Contracted by Two Clients for Same Project 2

[MattP]

I helped company A design a piece of equipment for their plant. Company A requests bid for fabrication of this equipment from company B, whom I also provide services for, one of which being pricing the fabrication of equipment. Company B sees that I was involved in the design of this equipment and they seek to hire me to help them price the equipment. Would you consider it unethical for me to take on this work from Company B? Can you see any "Conflict of Interest" issues or any other ethical or legal issues?

(Insert witty signature line here)

 

[weh3]

I would not see a problem as long as everything is above board and ther is no kickback or anything of the sort from Company B. It makes sense that they would use your expertise in pricing it. The interests not conflicting but complementary.

William

 

[MintJulep]

There may or may not be a real conflict, but certainly there is the appearance of impropriety.

While working for company A you potentially had access to or involvement in "how much are we willing to spend on this thing" information. That type of information could provide company B with an unfair advantage in the bidding process.

 

[weh3]

Good eye, MJ. In that case, MattP should provide Company A with price recommendations instead of Company B. It is just like doing an engineering or construction estimate as the designer.

William

 

[CajunCenturion]

Perception is 99% of reality.

I think this could be potentially a dangerous situation. As weh3 suggests, everything must be above board, and even then, you could get into trouble.

You already have separate financial arrangements with both companies, and now, you're being asked to be involved in an arrangement which controls finances between the two companies.

Will your objective be to price this so that Company A gets the equipment at a reasonable cost?, or that Company B gets a reasonable profit for the equipment? No matter how you answer, you will be both right and wrong.

Good Luck
--------------
As a circle of light increases so does the circumference of darkness around it. - Albert Einstein

 

[arunmrao]

The whole excitement in a bid process is to guess the target price. Once this knowledge is available to a bidder then the whole process becomes unethical. It would be advisable that you stay away till the bid process is complete.

 

[Heckler]

Matt,

I agree with Arunmrao - it would be advisable that you inform your contact person at company B that you would like to pass on the bidding process due to your contract with company A. If company B is ethical in their business practices then they will understand.

 

[MattP]

Thanks for all of the replys. I think I will pass on this which was the way I was leaning. I don't have any inside information as far as the "target price" is concerned but I agree with the "Perception is 99% of reality" quote. Reputation is important to me as a great majority of my business comes from word of mouth.

Thanks again!

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[dbuzz]

I was involved in a similar situation once. Suggest you advise Company A that Company B has made an approach and ask whether they have a problem with your involvement with Company B in this instance. If not, go for it. If they do, simply advise Company B that, unfortunately, this is the case. Either way, Company A will have high regard for you for including them in the loop.

 

[weh3]

And get it in writing.

William

 

[zdas04]

I have an ongoing relationship with a manufacturer who makes a nifty flow-modifying device that I really believe in. When I'm evaluating a pipeline for a client, I look to see if the flow-modifying device will help. I do this because I belive in the device, but I always put a disclaimer in that part of the report that "I have a relationship with [the company] and [the client] must make their own determination as to whether my recommendation is really in their best interests". I've had very good feedback from that disclaimer.

I'm not really sure how it would play out if there were competing technologies that were being let for bid. I think I'd carefully avoid being on both sides of a bid process.

David Simpson, PE
MuleShoe Engineering

http://www.muleshoe-eng.com

Please see FAQ731-376 for tips on how to make the best use of Eng-Tips Fora.

The harder I work, the luckier I seem

 

[BigH]

dbuzz - one problem is that Companies C and D might, if they catch drift of this, create a snag down the line for unfair bidding. Might be tricky. I think I would stay away and take the high road.

 

[dbuzz]

BigH

It is a tricky situation indeed and no matter how scrupulous you are, perception is everything.

dbuzz

 

[jsummerfield]

Full disclosure. Tell A and B if you are proposing to support the work.

John