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Comment by michaelochurch | Hacker News Reader

Misleading title (in the current political environment) because the gouging is done by contractors who've figured out how to exploit an antiquated (lowest-bidder wins) system. The article is not suggesting that we have "too much" mass transit, but that we pay too much for what we get, and this is undeniably true.

The gouging doesn't stop once the infrastructure is built. U.S. transit is also expensive when delivered (it costs over $100 per person round-trip to go from New York to Harrisburg, PA; for two people, it's cheaper to drive). Finally, we pay again through exorbitant real estate prices because our transport infrastructure, in this country, is so poor.

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the gouging is done by contractors who've figured out how to exploit an antiquated (lowest-bidder wins) system.

As someone who works on transportation projects, I find this to be incredibly unfair. Yes, there are a few shady contractors out there, but there are a lot of things that can happen during design and construction that can increase costs through no fault of our own. For example: change orders. A project gets designed and approved, the contractor gets his contract and starts digging. Two weeks into excavation, the project engineer tells the contractor "oh, that tunnel needs to be built 20 feet deeper and moved 15 feet to the south." Why? It could be for any number of reasons, maybe construction uncovered a gas line that couldn't be moved, maybe some politician wanted the line moved further (or closer) to a friend's business, etc. There are also the inevitable lawsuits, environmental issues and so on.

One of my big beefs, and one of the factors that IME increases costs for architectural/engineering consultants like me are the hoops we have to jump through to demonstrate that we're not ripping off taxpayers. There are all sorts of audit requirements (including the dreaded DCAA audit), insurance requirements and so on that increase our costs and so we have pass on those costs to the taxpayers. Recently we had an issue when negotiating a contract for transit design project - my firm's is relatively new, and we don't have a revenue history with which to develop audited rates, so we intentionally set out rates low in an attempt to convince accountants that our lack of audited rates wouldn't be a problem. We spent a munch arguing with the prime's accountants who wanted our audited rates to we could demonstrate that our profit on the job wouldn't exceed 10% (they were obsessed with the 10% profit number), depsite the fact that our rates were 40-50% lower than other similar contractors. We had to get someone from the Federal government to step in and tell the prime that our rates were fine as-is.

Insurance requirements are the other big issue. General liability isn't so bad, but E&O can be costly for big engineering projects, even if you're exposure is low. However many projects have a "one size fits all" with respect to insurance requirements and require everyone to carry $10+ million in general liability and $5+ million in E&O. If you're the general contractor responsible for digging up streets which can have all sorts or negative effects, that's probably reasonable. If you're the graphic designer responsible for creating the signs for the project, that's probably a little excessive.

Yeah, but the issue is that due to the lowest-bid system, the govt is guaranteed to get a contract that doesn't properly plan for contingencies and most likely leads to disaster.

It's not that all or most contractors are bad, it's that the least honest tends to win the bid.

I think you would enjoy reading the article that specifically addresses the issue of lowest-bidder leading to rights of contractors, leading to ever more explicit rules and difficult hoops to jump through.

Considering what is behind this article, and its audience, you might even feel heartened about prospects for some progress on the conditions.

You cite change orders in your defense:

>For example: change orders. A project gets designed and approved, the contractor gets his contract and starts digging. Two weeks into excavation, the project engineer tells the contractor "oh, that tunnel needs to be built 20 feet deeper and moved 15 feet to the south."

But I think it's worth pointing out that change orders are probably THE primary mechanism of gouging used by contractors in 'lowest-bid-wins' scenarios, as you should know.

What often happens is that contractors lowball, knowing that they will make up the margin on the change orders which are not competitively bid. A well designed RFP can mitigate this somewhat by requiring menu pricing on add/deducts for the most common in-field changes, but it can't account for everything, and bidding contractors look for open ended RFPs and exploit them.

There may only be a few 'shady contractors' out there as you say, but a)low-bid systems bring them to the top of the short list, and b)I'd wager almost every 'reputable' contractor's change order margins are higher than for the exact same work that was competed in a public RFP.

Just my thoughts on that. Raised an eyebrow since change orders are the primary mechanism for inflating post-award margins.

