I Saved The Customer 55% And Now He Is Shopping My Bid To Competitors

I know this has been discussed in a number of different ways, but I am faced with it again. I have saved the customer 55% and exceeded his expectations. His superiors want to take my design and equipment list out to bid. Would you stay in it or politely withdraw your bid? There are only two options here. You are either in or out. Maybe it should be titled Design value and Ethics.


Do you mean you have exceeded the customers expectation with this bid, or on work completed in the past?

It sounds like you have a guy on the inside giving you the real deal, but on the down low. Is that true or can you openly confront the superiors about this without throwing the guy under the bus?

I am not sure how to respond to the question(s).

The customer (a representative of the orgainization) asked a number of contractors out to the site. The customer had in mind what they wanted. All of the estimates came in at or near 35k. My original estimate (in my head) was around the same number by the way. Then I re-thought about what they wanted (played the conversation back in my head and listened), and changed my point of view. Very simply I took a look at their problem from a different perspective. My written proposal is 14k and offers them more than they wanted in performance for far less money. Now his board wants to take my proposal (yes I listed parts, pieces and some theory) and shop that out to the competition to see if they can save any more money. Their official position is because it is over 10k, they need 3 bids. It was always over 10k. They knew that. This leaves a sour taste in my mouth.

A pro figures out how to correctly do the job for less, far less in fact, and there is no reward for that.

I do sense in his emails he is a bit embarrassed. He knows I am getting the dirty end of the stick for what amounts to maybe 3 or 4 percent. Any idiot can write a number on a piece of paper.

"Now his board wants to take my proposal (yes I listed parts, pieces and some theory) and shop that out to the competition to see if they can save any more money."

Don't do line item breakdowns.

Require an agreement before sharing proposal / quote with prospects.

You need to better protect yourself against this. I wouldn't withdraw but I would adapt my practices going forward.

Let me get this straight, you proposed a novel solution in which the customer would save over half compared to the competition. They liked it, agreed it would work and then said "Yeah, that a great idea, let's do another RFP specifically designed for this solution and have everyone bid on it again!?" And told you openly that's what they intend to do?

Wow. I would play hardball. First off there already was a bid process with at least 3 bidders, and your solution for THAT bid was obviously deemed viable as well as least expensive.

So that should be game over, contract awarded right there. I would appeal to their sense of decency and fair play. If that doesn't work remember that even in the absence of any specific language in your bid, your design is your creation and your intellectual property, and copyright rights extend from the time you set it down, regardless of whether it has been formally copyrighted yet.

So if they intend to reuse parts of your proposal without permission, that would seem legally actionable. Worth bluffing with at least. In any event doesn't seem like someone you would want to do business with anyway. Good luck.

Well, today is not a total bummer. I just got my IPVM lanyard from Mike in the mail. Put a smile on this old man's face! I will wear it very proudly at the next ASIS (and around the office too!!) ;-)

No one thought to use mesh network. Everyone bid what the customer asked for - hardwired. I came back with mesh network and kicked butt. Now they want prices from everyone else on mesh hardware. If I don't think to use it, they are paying 35k or doing without.

It's a tough situation.

In this case, since they specified one topology and you proposed something different and with potential trade-offs, I don't think they are wrong for wanting to get new pricing based on this new information.

It sounds like this is some kind of HOA or multi-tennent environment. If they put out a bid for new cement parking lots and someone proposed this new material called "asphalt", I think they'd want to make sure they were getting a fair price for a similar-but-different solution.

To me, this is part of doing business. I think you should have submitted a bid for what they wanted and then also said something along the lines of "I can also recommend an alternative approach that I feel would be even cheaper and offer a comparable solution". Personally I've always been hesitant to just give away "ah-ha" ideas in a scenario like that without some protection.

"I can also recommend an alternative approach that I feel would be even cheaper and offer a comparable solution".

So, when you say that and then they say "what is it?", what do you do? Do you make them swear up and down first that they won't put it out to bid? Does that help?

At that point it's a conversation. Meaning that there is no single answer. In rare cases the customer doesn't want any alternative anything. The job has been designed by a consultant and they need/want to stick to that design, etc.

