larger sum upfront.
I would have also liked to see more discussion about joint probabilities. If one sub-discipline goes over budget, it may other disciplines (particularly commissioning) exceed their initial estimate as well. Change orders beget change orders.
In my experience project managers can often be fairly realistic. But everyone up the management chain (understandably) wants projects to cost less and take less time. So a lot of pencil sharpening happens to take slack out of the system. Then deliveries are late, Joe is out with the flu for a week, v arious unexpected problems are encountered, etc. And before you know it you're overbudget and late.
Project managers often come in too late, in my experience. And they are, by and large, realistic. Specifically for construction, the low-balling stage is when the Estimators are putting together a tender to try to secure the work in the first place.
The PM arrives later, once the project has been awarded and now they have to make these estimator sourced budgets and schedules somehow jive with reality. It isn't an easy task.
One of the researchers mentioned by another commenter has termed this "strategic misrepresentation":
The first theory Flyvbjerg embraced is called “strategic misrepresentation.” Which is essentially a fancy way of saying that you lie in order to get what you want.
>FLYVBJERG: We’d actually interviewed planners who said that they did this deliberately, that they actually were incentivized to misrepresent the business cases for the projects in their benefit-cost analysis. And they wanted their projects to look good on paper, to increase their chances of getting funded and getting approval for their projects. And they said, “We do this by underestimating the cost and overestimating the benefits, because that gives us a nice high benefit-cost ratio so that we actually get chosen.[1]
I've experience this, but I also think it may depend on the unique culture of individual organizations. Of course, it's likely just one of many factors that ultimately lead to poor planning. The podcast in [1] covers some of them and it's a good listen for anyone interested in public work projects.
This is exactly it, the optimism bias is usually more likely to come from the client, especially if there's politics involved. What makes it worse is that once the project is underway there's a political tendency to increase the scope.
Prime example is the Scottish Parliament building, first estimate was for £50m. By the time all of the politicians were done with it the project's scope was unrecognisable and it cost well over £500m.
And there's one of the biggest differences between public and private sector scope changes. When the private sector decides to massively revise what they're doing on a project most of the decisions take place behind closed doors and the guy with the most impact on the scope creep probably puts in on his CV as successfully scaling up operations. When the public sector project balloons it's people's tax dollars and there's an opposition party and lots of journalists pointing out the original budget.
“News that the Transbay Terminal is something like $300 million over budget should not come as a shock to anyone. We always knew the initial estimate was way under the real cost. Just like we never had a real cost for the Central Subway or the Bay Bridge or any other massive construction project.
So get off it. In the world of civic projects, the first budget is really just a down payment. If people knew the real cost from the start, nothing would ever be approved. The idea is to get going. Start digging a hole and make it so big, there's no alternative to coming up with the money to fill it in.”
Unfortunately, public projects also have to manage public perception. Just like you wouldn't appreciate, say, a roofing estimate to be later called a "down payment," the public in general doesn't like that approach either. "We don't know how much it'll cost but just trust us and let's just get started" isn't a particularly palatable sales pitch, especially in domains with a long history of corruption.
I'm curious about the higher level issues at play as well, which I'm just guessing about since I only have a lay understanding of the field
Seems like there's probably a "winners curse" variant: conditioned on a bid being accepted, it is likely to be underestimated even if unconditioned there's an equal probability of under and over resonating
Also seems like there's an incentive alignment problem as well: there's a clear benefit to bidding lower, and if the costs of underestimating are not born by the bidder then you would expect to see systematic underbidding even if we have on-average-accurate ways of estimating.
These feel like important issues that are orthogonal to our ability to estimate things accurately and I wonder how much of the effect is from which type of cause (I wish the author had talked about this)
From experience, what you mention is part of the perverse effects of the bid mechanisms, but these have nothing to do with the initial underestimation and is comparatively minor in relevance.
Something is designed (years time), then it is estimated (often wrongly, however it takes some time as well), then it is approved/funded (some more years).
But, IF the design was valid AND the estimation was correct at the most you could adjust the total amount by inflation/increases of prices.
So, pure theory, you calculate a cost of 100 units (million dollars, whatever), then, since a few years have passed you should add (say) 10% for inflation/price adjustment before proceeding to a public bid (but it is extremely rare that this is actually done).
The construction firms/contractors will offer between 15% and 25% rebate, if the bid is (as often is) given at max rebate, the one with 25% rebate will get the job.
Now, assuming that the estimation is perfectly accurate (it isn't at all) the winner is (on the first day) under for at least 20%, 10% (the price adjustment, if included) and another 10% (their profit), while the remaining 5% is debatable, in the sense that it is what is actually possible that one construction company can save when compared to another for a number of reasons (machinery, organization, whatever).