Edit:

Also want to point out that my use of the word 'gouging' is kind of a loaded term:

>But I think it's worth pointing out that change orders are probably THE primary mechanism of gouging used by contractors in 'lowest-bid-wins' scenarios

Are these contractors gouging? They are not doing anything illegal, but it can fall into questionably ethical territory. But from many contractor's point of view, they are stuck bidding on a system that is designed somewhat unethically. From a systems standpoint, when the only factor in winning a bid is lowest cost on the delivery of a product that will unquestionably have change orders, you get a scenario where the following is actually happening.

1)Firms provide goods and service for margin 'a+b' which is averaged over the life of the project

2)Only margin 'a' is competed

3)Margin 'b' is projected but undefined and can be adjusted by the Firm after the award based on margin 'a'

Is it ethical to even ask a Firm to submit a bid based on margin 'a' set equal to margin 'b' knowing that the system is designed to produce competing bids distributing the total product margin unevenly between the two variables, weighting 'b' much more heavily and minimizing 'a' in order to win the bid and work at all?

I don't think so, and what happens is you get a system that is almost explicitly designed to inject increased total project costs and increased variability.

I think that under this system, it's an incredibly gray area on the how ethical increased post-award margins on change orders are. Just the fact that an increase occurs does not strike me as unethical, but there is absolutely zero doubt that some of the margin increases are absolutely unethical and drive the total product margin up well past what it would have been if bid under a possibly more efficient system (throw out high and low bids for example).

If gouging is going to happen, it's going to happen on a change order, but it's not so black and white.

Raised an eyebrow since change orders are the primary mechanism for inflating post-award margins.

This comes down to how well the contract is written. The Big Dig was getting screwed pretty early on by contractors doing exactly what you described, but learned from the experience and started tightening up those contract terms. As a result, some contractors continued to try to play that game, and when they couldn't make up for lowball bids using change orders, they went out of business. Other contractors learned their lesson and started pricing things more realistically.

>and when they couldn't make up for lowball bids using change orders, they went out of business.

Yeah. Unfortunately, this also adds to the cost of projects massively. One of the reasons I like the practice of throwing out the lowest and the highest bids. That method doesn't work in every scenario, but when you have enough firms competing it can really protect the owner, as well as the winning contractor.

I used to drive in the Boston area in 95-98 and dealt with the Big Dig daily for years. Shudder.

And there you fall into one of the traps. Contracts that are long because they explicitly protect against every way that the agency has been screwed in the past.

It would be much more effective to have the response to being screwed be, "We have the option of saying you are not allowed to submit bids on public projects in the future." Then you don't have to legislate every last detail of when that happens.

This is what happens in the private sector. I do not have to do business with you if I don't want to, and I don't want to do business with you if you've screwed me in the past. If you're not planning on screwing me, this is not a problem. If you are, it is only a problem for me..once. And a problem for you going forward.

It would be much more effective to have the response to being screwed be, "We have the option of saying you are not allowed to submit bids on public projects in the future." Then you don't have to legislate every last detail of when that happens.

This happens in the public sector as well. Case in point: Parsons-Brinckerhoff is persona non grata when it comes to bidding on MA projects (MA tried to legislate the ban and weren't able to, but I know firsthand that PB has been thrown off several teams bidding for MA projects when the team was told they would have no chance of winning the project with PB on board).

>This is what happens in the private sector. I do not have to do business with you if I don't want to, and I don't want to do business with you if you've screwed me in the past.

That goes in both directions in the IT services world. I run into plenty of procurement departments that are far less ethical than many contractors I've worked with. I have caught procurement officers flat out lying to me on what they have as competitive offers, playing incredibly puerile alpha dominance games, pulling bait and switch by tacking on a new deliverable as an afterthought in an email without prior discussion after a verbal agreement at the end of exhaustive negotiations, acting rude and imperious as if that was their sole strategy to browbeat me instead of negotiating like a professional business person...the list of eye-popping, unprofessional behavior would have been unbelievable to me when I started in business.

These customers go onto our blacklist that we graciously introduce to our less-capable competitors.

>These customers go onto our blacklist that we graciously introduce to our less-capable competitors.

Why not keep them? Doesn't sound like anything that can't be addressed. Insert language defining scope as only in contract with verbal, email, and other communications besides formal change orders not binding.

