Customer shares contract with competing firms
Customer shares contract with competing firms
(OP)
I am the proprietor of a small engineering company doing specialty work for a large corporation. My work dovetails into projects completed by larger engineering firms, that at one level also are competitors. Due to the project nesting, the customer sent our project proposal, including terms and conditions, competitive rates etc, through two other firms that would like to have this work, to get back to myself.
This information would seem to make an easy target for anyone and everyone that would pretend to have a competitive advantage: slightly lower rate (and absorb more hours), slightly different work scope wording, etc.
Is this ethical? Both the other firms are pretty secretive about their rates, to the point that employees working there have no idea what they are billed out as (I worked for 18 months at one of the firms, we were aware only of 'billable hours' with no sense of the dollar associated). Any suggestions on a polite way to state this should not have been done and should not happen again in the future?
This information would seem to make an easy target for anyone and everyone that would pretend to have a competitive advantage: slightly lower rate (and absorb more hours), slightly different work scope wording, etc.
Is this ethical? Both the other firms are pretty secretive about their rates, to the point that employees working there have no idea what they are billed out as (I worked for 18 months at one of the firms, we were aware only of 'billable hours' with no sense of the dollar associated). Any suggestions on a polite way to state this should not have been done and should not happen again in the future?
RE: Customer shares contract with competing firms
I would tell the "client" that this is very disrespectful to you as a consultant, recant your proposal/contract, and do not deal with him again.
Mike McCann, PE, SE (WA)
RE: Customer shares contract with competing firms
What is Engineering anyway: FAQ1088-1484: In layman terms, what is "engineering"?
RE: Customer shares contract with competing firms
I will add another paragraph now. Thank you.
RE: Customer shares contract with competing firms
TTFN (ta ta for now)
I can do absolutely anything. I'm an expert! https://www.youtube.com/watch?v=BKorP55Aqvg
FAQ731-376: Eng-Tips.com Forum Policies forum1529: Translation Assistance for Engineers
RE: Customer shares contract with competing firms
a few more observations:
This is a good customer that has been pretty consistent in using us for the past 10 years. Good work and fair pay. I won't be firing this customer. Nor will our work at this customer be jeopardized by this slip.
I suspect the "guilty parties" were not aware of what they were exposing of mine. They are employees in staff positions and not feeling the burn of self employment. But they also are aware of the ethics violation in sharing material and construction quotes among bidders, for those services.
We have massive Non Disclosure Agreement that unfortunately does not extend to contract content. That might not be enforceable for contract content, because of the way this is structured. But I would like to make a statement on the next proposal that this information is for them only.
As stated, there will not be a problem with competitive bidding at this customer; however, there will be an unfair advantage now at other locations where the same companies compete for work.
RE: Customer shares contract with competing firms
RE: Customer shares contract with competing firms
TTFN (ta ta for now)
I can do absolutely anything. I'm an expert! https://www.youtube.com/watch?v=BKorP55Aqvg
FAQ731-376: Eng-Tips.com Forum Policies forum1529: Translation Assistance for Engineers
RE: Customer shares contract with competing firms
Secondly "Not to be trite, but clients who negotiate just to get the lowest price, just get the lowest price.". Oddly enough that is exactly how many bids work in the real world. If I write a spec and a contract, then if I don't take the lowest price then either the spec or the contract was wrong.
Cheers
Greg Locock
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RE: Customer shares contract with competing firms
I'm not saying price never enters into it, but it is not intended to be the primary input.
RE: Customer shares contract with competing firms
A few more observations:
I do not feel the customer was price shopping in this case. It was simply careless communication and the price effect will be more acute at other sites where we meet the same competitors.
I have over 30 years operations and maintenance experience in this work and when employed for one aspect, the customer will often benefit from some unspoken previous experience. That has been very valuable for operations when we can diagnose what caused a problem, that may not be apparent to the novice. But now the fellows we are working for tend to be novices themselves and to write this into an engineering specification is almost impossible. So when they compare services they are overlooking the system of organization that our firm provides, and the consistency given by a proprietor compared to rotating staff.
I may be that no clear cut solution exists. I could perhaps seek opportunity to sit down and chat with higher level managers that would appreciate the large cost savings of avoiding shutdowns, but of course they hear that from everyone; and the technical folks this is delegated to are not paying attention.
RE: Customer shares contract with competing firms
The quality of your response will reflect some of the intangible benefits of selecting your firm beyond mere cost.
I used to count sand. Now I don't count at all.
RE: Customer shares contract with competing firms
TTFN (ta ta for now)
I can do absolutely anything. I'm an expert! https://www.youtube.com/watch?v=BKorP55Aqvg
FAQ731-376: Eng-Tips.com Forum Policies forum1529: Translation Assistance for Engineers
RE: Customer shares contract with competing firms
I think that is your answer also. And also the problem if they are not paying attention.
Why do people pay attention to their doctor but not their engineer?