You'd figure that the best way to reward yearly budgets for the following year would be to those who finish (1) under budget (2) competently/safely (3) on time/earlier*. Then, you know they're working and planning smarter and that innovation and clarity should be rewarded. But every bid must be re-created for each new project to prevent favoritism.
Instead, you get a ton of this with government spending – contractors and private industry too – and it only contributes to more spending waste. It's all ca-ca-cuckoo, I tells ya. It's the kind of stuff that make you turn into Frank Grimes.
* pipe dream
I think you (and everyone on Nextdoor, come to think of it
![LOL :lol: :lol:](/wp-content/themes/gtp16/images/smilies/lol.svg?v=3)
) are expecting an unreasonably efficient process.
The problem is that contracts to do anything substantial often involve a huge amount of people with differing motivations. If you tell a contractor you want to finish ahead of schedule and under budget (lets call it a bond-funded public building) he will just look at you and say "no". Now you can probably get it finished ahead of schedule, but that typically involves paying out a bonus (effectively, the balance of the unspent budget) to do so. If you have a $300m public building budget, it will probably be bid at a guaranteed maximum price (GMP) and so the contractor has absolutely no incentive to finish under budget - he will do everything to hit exactly $300m, not a penny more or less. If you try to structure the bid such that any amount of budget left over goes back to the owner, then contractors
may not even bid the project (they do want to make money afterall), or you'll end up with the bottom feeders and low quality. See how the public reacts to
that. I've been on teams going after projects where the financial terms of the project were so unappealing that we actually couldn't find a contractor willing to team up with us, because it wasn't worth the risk/liability. In one instance, a project received zero proposals.
There are other ways of structuring a bid, but a contractor is going to act in his own self interest, whatever the method. If you dare to establish a budget around time and materials (as in no predetermined maximum price), it's absolutely certain you will go massively over budget. There's also cost-plus where the contractor is paid a fixed fee and whatever the cost of materials, but I don't know if this is really applicable to big projects of the governmental variety, and again, the final cost is somewhat unknowable. If you have tax payers funding a project and you cannot tell them what it will cost, that is not good.
Another issue is that public projects are often funded very specifically with things like bond measures which are typically voted on (at least here in the golden state). If voters approve $300m to build a new library, and if $280m is spent on the library and $20m goes somewhere else (lets say a project
you didn't vote for), that doesn't reflect the will/intent of the voters.
The spend it or lose it model is far from perfect, and there are very clearly examples of abuse of funds, but realistically its probably the most reasonable approach. It's as good as the people managing it are.