I recently came across a document prepared by a federal agency for a small construction job.  This is not for any building of significance, in fact there is a provision that the main work is to be completed within two weeks.  Again, this is not a big job.  I took a brief look at this document (it’s an inch thick) and was amazed, though not surprised at what I found. 

So why do government  hammers cost $1000.00?  I know I am repeating, but I would like you to keep one fact in mind as you read through the following reasons; This is a small construction job that, by contract, will have to be completed within two weeks.

Reason 1 – Artificial Wages:  This job will be funded by our tax dollars and so there is a provision to pay “prevailing wages.”  Essentially you have to pay your employees the wages specified by government regardless of market rates.  The federal law that requires these higher rates is is the Davis-Bacon Act (most states have their own version).  A general laborer rate for this job is over $45.oo per hour (including fringes).  Many believe that prevailing wages are a way to allow unions to compete with smaller, leaner companies and it’s hard to argue against that as I note that this adds cost to the project.

Reason 2 – Red Tape:  Whom ever the lucky devil is that will get this job will have to write and gain approval of a few plan documents including:

• Work Plan (it makes sense to give them your plan)
• Disposal Plan (also makes sense to show them where you’ll dispose of waste)
• Environmental Protection Plan (OK?)
• Accident Prevention Plan (safety is important)
• Activity Hazard Analysis (this is a detailed look at all expected tasks to identify hazards and measures to prevent injury such as how to lift, how to unload a truck, etc.)
• Site Safety and Health Plan (not sure why it is not included in above)
• Temporary Facilities Plan and
• Dry Work Environment Plan

None of these on their own are unreasonable, but remember that this is a two week job and the development, submittal and approval of these plans is likely to take much longer than the actual job.  In addition to these Plans there are dozens and dozens of other submittals.  To the agency’s credit the document contains a six page Submittal Register to track submittals and approvals.  Development and seeking approval of these plans adds cost to the project.

Reason 3 – Too Many Cooks:  Even though this will be a federally funded project, other local, county, and state governments have included specifications that will have to be met.  I mentioned earlier that the document was approximately one inch thick.  If I were to print out all of the documents incorporated by reference that thickness would swell to probably four inches.  Also any of these agencies have the right to ”inspect” the project and could presumably order work to be stopped.  While much of the specifications in those documents may not apply to this project they have to be considered in the bid which adds cost to the project. 

Reason 4 – Minutia:  A while back I wrote an article on uncertainty and briefly discussed how uncertainty in bidding a job will add cost.  The flip side is providing every minute detail thereby limiting any flexibility to comply with the requirements.  This document includes fives pages of specification on the two project signs that must be provided and specifications on a work trailer for inspectors including;

• heat (even though this job is scheduled to be completed in the summer)
• 150 foot-candles of light at desktop level
• electricity (gasoline generators must be provided if necessary – doesn’t seem very environmental)
• air-conditioning
• lockable doors
• partitioned restroom facilities
• a lockable mail box (the size is specified)
• water cooler (no mention that water must be provided)
• one desk “having 60-inch by 30-inch top, with lockable drawers
• two swivel chairs
• one table with 60-inch by 30-inch laminated top
• one lockable, fire-resistant, letter size, two drawer 36 inch wide steel lateral filing cabinet set up for side-by-side filing with ball-bearing suspension for full drawer extensions
• one shelf set, two shelves high, measuring 12 inches deep by 3 feet long
• two waste baskets (no mention of a recycle bin)
• copier, Konica Model 3290 desk top copier, or approved equal, including adequate supplies and service agreement (it is interesting to note that there is a “buy American” provision in the document and yet they specify a Konica copier)
• Fax machine, Xerox Model N58, or approved equal, including adequate supplies and service agreement (Xerox is an American company, but I doubt that the the Model N58 is made anywhere in North America)  – There was no mention about providing telephone service for the fax machine.
• a clock; not just any clock, but a battery-powered quartz round wall clock, 8.5 inch minimum diameter, constructed of a plastic case and lens, having a white dial with Arabic numbers and black hour, minute, and second hands.
• a countertop microwave oven, with digital display, interior light, and a minimum of 0.6 cubic feet of capacity
• a compact refrigerator, with 1.58 cubic foot capacity, and ice tray

Most of the text for these was taken directly from the document (except for my pithy comments) and I am not exaggerating.  As a reminder this is a two week job.  This stuff all adds cost to the project.

