Quote:
Originally Posted by OldDartmouthMark
However, it's not arbitrary. When contracts are created to be put out for tender, cost estimates are calculated beforehand. In this case the estimates were probably calculated before pandemic cost increases came into effect, and thus the "sticker shock" when contractors came back with pricing based on current costs.
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Sure, but to get at my point imagine 2 scenarios.
1) The price of project inputs goes up in 2019. HRM staff estimate in 2020 that it will cost $20M. The winning bid accepted by HRM council is $19M.
2) HRM staff estimate in 2020 that it will cost $18M. The price of project inputs goes up in 2021. The winning bid accepted by HRM council is $19M.
Scenario (2) is a "cost overrun" scenario with attendant news articles. Scenario (1) is the opposite, maybe with some good news articles. Both result in the same expenditure. Ultimately the core questions are what the city spends and what the value of the service is. Maybe we can say something about the accuracy of projected costs too but I doubt that HRM staff can accurately predict events like the pandemic.
Note the overall background here is growth, inflation, and HRM delays for one reason or another. So gradual escalation in costs is going to be the norm.