If the government uses its own employees, they don’t have to worry about profit margins, and have greater control over material quality and costs (no cost+ on materials, either). I will also admit, though, that too few govt managers/supervisors are especially good at cost control, but this is usually at the top, not where union workers are involved.
What would happen if they accepted the lowest bid, and the contractor showed up with fresh (illegal?) immigrants with no experience, etc. and used sub-standard materials? How much would it cost to remedy problems that would not be as likely happen with union workers who are paid a living wage? As you know, with union workers, you know that you’re getting trained, experienced workers who can more easily be held accountable for the work they do.
Not saying there aren’t issues with unions and all the red tape, just saying that using the cheapest labor and materials won’t necessarily translate into savings over the long run.[/quote]
CAR: Except low bidder does not = illegal labor and sub-standard materials and for one reason: Existing building codes like IBC 2012 (Int’l Building Code).
Most of the conventional costs are carried in Labor and Material. When you use union crews, the costs skew heavily in the Labor direction. You can deliver excellent build quality (from the Material side) without breaking the bank to do so, but Labor costs can swing widely and all it depends what costing standard (e.g. Prevailing Wage, union, Merit/Open Shop (non-union), etc) that you’re using.
I’m not banging away on unions here, this is just from past (and present) experience. The rough rule-of-thumb that we use in Metro markets (like NYC, Chicago, SF) is 2x Materials and 3x+ Labor (and this number goes even higher in Metro NYC, which is a friggin’ nightmare) when compared to a “standard” Commercial project.
