?Bid Chiseling? and ?Bid Shopping?

[growler]

I believe it is truly unethical to show bid details to other subs. Although I know it is done.

I use to have a contractor that I did all the electrical work for, he would on occasion tell me and show me just the price of my competitors bid. Not the bid details just the price. I sometimes worked with him to do the work. Sometimes I said no way and lost the work.

Sounds like the guy that smoked pot but didn't inhale.

I have always herd that if you are going to be hanged it just as well to be hanged for stealing a sheep as it is for a lamb. May as well go ahead and inhale. :wink:

 

[john_axelson]

Don't Do It

Don't Do It

Don't change your price.

It sounds like you were already "significantly" low.

When checking with the Muni ask about what the requirements are of the M/WBE requirements. It is possible that the GC has his M/WBE requirement covered with another sub and you may not be able to use that as an out. I know on previous projects that I have bid on that required you to list your W/MBE contractor, along with the percentage of work to be done by them, there was a clause that you could change that vendor with approval from the city.

Just don't change your price to meet someone else's. You don't know what they did to get down to your number and you could be just throwing more money out the window.

 

[Pennylady]

Update!

Update!

We had a meeting with the GC on Monday. Told him we would not change our price. Further, that if it was good enough to use on the bid documents to get the job it should be good enough to do the job. He said that the other bid came into his office while he was at the bid meeting and because of that he does not feel he?s doing anything wrong. They requested ours 3 days prior to bid opening so they could get the final numbers together. Prior to bidding we also spoke back and forth with them as to what format they wanted it. We had further detailed discussion to make sure that other trades did not duplicate items in our bid and vise versa. Even further? We drove to their office at 7pm the night before bid opening to deliver a certified document they requested earlier that afternoon proving our M/WBE status. His job coordinator told me our bid and our name was used on the bid documents and that they didn?t even look at the other guys bid until the other contractor called wanting to know how his numbers looked. Then without our knowledge they worked back and forth with the other contractor for 3 weeks massaging his numbers and getting them into their format so they could compare it to our bid.

The bid documents require M/WBE participation and if they do not use a M/WBE business they received a bid from they have to state why. When we brought this up to the GC he did not have an answer.

I think the biggest disappointment is finding out what an unethical shady character the GC is. It?s particularly bothersome that the GC fails to see that he?s done anything wrong.

I recall an old proverb that was taught to me in the martial arts many years ago. ?He who knows not and knows not he knows not, he is a fool ? shun him;?

Thanks to everyone for their insight and comments.

 

[cowboyjwc]

We've talked about this before, though along a different line.

The problem with muni jobs is that they come with a spec book. So the contractor will bid getting, let's say the lights he uses at his price. He installs them then along comes the muni inspector and tells them nope, you used X and we speced Y.

The other guys may have been higher just to cover the incidentals that always come up on these jobs. "I didn't bid that" "to bad it's in the spec book".

The GC for our new police station went under and took 3 of his subs with him and they were all big well known companies.

I don't believe what the GC did by showing you the bid was ethical or legal, especially if it was a sealed bid, that being said I wouldn't lower my price just to get the work.

Remember the guys flying the space shuttle are putting their lives in the hands of the low bidders.:grin:

 

[LawnGuyLandSparky]

I think the biggest disappointment is finding out what an unethical shady character the GC is. It?s particularly bothersome that the GC fails to see that he?s done anything wrong.

I recall an old proverb that was taught to me in the martial arts many years ago. ?He who knows not and knows not he knows not, he is a fool ? shun him;?

Thanks to everyone for their insight and comments.

The G.C.'s position is that anything he does that results in greater profit can't be wrong - it's the purpose of being in business. Towards that end, he's right. Notice, a G.C. never comes back to anyone about their "ridiculiously low bid?"

The fact that he's even engaging you instead of dropping you like a hot potato indicates that he's playing games. As others have pointed out, It's quite possible this is all just a rouse to get you to lower your bid.

Your proverb is insightful but I don't think it applies here - the G.C. knows EXACTLY what he's doing.

 

[roger]

The MBE participation will be your ally, use it and don't hesitate to notify the agency enforcing it.

Roger

 

[growler]

I don't believe what the GC did by showing you the bid was ethical or legal, especially if it was a sealed bid, that being said I wouldn't lower my price just to get the work.:grin:

That's true enough. But, I think this has worked out for the best. The pennylady has found out what sort of low life she would have been dealing with before her company was in too deep. She may end up in better shape than the people that actually get the job.