So, from day one the winner has two possible ways out, the first is to actually optimize the work to recover this 20-25% (difficult) the second is to find errors in the project (relatively easy).
But, once the project is analyzed, what is found is not just the "missing" 20 to 25% (which if spent would not make the project over budget) but more likely something like 100%.
So, at the end of the day, you are going to spend 175 instead of 100, of which 15 is connected to the perversions of the bidding, but 60 is errors in the project or in its estimation.
There is also an element of how government purchases services from vendors. There is some weird setup where an honest estimate often will not be awarded the contract, as it is too high. A vendor will intentionally bid low, and then change order the job to way over the "honest estimate" price.
Vendors need to be rated and penalized for this kind of bait and switch, but unfortunately there is no downside to low ball the bid, and they often win and continue to win contracts.
It comes across as exactly more transparent and honest to me. The bait and switch is dishonest and this incentives against that. If the starting price is closer to the final price that's a better outcome and more transparent.
Exactly. There was some talk of this on some government aviation projects where our company was generally outbid by competitors who would allegedly low-ball the development costs, then when the project inevitably ran out of money, just request more from the government. It was really frustrating to our PMs who tried to bid honestly and lost a lot of business because of it.
It would be interesting to compare prices of privately funded projects vs publicly funded ones, both in terms of cost, over-budget amounts and time needed to complete the project.
I see many public locations, where a short street or even a walkway is closed for months, because they need to repave literally 20-30 square meters of a walkway, while companies such as Hofer (Aldi) manage to repave their parking yard in a few days, while keeping half of it still open for customers.
I imagine a lot of the cost & time for public projects is precisely because they have to be contracted out to private developers. If the government had construction workers & equipment on it's own payroll (like we do for police, postal workers, sanitation, etc), these projects probably get done a lot quicker.
It would have the bonus effect of making infrastructure construction/maintenance projects happen more often. Both by lower the barrier to get started (no need to have contractors bid your project, etc) and b/c it's wasteful to have public employees just sitting around with no work to do.
I’m not sure it’s so much the have to be contracted out part, Aldi may not have in-house pavers either, as the contracting protocols and methods they are required to use. I think an honest, empowered government worker could find and supervise a modest construction project as well as an honest and empowered Aldi worker. But the government workers are not empowered.
The cost of a grocery store parking lot being closed can be easily quantified in terms of lost sales, while the cost of closing a short street or walkway is not as well-defined, and the cost is not borne by those in charge of the construction anyhow. So in the former, there's a clear and measurable incentive to get things done quickly, and in the latter, there's not.
Also: below pavements there are usually quite a lot supply lines as that's the only available space. All work there has to be done careful not to damage anything. On a larger parking lot however there is just a single power line for the lights and little sewage for collecting rain water, while most other area is free.
So my city runs along a highway. They did construction, closing 5 of the 7 north-south roads crossing that highway at the same time. It was either incredibly stupid, or a brilliant move to build a habit of doing everything local.
Absolutely, and added on to this is that cost is fairly proportional to labor hours (plus cost of rental equipment), so if it takes a lot longer to get done, it’s probably also costing a lot more money.
"Stupid rules" for one person are what enable another person to live an independent life. The Americans with Disabilities (ADA) act has been law since 1990 and codifies mobility and access as civil rights in the US.
ADA does add to the costs of projects, but so does, say, safety code compliance. It's the law, and it exists for a good reason.
As for the example of a minor accessibility project costing $1.4M and taking 3 years, I would suggest that there is probably more to the story that helps explain the cost or the time.
A few years ago, my daughter (a young person) ended up in a wheelchair and/or on crutches for several weeks while recovering from surgery. It is moments like that when you realize that the scope of beneficiaries of the ADA is: all of us
Put differently, if you live long enough, you can pretty much guarantee that you will benefit from the facilities the ADA requires at least once (and possibly for a more extended period than my daughter did).
It all looks like extra cost for little benefit until you can see it through the eyes of someone who actually needs this stuff, at which point it becomes at least a valuable and at best a life-enabling set of features.
And the chances are good that you will be one of the people, assuming you live a long and healthy life.
Reminds of the Navy Pier Flyover in Chicago, a half-mile long bicycle/pedestrian bridge that took seven years and $64 million to construct[1].
Not saying that this project was simple by any means, but why did it take seven years to finish? For comparison, the Sears Tower, arguably Chicago's most iconic building and at one time the world's tallest building, only took four years to complete.
I imagine some aspects of building horizontally might not scale as well as vertical construction.
For instance, it looks like the Navy Pier Flyover touches the ground in many different places along its half-mile length, each of those places will have different junk buried there already, unique challenges and access restrictions, and new ownership/usage agreements.
With the skyscraper you dig one messy hole then stack and connect layer after layer of engineered rectangles.
