MBTA3247 wrote:BandA wrote:Would the cost be any lower if they re-bid the contract & dropped the MA assembly plant? Probably no.
It almost certainly would be lower. Even with CNR taking a gamble on getting more orders in the future to cover the full cost of the factory, they are still charging the T millions on this order to cover part of that cost. Eliminate the requirement to assemble the cars in MA, and you completely eliminate the need to pay for a brand new factory. The long term cost of the cars will be lower, too, because they'd be built at an existing factory by experienced workers, not novices.
From my own work experience bidding on contracts in a totally unrelated industry, etc, there's three ways you do it.
There's the way you bid for a contract when you're desperate for any new business, so you don't just underbid, you lowball so hard they wonder when you'll put down the crack pipe while offering the sun, moon, and everything in between and acting with minimal regard for how you'll actually be able to carry out the contract. It's the "meh, we'll figure everything out once we win" method.
Then there's the way you bid when you're a comfortably established player, with a name, a reputation, and the means to carry out the contract. You submit a strong proposal, with an appropriate pricetag, and you let your reputation do the rest. This is how BBD bid on the 1800s, just as Hawker/UTDC bid in the 80's, as well as how CAF and Siemens bid on their respective recent car deals.
Finally, there's the way you bid when you see the RFP and realize either that the game is stacked against you, or that the client has thoroughly unreasonable expectations of you, or usually both. So you highball, and submit a bid that you almost plan to be non-competitive from the get-go, because you don't really want to win, but you don't want to make it look like you don't care either. If, by chance, the client chooses your bid somehow, you've priced your bid to allow for their unreasonable demands so you'll be able to meet the requirements and still make money doing so.
Rotem played the first gameplan, between the Philly factory, the pricing, etc, and we all saw how that played out for SEPTA and the T. CNR played that game so hard that they made even Rotem look like they didn't care about winning, so we can only speculate on how the CNR bid will pan out. Past experience doesn't leave things looking too promising though.
But I think that it's also equally important to look at how ALL of the "big 4" of Alstom, BBD, Siemens, and Kawasaki choose to bid on the T's RFP. They all pretty clearly submitted those "tell the client to pound sand without being too overt about it" bids, highballing the state on purpose so that if in the unlikely event that they were chosen, they'd have the extra money to deal with the headaches of the state's bid requirements with new factories, etc.
I think that it's very telling how the key bidders chose to deal with the T's requirements in the way that they did, and it speaks volumes about just how ridiculous Deval's bid requirements were, especially for an order that numbers-wise is a drop in the bucket compared to what WMATA/MTA/CTA/TTC/Montreal all order.