There are enough problems even when dealing with honest contractors ( somewhat honest), when you go over to the dark side it's probably just as well to take a trip to Vegas and throw your money on the table and let the wheel spin ( you have about as much chance of winning ).:grin:

I think I would wait until the other contractor starts the job and then try to sue for damages. I wouldn't actually want to work with this GC.

 

[mkgrady]

Penny- seems to me the job is yours, maybe even if you decide you would rather not have it.

You said the GC would need to convince the muni that switching subs is OK. I doubt the Muni would allow the switch just because the GC got a lower price after bid submission. That would make a sham out of the Muni's procurement process.

At the same time you are committed to do the job for the GC at the price and under the terms of your proposal. It looks like you can have the job at your price or you can drop your price.

I wouldn't walk away from the job (assuming he would let you) because he tried to work you over, but I would be careful not to make any mistakes that could cost you during the performance of the work.

 

[petersonra]

Every bid I do contains a non-disclosure agreement to preclude an unethical prime like your GC from sharing anything I've provided, cost or data. I also require a binding agreement that, if they are awarded a contract, I will be awarded a subcontract for my portion.

My experience is that good ethical business partners happily agree, and I really am not interested in working with the ones that don't.

When the shoe is on the other foot, I act the way I want my prime contractors to act. I have often been approached post award by companies that worked with one of my competitors. After I win, they come and offer me a "deal" if I'll use them. I always give the same answer - I'll happily consider them for the next bid. But now I'm gonna dance with the one that brung me.

A non-disclosure agreement precludes nothing. if the GC is unethical, he can still share your bid with others. Just how do you get the GC to sign such an agreement in the first place? I know most of the bid specs I used to see gave the GC a whole lot of leeway with what he did with the bids that came in.

Sounds to me like you don't trust the GCs you work with, otherwise you would not need non-disclosure agreements and binding award agreements.

 

[Pennylady]

I think I would wait until the other contractor starts the job and then try to sue for damages. I wouldn't actually want to work with this GC.

It would be nice, however I would never do it unless I was certain without a doubt I would win. The negative energy and change of focus may not be worth it.

The question is whether promissory estoppel exists with the evidence being my name and numbers on the bid document as well as submission of M/WBE documentation.

I am very irritated by the fact that the GC will get paid by the Muni off of my number but will actually pay $43,000 less than that to the other contractor. The little switchero doesn?t save the Muni (tax payers) any money and puts a sweet 43 grand in his pocket.

I was amazed I got a call from this same GC today asking me to bid on another job. So he can have my team do all the footwork and lowball me again. I don?t think so!

 

[LawnGuyLandSparky]

It would be nice, however I would never do it unless I was certain without a doubt I would win. The negative energy and change of focus may not be worth it.

The question is whether promissory estoppel exists with the evidence being my name and numbers on the bid document as well as submission of M/WBE documentation.

I am very irritated by the fact that the GC will get paid by the Muni off of my number but will actually pay $43,000 less than that to the other contractor. The little switchero doesn?t save the Muni (tax payers) any money and puts a sweet 43 grand in his pocket.

You can't be sure of that. For all you know, the GC is setting you up to bid the work with the unspoken understanding that you'd better lop off 10% from your "official number" if you ever want to actually get the work.

I was amazed I got a call from this same GC today asking me to bid on another job. So he can have my team do all the footwork and lowball me again. I don?t think so!

Make sure he knows that you're not bidding, and why.

 

[dduffee260]

I am very irritated by the fact that the GC will get paid by the Muni off of my number but will actually pay $43,000 less than that to the other contractor. The little switchero doesn?t save the Muni (tax payers) any money and puts a sweet 43 grand in his pocket.QUOTE]


So your original bid was $300,000 and the next guy is $43,000 low? The contractor can have the job. It will look nice at the start, they all always do. But when the end comes around he will either be working for free or losing money. Most generally anything over 10% difference on medium size projects is too much of a difference. If we got the job and they called us wanting us to cut $43,000 from our price we would say no way.

 

[roger]

Make sure he knows that you're not bidding, and why.

I agree with this statement 100%

I would also give all his competitors a better price on future projects than I give him, that's if I quoted him at all.

Roger

 

[LawnGuyLandSparky]

Pennylady, I would like you to clarify your Municipal bidding process if you would. What is to stop every GC from gathering and submitting quotes from the highest priced subs they can find, and then doing the actual work with the lowest priced subs the can find? Is there no system in place to prevent this, such as direct payment to the submitter?

 

[Pennylady]

So your original bid was $300,000 and the next guy is $43,000 low?