The flyover is free. The sears tower collects rent. If you pay for fast construction with the tower, that means less time not collecting rent which might work out better. If you pay extra to expedite the bike bridge, whats the point? Its a cost center for the city either way. Getting it done faster just wastes the public's money giving them the same thing they would have gotten anyhow.
> It would be interesting to compare prices of privately funded projects vs publicly funded ones, both in terms of cost, over-budget amounts and time needed to complete the project.
Take for example the Munich "Luise Kiesselbach Tunnel": it finished early and under budget, and to my knowledge in its seven years of operation there was no apparent case of cutting corners or botched work. And now one may ask, how is that possible in the country that produced infamous disasters such as the BER airport, the Elbphilharmonie or the #2 S-Bahn tunnel under Munich?
The answer is, the funding makes no difference - the oversight of the funders over the construction process does. When you have to hire external consultants for each project, where the people keep on rotating, instead of having expert knowledge in-house that answers to you, you'll always end up with worse quality - and the external consultants may not have the political standing to override pushes for changes, which tend to be a massive issue in government-funded projects.
Private meet budgets way more often, because there's a finite amount of money. Lenders sign term sheets detailing exactly how much money they'll lend and on what terms, so the developer has precisely that amount of money to spend. It's a big deal to need more funds, because it requires a ton of legal work, probably new banks, new agreements, new terms, etc - all of which might conflict with the existing funding structure.
I feel like some of the issue/reason is because the government has to cover every single possible scenario. “Time to make a road. We better do a three year environmental study to make sure this doesn’t hurt the native turtles.”
I’m all for taking care of the environment, but it feels like there’s a lot more “let’s get community and environmental input” than we had in the past (for better and for worse).
The article/video addresses this. You have to be careful that images of past efficiency aren't just examples of externalizing costs.
> There is no perfect project that makes everyone happy. So, you end up making compromises and adding features to allay all the new stakeholders. This may seem like a bunch of added red tape, but it really is a good thing in a lot of ways. There was a time when major infrastructure projects didn’t consider all the stakeholders or the environmental impacts, and, sure, the projects probably got done more quickly, efficiently, and at a lower cost (on the surface). But the reality is that those costs just got externalized to populations of people who had little say in the process and to the environment. I’m not saying we’re perfect now, but we’re definitely more thoughtful about the impacts projects have, and we pay the cost for those impacts more directly than we used to. But, often, those costs weren’t anticipated during the planning phase. They show up later in design when more people get involved, and that drives the total project cost upward.
This is a huge time sink for transit projects. For example, the sepulveda rail project in LA has like 6 alternatives right now going from heavy rail, monorail, above and below grade, a few different routings. Each requires careful study as if you were going to commit 100% to it, millions of dollars probably in expensive engineering labor, even though realistically only 1 alternative (the heavy rail offering the fastest end to end time) is rumored to be considered. Still, the agency got proposed by this monorail maker, so to act in good faith they have to claim they did their due diligence and came up with these plans showing that yes, in fact, the monorail is inferior to the heavy rail alignment. If you have any community groups opposing any aspect of the project, prepare to spend 2 years refining further useless alternatives to satisfy each and every nitpick. Both community groups (and these are not representative of the community, but more the loudest and angriest with the most time to spare of the community) and companies exploit this good faith planning to extend timelines, increase costs, and often dilute the end product to the detriment of the public that this "community engagement" process is supposed to protect.
That (re-paving 20-30 meters of a walkway) is a tiny project, it has nothing to do with the complexities of large projects (which are the theme of the article).
On these tiny projects, usually the difference between what a public administration and a private can do is only the bureaucracy involved which is a lot for the public and very little for a private firm.
It can also depend on the depth of the bureaucracy; in my little town the town owns a pothole/miniature paving setup, and fixes their own minor things; they don't have to contract out with a company to get it done.
A (larger) town nearby they contract, and everything gets pretty bad before they sign a huge contract, and the company works for a year and fixes everything in one long go.
I've seen this with roads. 1/2 mile closed or under construction for the whole summer. And then 4 miles of another road seems like they do it in 2 weeks.
Thats sometimes because the teams are not in sync because there's often more work than labor or budget. sewer work has to happen but the sewer team is busy with 10 other streets that will be completed first, so the paver team has to wait. It's not like work isn't being done, its more like work is being done elsewhere and you aren't there to see it.
A possible explanation for that situation is that some utility below the pavement needs urgent work, so the pavement is broken open by a utility contractor to do that work, and then they don’t repave it properly … because they’re not allowed to. If that utility contractor did the final repaving they would be taking that work from other contractors which would violate laws that force government to open up contracts fairly. So, a bidding process is started to select the contractor that will repave, and that process takes months.
