Random Writings

I’ve just been to Dresden by train, to attend a work-related conference. This, in many ways proved remarkably simple: travel down to London, take a 4pm Eurostar to Brussels, connect to a convenient Thalys train to Cologne, have dinner in Cologne and then take an overnight sleeper to Dresden, arriving at 7am the next morning.

My return journey went pretty well, too – I had an hour in Cologne to have some breakfast and then took a train back to Brussels in order to get the Eurostar. The border crossing between Germany and Belgium happens between Aachen and Liege, and the only thing that you notice is the beeps from people’s mobile phones as they switch to a roaming provider! If you’re a train nerd like me you also notice the brief flicker of the lights in Aachen station as they switch from German to Belgian electrical supplies (there’s a change of voltage AND frequency, how exciting!)

At Brussels South Station, I joined the queue for the Eurostar terminal. You queue first to scan your ticket on the automated gate, and then immediately join a queue for baggage security – there’s the usual bag x-ray and metal detector. Following this is outgoing Belgian border control, quickly followed by British border control. Just before the border control point, a door marked “Lille” allows passengers travelling to that city to skip the unnecessary border control – this is because Belgium and France are both in the Schengen Area which allows free movement without border control.
Finally, you reach the Eurostar lounge, which is actually a bit pitiful – a coffee shop, an expensive chocolate shop and some seating. But you only need to check in 30 minutes before departure, and the train usually boards 15-20 minutes before departure, so most people needn’t wait in the lounge for long.

Upon arrival at the still-fairly-shiny terminal at St Pancras, passengers queue down the platform and then onto a long escalator. At the bottom of the escalator the huge horde executes a brisk u-turn and joins… a British immigration queue! “But hang on”, I thought, “didn’t we do border control in Brussels?” I asked the border control officer (politely but firmly!) why they needed to check everyone’s tickets and passports again on arrival. It turns out that this is to do with Lille. I dimly recall a media hoo-hah a few years ago about immigrants getting into Britain on Eurostar, and this is the result. If you buy a ticket from Brussels to Lille, you are very likely to travel on Eurostar. Passengers travelling to Lille avoid border control, but no-one can actually guarantee that they leave the train at Lille –so some took advantage of this loophole to enter the UK without the necessary visa documents. The British press (predictably the Daily Mail and the Daily Telegraph) kicked up a fuss about this, and so the British border control agency attempted to close the loophole. Now, the problem is that the British authorities can’t legally interfere with passengers travelling between France and Belgium (in fact, an attempt to do this provoked a brief diplomatic row between the UK and Belgium, and the threat by Belgian authorities to arrest British border control officers in Brussels that attempted to do this!) and the Eurostar system was designed to make the border crossing as painless as possible when it first started. In fact, when Eurostar first began, the border checks were conducted on the train – but since a 2004 agreement, UK border staff have been stationed in stations in France and Belgium. The reason for this change is the perceived problem of political asylum. Under the terms of the 1951 Geneva Convention on Refugees, and the 1950 European Declaration of Human Rights, persons persecuted by foreign governments may claim asylum when they arrive in a foreign country. This is a headache for the UK government, as it means that they’re obliged to decide whether such persons are genuine refugees or “undesirable” economic migrants. Because the asylum rules kick in as soon as your feet touch the soil, the UK government tries hard to keep potential asylum-seekers out – even more so because they could (and should) be claiming asylum in France or Belgium. So, in order to maintain the “fortress Britain” idea and appease domestic political audiences, the UK now perversely has decided engage in extra border checks at St Pancras. The joys. As I said to the German couple ahead of me in the border control queue at Brussels – “I’m terribly sorry that we didn’t join the Schengen Agreeemnt, but it’s politically unacceptable!”.

Summary for those not wishing to read 1000 words: a book published in 1911 and mostly concerned with the performance of men doing backbreaking physical labour continues to have a disconcerting influence on management today.

