So-called "Jobs Plan"

I think I heard, "You should pass this job right now" too many times tonight. It still blows my mind that President Obama is trying to present another stimulus plan after admitting it was an utter failure the first time. I'd like to address the significant problems with the government "creating" jobs and specifically through construction work.

After I returned from Afghanistan, and the "shovel ready" jobs trickled down to begin bidding, I received a first-hand, down-and-dirty education on why government jobs, especially stimulus jobs, caused a bigger downturn in the economy. Aside from the massive waste of taxpayer dollars, let's take this step by step. Since I work for a commercial construction company, we focus on commercial jobs - offices, warehouses, schools, churches, etc. With the construction industry in such a depression, this means that residential builders and commercial builders both desperately look for work. As a general commercial contractor, its rare that you get into the residential side. However, it's more likely that a residential contractor becomes interested in commercial work and decides to give it a shot. Now we have more competition who may or may not know commercial subcontractors that can accurately estimate a job and who themselves may not know how to accurately supervise a job. Next, since so many contractors across the nation are without work, they look across state lines for work. This is also risky in knowing reputable subcontractors, labor and equipment rates, and local codes. Well, now, the pool of contractors that bid a government job just got much bigger.

With all that said, hears the problem - we arrive at a government pre-bid meeting. "Back in the day", I'm told, our construction company would compete with 5-10 general contractors. Well, that day, the room had at least 40 other contractors in it - each one salivating for a chance to beat out the competition. Competition is good for consumers, but let's put this in perspective. For this job, you have everyone in their brother that passed their general contractors license exam in the room. They may lack experience, local knowledge, but man do they want this job. The competition is stiff; what do they do? The guy who wins the job is so inexperienced, he wins because he underbid everyone else - I mean way underbid. That job was awarded to a contractor who underbid our COST (no profit) by around a million dollars.

So what's the end result? Quality contractors who have made it through the years due to their craftsmanship, value, and knowledge are suffering even more due to an inexperienced bidder flying by the seat of his pants. In turn, the consumer most likely gets a lot of headache for fixing their problems and arguing, and most likely gets a chintzy product.

A good example of the red tape involved with stimulus jobs is the call I got a few weeks after the previous example. This town said they received good recommendation about us regarding a rest stop we completed and wanted us to come to their stimulus pre-bid meeting to discuss a "bus station." I was thinking I was going to build a bus station or maybe even a bus mechanic station for the town. When we arrived at the meeting, we were instructed that since this was a stimulus job, we needed to fill out this form first, that form weekly, this form daily, we needed to hire these people from the unemployment office at these rates, contact these geological surveyors to locate this on a map, and this list goes on and on. It turns out, this job was for two bus canopies. After seeing the insane amount of nightmares involved with this project, every single contractor walked out the door silently following the meeting. A couple weeks later I received a call from the town construction supervisor asking if we would be bidding the job. After hearing my reply, he responded, "Yeah, I figured that. No one is bidding this job and this is the third time it's out for bid. After the third time, the allocated funds for this project go back into the pot." What a waste of everyones time and money. This is the problem with government.

Furthermore, for every government job I've looked at, the contractor is required to put up a bond. What they don't care about is the fact that, now, the contractor has to indemnify (or backup) the job 100%. So regardless of the fact that a contractor has outstanding financials, has busted his tail to get an unlimited license, and has protected liability under a corporation, the officers of that corporation now have to essentially put up their personal assets as collateral for the price of the job? Why do we need a bond if we're going to do that?

Like Ronald Reagan said, "In the present crisis, government is not the solution to our problem; government is the problem." Government's wasteful spending on plans like this is just one example of the utter waste and thievery that's collapsing our country. Contractors will rarely see private jobs any time soon since banks will tightly hold onto loans due to the economic turmoil caused by politicians who quickly swept problems under the rug for far too many years. That may have been a run-on sentence, but I think you get my point. Government will not create private sector jobs because it is just that - the private sector. Getting rid of the abundance of regulation which has big impacts on the cost of a project will help, though. I won't even mention how small business owners get taxed every way they look (I'll save the tax talk for another day).

Unfortunately, the problems we see now was caused by ignorant people voting in an ignorant man with no business experience and tax cheats/liars/politicians/lawyers.