Have Shovel, Will Build

I don't know about this as a sensible approach to infrastructure building. Sound suspicious to me, as if the motivation is more to get money to go, and worry about problems later, than have a tried and true plan.

Who cares if John Nutcase ends up with some weird house he has to continuously rework?

If it is your towns water system, well there will be more than enough demand for building on the fly down the road, to call for a really good plan for the core to start with.

This post is a bit mixed up, for it mixes housing and infrastructure building as if they are the same thing.

In my case I was waiting for the housing bubble to burst so prices of Homes would go down enough so I could buy one.

However what happened was that the housing bubble burst, and the entire economy went to hell and I lost my job and the government is working to make sure prices of homes stay up.

Further taxes are raised and my rent goes up, as I have lost my job.

In the meantime rich retirees still have income enough to stay retired and play golf.

"It costs what it costs, and takes what it takes."

"Pay now or pay later."

Gee Whiz, isn't there any standard sort of water treatment plant design by now?

Yeah, the recovery is starting...
We are already back to our old ways...selling people stuff they don't need and can't afford.
The idiots are complaining that house prices have dropped and whingeing that they can't afford them in the same breath.
Insead of building 'affordable housing' one council in the UK is giving the money to people to use as deposits to buy expensive housing (Duh?)...which will of course all help put the prices up.
Do we learn?
No.
The UK Government is also talking of selling off some of it's assets...ho, hum ,we can all guess who will benefit and who will suffer on that score...
The bankers crashed the car...heck, lets have a whip roud and buy 'em a new faster car with no brakes and a blacked out windshield...that'll ensure the future of our economies.
Jeez, with a lucid post like this don't I deserve a Nobel Prize of some sort?

Del

Design build is the only way to go. To not do so is tantamount to foregoing the Federal money.

Of course, design build will produce design errors leading to costly change orders and rework. The costs of the projects will skyrocket enormously. Profits to engineers and contractors will increase on each change order...but the funding for all practical purposes is free....

There are two questions in your post:

1. Are we beginning to see signs of economic recovery?
2. ...do you prefer the design-build method over the more traditional general contracting method or construction management

The answer to question 1 is a resounding no. Almost all economic indicators are being influenced by government bailouts and the ARRA government spending. What we are seeing are signs that the U.S. government is borrowing from the future to pay for jobs today. Since 100% of the money used for these programmes is borrowed, the government is taking from future (young and unborn) citizens and distributing to present citizens. Since young and unborn citizens can't vote, this makes perfect sense from a politicians point of view.

As for question 2: All contractors, professional design firms and now local government officials now have a love affair with design build. To understand why, we have to review the work of prescient economist Mancur Olson and his 1982 treatise The Rise and Decline of Nations.

Mr. Olson demonstrated that it is entirely logical for a member of government, or private lobbyist, to form "distributional coalitions" seeking "selective incentives". That is, a group (the coalition) who has an interest in receiving a greater percentage of society's wealth (the incentives) than their percentage of the population or ownership of society's wealth would normally entitle them.

As long as the entire population of a country is required to pay for an incentive, but the few members of the coalition receive the benefit, the cost to benefit ratio of a project can get completely ridiculous; yet are entirely rational from the coalition's point of view.

For instance, say a few engineering designers and contractors from Alaska approach their hypothetical Senator and say they have an idea for a public works project to build a bridge to replace a ferry that serves 50 residents. The bridge is estimated to cost $300 million dollars, which will come from Federal spending, and all of the benefit of the bridge and construction spending will be to Alaska residents and businesses. The ferry costs $500,000 a year to operate.

A corporation in the bridge build-own-operate business would look at the situation as a ridiculous investment. Taking out a 30 year bond to pay for the bridge would yield an annualized cost of $1.9 million + maintenance costs per year to avoid an operating cost of 1/4 that. It is a bad investment from the Federal point of view.

But to the Senator he sees a $300,000,000 benefit to his constituents. Alaska has 700,000 residents out of a total U.S. population of 300 million. Therefore, assuming Alaskans pay taxes in equal shares to other Americans, Alaskans pay only a fractional share of the cost of the bridge (700,000/300,000,000 * $300,000,000 = $700,000) but recieve the entire benefit. The Senator can easily justify to his constituents spending $700,000 to get a $300,000,000 benefit. This is an incredible 1:425 cost-to-benefit ratio!

The Senator, engineers, contractors all eagerly urge the Senate to approve this wonderful project! Yet in reality, it is a terrible misallocation of society's resources to propose the project. How can such a misallocation occur? No single elected official can pass a bill to appropriate the money singlehandedly, all politicians eventually agree to form distributional coalitions of sufficient size to gain projects for their constituency. "You support my pork, and I'll support yours".

How does this tie in to ARRA? Every local official now has a choice: Start a project NOW, or do not receive the Federal money. Since it is in the local interest to get as much Federal money NOW, design build is really the only practical alternative. To wait for a properly engineered, optimized design constructed under the lowest price tenderer is tantamount to career suicide.

The tragedy is ARRA will only make America's fiscal problems worse over the next decade. The government is projecting 3% growth for a decade which includes another addition of $1 TRILLION new debt. 3% is unjustly optimistic, the debt will grow faster than the populace will realize until the creditors refuse to extend new credit. Then the real problems of massive unemployment, monetary inflation and consequential civil unrest will begin.

Although ARRA will do what it intends in the very short term, in the longer term it is adding to the unjust burden U.S. citizens are placing on their future citizens and concerns of their creditors. Sooner, rather than later, this debt will crush the America as we know it out of existence. This will be very sad, and I urge all democratic citizens to urge their elected officials to stop adding to a mounting debt.

There are hundreds of thousands of experienced workers out there who are not capable of paying the fees and insurance necessary to become licensed contractors. I have over 40 years of experience in the trades, and know more than many of the contractors out there scamming. I am willing, as are many of my counterparts to provide labor at a reasonable rate to the home owners who need work done, but the government still insists on making my efforts unavailable, because I'm not charging enough to pay the contractor who pays the state. A home owner should be able to contract for himself, or herself, and hire their own help. They should not be forced to hire a State licensed contractor that charges three to five times what they pay their employees, to do the work. I can do almost anything from pouring concrete to code, to Electrical, plumbing, and carpentry to code. Why should the homeowner be forced to pay $40 to $100 per hour for these services while I can not legally find work for $20 per hour?

The Govt. insists that it is the non-licensed workers who are the scammers. I contend, it is the State and the licensed contractors who are scamming to keep wages unnaturally high.