If you go to a bookshop, or surf through the pages of Amazon, you’ll find a colossal number of books for businesspeople. Most of these are about leadership and productivity – how to be better at your job and (often) how to get other people to do better at theirs. This blog post is about the grandfather of all of these books – “The Principles of Scientific Management”, published in 1911 by Fredrick Winslow Taylor.

Taylor was an American, a mechanical engineer, and had worked his way up from the shop floor. His book still shapes a lot of corporate thinking today, and yet very few people I meet have ever heard of him. Here’s a short summary of what he has to say.

He argues that the interests of employer and employees are in fact aligned – both should be interested in the continuing prosperity of the company: the employer in terms of dividend, the employee in terms of wages. He also points out that good management should help each employee find the work that best suits them, and help them develop their skills. However, his main point concerns the problem of “soldiering” as it was called in the US: workers in factories trying to do as little work as they can get away with during their working day. This practice was particularly widespread at the time – a culture developed amongst factory workers that greater productivity per worker would result in some staff being laid off (on the basis that the amount of work required was fixed) and that those that were able to work quickly should slow down in order to protect the jobs of those that could only work more slowly. Taylor points out that supply and demand economics generally means that higher workforce productivity results in lower sale prices and increased sale volumes, meaning that demand for the product actually increases, making more work, not less. In this regard, he is almost certainly correct! Taylor raises his voice against the trade unionists of the time, who were largely responsible for curtailing the productivity of their members. Of course, there was also an issue of fairness: if all workers are paid the same, why would you work harder than your colleagues?

Taylor goes a step further and notes that most workers could work faster if they needed to, but they try and conceal from their employers exactly how fast the job really could be done…

In the main part of the book, Taylor notes the lack of standardisation within most trades. This is logical – skilled workers at that time learned through apprenticeship, by copying an experienced master. Each had their own methods that they passed on to their apprentices. Taylor points out that in a factory with thousands of workers, standardisation of the best method must take place in order to achieve the best productivity. So, how do we do this?

This is the essence: study the methods using the tools of science – observation and experiment – to determine the best method. Teach that method to every worker, and train them to do it well. The management should “heartily cooperate” with the workforce to ensure that the work is done according to the method. Finally, “the management take over all the work for which they are better fitted than the workmen” ensuring “an equal division of labour between management and workforce”. By this last statement, Taylor means that all of the planning and organising of the work should be taken on by the management (whereas traditionally the craftsman worker would have done it himself). The idea here is to remove from the workforce the responsibility for determining how best to do their work – instead, they should do as they are told by the “planner” or manager.

Taylor illustrates his point by describing the work of pig-iron handlers in a steelworks. The pig iron handler “stoops down, picks up a pig weighing 92lbs (that’s 40kg), walks for a few yards and drops it onto the ground or on a pile”. He says “the work is so crude and elementary in its nature that the writer firmly believes that it would be possible to train an intelligent gorilla so as to become a more efficient pig-iron handler than any man could be.”

Taylor then goes into a long explanation of his “experiment” with the pig-iron handlers. He essentially determined that by having a manager stand over the workforce with a stopwatch, telling them when to work and when to rest, and (crucially) by paying the men more to participate in the experiment, he improved their productivity dramatically.

Most of the rest of Taylor’s book is taken up with the details of exactly how much work can be extracted from manual labourers. This is early ergonomics stuff – how big a shovel should you use to shovel coal?

At the end of the book, Taylor counsels against the blunt application of his system, warning that many workers will resent a system that dictates their work so precisely unless there’s something in it for them, in the form of higher wages and a good relationship with management.

