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355 points pavel_lishin | 11 comments | | HN request time: 0.001s | source | bottom
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SoftTalker ◴[] No.45386831[source]
Not sure why transit agencies are still paying for custom paint schemes or colors when they just turn around and wrap the whole bus with advertising. Just buy a plain white bus.

The article didn't mention corruption but I would not rule it out. Follow the money. Whose pockets are being filled when one transit agency is paying 2x what another one does for the same bus.

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1. michaelt ◴[] No.45387082[source]
> Whose pockets are being filled when one transit agency is paying 2x what another one does for the same bus.

I mean, that could just be normal, routine failure to negotiate effectively. If every bus vendor says "call for pricing" and your organisation has "always" paid $940k per bus, when you're told to buy some more buses, you might not even know you can get them for half or a third of that price by getting competing quotes from other vendors.

And if you're an ambitious, hard-nosed type that can really turn the screws on vendors, leaving no stone unturned in your search for savings - would you be working in the purchasing department of a municipal bus company?

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2. SoftTalker ◴[] No.45387148[source]
OK I agree... add "incompetence" along with "corruption" as a potential reason. Though corruption is easier to get away with if it appears as incompetence.
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3. garciasn ◴[] No.45387237[source]
I have a degree in Public Administration. This is basically an MBA for the public sector; but, the difference between the two largely lies in an MBA looking for opportunities to maximize the business and its shareholders vs an MPA looking to implement policies that best serve the public good.

Government employees are NOT well-equipped to compete with private sector ones; they don't think like them and they don't act like them. Why? Because the public sector is driven by a completely different model: bottoms-up management, led by the citizenry, not led top-down to maximize shareholder value. In addition, because private sector jobs pay 2x+ what the same level in a public sector organization will pay and thus the candidate pool is simply not at the level that you would expect at a similarly sized private sector organization. Because of this flip-flopped model of operation (bottoms-up vs top-down) Public/Private partnerships are NOT equal arrangements and the private sector companies know exactly how to leverage these differences in their favor.

In this instance, a public sector employee may feel that paying more for a bus will better serve the public good because it /may/ be better engineered, have a longer lifetime, and offer value to the public that's above and beyond what a less expensive model will do. But! Even if the support staff look for multiple quotes from a variety of vendors, all of which may be at the cost level a private sector company may prefer, that public sector staff member may very well be directly overruled by the elected officials; who, for reasons that can only be hypothesized (take your pick: corruption, brand/personal preference, whatever) may prefer the more expensive vendors that were not included in the research and bidding process.

While I have laid out that the public sector is not well-equipped for public/private partnerships and business dealings, there are MANY reasons for this including: candidate pool, different underlying model of operation, and elected official decisioning.

4. xnx ◴[] No.45387239[source]
> And if you're an ambitious, hard-nosed type that can really turn the screws on vendors,

Absolutely not. Cost savings is career suicide in the public sector. The goal is to spend all budget and then beg for more. Regardless of ridership, the ironclad rule is "budget must go up".

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5. Volundr ◴[] No.45388385[source]
It funny because having worked both in private industry and public (transit!) service, my experience is the exact opposite. In private anytime my department were coming in under budget on anything, there was always the end of the year pressure to spend it on something lest accounting take it away. Meanwhile in the public sector my team went to great lengths to get rid of vendor services that weren't providing value.
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6. xnx ◴[] No.45388640{3}[source]
Good example. That budget behavior is common. Fortunately, if that has true negative effects, the market corrects by putting one company out of business.
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7. Volundr ◴[] No.45388723{4}[source]
Let me know when the market gets around to that. At this time it's ignored all the ones I've worked for.
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8. mh- ◴[] No.45389109{5}[source]
Is it "ignoring" it, or is it priced in to the company's valuation?
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9. conductr ◴[] No.45389184[source]
It’s a matter of procurement process and personnel. They simply aren’t always concerned with cost as the primary decision point and thus tend to not negotiate as hard as you might like. I’m in a finance role, company’s money is my responsibility so I very frequently have to tell procurement people that think a product “ticks all the boxes of the RFP” or similar, that the runner up product only missed on items we can live without so paying 2x isn’t worth it. I does come off as lacking critical thinking, but I’ve come to learn they just go off the requirement and don’t really know which things are critical versus nice to have. Those kinds of things, so I’d blame this entirely on whoever is supposed to have financial oversight over the bureaucracy. Do they have CFOs or similar, idk honestly, but that’s a reason most for profit companies do. They are monitoring large financial decisions for reasonableness.
10. SoftTalker ◴[] No.45389787{3}[source]
In my fantasy world where I run things as a benevolent dictator, people would get bonuses for finishing the year under budget while still achieving all their objectives. I suppose that would just incent them to inflate the budgets to begin with though.
11. Volundr ◴[] No.45392436{6}[source]
I mean could be, maybe their stock would be a touch higher, but it doesn't stop them from being some of the biggest players in their markets. A far cry from being "put out of business" as the commenter I replied to promised.