I'm having trouble tracking it down, but a few years ago congress set up an investigation into why costs are high. The investigation, which basically consisted of calling up various experts, asking them to talk for free, and compiling what they said, reported that the issue was so complicated it needed a better funded study. To my knowledge, that better funded study has not occurred.
At a very broad I recall some of the items identified were:
- Illegal collusion between contractors capable of expensive jobs
- Illegal collusion between contractors and consultants hired by cities to help pick winning bids
- No expertise in government due to cutbacks, so no ability to vet a proposal or understand the progress made (see above)
- No accountability in government
- No accountability for contractors in in contracts
- Poorly thought out legislated process on choosing bidders
- Inefficiencies in mandated working conditions (think multiple people sitting around watching a hole)
- Government/private enterprise corruption
These are all over simplified high level points. The dynamics here get quite complex. For example, local government often signs a contract with a local contractor wherein they are able to put in stop work orders as desired without owing payment for the time. This is very expensive for the contractors, they must pay to move heavy machinery to another job or wait while paying their workers. Delays can add millions in cost/lost revenue for the contractor. The contractor thus has to drastically increase prices to hedge against these delays.
These issue touch every level of government: city, county, state, and federal. Sadly we no longer have a functional body politic capable of addressing issues of that scale.