However, viewed with the benefit of a century of hindsight, we can see why Taylor’s book was a success: his approach reinforces the prejudice of the management that workers are merely interchangeable parts in the vast machine of the firm. So much of his methods relates to managing teams of men doing backbreaking physical work like lifting 40kg iron bars (to give you an idea, under British safety legislation any item weighing over 25kg is considered a two-person lift) or shovelling iron ore. These jobs are better done by machines – and indeed they soon were. Whilst Taylor correctly grasps the importance of the idea of the “best way” to do a job, the idea that determining this best way is solely the role of management is a pervasive and unhelpful myth. Where Taylor is right is that the system of work is the responsibility of the management, and that providing the most efficient system possible is best for the company. But improvements to the system need to come from both the management and the workforce, with the workforce being motivated through encouragement and not through fear.

When we moved to Oxford, we rented a flat. We found one we liked at a price we were prepared to pay. When we said “we’ll take it” to the letting agent, he said “that’ll be £210 in fees to secure the tenancy”. A couple of hours later he rang back: “Sorry, I should have explained – that’ll be £210 *each*”. What do you do for us, for this sum, I asked. “Oh, we draw up a contract, make sure that the place is fit for you to move in…” Oh, so all the things you ought to be doing anyway. Right. I was incandescent, but we paid. Adding insult to injury, the agent *didn’t* actually do their job properly and our moving-in had to be postponed by a week because the gas inspector (who’d seen the flat literally the Friday before were due to move in on the Monday) condemned the boiler installation and it took a week for the gas fitters to rectify it…

Now it’s payback time. I’ve written to my local (Labour) MP, suggesting that the government make this practice illegal in England & Wales. It already is illegal in Scotland. Here’s the letter that I wrote (with a few personal details removed). If you feel similarly about this issue, please write to your MP – the excellent WriteToThem.com will let you do this quickly and easily.

Here’s the letter I wrote. Please don’t copy it verbatim.

Dear Andrew Smith,

I’ve recently changed jobs and moved to Oxford, becoming a constituent
of yours. My partner and I initially rented a flat in Headington,
although we’ve now just bought a house in . Anyway, my
enquiry to you stems from our experience as tenants in Oxford. The
market for rented property is extremely busy, with high levels of
demand, and a large number of letting agencies operate within the city.
I was stunned to discover that the agency expected us to pay an upfront
fee to secure a tenancy on a rented flat – in fact, they wanted £210
from each of us – and checked up on whether this was a common practice.
It is, apparently, extremely common in England – but it is illegal in
Scotland. I last rented a house in London in 2005, and at that time
tenancy fees were not routinely charged by any of the agencies I dealt
with.

I feel strongly that a letting agent is appointed by the landlord, and
acts in the landlord’s interests. They should therefore not be allowed
to charge the tenant a fee – as the tenants are not operating in a free
market. This situation is compounded by the fact that no agencies
include the associated fees in their online advertising – you only
find out exactly what fees they are charging once you make more
detailed enquiries.

Furthermore, the changes introduced by the last Labour administration
to provide statutory deposit protection have also contributed to fees
charged to tenants. There are three deposit protection schemes: one is
free, but keeps the money in escrow. The other two are insurance
schemes, which allow the landlord or agent to keep the deposit and
resulting interest themselves – these charge a fee for the deposit
management service. Our agency (and it seems that this is also common
practice) charged us an additional fee of £30 on top of the £420 we
paid up front in order to cover the cost of the deposit management. So,
as tenants we benefit from knowing that the deposit protection scheme
will ensure that our deposit is returned, but we are expected to cover
the agent’s costs in using an insurance-based deposit protection scheme
that allows them to profit from the interest on our deposit! Again, we
have no choice in the matter: the agency chooses to operate in this
way.

I would suggest to you that in the present financial climate, with
increasing demands on the private rented housing sector, that
unscrupulous exploitation by letting agents is likely to become ever
more common. A manifesto commitment to prohibit agents charging any
fees to tenants in England and Wales would undoubtedly be very popular.

I look forward to hearing from you.

Yours sincerely,

Michael Prior-Jones

The next nail-biting instalment of our ongoing attempt to buy a house in Oxford… are you sitting comfortably?