Rude? Imperious? Browbeating? Fine with me. As long as I can lock you down on paper I'm fine with it. You can corral most customers like that and shrug of the distasteful personalities...as long as they are paying their bills. That's the deal breaker right there. Even lying on what they have for competitive offers. It doesn't matter what they say as long as you know your margins and make your decisions based on that. Psychologically it can be painful to know that you took money off the table for what turned out to be non-existent competition, but it won't bite you as long as you are negotiating with a solid grasp of your costs and profit potential. This type of behavior is so standard that it doesn't even bother me. Really, they wouldn't be doing their job if they didn't do this in a lot of cases from one point of view.

If you suspect your customer is lying about competing bids and you feel your margins are dipping close to below acceptable levels, try a large increase in margins on a smaller sized order or project to test the waters every once in a while. It really gives good feedback that you can use to make decisions when confronted by that behavior in the future. I have a couple clients who like clockwork, ALWAYS try and talk the price of a quote down after submission. I look at my margins and decide if I'm willing to do it based on that alone, but every once in a while when we're really busy and I get a quote request from them for a medium or small sized job, I will increase the margin to 20% past my ideal rate to see if they bite. They usually do. So now when they try and talk me down on a larger project I just 'see if my distributor can move at all on the pricing'. Turns out he can't. Sorry. I tried.

Most of those games are rare though. Our firm is often subcontracted out, and I openly discuss my margins and those of my customer that is requesting a quote. Being open, honest, and transparent really goes a long way. I'll often send a quote along and follow up with a phone call that goes something like this: "Hey xxxx, I just sent that number in. Take a look at it. I've got about 20 points on it, -how much were you planning on marking my number up, -is that going to leave you enough margin?" 9 times out of 10 they say yeah, and appreciate me asking if they are set on their margin. When they ask for a price reduction, it's usually with the sense that we're both in it together, and they aren't looking at me as an adversary, and they are more honest about what number from me is the HIGHEST they are comfortable with. That information is golden, because I am usually bidding against other firms (at least to start). I've had many contractors stop competing my bids just because of this type of communication (as well as the execution of our firm as well).

> Our firm is often subcontracted out...

This might be the difference between our experiences and responses. Most of my work is direct, corp-to-corp, B2B. We're steadily climbing up the value chain each year, and find that we have to directly interact with procurement departments more often.

For me, it is not a matter of what we can negotiate and lock them into terms we can live with; I've done that before, but fortunately now we aren't in the cash position to have to do that. It really comes down to the unavoidable reality that these customers' procurement methods cost us a ton of sales time that we could more profitably spend elsewhere on customers that more appreciate our value props. As for transparency on margins and per hour rates, we avoid that because we price on business value: if your business benefits by $X+N from spending $X with me, we both win. I've concluded from experience that sharing this information simply opens you up for piecemeal negotiation and commoditization in the future, which doesn't currently fit into my company's business model, but certainly YMMV.

The characterization was unfair, but essentially true from an outsiders perspective. Government procurement policies create a cozy aristocracy of vendors who are equipped to work with the government.

Add to that the fact State laws are often rigged in various ways to give preference to union shops, and all of the sudden someone is low-bidding a $10,000 toilet seat.

Yup. 2 anecdotes from a 3-year stint in town government:

1) Built a new town hall because they were double-desking at the old one. Lowest bid wins, realistic and competent bids lose. They lay the sidewalk outside while it's below freezing out. Official in town who's managing the project shows up, "What the hell are you doing! You can't lay concrete while it's freezing." "This is the only way we can do it on the budget, sue us if you don't like it." Cracked, shitty sidewalk, would be cheaper to rebuild it than sue. Shitty sidewalk persists.

Built a school, too. Lowest bid. HVAC system is so noisy that several classrooms are unusable, and the floors are all fucked up through half the school. $1.5 million in legal fees later, we settle for $500k in damages, not enough money to fix the defects.

"Lowest bid wins, realistic and competent bids lose."

But what would the best practice be to determine that the realistic and competent bids are objectively evaluated? How do you solve that problem in the real world (and not even talking about any other conflicts or issues)? Employ consultants or? My anecdote would relate to government bidding for some mfg. projects. It was very clear that the people evaluating the bids (at least in the small area I was involved with) took into account the reputation of the bidder in awarding the contracts.

It's hard. Usually it's well-intentioned taxpayer protection legislation, passed after some disaster contract like the big dig, which actually reduces the ability to objectively evaluate the realistic and competent bids.

