[pjc50]

> When you put a design contract out for bids they have to go big. They have to deliver for $54M even if things are harder.

Yes - and they also have to deliver for $54m if things are much easier.

The tender process often imposes an overhead of several million $ per bid, which has to get rolled back into the margin on the projects.

[bluGill]

You would be a fool to not ensure that things will go at least a little easier in even the worst case.

The other option: cost plus bids (that is you pay their actual costs plus a fixed amount of profit) is even easier to game because you can add costs in so many ways. That is why most large bids are fixed cost despite that downside - they are much harder to hide extra costs in.

There is no alternative to carefully watching your suppliers. Some are more honest than others (and you should blacklist the worst).

[pjc50]

> There is no alternative to carefully watching your suppliers

Hence: inhouse.

[bluGill]

You still have to watch your suppliers even when they are in house. Things change, but not the fundamental problems. In many cases out sourcing really is the better cheaper option (this seems to be when an expert can be a deeper expert because they do the same thing for multiple different groups)