Leo, paul, other good folk:
The joys of government construction work…
The initial problem usually begins with the inadequacy of and contradictions within the design documents. The architects and engineers get their work on a lump sum basis, so the less time they spend actually producing the plans and specifications the more they make. And, the design work is not usually awarded based on price but on how the government agency awarding the contract likes the presentation of the design firm. And, since the government employees making the decision are unlikely to be knowledgeable about what an architect or engineer actually does, their criteria for selection seldom have anything to do with relative competency of the competing firms. And, whiskey’s paradigm often applies with “affirmative action” firms getting the job, without regard to their prior experience or core competencies.
Then the bureaucrats at the awarding agency put together the bid package with hundreds of pages of boilerplate, much of it mutually contradictory or inapplicable to the actual project. But all of it is in the regulations somewhere, so, into the bid package it goes.
Then the potential bidders actually get to look at the bid documents and have a chance to ask questions and point out discrepancies and vagueries. These questions may or not be answered by one or more “addendas” to the bid documents and it the plans and specifications are truly FUBB, the bid date will be extended more than once.
Bid day comes, the bids are received and may or may not be publicly opened. If not publicly opened, no one knows how they did and the public agency sits on the information for as much as six months, while the bidders are obligated to hold their offers open. All the bidders have posted bonds in the amount of ten percent of their bids, which means that until they know how they did, they are limited in bidding other, possibly private, work.
Eventually, one bidder is selected and notified. Now the successful bidder has to come up with a huge amount of additional documentation on who their subcontractors and suppliers are and a job specific safety plan and a minority and women-owned and disabled veteran-owned business utilization plan and a recycling plan and a local hiring plan and after all these get scrutinized and critiqued and revised and re-critiqued by bureaucrats who have nothing else to do but to justify their existence, the contractor is allowed to start work. In retaliation, the contractor will have prepared many, perhaps hundreds of “RFI’s”,(Requests for Information), asking for clarifications of discrepancies in the plans and specifications and pointing out things that will be physically required to complete the job that are not incorporated into the design documents. These are addressed by the architects and engineers, who generally try cover their anatomies (CYA) by saying that anyone should have foreseen these issues and resolved them at their own expense. The contractor protests and this may or may not delay the job and usually results in the contractor receiving change orders giving them additional time and money for the “changed conditions”.
Once work actually starts, additional changed conditions are discovered, either things that the architect and engineers could not have been aware of, “concealed conditions”, or should have been aware of but blew off. More RFI’s and change orders to the agency.
There used to be a rule that the worse the plans and specifications, the less markup on the original bid, since the contractors would figure that they would make their profit through change orders as the contract documents were corrected over the duration of the job. So, that agencies got”smart” and severely limited the percentage of overhead and profit that contractors could charge on change orders, often to a point below actual cost, so now the worse the design documents the HIGHER the initial bids will be.
The agencies, like many consumers, believe that somewhere out there is a Magic Contractor. This is, that there is a contractor who is financially strong enough to bond the job (100% performance bonds are required), stupid enough to bid for less than the job will actually cost, but technically savvy enough to build the job and,again, financially strong enough to complete the job at a loss and walk away happy. Well, there may be Magic Contractors, but they don’t last long. But, like contractors who abuse their subcontractors and suppliers, the agencies believe in the Infinite Pool of Fools Theory, i.e. there are an infinite pool of fools who will take work for less than it costs to perform. Sadly, this is often correct in the short run.
Inspectors? Some are pretty good, but there are also those like a contractor I know encountered on a project for the Golden Gate Bridge Authority, who would actually damage the work in place and require the contractor to remove and replace it. Since the contractor had subcontracted the work, it was no skin off his nose and he just passed the responsibility on the the subcontractor. Subcontractor could have protested, but he would have to go through the general contractor to get to the agency, and this would have delayed the job, which had a thousand dollar a day penalty for delayed completion, the subcontractor just shut up and made the repairs.
Similar situations occur all the time with the inspector requiring work which is beyond the scope of contract documents. If the general contractor is scrupulous, this will be challenged and a change order written, but the general contractor may be trying to curry favor with the agency and the inspector, so again the subcontractor may simply be hung out to dry.
In fairness to the agencies and their inspectors, there are incompetent contractors and subcontractors. However, unlike incompetent contract administrators and inspectors, they go broke and leave the industry.
Yup, that’s why government work costs a damn sight more than private work. But, not to worry, a lot of social goals are met along the way and it’s not like it was anyone’s money.
