Consultants: the real reason it costs so much to build new subways in America

The government doesn’t need the best of the best for this stuff they just need basic competence.

He's mentioned consultants a lot, and has said the reason they relied heavily on consultants and contractors is because hiring or firing an MTA employee is a complicated and time-consuming process, and it's easier to hire consultants you can decide not to renew instead of risking a bad hire (that said, the way he's described the bidding process for new contracts also sounded extremely complex and time-consuming to me - I'm speculating that getting rid of a bad hire is somehow worse than that).

He's also talked about a different kind of consultant, namely a cadre of management consultants that were brought in under Andrew Cuomo to restructure the agency. He didn't like those folks very much.

I don't see how you can avoid this problem without building far faster than the US currently wants to. (Largely because many argue that we don't need to build dozens and dozens of new projects simultaneously, whether subway or anything else infra-wise, all at once.)

You won't get competence in managing the budgeting, planning, and execution of a subway line without doing it a lot.

So how do you break the cycle of inefficiencies leading to people scared to start enough projects necessary to build expertise?

There's a bit in here https://chrisgagne.com/1255/mary-poppendiecks-the-tyranny-of... about how we haven't matched the construction speed of the Empire State Building since then, and a lot of it is because the depression + war that happened right after it was done cause all that knowledge to be forgotten.

The main problem in my opinion, is that it is impossible to have that on the local level. Multibillion-dollar project at rare events, even if you develop that talent locally, you will never need it again.

I think the solution would be government employed large project professionals on the federal level.

It seems you could hire them by paying them 10x more than you would usually do. And if it's a multi-billion dollar construction project, that's a rounding error.

It is very easy in fact: abolish public-private partnerships, they have been an abhorrent failure from the Smedley Butlers of the world [1] to the Norfolk Southerns of recent news.

You want to have "a company in the free market", very well, do it, no state funds, no grants, "hustle", be innovative well within the regulations, whatever.

You want to have a state, very well, do it, be interested in educating people as soon as they can talk, take care of the basic needs for all people (food, shelter, safety, healthcare, meaningfulness), make the state interface an absolute pleasure, perhaps develop even some status games, reward people for following the laws, for developing a community (invert the reinforcement curve, less punishments, more rewards), and so forth.

What we have today is simply a criminal joke: some nameless suits (random pick, who is the COO of CVS Health? [2]) meet in various glass buildings and print trillions for their own benefit. No society will be able to withstand this kind of sociopathic behaviour for more than a few centuries, vide Senatus Populusque Romanus [3], not like that's any consolation for us living today.

[1] "I feel I might have given Al Capone a few hints. The best he could do was to operate his racket in three city districts. We Marines operated on three continents." https://en.wikiquote.org/wiki/Smedley_Butler#:~:text=I%20fee....

[2] CVS Health is the 4th company in US by Fortune 500 in 2022; Jonathan C. Roberts was the COO until 2022 apparently, now there is no COO, https://drugstorenews.com/cvs-health-coo-jonathan-roberts-re...

[3] An example would be the story of Marcus Licinius Crassus, https://en.wikipedia.org/wiki/Marcus_Licinius_Crassus#Rise_t..., Crassus became wealthy, "the richest man in Rome", from real estate, among others: he would buy burned houses for nothing and use slave labor to rebuild; he also had his own fire brigade, the first ever in Rome: the firefighters would start fighting the fire only after Crassus finished the 'negotiation' with the owner for the price of the burning house.

This seems extremely easy to solve then, if it weren't for weird hangups about government employee salaries vs government spending.

NY/C governments overpay low skilled workers (especially once benefits and work rules are factored in) and dramatically underpays highly skilled workers. Since there are a lot more unskilled roles, fixing the one problem would free up plenty of money to fix the other.

You pay them 5x as much as they would get in the private sector. In all my hiring trouble never have I been in a position where spending what I was told was unreasonable money on staff did not result in a better outcome.

My only explanation why no one else does this is that CEO will never let anyone else in the company earn more than them.

You pay them the market rate. That's certainly expensive. But as illustrated by the article, the alternative is more expensive.

You recruit and reward just like any employer. The issue is that in government it looks bad to be paying market rate for talent, and yet the optics and blowing money on consultants with no results is practically ignored. Oh and there’s the plausible deniability when the consultant goes off the rails.

Our federal government up here in Canada can’t tie its shoe’s without a consultant. Gutting government in favour of private consultants is a really really big problem that’s being actively pursued, marketed, and lobbied for by these firms. In fact a lot of politicians come from consultancies (like McKenzie) and the ties are blatent. So basically capture.