Since my last blog entry on March 8th, the whole process has moved on quite a lot, but every so slowly… we still don’t have a house, and only got the final mortgage offer three days ago.

So, let’s start with the Good, and the award here goes to the Cambridge estate agents Pocock & Shaw, who were (to us) always friendly and helpful. Kevin Burt-Gray showed up on New Year’s Eve morning (a Saturday) to look at the house, made a sensible valuation bearing in mind that we wanted to move quickly and said that he’d expect us to be sold subject-to-contract within two weeks of going on the market. And that is indeed what happened – a flurry of offers resulted in us selling the house to a BTL investor for £500 more than we’d advertised for. Much, much later on – after the sale completed (a bit of a mad scramble in itself) – Kevin continued to take an interest and helped us get meter readings from the new owner, as we’d neglected to take them ourselves before leaving! So yes, good estate agents *do* exist…

I’ll put in good mentions here for Chris Wingfield, of Woodfines – our solicitor – and for Fulcher’s Removals – both of whom have been consistently friendly and helpful. I’ll write full recommendations when we’ve finished our business with them.

The Bad: I’m afraid I have to say that I am underwhelmed by London & Country, the mortgage brokers. They are a no-fee, telephone service, and their sales operation is extremely efficient and helpful. However, the follow-up left quite a lot to be desired: there’s a “case manager” who liaises with the bank, and now that banks are a lot more picky, the case manager’s workloads have shot up. Our case manager was very helpful when I spoke to him, but getting through to him was nearly impossible. I fear that L&C’s business model is gradually becoming unsustainable as hassling the banks is going to take up more and more of their time. I’m not inclined to use them again.

The Ugly: Clydesdale Bank – don’t touch them with the proverbial bargepole! Clydesdale are the lenders that L&C recommended – for two reasons: firstly, they had one of the best rates on the market at the time; and secondly because they do their underwriting “by hand” and therefore it’s possible to explain unusual circumstances to the underwriters, where other lenders would just have said “computer says no”. Our recent changes of job, my recent period as a grad student and the fact that Mike isn’t a British citizen have all put other lenders off us – in fact I got a flat “computer says no” rejection from Yorkshire Build Society’s online system – and so we went along with Clydesdale. However, they are slow. Slower than you can possibly imagine. From us putting in an offer to a survey being conducted on the house took two months – admittedly, two weeks of that were a postal delay which was my fault – but then post-survey they faffed about and eventually we were told that a specialist damp survey was required, which took time to arrange and for the surveyor to make his report. By the time the survey was completed, Clydesdale’s computer system had closed our case due to lack of progress! It took a week for them to reinstate the case and get it going again. I complained vigorously to both Clydesdale and L&C, each have blamed the other. The vendors got fed up and put the house back on the market. Now, 3-and-a-half months after we first applied for the mortgage, do we have a mortgage offer. Never again!

A few weeks ago, I was having dinner with a friend and noticed on her bookshelf a copy of the “Dairy Book of Home Cookery” which looks like this:

It caught my eye immediately – my Mum has exactly the same edition, and I remembered it well for its comprehensive selection of classic British recipes, and also for the now cringeworthy recipe ideas and photography from the late 1970s! It was published originally by the Milk Marketing Board (a now-defunct UK government agency which regulated the price of milk and promoted the use of dairy products) and consequently contained a lot of rather blatant marketing material. However, the authors included the basic recipe for pretty much every classic British dish, including a huge range of puddings, cakes and home-made confectionery.