In cases where the customer says "I'm interested" you need to determine are you giving away a big secret or a small idea, and proceed accordingly. For example you might say "I can show you an alternative network topology using a proven solution, but I need to charge you an up-front design fee." (along with a hook about how this solution could save them $X,XXXX or YY%. You can make the design fee refundable if they go with you for the job.

In other cases you might decide that saying "This is a scenario where a mesh network would save you a lot of money. I've done similar deployments and have had excellent results." This would be for example in a case where you know or suspect the other bidders either won't know what to do, or won't be able to meet your price (because you have an exclusive product, the only certified/trained techs in the area, or whatever).

I also agree with John that detailed line-itemed bids are typically not preferred if possible.

This is always a possibility. It is one of those things that you have to do in prequalification yurself of the client. I usually have a pretty good idea if I can do a line item bid or not by getting to know the client. If I do and let out some technology, I will make sure that a competitor has no idea what I am talking about. For example the "mesh" network idea. You really mean a network topography in a decetralized design relaying messages using a flooding or routing technique. I will verbally explain the bid to the customer explaining how I am saving him the money but the average trunk slammer will have no clue. If it is a fair bidder by a competitor I never have a problem with that. That is how things should work. I will fight for the bid but when it is over and let's say I don't get it, I will help out the other company fo the good of the industry.

Kind of rambling, sorry

If it's any consolation, this happens to consultants too. Potential clients often call me, ask for a detailed proposal, and then turn around and use my proposal language (in some cases, verbatim), to produce an RFP that goes out to bid. I suppose that technically you could sue for copyright violation, but I don't think anyone wins when you try to force a client to hire you or threaten to sue over some technical violation. You might eventually win, but in my opinion, the negativity and expense associated with taking legal action just isn't worth it.

I really don't think there is a way to protect yourself against this type of thing. Just keeping offering creative solutions and doing your best work, and you will win more than your fair share of the business. Don't waste your precious time fretting over the jobs you lost, regardless of circumstances.

Also, those of us unhappy with this sort of thing should pay closer attention to our own actions when we are the customer: have we gotten ideas from a contractor who we asked to bid on a home improvement project, and then later used these same ideas when we did the work ourselves? Or have we shopped for something at a local retailer, gotten educated by their saleperson, and then later ordered the product online rather than buying it locally?

Only John had an opinion as to whether to stay in or get out, but I do understand that nearly everyone will feel it is our decision to make. Well, for better or worse, (better in my opinion) and after a good run and nights sleep, I have made it.

An excerpt from the email I sent to the client reads:

We offered a better, more creative solution that not only accomplished what the Board wanted, but significantly reduced your potential investment. Not only that, but we tested the technology at your site to make sure it would work and to give everyone the peace of mind about an alternative approach. We feel that we have successfully accomplished our commitment to you. We know our products, we stay connected to our industry and are not limited to one or two corporate product lines. We have the freedom to choose from the best available technologies to design a custom fit for our customers needs. We are solution providers, not quote writers.

On all of our proposals, there are but a very few footnotes or "conditions". Item 5, the very last one states: "This document encompasses concepts, ideas and prices discussed with the client to meet certain expectations. It is considered work product of VIALARM Security & Fire and marked "Confidential". This information is not intended for, nor should it be disclosed to parties other than the intended customer."

At this point, as I understand your email, the Board intends to take our work product out to the marketplace. We obviously cannot stop that process. What we are left with is a decision. Do we continue to wait patiently while you solicit bids from other vendors based on our ideas or do we put a voice to our objection? Do we really mean what we say, particularly in print? Yes Sir, we do. This company stands behind what we say, even if it means we occasionally lose a potential customer.

Given all of these considerations, we are withdrawing our proposal; we do however wish you all the best.

To be honest, the second I hit the "send" button, I felt better about things. I just thought some of you might be interested in my solution. Have a great one ladies and gentlemen.

Mark, Thanks for sharing!

I appreciate the effort to fix the format John, and you are welcome.

Mark,

Your email was very well written and I am sure difficult to send out. Your post is helpful to read as your situation isn't an isolated one to you and your company. Thank you for sharing.

Good for you, seriously I applaud. It would be too easy for the client to simply send a new RFP with generalized terms but based on your design.