Minor example: Town AV girl needed a new video camera. She knows what she's doing, researched, found the best model as far as pricepoint/features and a good place to buy it. We had to convene 2 subcommittee meetings and make her go way out of her way to find that model offered 2 other places so we had 3 bids, and document them, before just doing what she wanted to do anyways. Probably wasted an additional 10 hours of salary on the taxpayer dime. This is all by statute, it wasn't us being a bunch of bureaucratic morons.

For those two specific examples?

1. Town Hall. Instead of building a new building, rent office space somewhere else that was privately built.

2. Public School. Same deal -- taxpayers pay more per pupil for public school than they do for private school, so send the kids to private school and close the public school.

There's no point in getting on to Government for being inefficient in a system like the US, but we can get on to them for doing the NIH thing by default. When the private sector does something better, LET THEM DO IT.

Town Hall. Instead of building a new building, rent office space somewhere else that was privately built.

In very small towns I've seen that done, but that makes less sense for medium to larger towns and cities for a variety of reasons.

taxpayers pay more per pupil for public school than they do for private school, so send the kids to private school and close the public school.

A large part of that is because private schools don't have to admit (or can expel) students with special needs and behavioral problems. Force the private schools to have to deal with those students, and chances are those costs will increase.

"because private schools don't have to"

Exactly.

I always find it interesting (and this isn't a critique of the parent) just an observation that when people use an example such as "In <insert country> <insert thing> costs <insert percentage> less than in the US therefore...". This is always tossed around with healthcare for example.) Things are never equal and can't be. It's like comparing heating costs in San Francisco vs. Montana w/o considering the temperature. Details matter and rarely in a casual observation of the on the surface facts can you account for why something might be possible in one circumstance but not another.

Private school teachers, at least in one case that I am familiar with, got paid less than the public school teachers in the same district. They were of a younger age group and were only doing it for a short period of time before moving on to bigger things. Also the fact that they had much smaller classes and a different student population made the job less stressful. And a host of other factors that would be difficult if not impossible to scale to a public environment.

Force the private schools to have to deal with those students, and chances are those costs will increase.

It would also prevent private schools from specializing, which is hardly a good thing.

A better way would simply be to pay a different price for different children - i.e., $7k for a normal child, $13k for juvenile delinquents, $16k for retards, etc. Different schools (both public and private) could specialize and cater to different varieties of children.

One size fits all is generally a dumb idea.

Go look at the education system and standards in Finland, then see if you still hold that view.

Also, your use of the word retard as an epithet in this context probably means that your views on education policy should be treated with the utmost suspicion, at best.

It is my general view that it's crazy to spend 2-3x as much as normal on a kid who will never achieve anything beyond bagger at Walmart. How clever, you caught me.

If you want to apply the ad-hominem fallacy on this basis to dismiss an unrelated point, be my guest.

It is my general view that it's crazy to spend 2-3x as much as normal on a kid who will never achieve anything beyond bagger at Walmart.

So how do you know in advance that a given kid will never achieve anything?

Early education and intervention saves a ton of money in the long term.

(Citation needed)

To be slightly less flip at some point you reach the point of duminishing returns where the money could do more good elsewhere. Also, the overwhelming majority of education interventions don't scale.

I think the parent made a very obvious point. Correctional facilities (i.e. prisons) are much more expensive than decent public education up front; and this primarily applies to troubled students.

Or even just in allowing people to live in the community, and earn a wage (even if it's a subsidised one) rather than needing to be institutionalised or have round the clock care (the original context was yummyfajitas' use of the word 'retard').

And there's the other point - do you really want to live in such a dog-eat-dog society?

I totally agree. Actually, I only didn't make that point because the benefits productive/happy members of society are less obvious. So what if some of these kids become baggers at WalMart? That is much better than someone who can't live on their own or hold any job down at all.

The next official term will inevitably become another epithet. Moving further along the euphemism treadmill doesn't change whether the underlying idea is right or wrong.

Ok, the underlying idea seems to be that it is highly beneficial to have segregated schools based on ability. However, if we look at the global ratings for education, this does not seem to be the case, otherwise countries such as Denmark and Finland would not be doing so well.

That said, I think that the largest effects would seem to be having high educational standards required to be a teacher, coupled to a high degree of autonomy to do their jobs and a massive public budget for resources across all levels of education, from kindergarten, right the way through adulthood. If you have that covered then you can get good results and have streaming based on ability, if you like.

