Was T5 supposed to work so well that after two weeks of “live passenger testing” BA would decide that they’d put back the date of moving their long-haul flights from T4 to T5 from the end of April to an indeterminate point in June?

http://news.bbc.co.uk/1/hi/business/7342263.stm

Remove the clothes peg from your nose John and you’ll realise that the roses smell like shit.

I also agree, up to a point, about the incentives of both the bidder and principal, but what we see still strikes me as a rather strange state of affairs. Don’t the procurement guys have any incentive to avoid well publicised disasters and cost overruns? I understand about variation charges etc. but not quite why procurement departments appear to be happy to accept contracts with such punishing variation clauses, soft penalties and upfront fees that are well known to be unrealistically low, when they could (I think) write contracts where variation is less costly, penalties harsher, and compensate the bidders with a higher upfront fee. From a distance, I don’t see why the expected/average eventual cost project couldn’t be kept the same, but the incidence of apparent ‘failure’ reduced. Is it as simple as the buyers (politicians, board of directors) are repeatedly duped by low upfront estimates, with no learning in the system? A major blow to the ‘rational expectations’ line of reasoning.

See what I’m getting at (that there’s still something a bit odd here)? I wonder if there’s some other reason, that I can’t see, why things are as they appear to be.

Man, here I am trying to do an economic PhD with no decent research ideas … but contract theory melts my brain, and I’m supposed to be doing development economics.

And if you’re in government procurement, it’s rational to choose the lowest bid from a credible firm to win the contract, and hope that the penalties will at least partly offset the variation costs when your minister changes the spec mid-contract.

dsquared often comes out on an interesting and probably reasonable take on this kind of problem though, which is that even if it’s entirely reasonable and unsurprising that a project has failed, we should still criticise, pillory and sack the people responsible, otherwise everyone will get the idea that it’s acceptable for projects to fail all the time…

It reminds me of the endless articles decrying how terrible it is that government IT projects fail or run over budget so often, and how it shows everybody involved are morons and/or deliberately fleecing the taxpayer. Okay, I get the understand less condemn more idea, but it doesn’t seem to occur to anybody that gigantic IT projects might, ooh I don’t know, be very very difficult do?

Once I saw some data on how many IT projects go wrong in the private sector (from some German software testing firm) but I can’t find the source now. Anyway, it was very high. So what, the entire IT industry is run by morons? What a tragedy it is that all the smart people chose to work for Private Eye etc., while all the morons run businesses / government. If only it were the other way round!

By the by, I wonder if there’s some sound reason, to do with how you contract for these things, why you want to keep IT project budgets and schedules ‘unrealistically’ low to minimise the eventual cost and duration. Can’t quite figure out what it is, though. I always hated contract theory.

http://blogs.guardian.co.uk/sport/2008/04/02/players_ran_the_distance_but_b.html

JVIP

T3 at LHR used to be similar (and just about the only reason to not fly Virgin), although they’ve poshed it up a bit in the last few years.