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Re: Very topical comment on "Buy American" from hsr blog site
Author: OldPoleBurner
Date: 12-17-2010 - 21:10
I don't know if directly lifting stuff off of a blog to this forum is OK or not, but since the formatting was lost in the process, it was very hard to read.
> [Money] which immediately flows out of the local economy and sinks without a trace
> into the parent company’s byzantine tax-sheltered and often off-shore structure. . . . .
> The nominally “public” agency is completely over a barrel, throwing more and more
> good money after bad. . . . .
All of this looks pretty much like business as usual to me - nothing much new here.
At least, this is a very good description of how public passenger transportation in America has been for the past 40 years that I have been involved - to a tee, and then some. If anything, it is understated! The real cost numbers plainly plainly show, that based on the prices paid by private railroads for stuff: If BART had been a private company, then for the same money BART paid for its 125 route miles, we could have had close to a thousand miles of BART in-service by now.
Yes, the vendors that public transit agencies are dependent on, have been playing one huge shell game after another. Based on the above paragraph, it would seem that 90% of what these agencies pay out, goes into this shell game and not into added value. The process, as described, is clearly a big part of why the likes of BART, VTA, MUNI, etc, costs so damn much.
But how they keep getting away with it has to be laid at faulty or even corrupt public contract law. By the way, a big part of what puts public agencies over a barrel, is the (hopefully) unintended consequences of "Low Bidder" rules. In order to compare bids on a strictly monetary basis, all bidders must bid on exactly the same specifications.
So out the window goes any chance of buying Off the Shelf. No two vendors have the same specs already catalogued, so the agency must write them. You cannot even use the specs of one potential bidder's product - you'd go to jail for that! The agency must use its own specs. Now you all know what the definition of an elephant is - "A mouse built to government specifications".
Another issue is the pathetic inability to actually weed out bidders that obviously do not have the expertise or resources to do the job. You can't even weed out those who have already failed the agency in past contracts - we simply are required by law to go back for more drubbing - time after time. That is why these outfits, as stated, can continue to hire incompetent bozos for every public contract.
And since the agency can never anticipate the quirks of any vendors product, it always runs amok and needs "Change Orders". The only competent people these vendors hire, are the ones looking full time, for change order opportunities.
The only part of this blog that I would disagree with, is the notion that foreigners are to blame. In the first half of my career, it was strictly American companies that were successfully pulling off this massive shell game. But now that these old line American companies have died out (milked until dead), the shell game baton has merely been passed to successors (those foreigners). And I'm not so sure that "Siemens" has really been any better than the others. And I wouldn't give you two cents for the safety of Ansaldo equipment - or most German stuff, especially their version of ETMS (European Train Management System - someday to be the PTS of Europe). The French version is much better - and more incremental in its approach as well.
But make no mistake about it; this shell game has been going on at least since Eisenhower started the Federal Defense Highway system (Interstates). It went on there too, to the tune of tens of trillions of dollars. Of course, this drove all construction costs through the roof because no one else could compete with this govt' largesse - housing costs thus went out-a-sight. The rest is painful history.
It is a pathetic situation. But I personally have no idea how to fix it. Anything I have ever thought of, would probably be way too radical to ever get past the politics of it all. Most radical of all: If this also is actually happening throughout every program of government; then if we did fix it, gov't would cost 80-90% less than now - and we could cut taxes by 80& and still have a huge surplus.
Yeah I know - there I go pipe dreaming again. . . . .
OPB
> [Money] which immediately flows out of the local economy and sinks without a trace
> into the parent company’s byzantine tax-sheltered and often off-shore structure. . . . .
> The nominally “public” agency is completely over a barrel, throwing more and more
> good money after bad. . . . .
All of this looks pretty much like business as usual to me - nothing much new here.
At least, this is a very good description of how public passenger transportation in America has been for the past 40 years that I have been involved - to a tee, and then some. If anything, it is understated! The real cost numbers plainly plainly show, that based on the prices paid by private railroads for stuff: If BART had been a private company, then for the same money BART paid for its 125 route miles, we could have had close to a thousand miles of BART in-service by now.
Yes, the vendors that public transit agencies are dependent on, have been playing one huge shell game after another. Based on the above paragraph, it would seem that 90% of what these agencies pay out, goes into this shell game and not into added value. The process, as described, is clearly a big part of why the likes of BART, VTA, MUNI, etc, costs so damn much.
But how they keep getting away with it has to be laid at faulty or even corrupt public contract law. By the way, a big part of what puts public agencies over a barrel, is the (hopefully) unintended consequences of "Low Bidder" rules. In order to compare bids on a strictly monetary basis, all bidders must bid on exactly the same specifications.
So out the window goes any chance of buying Off the Shelf. No two vendors have the same specs already catalogued, so the agency must write them. You cannot even use the specs of one potential bidder's product - you'd go to jail for that! The agency must use its own specs. Now you all know what the definition of an elephant is - "A mouse built to government specifications".
Another issue is the pathetic inability to actually weed out bidders that obviously do not have the expertise or resources to do the job. You can't even weed out those who have already failed the agency in past contracts - we simply are required by law to go back for more drubbing - time after time. That is why these outfits, as stated, can continue to hire incompetent bozos for every public contract.
And since the agency can never anticipate the quirks of any vendors product, it always runs amok and needs "Change Orders". The only competent people these vendors hire, are the ones looking full time, for change order opportunities.
The only part of this blog that I would disagree with, is the notion that foreigners are to blame. In the first half of my career, it was strictly American companies that were successfully pulling off this massive shell game. But now that these old line American companies have died out (milked until dead), the shell game baton has merely been passed to successors (those foreigners). And I'm not so sure that "Siemens" has really been any better than the others. And I wouldn't give you two cents for the safety of Ansaldo equipment - or most German stuff, especially their version of ETMS (European Train Management System - someday to be the PTS of Europe). The French version is much better - and more incremental in its approach as well.
But make no mistake about it; this shell game has been going on at least since Eisenhower started the Federal Defense Highway system (Interstates). It went on there too, to the tune of tens of trillions of dollars. Of course, this drove all construction costs through the roof because no one else could compete with this govt' largesse - housing costs thus went out-a-sight. The rest is painful history.
It is a pathetic situation. But I personally have no idea how to fix it. Anything I have ever thought of, would probably be way too radical to ever get past the politics of it all. Most radical of all: If this also is actually happening throughout every program of government; then if we did fix it, gov't would cost 80-90% less than now - and we could cut taxes by 80& and still have a huge surplus.
Yeah I know - there I go pipe dreaming again. . . . .
OPB
