Why Major Projects Are Always Over Budget
April 26th, 2009 by Steven GardnerRead Danny Westneat’s column Sunday on why the deep-bore tunnel project is almost certain to be far more expensive to build than what’s being projected today.
An English professor (English as in he’s from England, not that he teaches English) has done a series of studies as to why major government projects often come in over budget. There are two things at play.
1. Delusional optimism on the part of those who want to see the project done and are the ones crunching the numbers, which leads to
2. Lying.
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April 26th, 2009 at 2:06 pm
Quit contracting out and do more in-house. Not only will numbers be far more accurate and reliable, more people will keep thier jobs.
See letter to Gov:
http://www.ifpte17.org/units/state/contract/documents/gov_letter_3_09.pdf
Or full report:
http://www.ifpte17.org/publications/docs/Value_subtracted.pdf
April 26th, 2009 at 3:37 pm
It’s very simple, the government doesn’t write a precise specification for the work to be done and then they allow “change orders” to fix what they forgot. Once that happens, the contractor has the upper hand.