The US outperforms Denmark educationally after adjusting for one of the bigger predictors of student quality, by roughly the same margin that Finland outperforms the US.

http://super-economy.blogspot.com/2010/12/amazing-truth-abou...

If we want to cherry-pick some more, Germany performs well (marginally better than the US and far better than Denmark) and does segregate schools based on ability.

I see, so you think the education problem in america is down to people who aren't descended from europeans dragging the side down.

You know, you could make exactly the same argument with income if you like and then argue that the figures would be higher if it wasn't for all the poor people.

I see, so you think the education problem in america is down to people who aren't descended from europeans dragging the side down.

It is my belief that the US is marginally better than Denmark at educating people of European descent. The data supports this belief.

I have no data on whether the US is better or worse than Denmark at educating people from other groups. If you have data on income I'd love to see it.

I don't know what you mean by "education problem". The main "education problem" in the US is cost, and this has little to do with the quality of the students.

The main "education problem" in the US is cost, and this has little to do with the quality of the students.

I partly agree with you there, the administration costs are atrocious. However, as a percentage of GDP you are low down the list on education spending even while you are near the top on spending per capita, so economically the US could afford to spend a lot more while at the same time what is being spent seems to be spent rather badly.

Personally I suspect spending a fair bit more, but firing three quarters of the management staff would be not a bad start. I also think that raising both the wages and required qualifications of teachers would be a good idea, with paid for education available to current teachers who don't yet meet those standards, and job reviews and some redundancies for those teachers who really can't hack it.

Teaching at a state school should be a very well paid, highly sought after, difficult to get into and thoroughly respected profession.

Again, the difference between the two populations "Danish" and "US minus non-whites" is that the latter neatly excludes a lot of society's poorest, whereas the former does not. It's not an apples-to-apples comparison.

You seem to be implying that the non-white poor in the US somehow lift whites out of poverty.

The objection I'd make is that unless non-white Danes are a small fraction, "white Americans" vs "all Danes" should be instead vs "white Danes" (that is, the motivation in slicing out a subpopulation of the US is not to exclude the poor, but to control in a coarse way for the influence of genetics, via the proxy "European" (really, "white").

The objection I'd make is that unless non-white Danes are a small fraction

They are a small fraction.

Non-whites in the US are heavily overrepresented amongst the poor. Excluding them excludes much of the poor from the US figures, which would raise the average performance - specifically given that the author is saying that it's the kind of homes you find in places of poverty with high crime that reduce PISA scores.

Also, claims of genetic intellectual differences between the races are dead as a dodo. No real genetic difference has been found, and if there was any, it is so small that it's utterly swamped by cultural issues. Claiming that you want to cleave off a different race to 'make the comparison fair' is tantamount to saying 'blacks are intellectually inferior to whites'.

Poverty, crime, and broken homes are presented as the thesis for poor performance in school, then the author removes a large amount of those people from the US results citing this rather racist "but, genetics!" idea.

When I moved to Sweden from the US, I was surprised to see that children born in Sweden, but with one parent from outside the country, were considered 'foreigners.' One of the books we read in Swedish class had a character who had a single grandparent from Chile. That contributed towards her dark eyes and complexion, so that another character asked "are you really Swedish?". I was astonished even, since my personal belief (being brought up in Miami during the 1970s and 1980s) is that nationality is not so stingy. My father and his parents were born in Canada, but Dad became a US citizen when he was a teen. I can't count the number of friends of mine whose parents are both from Cuba but consider themselves patriotic US citizens. Compare that to my dad's mother's mother, who forbade her daughter from dating my grandfather because she's a Norwegian Lutheran while he's a German Baptist. Those being very different cultures, you know.

These memories come to mind because the author, who is raised in the Swedish system, uses this same definition of 'foreign;' and it's a view I find rather un-American.

So when I read that essay, which excludes from consideration the rather large sub-population of people whose distant ancestors came to the US as slaves in the 1800s, who are by now fully part of the American system, with basically zero language or cultural ties to any ancestral lands, I can't help but think "so what?" I don't care if there's a sub-population which did better ... and why is race used in one place and immigration status used in another? Is the correlation with relative income more significant? It's easy to see how doing just one simple factor analysis isn't enough on its own to be anything more than suggestive.

