Quote:
Originally Posted by bomberjet
Thanks. So I wonder where they're gong to re-coup the $10M they are over budget.
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I'm wondering if that original $10MM over budget figure was inclusive of significant cost contingencies. If it's true they pushed aside their local consultants in favour of larger, more experienced ones, it's possible they were able to bring the costs of contingencies into line through better engineering and a reworked schedule that fixed the cost slightly lower, but required 100% bonding. No clue. It seems like $10MM is a huge amount to squeeze out of that kind of budget, but it's really all about somebody taking the deal on a stipulated price basis and bonding the project against significant change orders and cost over-runs. That said, if I was $10MM over-budget and there wasn't yet a pile in the ground, I'd be forecasting greater overages than that and would probably be hesitant to proceed unless VE was incredibly effective in identifying and mitigating certain inefficiencies...