Anonymous
Post 05/04/2020 15:51     Subject: The Purple Line builders want out
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:Project Finance 101 - the cost of the risk is absorbed by the party best equipped to mitigate it. This should be the government’s problem, not the contractors’.


Well, the cost of risk is usually spelled out in the contract. Most able is certainly relevant, but you also need to do it in a way that creates the right incentives for each party.


Something like this was bound to go into litigation. Inavoidable. If these issues aren’t clear in the contracts, many people weren’t doing their jobs. My entirely uninformed guess is that these idiots probably sent the legal work to the lowest bidder among law firms. “Who pays poorly, pays twice.”


*unavoidable
Anonymous
Post 05/04/2020 15:50     Subject: The Purple Line builders want out
Anonymous wrote:
Anonymous wrote:Project Finance 101 - the cost of the risk is absorbed by the party best equipped to mitigate it. This should be the government’s problem, not the contractors’.


Well, the cost of risk is usually spelled out in the contract. Most able is certainly relevant, but you also need to do it in a way that creates the right incentives for each party.


Something like this was bound to go into litigation. Inavoidable. If these issues aren’t clear in the contracts, many people weren’t doing their jobs. My entirely uninformed guess is that these idiots probably sent the legal work to the lowest bidder among law firms. “Who pays poorly, pays twice.”
Anonymous
Post 05/04/2020 15:31     Subject: The Purple Line builders want out
Anonymous wrote:
Anonymous wrote:Good. Shut it down. Don’t need it anyway.


This. Who wants to ride metro anyway anymore?


Metro is going to have to come back to normal at some point for the city to function. Whether anyone will be interested in the purple line is a largely separate issue.
Anonymous
Post 05/04/2020 14:53     Subject: The Purple Line builders want out
Anonymous wrote:Good. Shut it down. Don’t need it anyway.


This. Who wants to ride metro anyway anymore?
Anonymous
Post 05/04/2020 07:25     Subject: The Purple Line builders want out
Anonymous wrote:Project Finance 101 - the cost of the risk is absorbed by the party best equipped to mitigate it. This should be the government’s problem, not the contractors’.


Well, the cost of risk is usually spelled out in the contract. Most able is certainly relevant, but you also need to do it in a way that creates the right incentives for each party.
Anonymous
Post 05/04/2020 02:55     Subject: The Purple Line builders want out
Project Finance 101 - the cost of the risk is absorbed by the party best equipped to mitigate it. This should be the government’s problem, not the contractors’.
Anonymous
Post 05/04/2020 01:22     Subject: The Purple Line builders want out
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:Its money. They are price gouging the county as they know the county will pay. County should fire them at this point.


No. There were cost overruns that were not the contractors fault. The contractors agreed to complete the job for no profit, but the government would not pay for the cost overruns. It isn't the contractors fault that the NIMBYs lawsuit caused major delays and cost overruns. The government should have paid for the overrun costs that came from litigating the lawsuit and not tried to make the contractor take the hit. Montgomery County needs to pay for the cost overruns since it was the county residents who fought the project. Their tax dollars should be paying for the cost overruns and not trying to make the contractor bear the cost of the residents' legal obstruction of the project. The lawsuit, environmental delays raised by the NIMBYs, failure to acquire land rights, changes in design due to the above problems all cause cost overruns, none of which are the responsibility of the contractors and all solely the responsibility of the government. Looks like the NIMBYs may have gotten their way and killed the project by making it too expensive to complete. They're only going to hurt their own county because the county is going to have to pay back the federal money invested if they don't complete the project. Typical elitist privilege.




From the Washington Post article:
In a letter to the consortium Friday, Scott Risley, the construction team’s project manager, said it was terminating the design-build contract because of “extended” delays beyond its control. Delays caused by a lawsuit, problems obtaining land, last-minute changes in design requirements and difficulties in receiving state environmental approvals had added 21/2 years and $519 million to the project, Risley wrote.

Without financial compensation by the state, Risley wrote, the construction firms “would be forced to absorb hundreds of millions of dollars in additional costs that are [the state’s] responsibility. This is neither reasonable nor sustainable for PLTC.”

[...skip...]

Risley wrote that negotiations broke down in December, when the state refused to approve an “agreement in principle” reached after six months of “intense negotiations.” He said the companies had offered to complete the project without making a profit.


The environmental studies and the lawsuit were both efforts that were set up by coalitions of local residents near the Capitol Crescent Trail, the country club, and residents who did not want the Purple Line. And they may get their wish at the cost of $1B and many roads that are torn up with uncompleted track. The two counties and the state need to find a solution because these contractors will not accept those costs (they have a legal escape clause) and it's going to be very expensive, most likely more expensive than accepting the cost overruns to find new contractors. Most contractors are not going to take this writhing live wire without bigger financial concessions from the three governments. And worse, if the state defaults and does not complete the work at this point, they are going to be on the hook to pay the federal government back for the federal funds that were given to the project. Those funds are only guaranteed if the project is completed. If it doesn't get finished, the state and two counties will be paying the federal government back for a very long time.
Anonymous
Post 05/03/2020 23:09     Subject: The Purple Line builders want out
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:Its money. They are price gouging the county as they know the county will pay. County should fire them at this point.


