The ethical edge: Relationships, marketing and collusion (and plenty of murky waters)



How would you handle this situation?

A client you know from other jobs calls and asks you to bid on a project in another city, requiring extra travel and mobilization challenges.

You know you could do the job but you would (by local standards) be totally uncompetitive.

The client insists, and invites you to a site visit where you are the only contractor. “We arranged separate site visits for everyone,” the client says.

You bid the job, including a margin for fair profit after calculating your mobilization and travel costs. And you win the work.

What happened here?

In the story I’m sharing, it seems that the owner was on to a cartel — that the city’s contractors were colluding to rig the bids and set it so one of their circle would be sure to win the job at good price. All the local players, indeed, attended the site meeting and so they thought they had everything covered.

In this case, the “low bid” didn’t need to be the truly lowest cost of delivery — it simply needed (after travel and mobilization costs) to be lower than the agreed-on collusion bid.

We can look at this story from a number of levels.

The client provided undue preference to one contractor by setting up a special, private site visit. In most public sector projects this would be considered unethical. But if there was a bid-rigging ring, what should the owner have done (allowing that there would be no objective proof of any wrong-doing — the players in evil schemes are smart enough not to leave any smoking guns around that could document the situation?)

How widespread are these practices in the industry? I don’t know. No one is going to issue a news release saying they are part of a bid-rigging ring or (in most cases) are they going to admit to being part of a work-around to escape the ring’s clutches.

There is a mixed moral message here. In this context, the contractor won a job with an otherwise questionable “secret bid” because he was operating an honest business. And I’m sure this sort of thing happens elsewhere in the industry. Playing it straight may, in many cases, lead to opportunities you wouldn’t otherwise expect. But how much does any conventional ethical marketing count when the deck is stacked and the rules are made in mysterious back-rooms.

I don’t know. I shudder at the thought of how widespread this stuff is.

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