There have been a lot of issues recently over cost estimates that are starting to rub me the wrong way. I had never mentioned it before but in my head I kept thinking to myself that the cost for LRT in Norfolk seemed awfully low. The most recent estimate was $232 million for 7.2 miles. Compared to most LRT lines that would have been a steal. Phoenix was upwards of $80 million per mile while Norfolk was hovering around $32 million. Now it's $340 million which is still ok at $47 million a mile, but everyone is going crazy.
But today I saw something interesting out of Houston. The city is going to pay up front an extra $100 million for their contract and the bid winner will assume liability for any cost overruns during the project (assuming it doesn't cause them to go out of business). My question then becomes, how come we don't make all contractors stick to their cost estimates?
While I understand that things change and work orders change, shouldn't the company which came in with the chosen bid be responsible for seeing through with their magic eight balls? Perhaps that is asking too much or asking in some instances for disaster. Cutting corners leads to bad things and I certainly wouldn't want a contractor to go cheap on materials because they were trying to make money. In any event, with all these cost overruns on projects that are making LRT look bad, I don't see why more isn't being done to make the bidders more responsible for their bids.