I work for government myself and have often been frustrated by the inefficiency forced upon us by well-intentioned but misguided legislation. Also, you learn pretty quickly that some contractors play the game better than others and will win one government contract after another, not because they will do the job better, but because they understand the rules around bidding better.
Madrid Terminal 4 cost about half what Heathrow Terminal 5 did. Same architect. Both billion € projects. Both complicated sites next working airports. Similar sizes and infrastructure. Madrid T4 was a public project and Heathrow T5 was a private project. So I think it's more to do with the contracting culture of a country than wether it's a private or a public project. With the UK megaprojects there's about 5-10 project manager guys who rotate between them. It's quite a small group of people who all know each other. A lot of the people working on HS2 now would have been junior project mangers on Heathrow T5 or Crossrail in the past; they bring the culture with them between projects. I think UK construction culture is quite slow and bureaucratic compared to say France or Spain, but not as bad as the US which is on another level.
The scale that government manages, even your small suburban town or whatever, is much larger than an aldi store. Chances are there's more work than money or labor which is why things take as long as they do more than anything. It's not like a private company would manage this better, when the mindset of the american capitalist is to ditch their lifeboats to appear to sail faster.
Thank you for that recommendation. I didn’t know Flyvbjerg had a new book.
For other HN readers interested in the topic I can recommend “ The Oxford Handbook of Megaproject Management”. Bent Flyvbjerg is the editor of the book I believe.
Readit News
Coming from a software perspective, I thought this was pretty impressive. When was the last time anyone told you something was going to take a week and it actually took a week? :D
BTW, to answer a question about the crane, there are regulations limiting the crane to a specific height which change once the building gets tall enough to support having the crane bolted to the side of it.
But that’s just the simple stuff, the stuff without humans. Most of the time if something will take five minutes, we often try to find something to do that will take a few minutes. Well guess what, we always underestimate how long things will take, ususally by a factor of two. So a five minute build can take ten minutes for you to notice if it succeeded. And if it failed thirty seconds in, you might still be looking at fifteen to twenty minutes to the end of the second build (the more failures the lower the likelihood someone will multitask, but for some they only watch the third try closely).
This doubling and tripling is why it’s more important than you might expect for compile and test times to be very fast. An extra minute can turn into three way too often.
compare this to a software team that has plans (design docs) for everything they want o build. they have schematics (tickets) that say do this here. to this exact interface. they don’t (usually) say which tools to use or how to do everything, it’s assumed you know
i don’t think these scenarios should be that far apart. those people in the skyscraper aren’t moving walls. that would screw over the whole project. they have the output of more planning so they don’t have to. and it paid off during implementation
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Two Fridays away at 11:05 a concrete truck turns up and pours. At 13:10 something is laid by some specialist in the concrete. At 14:50 another thing happens.
I asked her if she was joking and she looked at me like I was mad. Of course not. The concrete needs to be poured and then the truck goes somewhere else. When it hardens a thing has to happen and then the guy who checks the thing turns up and they’ve only got him for half a day and so on and so forth.
My mate says that “if they built bridges like we built IT infrastructure a lot more people would die”.
If people regularly died because of IT infrastructure, we'd be regulated and licensed like civil engineers and we certainly wouldn't be writing software in C/C++/nodejs. We'd all be coding in stuff like Ada and Erlang and most of our day wouldn't involve writing logic at all - it would involve filling out documentation and forms around the occasional bit of logic that would get written, probably by someone else.
https://en.wikipedia.org/wiki/Takt_time
Maybe it's just me, but having my reputation staked on my estimates with an easy to read chart of dependencies and deadlines helps me 'servo' my effort(i.e. work overtime) and come in closer to the estimate.
I wouldn't suggest that for everyone, but some of us like that sort of pressure and the feeling that comes with nailing it. Then again, I don't have kids.
Management always tried to ride them like it was sheet music for an orchestra. This has to be done before this, so we’re going to schedule one to start the day after the other finishes. Sure. This whole scheduling process is a farce so I’m now entirely checked out, so it’s just going to get worse as the meeting goes on.
I'd argue that the dedicated project manager was much more important for success than the Gantt charts.
If you are asked to write the same exact piece of code (like each floor) 18 times you'd probably have no problem meeting schedule.
Maybe it didn't happen that time, or maybe it did and they remediated somehow (at higher cost), but I have a dataset that says it happens all the time. And that "it can't happen" attitude is part of why it actually happens- nobody is looking ahead at uncertainty.
Writing software is the equivalent of creating the blueprints; compiling is the equivalent of pouring concrete.
Add things generally go according to plan in Western countries so I'm not surprised. (I'm from a non-Western country where long term planning of anything is futile — too much entropy and chaos).
