Chapter 16. A Telecommunications Company Evaluates Its Software Suppliers

A few years ago, a college in Southern California planned to build a new theater arts building with funds donated primarily by a single benefactor. The architectural firm hired for the job, from Oregon, submitted with the detailed plans its estimate of what the construction costs should be. When the contractors’ bids were opened, however, all of them were substantially in excess of the architect’s figure. They were close together, too—within a few hundred thousand dollars of each other.

The relative proximity of the bids implied that the contractors knew what they were doing. The college’s building committee felt that the contractors’ range of figures was probably realistic. ...

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