BTW, the re-analysis on that blog shows that "the mean score of Americans with European ancestry is 524, compared to 506 in Europe, when first and second generation immigrants are excluded." Because the original analysis shows that Europe overall did better than the US, then I think it's equally reasonable to interpret the re-analysis as saying that Europe does a much better job of educating its first and second generation immigrants than the US does at educating its citizen with non-European ancestry.

In other words, since most of the excluded populations are black, the US seems much worse at educating citizens of African descent than of European descent. I would like that to change, so that all children have access to a good education, as well as to social services to help with nutrition, health, housing, and other factors that strongly affect the education and well-being of children.

From your link:

I define immigrants here as those with a parent born outside the country, so it includes second generation immigrants.

then

In the case of America, 99% of the population originates from other countries, be they England, Italy, Sweden, India, Africa, Hong-Kong or Mexico.

So if you're saying that 99% of the US population is first- or second-generation, that means that amount of population have come here in the last two generations. The baby boomers are retiring now, so lets use them as an easy 'oldest' generation.

The US currently has 300 million people. So according to this guy, just before the boomers, there were only 3 million people.

Truly, it is a testament to the industriousness of the American public how with only 3 million people, they managed to send 16 million to serve in the military in WWII, and still have enough people left over to manufacture military hardware to supply the Allies.

The guy has a point about home environment being important, and that endemic poverty for blacks in the US is a problem, but you can't just carve those out of the results. For a start, those blacks are still American, born and bred for generations. Secondly, every country has sections of entrenched poor. In the US it's much easier to divide along race lines. In the UK, you have a ton of whites that come from equally crime-riddled, poor neighbourhoods, but they don't get excised from the tampered data.

The author starts out with a reasonable concept, but horribly mangles the philosophy and method to isolate the numbers.

So if you're saying that 99% of the US population is first- or second-generation...

No one besides you is saying this.

Incidentally, race is highly predictive even holding income reasonably close to constant. For example, Asian Americans tend to have income comparable to Europeans Americans, yet their test scores tend to be considerably higher (in the same range as other Asian nations).

http://super-economy.blogspot.com/2011/01/how-well-do-above-...

Now, you are correct that given more granular data, a better comparison could be made. Do you have more granular data?

No one besides you is saying this.

In the context of the article, these two quotes are right next to each other. The author is saying this. He's trying to paint cultural homogeneity with the parent country, which is reasonable with first and second generation immigrants, but it's a sloppy way to exclude blacks from the American scores.

Let's be very clear here with another quote:

So similar to my comparison of GDP levels, let us compare Americans with European ancestry (about 65% of the U.S population, and not some sort of elite) ... We remove Asians, Mexicans, African-Americans and other countries that are best compared to their home nations.

The author is removing all blacks as they are 'best compared to their home nation' as he has defined them as 'immigrants'. (he's also exluding hispanics, apparently, despite a lot of them already living on land that was acquired by the US in the 19th century - how these are 'immigrants' is beyond me)

The thing is, blacks in the US don't live like their West African forebears, nor raise their kids like West Africans. They live like Americans and raise their kids like Americans. They are Americans and have been for multiple generations. To exclude them on 'American' scores is pretty racist.

Also, how can you really make a representative argument when you cut out one third of your subject pool? If the system only 'works' if you exclude them, then that means that the system is not working so well for that particular country.

The scales used on global measures of education are scored in a way that makes a few low scores a lot more influential than a few high scores (since the average score on the test is around 70%, it takes more than 3 100% scores to balance out one 0%). So countries which are more homogenous (so that their upper end's scores don't get capped at 100%) and don't have as big of a low class do well, such as Japan, Korea, and Finland.

If the tests were structured so that the average score was 10 out of 100, one genius who scored 100 would be worth 9 people who scored zero.

I think this is a more realistic way to score education; would you rather have the median of the population go from grade level 7 algebra, to grade level 7.1? or would you rather have 20% more utter geniuses in your society? Both have value, obviously, but breakthroughs are made at the edges, and only need to be made once.

All this is to say that we should focus on where the returns are greatest.

In terms of intellect, I'd think that the returns to society from state schooling are greatest from educating the bottom 95%, as the geniuses tend to be more auto-didactic anyway and usually need more in the way of social support and access to academics rather than traditional school teaching. A society that reserves high quality education only for those children already considered to be intelligent, is a pretty stupid one in my opinion.

