Boston’s “Big Dig” project: Government estimated coat $2.8 billion. Actual cost: over $14.6 billion
Nearly 7x what we wee told. Why should this be any different?
Well, a couple of things. One, is that these are not "Government estimated costs" and not estimated at all. These are actual first-year (proposed) premiums. Second, these companies will not be paid by anyone to "make up the difference" if their actual costs go higher. It is not any variation of cost-plus and there will be no re-negotiated contracts for the year. Premium stability is another issue altogether and as I've said, this will be interesting to watch.