No. There were cost overruns that were not the contractors fault. The contractors agreed to complete the job for no profit, but the government would not pay for the cost overruns. It isn't the contractors fault that the NIMBYs lawsuit caused major delays and cost overruns. The government should have paid for the overrun costs that came from litigating the lawsuit and not tried to make the contractor take the hit. Montgomery County needs to pay for the cost overruns since it was the county residents who fought the project. Their tax dollars should be paying for the cost overruns and not trying to make the contractor bear the cost of the residents' legal obstruction of the project. The lawsuit, environmental delays raised by the NIMBYs, failure to acquire land rights, changes in design due to the above problems all cause cost overruns, none of which are the responsibility of the contractors and all solely the responsibility of the government. Looks like the NIMBYs may have gotten their way and killed the project by making it too expensive to complete. They're only going to hurt their own county because the county is going to have to pay back the federal money invested if they don't complete the project. Typical elitist privilege.




I don’t know if PP’s rendition is accurate or not, but what’s the point of posting an eye roll? If you think something is wrong, say what it is and why.
Anonymous
Post 05/03/2020 23:03     Subject: Re:The Purple Line builders want out
Yikes. Do the county and state realize what a negative message this would send about suburban Maryland as a place to do business if they can’t even work with their own contractors?

Anonymous
Post 05/03/2020 22:58     Subject: The Purple Line builders want out
Good. Shut it down. Don’t need it anyway.
Anonymous
Post 05/03/2020 21:22     Subject: The Purple Line builders want out
Anonymous wrote:
Anonymous wrote:Its money. They are price gouging the county as they know the county will pay. County should fire them at this point.


No. There were cost overruns that were not the contractors fault. The contractors agreed to complete the job for no profit, but the government would not pay for the cost overruns. It isn't the contractors fault that the NIMBYs lawsuit caused major delays and cost overruns. The government should have paid for the overrun costs that came from litigating the lawsuit and not tried to make the contractor take the hit. Montgomery County needs to pay for the cost overruns since it was the county residents who fought the project. Their tax dollars should be paying for the cost overruns and not trying to make the contractor bear the cost of the residents' legal obstruction of the project. The lawsuit, environmental delays raised by the NIMBYs, failure to acquire land rights, changes in design due to the above problems all cause cost overruns, none of which are the responsibility of the contractors and all solely the responsibility of the government. Looks like the NIMBYs may have gotten their way and killed the project by making it too expensive to complete. They're only going to hurt their own county because the county is going to have to pay back the federal money invested if they don't complete the project. Typical elitist privilege.


Anonymous
Post 05/03/2020 21:21     Subject: The Purple Line builders want out
Anonymous wrote:
Anonymous wrote:Its money. They are price gouging the county as they know the county will pay. County should fire them at this point.


No. There were cost overruns that were not the contractors fault. The contractors agreed to complete the job for no profit, but the government would not pay for the cost overruns. It isn't the contractors fault that the NIMBYs lawsuit caused major delays and cost overruns. The government should have paid for the overrun costs that came from litigating the lawsuit and not tried to make the contractor take the hit. Montgomery County needs to pay for the cost overruns since it was the county residents who fought the project. Their tax dollars should be paying for the cost overruns and not trying to make the contractor bear the cost of the residents' legal obstruction of the project. The lawsuit, environmental delays raised by the NIMBYs, failure to acquire land rights, changes in design due to the above problems all cause cost overruns, none of which are the responsibility of the contractors and all solely the responsibility of the government. Looks like the NIMBYs may have gotten their way and killed the project by making it too expensive to complete. They're only going to hurt their own county because the county is going to have to pay back the federal money invested if they don't complete the project. Typical elitist privilege.


I forgot to add that this article gives a better idea of the costs and why they are the government's responsibility and not the contractors.

https://www.washingtonpost.com/local/trafficandcommuting/firms-building-maryland-purple-line-say-they-plan-to-quit-the-job-over-disputes-with-the-state/2020/05/01/efafa372-8af1-11ea-9dfd-990f9dcc71fc_story.html
Anonymous
Post 05/03/2020 21:18     Subject: The Purple Line builders want out
Anonymous wrote:Its money. They are price gouging the county as they know the county will pay. County should fire them at this point.


No. There were cost overruns that were not the contractors fault. The contractors agreed to complete the job for no profit, but the government would not pay for the cost overruns. It isn't the contractors fault that the NIMBYs lawsuit caused major delays and cost overruns. The government should have paid for the overrun costs that came from litigating the lawsuit and not tried to make the contractor take the hit. Montgomery County needs to pay for the cost overruns since it was the county residents who fought the project. Their tax dollars should be paying for the cost overruns and not trying to make the contractor bear the cost of the residents' legal obstruction of the project. The lawsuit, environmental delays raised by the NIMBYs, failure to acquire land rights, changes in design due to the above problems all cause cost overruns, none of which are the responsibility of the contractors and all solely the responsibility of the government. Looks like the NIMBYs may have gotten their way and killed the project by making it too expensive to complete. They're only going to hurt their own county because the county is going to have to pay back the federal money invested if they don't complete the project. Typical elitist privilege.
Anonymous
Post 05/03/2020 20:38     Subject: The Purple Line builders want out
Its money. They are price gouging the county as they know the county will pay. County should fire them at this point.
Anonymous
Post 05/03/2020 20:29     Subject: The Purple Line builders want out
or just more money? Will they really walk? Will all these streets stay torn up while the dispute plays out?
https://wtop.com/maryland/2020/05/latest-problem-for-marylands-purple-line-the-builders-want-out/