Fair Warning, this is not a pretty story. If I do my job, you will look at every road repair, government building construction project, and every other public or private project very differently after reading this.
Back in the late 1970s, I was working on an Electrical Engineering (EE) degree at the University of Nebraska, Omaha (UNO). For the most part, UNO was a pretty mediocre school and the school provided a below-average-engineering program. It was, literally, the only game in town, with the next nearest college 65 miles away. However, some parts of the program were “enlightening,” to say the least. For example, my Introduction to Project Management class, ENGR391, was one of the most eye-opening and useful classes I took at that school. UNO was, in the 70s, well-populated with wannabe engineers and general purpose slackers from the local Air Farce base (Offutt). These characters typified the worst of everything about frat brats in that they stockpiled the instructors’ past tests (many of which had remained unchanged for years) driving grading curves into total nonsense, they openly copied the group “smart guy’s” test papers, and they had their Offutt superiors call instructors to contest poor grades. Most everything about UNO was subpar, but this particular class was educational in that it primed me for my future career managing manufacturing facilities.
The instructor was a civil engineer who had either done a lot of government construction work or who had been an engineer with one of the branches of service. At the time, Offutt was struggling to build some new officers’ quarters and the instructor took that well-publicized ridiculous situation as an opportunity for instruction. He had created a brief summary of the Air Farce building construction project and, on the first day of class, he assigned us the task of reading his document and creating a bid for the work. As a EE student, I had no idea how to bid something like that project. It was a 300-level class and I assumed that meant the civil engineering students would have an advantage. It turned out that we all missed the point that was hammered home the next time the class met and we handed in our estimates.
What we learned on that second class was that the design proposal, like the actual Air Farce building design specifications, was riddled with flaws and outright errors. Our assignment was to identify those errors and design problems and use each one to cut the quoted cost of the project accordingly, since design corrections are billed on a “time and materials” basis. The idea was to be the low bidder with accurate “time and materials” padding to more than make up for the thin bid margins. In other words, the more problems we could identify in the government design specifications, the lower we should bid the project.
One of the more notable defects in the Offutt housing design was a top floor swimming pool. Even before people started moving into the building, the pool was leaking into the upper floor apartments making them uninhabitable. During our class term, the contractor was in the process of moving the pool to a lower level, probably the basement, and redoing the top 3 floors of the building: all on no-bid time plus materials.
That was the first week of class. We learned that, as contractors, the first thing we should always do, once a project has been approved, is to tear up as much as possible as quickly as possible. Since that class, I’ve seen this tactic repeated hundreds of times on road, park, and building projects: On day-one, contractors hit the ground ripping up as much as possible as quickly as possible. The theory is that, once enough damage has been done that finding an alternative contractor would be even more expensive, the chances that even a totally botched project will be taken away from the perpetrator are near-zero. Once the initial destruction is done, the contractor’s urgency approaches zero and, not only does the work go slowly, but inspections and oversight dissipate out of boredom or worse. Ideally, the project schedule wanders into bad weather where the contractor can point to the original bid that allows “time and material” overruns due to “acts of god.”
And that’s the “good stuff.” In a half-hearted attempt to disguise encouraging criminal behavior as “instruction,” the UNO instructor spent a couple of days explaining where the “weak knees” in every government or corporate project lies. For some inexplicable reason, nearly every government employee imagines himself to be worth a lot more “in the real world” than he’s being paid by the government. Because of that delusion, government engineers and inspectors are easily and cheaply bribed. The low men and women on the government and corporate totem pole are quality inspectors. Delivering an “unmarked paper bag” full of money” is an old contractor “joke” that is only funny when you’re the one running the con. The relatively simple solution to preventing this kind of corruption is competent and on-site active management, but that is a vanishing skill in modern America. While our universities are cranking out MBAs by the bushel, the country is consistently demonstrating that “management” and “administration” are not skills our universities possess themselves. Sadly, being a decent manager is a lot of thankless work and “work” is exactly the kind of activity that our current crop of mismanagers avoid like the plague.
In my manufacturing management career, I found myself almost overwhelmed by the pull of multiple quality production disincentives and the lure of either a lackadaisical approach to solving problems or outright corruption. One of my three manufacturing management positions was with a very small electronic products company and, even there, those problems were ever present. Purchasing agents were easily and cheaply bribed, quality inspectors weren’t much of an improvement, even company executives (already grossly overpaid) went on vendor-paid junkets to ski resorts and Hawaii, returning with “deals” that were disasters on the production line. The bigger the company, the more holes there are in the corporate ethics system. That seems to be less true in government, where even local bureaucrats have their hands out full time.
This country once knew something about all of this stuff. When the transcontinental railroad was being constructed, railroad contractors were constantly pitted against each other. Railroad construction contracts usually were written with two different contractors, with one group starting at one end and another at the opposite end of the route. The one who laid the most miles of track got paid the most. That is the ultimate in competitive bidding. Obviously, because our brand of socialism has been contaminated with ruthless capitalism from the earliest days, there was plenty of corruption. Still, there was clearly an awareness of the need for government encouraged competition. The further we are from being a practicing manufacturing nation, the less we will know about managing quality. There is no easy fix.