Computers, software etc is a very young field in comparison. By the year 4723 things would hopefully be standardized (and possibly build themselves).
Totally off topic, but is this a normal usage of this phrase? I've never seen/read "get jumped up" used in this sense.
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> A contractor with a proven track record of rebuilding damaged freeways (most notably the Santa Monica Freeway after the 1994 Northridge earthquake) well ahead of schedule, C. C. Myers, Inc., submitted a winning bid of $876,075 to repair the damage to the I-580 connector. The bid was estimated to cover only one-third of the cost of the work, but the firm counted on making up the shortfall with an incentive of $200,000 per day if the work was completed before June 27, 2007.
> On the evening of Thursday, May 24, the I-580 connector re-opened, just before the busy Memorial Day weekend. The deadline to finish the project was beaten by over a month, with the contractor earning the $5 million bonus for early completion. The entire reconstruction project was completed only 26 days after the original accident.
Amazing: The Rebuilding the MacArthur Maze - https://youtu.be/-TKjwblp1XI
* Bidding low
* Negotiating an incredible daily reward for early completion (I imagine government did consult on the feasibility of this)
* Actually completing such a project in an incredibly short amount of time
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2007/05/04/...
> The collapsed section of Interstate 580 will be rebuilt and reopened to traffic within 50 days under a Caltrans plan to speed up repairs on the MacArthur Maze, officials announced Thursday.
> Nine construction companies have been given the weekend to prepare proposals to do the work, which Caltrans Director Will Kempton said should cost less than $20 million. Caltrans will choose one of the companies by Monday evening, rushing a bidding process that normally would take months.
> The firms must repair the collapsed freeway by June 29 or face $200,000 a day in penalties from the state. But should they finish the work ahead of schedule, they'll earn a $200,000-a-day bonus for each day they were ahead of the deadline, Kempton said.
> "There is absolutely no question in my mind that any incentives paid to achieve early opening is money well spent," he said at a news conference in Sacramento.
> The clock starts running Tuesday morning, Kempton said, and the contractor is expected to start work immediately.
> ...
> Kempton said that the bonus money offered to open the freeway before June 29 is based on what officials estimate the closures are costing the state. Caltrans will pay for the project initially from a highway safety account, but federal officials have said they will reimburse California for the repairs.
Wiki: https://en.wikipedia.org/wiki/Interstate_85_bridge_collapse
Timelapse: https://www.youtube.com/watch?v=PR0PB0BvKVI
> A state projection concluded that the connector collapse had cost $90 million, based on a $6 million per day economic impact estimate. This includes a $491,000 loss in toll revenue for the Oakland Bay Bridge.
$200,000 per day bonus vs $6M per day economic impact seems like a incentive that was priced very well for the state.
It worked great. They shut down the road for a couple hours, literally moved the newly built bridge from beside the road into place, and then were ready for rush hour in a couple days. I had a friend who worked the project.
America can build great things if we were willing, but the past 70 years has seen strong anti-government rhetoric (weirdly after the most successful big government projects seen probably in our history) has helped hollow out local governments and remove any chance they had to cultivate internal talent that could get more efficient at doing things.
Imagine having the pay of a local grocer, the turnover of Amazon warehousing, and the public animosity of Google and Facebook combined, with an entire TV channel watched by 60 million daily screaming that your very existence hurts the country, and plenty of grandmas taking that to heart. Government is overtly attacked every single day. Is it any wonder it often struggles?
Surely the solution to criticism of government inefficiency is for government to operate well. If visiting San Francisco was like going to Tokyo or Copenhagen—clean, efficient, convenient—Fox News would lose credibility. At some point, people in Missouri would point to San Francisco and be like “that’s great, why don’t we do that here?”
I think that would be a fair statement to make in the global context, but Americans' distrust and paranoia around anything the Government does really is exceptional.
The fact is people in other states have infrastructure that some of my taxes went to. I will never use those roads. Perhaps we should all be selfish and just take more and more for ourselves?
Principled, fiscal responsibility is a great thing and what I would champion - but these bad faith arguments are not fiscal responsibility. We need some level of service and infrastructure. Even if costs overrun, we still need highways.
This is precisely the conservative game plan though: starve the government of funds, force it to outsource as much as possible to the private sector, then when projects end up delayed and overbudget (or failing), point to lack of government efficiency and competence to justify further funding cuts.
https://en.wikipedia.org/wiki/Starve_the_beast
This has been happening since basically the Reagan era.
>> Surely the solution to criticism of government inefficiency is for government to operate well.
No organization can operate well if it doesn't have necessary levels of funding, and the government is no exception. Said lack of funding is the primary cause of the inefficiencies, which often times manifest as lack of inhouse expertise that can provide strict analysis of and oversight for projects outsourced to the private sector.
