And the subcontractors. And the sub-subcontractors. One thing that bedevils mass transit in the U.S. is how much it costs to build. Occasionally, we can have nice things, but it’s so expensive we don’t get very much of them. While there are a lot of reasons, many moons ago, some asshole with a blog speculated:
When it comes to infrastructure, there is a lot of subcontracting. And it’s not just a single subcontract: sometimes these things end up looking like those Matryoshka dolls. One contractor hires contractors, who hires contractors. Leaving aside whether the work itself is shoddier under this system, every subcontractor gets a profit markup (they’re not doing this at cost). I’ve never dived into large infrastructure contracts (and have no desire to do so), but I suspect this plays a big role in why infrastructure costs are so high in the U.S. Part of this probably stems from state and local agencies lacking capacity to do many functions they used to do, including oversight (which is essentially what Whitefish is getting paid for). Might want to do something about this if we want shiny, new stuff.
Well, recent work by Alon Levy suggests subcontracting is a considerable part of the cost of building mass transit (boldface mine):
Some 15 years after these initial inquiries, Levy now has an answer. It is a dastardly combination of:
- Hiring contractors to do the work in a manner so bizarre it almost seems intentionally designed to drive up costs
- Hiring consultants to design and manage projects rather than having the staff to do so in-house (or not having the necessary staff expertise to manage consultants in a way that keeps costs manageable)…
…What does have to happen, first and foremost, is political and transit agency leadership has to actually give a shit.
…None of this is done in New York. The MTA has its own internal cost estimates it regards as trade secrets; contractors almost always come in 20 or 30 percent higher, and then make more money on changes once the project is underway. How much everything costs beyond top-line figures is shrouded in mystery, not just from the public but from other companies that could potentially do it for less.
In blue urban areas, the crisis of governance really isn’t one of legislation–though there’s always room for improvement–it’s about execution and the executive branch. We need better governance.