Reason 5 – Buy American:  It is hard to argue against a provision to use American tax dollars to purchase American products.  Politicians love these provisions and they work well in their thirty second television sound bites, but protectionist policies are sophisms and only work for the protected industry.  An even then they only work until all of the other industries cry for protection and all prices are raised.  The documents do provide an out if the price of an American product is more than 25% higher than a similar foreign-made product.  You do, however have to get prior approval (red tape) and this, of course adds cost to the project.

Reason 6 – Damages:  Many contracts contain provisions requiring construction bonds or damage payments if a contractor does not perform the work to standards or takes much longer to complete the project.  This is one way to ensure that the job is done correctly and on time.  This bid document provides for damage payments for non-performance, including missing deadlines yet there are not any provisions for government guarantees regarding how fast they will respond to approve plans (Reason 2) or allow alternative products (Reason 5) or resolve issues between all of the government agencies (Reason 3).  Any government agency that put together a bid document this size cannot be expected to approve plans and alternatives in a timely fashion.  A contractor knows this and has to build in costs for anticipated delays (damage payments, payments to workers not working, etc.) and this adds cost to the project.

Reason 7 – Payment:  Government agencies pay slow, very slow.  Government agencies require exhaustive amounts of paperwork to request payment.  If you miss crossing a “t” or dotting an “i” they will bounce the request back without payment.  Any government contractor has to factor in the costs associated with delayed payments since they will have to pay their workers, suppliers, and subcontractors long before they get paid.  Time is money and this adds cost to the project.

At the risk of being repetitive I will ask you to remember that this is all for a two week, small, construction project.  It is likely that any company willing to bid this will pay someone more than two weeks to develop the bid and then, if successful, supply all of the information and probably have a person on-site completing nothing but paperwork. 

As a note, I own a very nice Estwing hammer that cost much less than $1000.00 and it was made in America!

                                                    (Chapter One can be found here and Chapter Two here).

Charles was startled awake again from his sleep, but this time it was his alarm.  Charles never pushed the snooze button, but today he indulged himself.  He deserved another 8 minutes of sleep.  He remembered his dreams vividly, but did not comprehend the meaning behind the visits.  For some reason, he expected another ghostly apparition, but the third had not arrived and for that he was grateful.

These ghosts made him think and more importantly he had lost some sleep.  He needed to look good today of all days to read the news.  All of the world would be watching, ok he had to admit to himself that his ratings were steadily dropping, but at least his numbers were better than Katie’s. 

Charles’ morning routine was normal and he watched Fox and Friends as he dressed.  “It’s good to keep an eye on the competition.” He justified to himself.  He did choose to wear the shirt with button sleeves.  “Cuff links might seem too high brow for my audience.” He thought.  He wanted to look good, but closer to the common people he’d seen on television.

Charles grabbed his briefcase and headed for the door.  As he opened it, he had to stifle a gasp as the world around him looked vastly different.  Charles grasped the handrail, sat down, and took a few minutes to gather himself from the shock.  He looked up and down the street and his upscale neighborhood was no longer upscale.  “It looks like Middle America.” He thought to himself.

“This is Middle America.” A voice beside him chimed in.  “This is the part of the country that you fly over and pretend does not exist.”  Charles immediately relaxed as he now knew that this was another, his third, apparition and not really happening.  Charles half expected to find himself back in his bedroom with this new stranger.  “Do I know you?”  Charles asked the ghost.  “I am the ghost of Pressmas Future.” The man replied.  “You may call me Matt.”

“My first two visitors were very famous people, but I don’t know who you are.”  Charles responded.  “I do like your hat though.  Are you famous or someone who became famous?” 

Matt chuckled at Charles’s naiveté and responded, “I am part of the new media so you probably would look down at me.  You might be surprised, however, to know that I probably Drudge up more daily hits to my web site that you have viewers.  I had 131 million views last month alone.  Not bad for a guy you think sits at home in front of his computer in his underwear?”

Charles started, “I know all about you boogers..” Matt interrupted, “Bloggers.” “Yes, yes bloggers.” Charles replied testily, “My company has many of its own web sites.  We are on the cutting edge of technology.”  Matt interrupted again, “I am sure that you have the best sites that money can buy.  Too bad nobody looks at them.  It is not about the technology, it is about the trust.  I basically run my web site alone and have gathered a wide audience.  I know that some of your staff visits my site.”

“I find that hard to believe” Charles protested, “We have real newsmen, sorry newspersons, who would not lower themselves to read your drivel.  Frankly I am also tired of hearing you ghosts go on and on about our credibility.  My network is not biased.  We have Elizabeth Hasselblad..” “Hasselbeck” interrupted Matt, “I know, I know. Hasselhoff” Charles testily replied, “We even put one of you conservatives on prime time.  Give me a break; we have John Stossel on our network!” 