Also, high quality education is not the same as teaching advanced courses, although obviously advanced courses should be taught to a high quality. High quality education is about the ability to bring standards up across the board, not just the production of geniuses, which educators largely can't take credit for anyway.

'Developmentally delayed' has been the 'next official term' at least since I started working in neurology in 2000. I have never, ever, ever seen it used as an epithet, not once, not in all the internet flamewars I've seen.

In our case, building the town hall and servicing the debt over 30 years was cheaper than rent, plus we get a building that we don't have to pay rent on after that period.

Less ideological and way smarter -- just the way I like things.

Buildings are not free after they are paid off. That's just about the time they need major renovations and repairs.

Of course, but if you have the capital and needs, why not just take care of it yourself rather than letting someone make a profit on you? Unless you're more concerned with libertarian ideology than saving the gov't money, of course.

So, a lot of time, the only reason the private sector does it better is that we've hamstrung the government to the point where they can't develop the skills in-house. If I can't pay my civil engineers competitive wages (because NIH you see), how am I supposed to retain talent? Moreover, how am I supposed to stack up against hotshot private engineering firms?

In opposition to your town hall example: The first (first!) thing I'd expect the free market to do would be to charge a premium to the government to lease to them. After all, where else are they going to go? It's a small enough market that you can cartel the ever-living shit out of it--assuming they can even pay amounts enough to push out other tenants, say a law firm or something.

In fact, it makes even more sense for the government to get a "deal" with the landlord, and maybe help contracts for their other tenants go through faster. Priority lane for occupancy permits and whatnot, sure. This is not a good idea.

If you want to have non-corrupt government, you need to make sure it can function decently without being overly influenced by the greed and selfishness characteristic of modern capitalism.

Perhaps you could do blind bids then just cut the top 10% and the bottom 10%. Get enough bids to make a bell curve and then take one standard deviation. That way you can get a deal, but still be reasonable enough to finish the project within budget.

Official in town who's managing the project shows up, "What the hell are you doing! You can't lay concrete while it's freezing."

Wait, what? Town official witnesses substandard work and just let's it go on? How was that not grounds for at least withholding payment from the contractor?

we settle for $500k in damages, not enough money to fix the defects.

No retainage?

Shitty contractors to be sure, but in a properly-executed contract agreement, there should have been ways to mitigate the poor performance.

No retainage?

You don't bring in your generalist town counsel on retainer to handle a million dollar construction lawsuit. Would've been nice to get all that work for free, mind you, but he's not in the construction lawsuit business and didn't have 1.5 million of free time that year, or any expert witnesses laying around.

Town official witnesses substandard work and just let's it go on? How was that not grounds for at least withholding payment from the contractor?

Withholding payment means a more expensive lawsuit than the sidewalk was worth. We wound up just dealing with the shitty cracked sidewalk. Don't get me wrong, he reamed them out on the site, but they basically told him to get lost and when we explored our options, turns out we had to just take it.

You don't bring in your generalist town counsel on retainer to handle a million dollar construction lawsuit.

Why would counsel get involved? Retainage is a pretty common practice for exactly this kind of situation. In fact I'm still waiting on payment for work performed two years ago for the exact situation you described.

Oh. Thought you were saying we should get all the legal work for free because of our retained counsel.

The way the contract was structured (apparently 'standard'), we retained about 2% of the total. Hard to retain more because the GC does have to pay subcontractors, or at least that's what we were told. We withheld, they sued, we countersued.

Yes, the "retainage" I'm refering to is: http://en.wikipedia.org/wiki/Retainage

2% retainage seems really low. Contracts I've been involved with had retainage of at least 5% and as high as 10%.

Hard to retain more because the GC does have to pay subcontractors

Someone fed your town a load of horseshit. Retainage may apply to just the prime, or so everyone on the team. If it applies to just the prime, the contract should have language telling the prime not to screw the subs (I was involved in a project where the prime had retainage and I as a sub was not subject to it - the prime got fired from the job, and the agency contracted me directly to make sure I got paid in full). If it applies to everyone on the team, everyone's check arrives 5-10% light, again that's pretty standard.

I wasn't there when the contract was inked, just for the lawsuit in the aftermath. Obviously in hindsight they should've pushed to retain more.

"...not enough money to fix the defects."

Not even enough to cover legal fees. Would have been cheaper just to fix it.

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