A reason why Amtrak projects are always over budget

https://www.yahoo.com/news/feds-chicago ... 00105.html
"Jason Meisner, Chicago Tribune
Thu, September 16, 2021, 4:08 PM
Shortly after starting work on the multimillion dollar renovation of the historic Philadelphia train station, Chicago-area company MARK 1 Restoration was reprimanded for improperly giving a holiday gift to Amtrak contractors overseeing the project.
It was a small gesture, really, just a fruit basket and some gift cards to the Cheesecake Factory and Buffalo Wild Wings. Still, following a brief investigation by Amtrak’s inspector general, the gifts were returned with an apology from MARK 1 and a promise it would never happen again.
But that allegedly was just an appetizer.
The contract to restore Philadelphia’s 30th Street train station was inked in December 2015 and originally called on MARK 1 to be paid $58.5 million to restore and clean the almost 90-year-old building’s limestone facade and provide a “complete window restoration,” records show.
When Amtrak gave the media in Philadelphia a sneak peek of the nearly finished project in 2018, Bhaskaran defended the cost overruns, which by then had ballooned the budget to nearly $109 million."
In a post-arrest statement to investigators, Bhaskaran “admitted to accepting tens of thousands of dollars in bribes from contractors performing significant contract work for Amtrak,” according to prosecutors.

So what's new?

Business as usual, Ron.

Let's go back and look at your service.

A "Gerald R. Ford" carrier costs about $13B and takes about six years to build. Since government accounting is simply "cookie jar" in nature, meaning that multi year projects are funded out of each year's Defense budget, the funding to build a "Ford" will be included within six separate budgets, or what is expected to be built on the ship over the year.

Are there overruns? of course (probably classified). Now what happens if Bernie, Liz, or "The Squad" stand up in their respective Halls, and rant away how "there are babies that need to be fed; why do we spend money on something that will kill babies rather than assuring they will have a better life?". Now the opposition responds saying, "what do you want; half an aircraft carrier rusting away?".

Now just to be fair, let's look at mine!

Safe to say the F-35 fighter aircraft has had its share of overruns as well. Some reported, others "classified".

Now Col. Perkowski may choose to comment about overruns in his.

Point is that Amtrak is a government agency (except when it is convenient for them to put on their private sector hat), and overruns are just part of the picture.

Gilbert B Norman wrote: ↑Fri Sep 17, 2021 7:27 am Point is that Amtrak is a government agency (except when it is convenient for them to put on their private sector hat), and overruns are just part of the picture.

I think the bigger point is there should not be any cost overruns at all in all sections of the government, including Amtrak AND the military. You were contracted for a product at this amount. Now unless said contract allows for such overruns, you get to eat the overage, not the government.

Seriously. Until a full audit of the entire government is performed, down to it's contractors, I have serious doubts that it is spending taxpayer money as effectively as the military's snipers are able to shoot enemies in the face.

Mr. Wolf, what if every "government project" of whatever agency, were "on time, on budget".

What would that menagerie of 535 clowns we the people send to sit under the Dome have to do with much of their time if everything were?

And whether it's Amtrak, public highways, the military or public schools slowly sucked dry by private charter schools, the trend toward contracting out to private companies is not always frugal and frequently a big source of these chronic over budget scenarios...

Anyone who thinks the private sector doesn't have similar problems should be institutionalized. More often than not most corporate capital spending has serious cost overruns too. While there is some graft going on, there are other reasons that apply in the public and private sectors:

1. Mission Creep - More often than not, the scope of projects change repeatedly.
2. Poorly Defined Objectives - Often those who make the objectives of a project rarely understand what is really required.
3. Timing - The longer a project drags out the more it costs. Some of it is inflationary. Some of it is that it gives the first two items time to drag into the process more and more.
4. Leadership Changes - Management changes (Whether public or private) and they want to change 1 and 2.
5. Lowest Bidder - When you choose the lowest bidder, there is a good chance that someone bid low just to get the business and will nickel and dime you for anything extra.

While there is graft at play at times, there are plenty of other reasons that explain cost overruns that have nothing to do with corruption.

I'll disagree. Send something out as a fixed bid, and you'll regularly see private entities coming in >20% under budget so they can take the difference as pure profit. Projects that get bid on time and materials almost never come within 25% of the original target.

Sent from my SM-G981U using Tapatalk

wonder how the costs of the V-2s came in compared to the bid ?

Mr. West Point, allow me to reiterate the point I've made at the Viewliner topic. One of these days, likely after both parties are agreeable to the release of information they presently hold as proprietary, the whole fiasco will make for a most interesting B-School case study.

But right now with the strong likelihood of litigation arising from this procurement contract, such will have to wait.

rcthompson04 wrote: ↑Fri Sep 17, 2021 4:19 pm Anyone who thinks the private sector doesn't have similar problems should be institutionalized. More often than not most corporate capital spending has serious cost overruns too. While there is some graft going on, there are other reasons that apply in the public and private sectors:

1. Mission Creep - More often than not, the scope of projects change repeatedly.
2. Poorly Defined Objectives - Often those who make the objectives of a project rarely understand what is really required.
3. Timing - The longer a project drags out the more it costs. Some of it is inflationary. Some of it is that it gives the first two items time to drag into the process more and more.
4. Leadership Changes - Management changes (Whether public or private) and they want to change 1 and 2.
5. Lowest Bidder - When you choose the lowest bidder, there is a good chance that someone bid low just to get the business and will nickel and dime you for anything extra.

While there is graft at play at times, there are plenty of other reasons that explain cost overruns that have nothing to do with corruption.

I'd reverse the order of 1 and 2, just because 1 begets 2 over and over and over. And change controls come with a hefty markup. Fixed price bids don't matter if the request changes after the award.

Current case in point: my own state of Maine was trying to implement Workday as its HR system. That project has dissolved into well-publicized acrimony, finger-pointing, hate, discontent and (I believe) lawsuits. One issue was that Maine said Workday was calculating police payroll incorrectly in testing (they get paid all kinds of differentials based on time of day, overtime, whether they're working with a dog, etc.). Workday's response was that they were calculating it correctly based on the specs they had been given; the truth is that the cops have been getting paid incorrectly all along.

west point wrote: ↑Fri Sep 17, 2021 5:45 pm wonder how the costs of the V-2s came in compared to the bid ?

I imagined that Mittelwerk cut corners to get the V2/A4 rockets out in time .

What about other railroad companies when compared to Amtrak? Do projects from the NY MTA, Brightline, Metra or other commuter or freight rail agencies come within budget for projects such as this? Which railroads are usually the best in terms of budget planning and which ones constantly run over budget? What could be done to help private companies (such as Brightline) stay within budget?

It probably doesn't help any that the various procedures and rules put in place to prevent corruption, as well as the obvious need to pay attention to public opinion, make it harder for a government agency to change its plans to match market conditions or whatever.

Private companies are more likely to come in on or under budget and on or under time. Back in the 1970s NYC couldn't repair a skating rink in Central Park. A private contractor was finally brought in and got the project done 3 months early and Millions under budget.
Private companies are about profit and waste and delays lose profit. Government doesn't care about profit, mostly just power and control.

Long, strange story about that Central Park ice skating rink, but your point is correct. But I'm guessing that if you look at the 2nd Avenue Stubway and LIRR East Side Access projects, they would make most Amtrak projects look dirt cheap and ahead of schedule. Of course, compare them to BNSF, UP, etc., ...