> it would be foolhardy for the government to cut funding for e.g. a bridge if it begins to run over

Exactly. They failed, so they get more budget. Happens with nearly all government projects. It's almost as if the department/contractor knows that if they fail they'll get more budget. Hmmm...

In which case, it seems like your blame is misplaced: the government is not particularly guilty of waste (although not innocent either), but is instead is mostly powerless to prevent private contractors from abusing the public's interest.

> the government is not particularly guilty of waste

Sorry, but LOL. For one fine example, the cost of a NASA launch vs the cost of a SpaceX launch.

> is mostly powerless to prevent private contractors from abusing the public's interest.

The government? Powerless? The government writes the contracts. There are a vast array of regulations specifically aimed at government contractors.

I'm talking about bridges. Depending on political proclivities, anybody can find an example of government waste to suit any particular argument.

The observation is very simple: if the government estimates and allocates $500 million for a bridge and finds a contractor that claims to be able to do it for that price, there's very little reasonable power we can grant them to make the contractor meet their claimed budget. We could allow the government to throw contractors in prison for bilking them but, well, we already allow that (and it doesn't recoup the costs anyways).

Regulatory capture and special interests seem to be the bigger problem here. Complaining about NASA without considering why the government so fecklessly pays Lockheed Martin et al. billions a year is short-sighted.

> anybody can find an example of government waste to suit any particular argument

True, as those examples are everywhere one looks.

The trick is to find one that is efficient.

> he observation is very simple: if the government estimates and allocates $500 million for a bridge and finds a contractor that claims to be able to do it for that price, there's very little reasonable power we can grant them to make the contractor meet their claimed budget.

Yet private companies contract stuff out to other companies all the time, and the contracts get done on time and on budget. For example, take Boeing. Boeing gets a contract from Delta to build, say, 50 airplanes for $5 billion, to be delivered on June 1. Every day Boeing is late, Boeing pays the airline a penalty. If Boeing runs over budget, Boeing eats the difference, not Delta. If Boeing fails to deliver Delta 50 airplanes, Boeing pays a big penalty to Delta.

Now, if Delta wants to change the spec after it is signed, well, they gotta pay Boeing. If Delta doesn't pay the bill, they get sued by Boeing. If Delta wants to reduce the number of planes they contracted for, Delta pays a penalty.

See how that works?

And Boeing does their damn-dest to be on time and on budget.

Very often contractors come in over time and over budget in private sector as well. I've cleaned up after contractors who have done it, and we've done it too. There's nothing magical about the private sector, it's the exact same problem. Do you want 4/5ths of an app that no one else will figure out how to finish in a reasonable time, or do you want to pay us more than we asked to finish? The choice is obvious, predictable, and observable if you've ever been involved in contractor relationships.

Oh, I have been involved in contractor relationships. If I don't meet the spec on time, I don't get paid.

I've also watched contractors who are paid a $$$ bonus for every day they are ahead of schedule. It's amazing how fast they work. I remember one group that received $10,000 each for delivering on time. This was back in the 80s, when that was real money. There was no way that project was going to be late.

May I suggest your outfit hire better contract lawyers.

Do you recall after that earthquake in LA the city hired a construction company to rebuild a freeway interchange that collapsed? They offered ONE MILLION DOLLARS PER DAY to complete it ahead of schedule.

The contractor broke all records and got it done months ahead of schedule. Everybody was happy.

Isn't it amazing how that works?

We don't hire contractors, we are contractors. And we are hourly. Not interested in getting $3/hr because the shit is much harder than you/we thought.

If you are paid hourly, what happens when you stop progress? I bet the money stops. Being paid hourly means you're going to be closely monitored.

Sure, but we aren't talking about them not working, we're talking about things getting done on time "or else."

Having to pay more money to a contractor mid-job is also a common theme in free-market home renovations/construction because the same incentives exist for the homeowner as they do for the government in your example. How has the free market solved it using tools the government refuses to use?

People experienced writing these contracts don't have those problems.

I've hired contractors to renovate. They get paid the contractual amount if they complete it. If they fail, they don't get paid till they fix it.

It's not rocket science. See this thread for what happens with Boeing and their customers.

The free market solves this problem by a thing called "Contract Law" which is enforced by the courts.

8% of construction projects from major companies ($5 billion+, publicly traded) are either on-time or on-budget. Obviously a smaller number are both.

If you can really solve this problem, you can make a ton of money.

Meanwhile, non-trivial projects with clauses like yours are less profitable and therefore tend to be the first delayed when resources are scarce. Which they frequently are. Unless you overpay by default. After all, "on budget" doesn't matter if the budget is 100x what other people are being quoted

Meanwhile, how you described Boeing contracts doesn't seem plausible.

I used to work for Boeing. You can also see it in the local paper what happens when Boeing fails to meet a contract.

> Exactly. They failed, so they get more budget. Happens with nearly all government projects

No it doesn't. Programs are cut or cancelled outright all the time. The important question is not whether they're failing or succeeding but whether they're believed to be necessary. Projects that are necessary get more funding if they are failing, like schools. Well duh.

Projects that are succeeding and have budget left get trimmed. Again, duh.

Projects that are unnecessary or no longer necessary get cut regardless of budget.

That's just good governance. The same pattern happens in the economy.

> No it doesn't.

How about those zillions spent to eliminate homeless encampments? They're spending something like $50,000 per homeless person. Hasn't put a dent in it. What is happening?

More budget! It's called the Homeless Industrial Complex for a reason.

> Projects that are necessary get more funding if they are failing, like schools

Yup, failing means more budget!