“I am not here to argue with you.” Claimed Matt, “I am here to show you the future; the future of your industry.  Unfortunately for you we don’t get to go to exotic places like you did with Thomas or Walter.”  Charles interrupted “Wait, you get to call him Walter too?”  Matt shook his head and continued, “I know that you start your day watching Fox and Friends so you would not have noticed this morning that the network morning shows that you were used to in your time have all combined.  It is called the America Today Early Show.  It is hosted by Keith Olberman and Chris Matthews and oddly enough Willard Scott is still on.”
“The television networks were like the stringed quartet on the sinking Titanic, playing the same music as the ship went down.  They could not see the forest for the trees, they had their heads in the sand, they were not playing with a full deck.”  Charles interrupted, “That was far too many clichés for my taste.”

“That’s my point.” Matt added, “The broadcast television networks became a cliché.  Rest is rust.  Sorry, I had one more cliché that I wanted to get in.  You might find solace in the knowledge that the networks did regain some of their ratings before their demise.  It is a dubious distinction, but ratings increased after your big Obamacare broadcast at the White House.” 

“You mean people watched and came back to network news?” Charles hoped, “I knew the critics were wrong, it was not a propaganda show.  We asked the tough questions…didn’t we?”

Matt seemed puzzled then replied, “That’s right, in your world, you haven’t done the broadcast yet.  This ghost thing and being in your head is rather confusing for me.  Sorry, I didn’t mean to say “Rather.”  Rathergate still probably stings even though it was another network.” 

Angered, Charles replied, “Dan stepped over the line on that one.  He should have never provided the memos.  It would have been enough to claim the memos and never show them.  He was just plain stupid.”

Matt, again shaking his head, continued, “Well speaking of stupid, your network really did Dan one better.  You totally misread the American people.  You feigned some tough questions, but the White House knew what the questions were going to be.  I have always been curious about whether you provided Obama with the questions ahead of time.  Did you?  It really doesn’t matter as most people believed that is what you did.”

“So what about the bump in viewership?” Charles inquired, “Tell me about the bump.  I was getting tired of having ratings in the tank.”

“You did get a bump for a while, but you are not going to like the reason.”  Matt replied, “Viewers were so disgusted with the apparent duplicity you lost what little credibility that you had.  A few weeks after your broadcast, a blogger started an internet contest called Bias Bingo.  Folks paid for and downloaded” Seeing the puzzled look on Charles’s face Matt added, “That means got a file from the internet.  So people downloaded their Bias Bingo cards.  Instead of numbers, each square contained an item of bias or liberal talking point that could be seen on your newscasts.”

“Your ratings increased as viewers played Bias Bingo on their laptops while watching your broadcasts.  The company went broke as there were too many winners.  You were actually more biased than even they anticipated.  After that, your only viewers were college students who were required by their professor to watch for current events.  As those professors went to the great protest in the sky (or ground) no one watched.”  Matt continued, “The government argued that you were too big to fail, gave you Stimulus money, appointed a czar, and ran the networks for a while, but they could not force anyone to watch.  They tried, but that Constitution kept getting in the way”

Charles was dismayed and asked, “What happened to me?”  Matt answered, “You landed on your feet and have a good career, but let me finish first.”  With that, they found themselves back in Charles’ bedroom and the television was still tuned to Fox News.  “Fox News had been steadily gaining market share even before your fateful broadcast.  That trend actually tipped as people realized that Fox was actually fair and balanced.  You main stream media guys had actually protested too much.” 

Charles turned toward the television as he heard a familiar voice.  It was Charles Krauthammer discussing President Palin’s new tax cuts.  “We were very fortunate that we only had one term before President Palin was swept into office.  The country was ready for a tax change and her call for a Fair Tax is gaining momentum.”  Krauthammer said as he turned to his colleague on the All Star Panel.  “So Barrack, what do you think about the president’s tax proposal?”

Charles’s mind went a little numb and he did not hear the response.  He was shaken to the core of his beliefs and world view.  As his mind started to swirl, his reverie was interrupted as he heard his voice on the television.  He turned expecting to see himself as part of the Panel, but the program had gone to commercial. 

Charles turned white and passed out as he heard his voice pitch, “If you act now, we will double the number of ShamWows that we will send you for the same price.  In order to take advantage of this, you will need to have your credit card ready and call within the next thirty….