A lot of the positive traits of these cities come from the citizens themselves. It's them as much as the government of these places that want that - therefore they create a system that achieves what they want - 'the government', and are willing to cooperate with it to get what they want.
If all San Franciscans wanted a clean, efficient and convenient city, I'm more than convinced that all citizens working towards that goal could readily achieve it, and would make a government tasked with those goals.
Governments I would argue, since they're usually made up of the local people, reflect the goals of these people. And if 'good enough' is OK for them, then that's what they get.
Fox news can openly tell a court that it knowingly lied to its audience and lose only ten percent or so of its audience. They faced bigger backlash being critical of Trump. Meanwhile there are 49 other states, some of which that do things well, but fox news doesn't talk about that because they don't run positive stories about government because of their ideology.
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This bridge project started December 2017! So 5+ years of work for a weekend of final execution. On top of this, while the bridge may be in a small city in Maine, the initiative is run by the Maine DOT, which is likely substantially larger as an organization.
I-85 is an interstate highway serving a central economic corridor through Atlanta. A portion of the bridge collapsed when a homeless person lit a fire next to highly flammable plastics stored under the bridge, which later grew into a bridge-melting inferno.
The state of Georgia provided incentives for contractors to finish the project early due to the incredible economic damage it was causing. The loss of the bridge took out all travel on I-85 - it was a devastating and crippling loss that gave many Atlanta area knowledge workers their first taste of "work from home" (or five hour commutes).
The incentives provided absolutely made the contractors hustle. There was work ongoing 24/7 for the entire period, and they completed ahead of time and budget. I don't think I've ever witnessed something happen so fast.
It was a marvelous feat, and it's too bad we don't see more like it. It's what happens when the correct incentives and pressures are put in place.
https://transportationops.org/case-studies/i-85-bridge-colla...
Anyway, some quick looking found:
> Gov. Janet Mills toured the Veranda Street site of the new bridge being installed along Interstate 295 in Portland on Saturday afternoon and said she was pleased with the rapid progress of the project.
> “I’m thrilled with the technology, thrilled that it’s going on time and on budget,” Mills said. “Three days’ time, and this bridge will be done. It’s amazing. It’s like giant Legos going together.”
https://www.pressherald.com/2022/04/23/i-295-bridge-replacem...
which seems like enough to go on to presume it's at least close to being on budget.
"Government doesn't work - elect me and I'll prove it!"
As an example in a 5 year project for a new overpass you can have literally 1000s of different contractors involved in the work and it becomes very difficult to notice and prove that Joe's Cement company never showed up to pour the liminal substrate pylons like they were paid $10k to do.
> with an entire TV channel watched by 60 million daily screaming that your very existence hurts the country, and plenty of grandmas taking that to heart
Just say the name next time, I think it's obvious whom you are referring to. It's also obvious replies to your assertions are off topic in part because of this part of your reply.
So here's my list of what the article suggests cause large construction projects to go over budget.
> SUMMARY: > It’s a tale as old as civil engineering: A megaproject is sold to the public as a grand solution to a serious problem. Planning and design get underway, permits issued, budgets allocated (that took a lot longer than we expect), construction starts, and then there are more problems! Work is delayed, expenses balloon, and when all the dust settles, it’s a lot less clear whether the project’s benefits were really worth the costs.
> REASONS: > underestimation > limit in design prevents accurate overall estimation > subcontracting availability > subcontracting sufficiency > subcontracting estimation (bids) > missed pre-construction costs > inflation of labor and materials > course correcting takes longer on big projects > stakeholder compromises > not taking exploratory work into account > opportunistic greed > ...but that's not nearly as common as: "just too darned optimistic and short-sighted"
The suggested solution from the source, as the author points out, is to spend more time in design and planning.
ref: https://www.cambridge.org/core/books/megaprojects-and-risk/7...
As far as software, that suggests waterfall like planning could give you a better estimation on total project expenditure. But delivery has won that battle, I think. Maybe as our industry contracts (layoffs and svb) we'll see a push towards that kind of project estimation too?
[This is good natured ribbing] Small? Small Maine City? I clicked this expecting to see Machias or Limestone, but I get your biggest city? Sure, it's small by comparison to other cities, but it is your biggest!
Tone is difficult to convey online, so please understand this is all in jest. :-) I grew up in DownEast Maine (Machias was my local 'small city') - so I actually was expecting some small city I'd never heard of. Jokes aside, that is very cool about the bridge, and you make good points in your last 2 paragraphs.
Right. Completely nothing to do with underdelivering while bending the knee to whoever corporation brib... I mean lobbied more.
Yet the TV channel is controlled by the council on foreign relations, like all tv channels, and says exactly what the government directs them to.
https://mronline.org/2017/07/23/the-american-empire-and-its-...