Awesome letter Mark! I've always maintained that "the customer is always right....until they are wrong and then its important to let them know they are wrong". You did just that in a very elegant way - hats off AND....can the rest of us plagerize what you wrote should we need a similar letter? :)

You've already done the work to get this far, stay in!

Tell him that you thought of a way to cut the price in half, again! And say no more. :)

I had a parallel thing occur back when I was on the Board of my HOA. We were getting quotes from vendors to do some specific upgrades to our buildings. One vendor came in with a bid that was 25% lower than all the other ones. Normally this is highly suspect and we'd throw out the low bid, but the company came back and explained exactly how they were going to be 25% lower and still exceed our requirements. One of the Board members came back and said we should re-bid it using that novel method and see what other vendors.

I fought for the guy and said we'd get a bad reputation. We were already saving 25% over the other bidders for a solution that was actually better. We should reward that ingenuity and just give the guy who thought outside the box the contract. And that's what we did.

That's not really advice to you, but I've seen it happen before.

You really have three choices here:

1) Play hardball - claim the bid was your intellectual property and if they put it out to bid you want to be compensated as a consultant who wrote the new spec for them (because that's essentially what you did. They had a spec. You came up with a proposed new spec. They adopted that new spec and want to put it out to bid.) That makes you the consultant and you should be compensated for that.

2) Walk away and never do business with them again.

3) Rebid along with everyone else and hope you win.

If you've got the stones and the legal resources, I'd go Option 1.

My stone cup runneth over. I walked. I appreciate the sentiment of option 1, but I feel that sueing would put a stain on the company I don't want. My bid likely would win anyway, even in a re-bid. I was plenty competitive. But at some point, you have to back up your words.

This customer had already proven to me that they could not be trusted by shopping my solution, and they did not ask me to re-bid.

One vendor came in with a bid that was 25% lower than all the other ones. Normally this is highly suspect...

Are you saying that most bids are within a much narrower range?

Are you allowed to just throw out the low bid by virtue of it being significantly less than the others? Do you actually tell the low bidder that they are 25% lower than their competitors and ask them to justify the better price? Just curious about the process.

Well done and thanks for sharing. In this new world where the price of anyhting can always be shopped it's your personal integrity and reputation that become priceless. Share this with a few of your long time customers and you sir will increase your value to them immeasurably.

Wait shopping your solution, Noooo way I can't believe that.

Is there a brother in-law lurking about?

Happens way to often.

I would politely tell the customer that you do not wish to be involved in that type of business, especially after you worked hard on it. If the job happens, it happens, and if it does happen, it will demonstrate the loyalty and integrity of the customer.

I have a customer, who we do his one business with cameras. He is building another business, and wanted us to do the cameras, but wanted us to do them under the general contractor. So I get played by the GC, and then told I need to sign a 50 page sub contractor contract and a 70 page safety contract, and have all specifications down on paper, and a bunch of other BS.

I poliely told the customer "Sorry, I will not sign the contracts. They are designed to cause much trouble for my company. We will gladly install the system once the general contractor is gone. While I hate to upset you, I have to do whats in the best interest of my company, and will be very grateful if you respect my decision"

Long story short, customer cooled off, my company got the job and he is very happy!

I wasnt going to play the liquidated damages game, and general contractor BS...If I signed that contract, I would be back 6-10X's for stupid stuff, when that time can be devoted to new business.

Sometimes you have to know when to draw the line and cut the losses. If your customer is loyal to you, they will see what you are saying when you back out. Loyal customers pay good money for good work and dont fuss about it.

Take the high road, I like that. If they pulled this kind of thing in the bidding, imagine what they would do AFTER they give you the order. Its a Lose-Lose.

I'm interested to see what they said in response, who got the work and what your contact said to you?

They sent an email last Friday to ask that we reconsider, they never intended to 'shop us" and they were awarding us the contract. Compared to hardwired systems (the bids they were seeking), we were easily less expensive, and the testing showed the technology exceeded their expectations. We were apparently rewarded for our ingenuity. The high road is always the best choice.

High road always wins, and if it doesnt, then it wasnt worth it. :)

Yea, thats great news Mark. Still waiting to hear if you mind if we plagerize your letter for own use :)

Oh, I did not realize you actually meant that. Sure, why not?

Thanks Mark

No worries. It is all the rage.