I thought I’d get a copy, and searching the internets I found that they have just this year published a new edition! I’m now the satisfied owner of the 2012 edition, which has been revised and updated but is still clearly the same cookbook with the same heritage. A lot of the recipes are clearly still written in Imperial and translated to metric, and it still contains big chapters on cakes, desserts, preserves and confectionery. Queen of Puddings? Bath buns? Treacle tart? Oh yes…

“You know”, my dearly beloved said to me, “It must be possible to play music in the living room more easily!”. He knows I’m an obliging sort, and an engineer, and I fell for that one hook, like and sinker. He outlined the brief in the manner of the client who knows what he wants but doesn’t know how it can be achieved – “I don’t want to bend over my old iPod to choose tracks. I’d like to play music across the network from one of the computers. Oh, and I’d like to control the playlist from my phone.”

I promised that something could be done. But it would require time, and would almost certainly require money.

So, I surveyed the existing things I had to work with:

– a Fatman iTube iPod dock / amplifier and speakers
– a classic iPod from days gone by
– a MacBook with an iTunes library full of music
– a wireless network

It ought to be possible to make that work out – all I needed was a box of tricks that would connect to the Fatman’s line input and pull music over the network. I punched “network audio player” into Google and found myself adrift in a world of solutions that didn’t quite work…

Here are some that I considered:

– Logitech Squeezebox. I know that Lorna is a big fan of Squeezebox and has them all over her house. But the entry-level Squeezebox Radio is £150 and you have to be running their software on a machine that’s on all the time.

– Apple’s AirPort Express. A funny old gadget this, basically a wireless access point that also can output a line-level audio stream and be a print server. They cost £79. The audio output works using Apple’s (inevitably proprietary) AirPlay system, so that locks me (as an Android user) out from the system. Dearly beloved boyfriend has an iPhone, so he’d be all right with it. Still, possible but not ideal.

– Revo Mondo Wi-Fi. This is a little adaptor device that’s designed to plug into a hi-fi. It’s mostly intended as an internet radio, and has a basic two-line display. It’s about £90 from online retailers. The underlying technology comes from a firm called Receiva, and claims to support BBC on-demand radio content (i.e Listen Again / iPlayer radio) as well as live streams.

In the process of looking at all these bits of kit I kept coming across mentions of DLNA and UPnP. I did a bit more research and discovered that these standards offered me what I wanted – a flexible, cross-platform system. So, what are they? DLNA stands for the Digital Living Network Alliance, and it’s a standards body that provides standards for networked AV systems. UPnP is one of the underlying technical standards – it stands for “Universal Plug ‘n’ Play”. For the purposes of networked AV, there are three basic items in a DLNA system:

– a media server: this is a box full of media (music, video, photos) connected to the network
– a “control point”: this is a control device, that allows a user to choose media to play
– a “media renderer”: this is a device that can receive commands from a control point and content from a media server and play it.

Confusingly, a lot of products support different bits of the standard and don’t always tell you which ones! Anyway, here’s my approach:

– Media server: MacBook running Twonky 7.0. There is quite a lot of server software out there – they all have different quirks. Twonky is easy to get going with, but it’s somewhat irritatingly bound up with Twonky’s attempt to be a social media site. I’m planning to eventually switch to a DLNA-compliant NAS device with all our media on it.
– Control point: my Android phone (HTC Desire S) running BubbleUPnP. There is a free Twonky app for Android (and iOS), but I found it a bit clunky and it also doesn’t seem to be able to adjust the volume control on a remote renderer. Note that BubbleUPnP (and Twonky Mobile) can act as a server, control point and a renderer all on the same device.
– Renderer: I bought an Archos 35 Home Connect internet radio, which cost me £88 from Amazon. The Archos box is a strange concept – basically a tiny, cheap Android tablet given a pair of kitchen-radio speakers – but it seemed like just the thing for the job. It runs BubbleUPnP also, acting as a media renderer. Because it has a little touchscreen it’s possible to interact with it directly, but I’ve mostly been using my phone to control it remotely. Note that you need the full version – costs £3 – to make Bubble UPnP into a remote media renderer: once you’ve installed the licence app, go to Settings->Local Renderer->Allow remote control and then it’ll show up as a renderer on the network. After a false start yesterday (turns out Google Play gets confused if you buy the same app twice in quick succession for two different devices on the same account) the system is working nicely now. The Archos has a 3.5mm audio out, which I’ve hooked up to the Fatman amp in the living room.