One part I didn’t see is how project managers may deliberately underestimate to take advantage of the sink cost bias. If competing for funds, a PM may intentionally low-ball an estimate to get their project selected, knowing it’s easier to continually ask for more money later rather than a larger sum upfront.
I would have also liked to see more discussion about joint probabilities. If one sub-discipline goes over budget, it may other disciplines (particularly commissioning) exceed their initial estimate as well. Change orders beget change orders.
The PM arrives later, once the project has been awarded and now they have to make these estimator sourced budgets and schedules somehow jive with reality. It isn't an easy task.
The first theory Flyvbjerg embraced is called “strategic misrepresentation.” Which is essentially a fancy way of saying that you lie in order to get what you want.
>FLYVBJERG: We’d actually interviewed planners who said that they did this deliberately, that they actually were incentivized to misrepresent the business cases for the projects in their benefit-cost analysis. And they wanted their projects to look good on paper, to increase their chances of getting funded and getting approval for their projects. And they said, “We do this by underestimating the cost and overestimating the benefits, because that gives us a nice high benefit-cost ratio so that we actually get chosen.[1]
I've experience this, but I also think it may depend on the unique culture of individual organizations. Of course, it's likely just one of many factors that ultimately lead to poor planning. The podcast in [1] covers some of them and it's a good listen for anyone interested in public work projects.
[1] https://freakonomics.com/podcast/heres-why-all-your-projects...
Prime example is the Scottish Parliament building, first estimate was for £50m. By the time all of the politicians were done with it the project's scope was unrecognisable and it cost well over £500m.
“News that the Transbay Terminal is something like $300 million over budget should not come as a shock to anyone. We always knew the initial estimate was way under the real cost. Just like we never had a real cost for the Central Subway or the Bay Bridge or any other massive construction project.
So get off it. In the world of civic projects, the first budget is really just a down payment. If people knew the real cost from the start, nothing would ever be approved. The idea is to get going. Start digging a hole and make it so big, there's no alternative to coming up with the money to fill it in.”
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Seems like there's probably a "winners curse" variant: conditioned on a bid being accepted, it is likely to be underestimated even if unconditioned there's an equal probability of under and over resonating
Also seems like there's an incentive alignment problem as well: there's a clear benefit to bidding lower, and if the costs of underestimating are not born by the bidder then you would expect to see systematic underbidding even if we have on-average-accurate ways of estimating.
These feel like important issues that are orthogonal to our ability to estimate things accurately and I wonder how much of the effect is from which type of cause (I wish the author had talked about this)
Something is designed (years time), then it is estimated (often wrongly, however it takes some time as well), then it is approved/funded (some more years).
But, IF the design was valid AND the estimation was correct at the most you could adjust the total amount by inflation/increases of prices.
So, pure theory, you calculate a cost of 100 units (million dollars, whatever), then, since a few years have passed you should add (say) 10% for inflation/price adjustment before proceeding to a public bid (but it is extremely rare that this is actually done).
The construction firms/contractors will offer between 15% and 25% rebate, if the bid is (as often is) given at max rebate, the one with 25% rebate will get the job.
Now, assuming that the estimation is perfectly accurate (it isn't at all) the winner is (on the first day) under for at least 20%, 10% (the price adjustment, if included) and another 10% (their profit), while the remaining 5% is debatable, in the sense that it is what is actually possible that one construction company can save when compared to another for a number of reasons (machinery, organization, whatever).
So, from day one the winner has two possible ways out, the first is to actually optimize the work to recover this 20-25% (difficult) the second is to find errors in the project (relatively easy).
But, once the project is analyzed, what is found is not just the "missing" 20 to 25% (which if spent would not make the project over budget) but more likely something like 100%.
So, at the end of the day, you are going to spend 175 instead of 100, of which 15 is connected to the perversions of the bidding, but 60 is errors in the project or in its estimation.
The article does discuss this but your comment sounded to me like it was meant to be self-contained.
Vendors need to be rated and penalized for this kind of bait and switch, but unfortunately there is no downside to low ball the bid, and they often win and continue to win contracts.
https://phiprojects.ca/wp-content/uploads/2021/02/boat_chang...
> Vendors need to be rated and penalized for this kind of bait and switch
That wouldn't make the process more transparent or honest, it would just drive up the starting price.
Thankfully we're seeing a rise in multi-point bid comparison. Judgement criteria like "40% price, 30% Proposal Quality, 30% Prior History"
And that is exactly the point! We want more realistic estimations, rather than void promises.
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I see many public locations, where a short street or even a walkway is closed for months, because they need to repave literally 20-30 square meters of a walkway, while companies such as Hofer (Aldi) manage to repave their parking yard in a few days, while keeping half of it still open for customers.