The $43,000 less number from the ?other guy? is a ?massaged bid? following 3 weeks of conversation back and forth with the GC. ?Your bid is lower, did you remember this, what about this?? etc. The ?other guy? had also included an equipment purchase the GC specifically told us to leave off. That it would be provided to us by others (overlap of trades). The GC told the ?other guy? someone else is providing the XYZ System, how much will you take off your bid for it? That?s how they arrived at the lower bidder?s number. Yet, When the GC first contacted us they were still concerned something was left out and asked to go over it. We asked a few questions but declined to sit down at their office and scour the other guys bid. The GC became satisfied that he had a lower bidder that would save him $43,000 on the project. In our last conversation with the GC he concluded that the lower price was because the ?other contractor? also does some retailing of material and they were able to get their materials much cheaper than us.

Pennylady, I would like you to clarify your Municipal bidding process if you would. What is to stop every GC from gathering and submitting quotes from the highest priced subs they can find, and then doing the actual work with the lowest priced subs the can find? Is there no system in place to prevent this, such as direct payment to the submitter?

The bid specifications (almost 2000 pgs)state that the GC must name his/her ?first tier? subs. The submittal document has a place where the GC is to list by name the contractors they intend to use for electrical, HVAC, plumbing etc. At some point, I think after the actual award is made, they are required to provide documentation on each ?first tier? sub proving they have the qualifications do the job. The bid document is VERY specific as to what to do if the Muni disagrees with a listed sub. However, no specific process is listed if the GC decides they desire to change a listed sub. The M/WBE requirements are to comply with the stipulations placed on the Muni for a loan they are getting. The GC has to prove they advertised for bids from M/WBE, state who they received bids from and if not used (awarded work) why.

I am not sure how the GC can ?cross us off? and put the other guy in. Maybe it?s as simple as using ?white out? on the bid document????

 

[SmithBuilt]

Do you know if the GC has submitted the sub list?

Does the GC have to take a M/WBE bid even if it is not the lowest?

Has the GC really done anything against the law?

 

[petersonra]

I would suggest that a $43k savings on a $300k contract is pretty substantial, but not impossible, especially if the GC and the new EC worked together to cut every nickel out of it they could.

One of the things about government contracting in general is that people put a lot of slop into the bids because the specs are often somewhat open ended and experience has taught the contractors they have to cover those costs somehow.

I have been involved in similar cases (but not involving governemnt contracts) where we got together in a room and tried to figure out just how to get the cost down to an more tolerable level. It is amazing what you can do when you really work together to cut costs. But government bids typically discourage that kind of thing.

Have you looked at your bid to find obvious places you could have cut your costs? A lot of times things that are "nice" to use and only cost a "little" more add up.

 

[Pennylady]

Do you know if the GC has submitted the sub list?

YES, He has

Does the GC have to take a M/WBE bid even if it is not the lowest?

Not sure?? But if the Muni wants the loan, I think so. The specifications for the Muni loan state that for Fair Share participation the GC "must identify" M/WBE to be Minority 5% and Woman 12%. The specs also say that to be deemed responsible with respect to M/WBE the GC must submit to the Muni letters of intent from the M/WBE 'LISTED IN THE BID', stating the work to be performed, and the dollar amount of the work.

There are further requirements that must be met if the GC reduces utilization of M/WBE after the start of the project. Stating that they must have good cause. Is better price 'good cause'?? I don't know.

Has the GC really done anything against the law?

They could find themselves in trouble with the M/WBE requirements based on language in the specs. Unless they have other M/WBE we don't know about. Under the heading of "Sanctions" non compliance or misrepresentation can lead to not being awarded the contract, disallow costs associated with non-compliance, referral to attorney general, fraud investigation etc.

I suppose whether or not the GC finds themselves in trouble depends on how diligent the Muni is in reviewing things as well as understanding their own specs and if I what to be a whistle blower.

 

[dduffee260]

I would suggest that a $43k savings on a $300k contract is pretty substantial, but not impossible, especially if the GC and the new EC worked together to cut every nickel out of it they could.QUOTE]

Bob, you are correct. It is not impossible. But the GC already has their profit built in. The only cutting is from the EC on this project.

Here is how I see this being broken down in a nutshell. Now this is in the West Texas area.

 

[growler]

It is not impossible. But the GC already has their profit built in. The only cutting is from the EC on this project.

Probably some pencil necked paper pusher looking for a big bonus because he saved the company $43 grand on just the electrical. If he manages to talk all the subs into lowering there bids then his Christmas stocking will be full.

You are right, no one saves any money on a deal like this it just going into a different pocket.