The problem is exacerbated by the "revolving door" mechanisms between government and private consultancies. Work few years for the government, hire extensive consultants, then become expensive consultant yourself and milk the system. Nowadays this is common collusion among all levels of government and private industries feeding of governmental contracts or consulting fees.

We got to where we are, in the U.S., because we've got massive inefficiency in state and local government. There's only a handful of cities that are massive enough to do projects that would require hiring highly paid specialists to manage these huge projects. Similarly, most states have very few opportunities for long-term career-building public project management. (There's like 3 west of the Mississippi.)

But consolidating all of this expertise in a federal agency tasked with planning and executing massive public projects would allow us to hire career-oriented planners and keep them busy for ever. It's how we run the military, of course. And, ironically, the military is a leech on the U.S. taxpayer, massively bloated and throwing money at foreign problems in the most ham-fisted way just to justify itself – but if you shifted even 20% of the military's spending to a domestic public works department, all that money would not only be to the benefit of the U.S. taxpayer, but you could hire tens of thousands more American workers to do the jobs. It's a win-win for everyone. And it's probably something a lot of legislators could get behind.

Not only that, but a federal public works department would quickly be able to aggregate learnings on improving efficiency – knowing what works and what doesn't – while also being able to wield the power of the federal government to negotiate lower prices.

The problem is not giving normal people an opportunity and always going for these big companies where people that are normal but good at selling themselves steal taxpayers money with "consultancy".

Just choose a guy with a good reputation in the office to lead the thing, don't bother him and it will be done well and at a fraction of the cost.

Perfectionism is ruining society

however - there's still plenty of "incentives" legal or not that the government can take to ensure those people work in civil service and are well taken care of.

plenty of gvts including the 'US' have had such appointments that can't be turned down.

The issue is that half the country subscribes to an ideology, or at least votes for said ideology, where the government being allowed to do anything on its own without paying a private contractor with your tax dollars as unacceptable. These same people will then complain when the garbage solution foist upon them by Tyler Technologies or similar is predictably garbage.

That way you'll have more money for even bigger boondoggles.

The thing is, these regulations are all well-known, sometimes decades old. Here in Germany, we have "Machbarkeitsstudien" ("feasibility studies") for that reason - we first look for obvious issues before we make a final decision. Of course, sometimes stuff crops up that hasn't been foreseen (e.g. more WW2-era bombs than expected, something has not been spotted at the time of the initial study), but there is no excuse in not doing the due diligence before starting a new project.

Environmental protection is often abused as a scapegoat.

Where we have a massive issue is NIMBYism - citizens feel that projects have been ordered "par ordre mufti", i.e. decided without engaging the affected people, and obviously that is an incentive for those people to use all legal tools at their disposal to obstruct a project. Thankfully, since a few years it's become the norm to not do that any more and actively involve affected people and NGOs already during the planning phase or even before, so at least for future projects we can expect less destructive opposition.

Precisely because the people who know what to do the first time around are not in-house. So you get a first push where they try to be quick and efficient, don't really know what the issues they're going to face are, and then 3 years in there's a complaint about a frog and they need to spend a million dollars on an expert to tell them "don't build it where the frog lives." It's penny wise pound foolish.

Another "fun" failure mode is Switzerland, widely hailed for it's direct democracy, and it took until the 1990s for universal women suffrage to be enacted across all levels (and it literally took a federal court enforcing it, voters refused it in the last canton).

Balance needs to be found, and that is not easy.

This is how NY originally built the subway and it has so many advantages. Can make use of any local unskilled labor. Cheaper by a lot. Stations are close to surface, not a labyrinth of escalators to hell. You won't have street level tracks cutting the town in half. Its the superior option in literally every way, but it requires making people put up with their street being in a constant state of roadwork while its built. No one has the tenacity to tell certain voters to just put up with things for the greater good anymore. Its easier to spend a billion dollars than do that!

> Costs are soaring throughout the English-speaking world. There is mounting evidence from Seattle, Los Angeles, Toronto, Sydney, Singapore, Hong Kong, Melbourne, and the Bay Area that the cost of rapid rail projects in the United States and other English-speaking countries is going to exceed $1 billion per kilometer even outside of New York. The best way to address these soaring costs is to empower experts at transit and capital construction agencies to plan, design, and manage the construction of these projects rather than relying on agency staff to manage contracts, grants, and the interfaces between consultants and agency departments. We argue that by elevating the transit agencies’ authority, and this unequivocally means bringing in experts who have a track record of delivering megaprojects at reasonable costs, this will temper downstream cost drivers.

The rule is, don't believe anything in any publication that has an agenda in that area. Like, the Economist is pretty good when writing about other countries, but becomes a political mess when writing about the UK. Same with Governing it seems.

The government provided guarantees for loans and some help building stations, but otherwise the private company drove this to completion.