It would have the bonus effect of making infrastructure construction/maintenance projects happen more often. Both by lower the barrier to get started (no need to have contractors bid your project, etc) and b/c it's wasteful to have public employees just sitting around with no work to do.
The problem is not the people completing the work; it's not like Aldi's has their own paving machine in the back.
It's that the government doesn't have employees who know how to specify the project and nobody has an incentive to finish in a timely manner.
I'm not sure it results in projects being cheaper or quicker overall.
But private companies have to contract out to private developers. ALDIs doesn’t have a construction division.
Ah yes, because that's what government workers are known for, speed, efficiency and quality.
Especially when things like equipment, cones and barriers are being rented at high daily rates for months while work is practically at a standstill.
A project in my city that resulted in adding a textured crosswalk pad, new stripes and a beg button cost $1.4M and took 3 years.
ADA does add to the costs of projects, but so does, say, safety code compliance. It's the law, and it exists for a good reason.
As for the example of a minor accessibility project costing $1.4M and taking 3 years, I would suggest that there is probably more to the story that helps explain the cost or the time.
Put differently, if you live long enough, you can pretty much guarantee that you will benefit from the facilities the ADA requires at least once (and possibly for a more extended period than my daughter did).
It all looks like extra cost for little benefit until you can see it through the eyes of someone who actually needs this stuff, at which point it becomes at least a valuable and at best a life-enabling set of features.
And the chances are good that you will be one of the people, assuming you live a long and healthy life.
Sometimes the comments on this site are just insufferable.
Not saying that this project was simple by any means, but why did it take seven years to finish? For comparison, the Sears Tower, arguably Chicago's most iconic building and at one time the world's tallest building, only took four years to complete.
[1] https://blockclubchicago.org/2021/05/10/navy-pier-flyover-a-...
For instance, it looks like the Navy Pier Flyover touches the ground in many different places along its half-mile length, each of those places will have different junk buried there already, unique challenges and access restrictions, and new ownership/usage agreements.
With the skyscraper you dig one messy hole then stack and connect layer after layer of engineered rectangles.
Take for example the Munich "Luise Kiesselbach Tunnel": it finished early and under budget, and to my knowledge in its seven years of operation there was no apparent case of cutting corners or botched work. And now one may ask, how is that possible in the country that produced infamous disasters such as the BER airport, the Elbphilharmonie or the #2 S-Bahn tunnel under Munich?
The answer is, the funding makes no difference - the oversight of the funders over the construction process does. When you have to hire external consultants for each project, where the people keep on rotating, instead of having expert knowledge in-house that answers to you, you'll always end up with worse quality - and the external consultants may not have the political standing to override pushes for changes, which tend to be a massive issue in government-funded projects.
Incentive alignment is one of the main problems. When big projects become “job builders,” you’ve now completely misaligned your incentives.
So yeah private ones usually do meet budget.
Source - am architect
I’m all for taking care of the environment, but it feels like there’s a lot more “let’s get community and environmental input” than we had in the past (for better and for worse).
> There is no perfect project that makes everyone happy. So, you end up making compromises and adding features to allay all the new stakeholders. This may seem like a bunch of added red tape, but it really is a good thing in a lot of ways. There was a time when major infrastructure projects didn’t consider all the stakeholders or the environmental impacts, and, sure, the projects probably got done more quickly, efficiently, and at a lower cost (on the surface). But the reality is that those costs just got externalized to populations of people who had little say in the process and to the environment. I’m not saying we’re perfect now, but we’re definitely more thoughtful about the impacts projects have, and we pay the cost for those impacts more directly than we used to. But, often, those costs weren’t anticipated during the planning phase. They show up later in design when more people get involved, and that drives the total project cost upward.
On these tiny projects, usually the difference between what a public administration and a private can do is only the bureaucracy involved which is a lot for the public and very little for a private firm.
Sears tower was built in three years, while our neurologic clinic [1] with three floors took more than a decade.
Say what you will, but sears tower is a complex project.
[1] https://goo.gl/maps/KLwDmGnk9PrcVLyr5
A (larger) town nearby they contract, and everything gets pretty bad before they sign a huge contract, and the company works for a year and fixes everything in one long go.
I work for government myself and have often been frustrated by the inefficiency forced upon us by well-intentioned but misguided legislation. Also, you learn pretty quickly that some contractors play the game better than others and will win one government contract after another, not because they will do the job better, but because they understand the rules around bidding better.
1. https://en.wikipedia.org/wiki/Bent_Flyvbjerg#Megaproject_pla...
2. https://www.amazon.com/How-Big-Things-Get-Done-ebook/dp/B0BR...
For other HN readers interested in the topic I can recommend “ The Oxford Handbook of Megaproject Management”. Bent Flyvbjerg is the editor of the book I believe.