Since the Archos is an Android device, you can make it run any app you like. You’ll need to install ArcTools from AppsLib to get the full Android Market / Google Play functionality though. I like to listen to BBC radio programmes via iPlayer, which works on the Archos. My only gripe is that iPlayer’s layout doesn’t work very well with the Archos’s landscape-only screen, and so you end up scrolling a lot to find the programme you want. Since the Archos has its own internal battery and speakers, I can bring it into the kitchen (disconnecting it from the amp) and carry on listening whilst I cook.
Its other feature is a little VGA webcam above the screen, so it could be used for Skype Video or even as a security camera!

The Archos unit is a “value-engineered” product, so don’t expect Apple-like levels of user experience. The resistive touchscreen is okay – I’ve used worse (TomTom, I’m looking at you) but not as good as you might be used to. That said, I think the Archos does the job I wanted pretty well. Let’s see how the “highly valued client” gets on with it!

After four-and-a-half years in Cambridge, I’ve moved to Oxford. Plus ca change, plus ca c’est la meme chose, perhaps – Oxford is like Cambridge but more so (no doubt some might say that one is a pale imitation of the other…) – the university is even older, even more full of bizaare jargon and traditions (Christ Church College keeps “old Oxford” solar time rather than the newfangled Greenwich time that was imposed on them by the coming of the railways), and the city is bigger, with broader streets.

I’m working for Sharp Laboratories of Europe, a big box of boffins an R&D department out on the Science Park. (Is it me, or should the term Science Park refer to a lively outdoor space where children can play with particle accelerators? Sorry…)

Part of the package of benefits offered by the firm is relocation – a wodge of money designed to offset the cost of moving. HMRC very kindly allow you to take the first £8000 of relocation expenses tax-free, as long as you claim them before the end of the tax year after the one in which you take the job. This is slightly daft, because it means that if you join a company on April 7th (one day into the tax year) you have two years to claim your relocation allowance, whereas if you start your new job on April 5th, you have only one year. Anyway, my contract started at the end of February 2012, so I have until April 2013 to claim the money.

Knowing this, we cracked on with trying to buy a house in Oxford. As it happens, we found somewhere we like very quickly, and had an offer accepted. We were also very fortunate that the house in Cambridge sold very quickly. But it did surprise me how much everything costs – the stamp duty on the new house in Oxford exceeds the £8k relocation allowance all on its own! Even just taking the legal fees, removal costs and agent’s fees there’s barely going to be much change.

A few notes of warning: in the present financial climate, mortgage lenders are becoming ever more finicky about their terms and conditions. This makes relocation quite tricky. Some things to watch out for: most lenders will not lend to you during any “probationary period” in your contract – which may be as much as six months. If you haven’t had a steady job with the same employer for the past few years, they may ask to see copies of your previous contracts of employment. This can result in a hectic paperchase, further complicated by the fact that all of these documents have to be presented as originals, which means posting them. Don’t do as I did and accidentally send off a bunch of papers with insufficient postage (contracts are printed on thick paper, and are thus quite heavy…) only to have them impounded by the Royal Mail – it can take up to two weeks for them to be released from custody!

We’re currently waiting for the decision from the mortgage lender, the survey and then the final round of negotiating.

I have a new job (in Oxford – more details in a later post) and as part of it I’m going to be doing a lot more board-level electronics than I have been before. I ought to brush up my skills and keep current, and so as a step towards that I’m going to start reading more technical books.

I have several problems with electronics books:

• they are expensive – £50 is a typical price
• they are rarely stocked in real bookshops, so online purchase is nearly always necessary
• a lot of them are rubbish – either they’re very maths-based with very little application, or they’re badly written, or out of date.

