Thursday, November 5, 2009

School construction costs: a windfall!

A few weeks ago, Other Sidecommented on reports about the cost of the new school here.

Now we have great news: the cost of construction will run about 35%, or about $7 million, below expectations.

But I wouldn't be true to myself or my readers if I didn't say that while this is good news, it raises a series of questions, most of which will float off into never-never land, rather than be addressed by those involved.

For example, what does this say about the competence of those who have been in charge from the start, and developed the estimates that were on the table? This includes state officials in the Department of Education, various architects and consultants, and no doubt untold others who make their living coming up with such figures.

It's important to note that all of the above are engaged in estimating such costs in various locations around the state several times every year; this is not some one of a kind, highly unique undertaking. It is what they do full time; a high degree of accuracy should be the normal expectation.

Then, consider Murphy's Law when applied to government involvement in almost anything, but especially capital construction projects. When's the last time you heard of any project coming in below early estimates, especially by 35%? If you look at Brunswick over the last several years, you have actuals coming in well over predictions and estimates in just about every case. Try Maine Street Station prep work, council chambers, public safety buildings, Times Record building renovation, and just about anything else you can think of.

Anyone who isn't riding in their first rodeo automatically expects costs to end up well above the figures the project was sold on. There's virtually no forces in play to make things come out otherwise. No profit motive, no job at stake, and we're always talking about other people's money, which is not conducive to fiscal prudence and cost containment.

OK, so what happened here? Are we simply lucky? Did we win the lottery? Or is this a train wreck waiting to happen? Or even worse, was the system gamed for reasons not clear?

Or on a different angle, are profit margins on such projects in "normal economic times" highly inflated, and when things get tough and work is scarce, they suddenly descend to competitive levels? Who the hell knows; these are reasonable questions, aren't they?

We're told that the unexpectedly low cost proposals are a reflection of the tough economy we're in.

OK, that sounds good. It also sounds like the town council should revisit the cost estimates for renovating the old Times Record building to turn it into a Police Station. The estimate of a few months ago had no rigor and no competition to back it up; it was an 'architect's estimate' based on a cocktail napkin level of computation and backup. If the school is any indicator, the conversion should come in more at the $2 million level, rather than the off the cuff $3 million plus figure that was used to summarily dismiss the possibility of using the building for this purpose.

And if tough times lower costs, we can all look forward to the next town budget, due for discussion in 4 or 5 months, to come in well below last year's figures. It's about time our property taxes get substantially reduced.

I can't wait; how about you?

1 comment:

  1. Thanks for the information.I think that construction cost has become the talk of the town and construction cost will increase after the recession is over and till the market is up.

    Portable Storage,