Budgeting with Lewis & Clark

In lesson 2.2, Expenses and Health Rules, we learned the original budget for the Lewis and Clark expedition was $2,500. The actual expenditures exceeded $38,000. This works out to a 1,420% increase. Part of this increase is due to the increase in the size of the group from 14 to 33. This increase also speaks to the nature of planning large scale projects. It has been suggested the budget was kept deliberately small to avoid congressional criticism and to quell Indian fears of an invasion (History.com). However, the appropriation of these funds was approved only a week after the appropriation of $9.3 Million for the Louisiana Purchase, so it may have seemed like a trivial matter to congress (History.com).

Large projects, both public and private, are subject to unexpected costs and cost overruns. Through September, 2014, the Alaskan Way Viaduct Replacement Program in Seattle has consumed $2.1 billion of the $3.1 billion budget (Washington State Department of Transportation, 2015). The project has not gone over budget, but the project is not completed. For guidance, we can look to a previous project that relied on a key component of this project: “Big Bertha” the tunneling machine. The “Big Dig” in Boston had a budget of $4 Billion, but its completed cost is set at $14.6 Billion (Stern, 2003). Further, the cost of serving the debt used to finance this project adds another $10 Billion to the price tag (Moskowitz, 2012).

When we look at the final cost of the “Big Dig” and see that the final cost is $20 Billion more than the original budget we see the mark was missed by a rather large margin. But when you consider the “Big Dig” was only 500% over budget, compared to the 1,420% that Lewis and Clark exceeded their budget, the “Big Dig” doesn’t seem so bad.

Works Cited

History.com. (n.d.). Retrieved from This Day in History: http://www.history.com/this-day-in-history/jefferson-requests-funds-for-lewis-and-clark

Moskowitz, E. (2012, 07 10). True cost of Big Dig exceeds $24 billion with interest, officials determine. Retrieved from Boston.com: http://www.boston.com/metrodesk/2012/07/10/true-cost-big-dig-exceeds-billion-with-interest-officials-determine/AtR5AakwfEyORFSeSpBn1K/story.html

Stern, S. (2003, December 19). $14.6 billion later, Boston’s Big Dig wraps up. Retrieved from Christian Science Monitor: http://www.csmonitor.com/2003/1219/p02s01-ussc.html

Washington State Department of Transportation. (2015, January). Alaskan Way Viaduct Replacement Program. Retrieved from http://www.wsdot.wa.gov/Projects/Viaduct/Media/Default/Documents/Brochures%20(fact%20sheets)/AWV_cost_and_funding_Jan2015.pdf



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