So, I have a plan. I will buy one new technical book a month (which I can afford), based on reviews and online previews. I read it during the month, write a brief review on this blog (and on the bookseller’s website) and if it’s no good, send it back for a refund or resale. March’s book will be Analog Circuits by Robert Pease.

My history teacher, Mr Emerson, talked about the origins of the First World War as “a long fuse and a short spark”. This blog post was triggered by the short spark of an article I read today, but the long fuse goes back at least twenty years. It’s going to be somewhat more personal and emotional than usual.

First, the short spark: this article in Rolling Stone. Not a publication I’ve previously paid much attention to, but I saw this particular article linked to by Kevin Arscott (Media watcher extraordinaire, writer of butireaditinthepaper.co.uk and editor of The New Journalist). The article is six pages long – a very potted summary follows: in the town of Anoka, Minnesota, pressure from parents led to the introduction of a school board policy that “homosexuality not be taught/addressed as a normal, valid lifestyle”. This led to teachers and school staff not being able to act against homophobic bullying of teenagers, for fear of losing their jobs for breaching the policy. This, aggravated by the presence of lots of kids who had been told (at home and at church) that homosexuality is morally wrong, led to the suicide of nine teenagers in two years.
Read the rest of this entry »

I’ve just seen some of BBC1’s Panorama programme, “Taken for a ride?”, which is about the rises in train fares and the costs of railway infrastructure. Now, the segment I saw (the last fifteen minutes) consisted of the journalist talking to various figures in the rail industry about the cost of project work, and in particular the large overspends on some rail infrastructure projects. He kept asking “will the project be on time and on budget?” and using phrases like “is our money being wasted?”. Now, this is the standard stuff of all projects, so let’s examine this in more detail. What do we mean by “on time and on budget”?

Well, a typical project, be it the construction of a garden shed or a high-speed railway line, starts with a proposal. In that proposal, the promoter of the project sets out the benefits the project will bring, the risks associated with doing it, and their estimate of how long it will take and how much it will cost. Note the crucial word there – estimate. The proposal is scrutinised by some decision-maker, and (all being well) the project is authorised on the basis of the estimated budget and timescale contained within the proposal. Of course, as the project runs, some tasks will turn out to be easier than estimated, and others will be harder. So the project cost and timescale may change as a result. So, when we talk about the “ability of an organisation to deliver on time and on budget”, we really mean, to a large extent, their ability to estimate the project in advance.

Now, let’s assume for a moment that we’re going to put this project out to competitive tender, as all public sector projects are. A number of engineering firms will bid on the project, and that means that they have to spend their own time and money researching and estimating the cost and timescale of the project. There will, of course, be pressure on the engineers to produce a low bid, as the company wouldn’t want to lose the business to a cheaper competitor. There will also be pressure not to spend too much time doing detailed research into the cost of a project, as the cost of the engineers’ time is at the company’s own risk – if they lose the bid, all that effort will have been wasted. So the tendering process is likely to produce optimistic estimates of the project outcome. If a bidding company has done a project like this before, they will make a better estimate – but a rival with less experience is more likely to make a low bid, particularly if they need the business badly. So the tendering process needs to evaluate the companies’ bids clearly, and not just look at the price. There’s always temptation for companies to bid low to secure the project and then ask for more money once the project is beyond the point of no return.

Well, what about making the job a “fixed price contract”? This transfers all the risk from the buyer to the supplier. Great for the buyer? Well, everyone bidding on a fixed-price job will include an additional contingency for unforeseen circumstances. Depending on the nature of the project, that “risk premium” could be enormous. Most companies taking fixed-price work will insure themselves against it, so now you’re paying an insurance premium and asking an insurer to take the risk, for which they charge a considerable markup! The fixed-price job works well when the job is well understood, but for big, risky projects, the fixed prices become ridiculously high.

So, perhaps we should be more circumspect before we condemn projects that run late or “overbudget” – how well can you estimate?