I didn’t want to hijack the thread that Tark started asking about the labor costs for installing four doors http://forums.taunton.com/tp-breaktime/messages?msg=42229.1 , and I don’t mean to flame Tark either. Rather, it sparked some thoughts on the ethics accepting and rejecting bids.
If a contractor submits a bid based on particular scope of work, and that bid comes in higher than you expected, is it ethical to ask the contractor to lower his price?
I think it is certainly unethical to do so.
Now, is it ethical to ask the contractor submitting the bid to re-evaluate his estimate based on conditions that the contractor may have misunderstood? Here is where I am on the fence. If you have several contractors bidding on the same scope of work, I think it would be unethical to ask one contractor to re-evaluate his bid. Presumably, all the contractors were given the same drawing and specifications, so if a contractor came in much higher because they missed something than it would be unfair to the contractors that bid accurately.
Any thoughts?
Eric
Replies
Just to clarify things, I think it is unethical to use the two words "bid" and "estimate" interchangeably as you are doing. They are mutually exclusive terms and you need to be clear before the discussion can move forward without confusion.
Nothing personal, but this is growing to be a great peeve of mine.
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Piffin,
Thank you. A bid and an estimate are not the same thing. One is what you'll do the job for. the other is a guess at what you'll do it for.
As far as asking the contractor to lower his price, no it isn't unethical. But I wouldn't lower mine.
ALL,
In my opinion, if you feel a price is out of line, you should discuss it with the contractor. Several years ago when I was taking bids for a project I got three plumbing bids. One was $9000, one $11,000 and one $31,000.00. I called the the $31,000 guy and explained that he was three times the others. I just wantes to make sure we were talking about the same work. He became beligerant and defensive so I just let it go.
Later on I figured out that I had dropped the plan off for the other two. My wife had dropped the plan off for him. Looking backmon our conversation, he said things that would leave me with the impression he thought he was dealing with homeowners trying to build thier own house.
A little later I got three for some electrical work. One was almost half of the other two. I called the Contractor and explained that his bid didn't jive with the other two I got. Never told him if he was high or low. He called me back about a day later and sheepishly appologized. He had left out the whole second floor.
It's a professional courtesy to let a guy know if you think his bid is out of line with the work to be done. Just don't beat him up about standing by his price.
BRB,
I agree with what you're saying. Too many take the attitude that if they are busy, they just bid high (like double). Then if they get the job, jack over the other person in the queue.
Better IMO to be honest, and upfront. If you're too busy, recommend an honest and competent "competitor." He may bail you out one day when you're not so busy.
Jon
Ummm, very good questions on both counts.
I am not sure if these are questions about ethics? Depending on what trade/profession you are in, these sound more like wheeling and dealing to me.
Give an example. If you are selling your house and you get two offers. If the HO is not satisfied with either offer the representing agent would ask both of the offerers to improve, or if the HO is satisfied with the higher offer but think that the lower offer may offer more he would ask the lower offer to improve.
A lot of business is done this way, it's a bargaining process. Now if you'd already accepted a bid and you go back and bargain, then it's unethical in my book...but some a$$holes do that anyway.
I don't find negotiating a bid, prior to signing a contract is at all unethical.
Whether it's negotiating a price on house for sale, or a price on a new car at a dealership, negotiating is part of the process. My $.02.
Tark
>> I think it is certainly unethical to do so.
Why? What ethical duty does the HO owe, and to whom, that he would breach by asking the contractor for a lower price? Would it be unethical to ask for a discount when purchasing goods? Why would purchasing services be any different?
It's sort of the same thing that Home Depot used to (or still does?) when I was a Corain fabricator. Any homeowner could take my bid in a they would beat it by 10%. If I lowered my price another 10%(which I wouln't) thay would beat that one by 10%.
Hello I just looked at your statement yes this is correct. I am a job super when some one comes in with a bid very low or high something is wrong.I have seen bids come in low and my company takes this sub on and look out 95 per cent trouble will happen. I have seen this many time on the job siter i know that companys out there are really putting the pinch on the subs. Also having a sub that is low and got the job most of the time i have to baby sit the sub. I was always told building a house or any thing is like building a car and when this car is coming to gether if one subs cannot stay up this will cause problems.I have also seen a sub take on a job saying i will come on low and make this up on the exstras on the job. What a way of thinking.
Eric,
Unethical, no. There is no ethic against negotiation of price in any format. Doesn't mean it will work but there is certainly no harm done trying. Do I lower my price, only if I have made a mistake or it is a good customer trying to squeeze in under a budget issue.
My issue is not people who want to ask about your price. It is when they have an issue with your price but talk to everyone but you. If I don't think your price is fair, or there might be a mistake, or I am trying to meet a budget then I should ask you about it.
Of course some folks are uncomfortable with asking as they percieve it as confrontation. Others feel the need to get a "deal". And some just feel stupid for asking so it is a pride situation.
But when you get right down to it, we as a proffesion have done this to ourselves. The professions that don't get questioned or have there price chipped away are ones that have simply stayed together and not allowed this to happen. Home improvement proffesionals of all areas simply have allowed themselves to be sucked into the "low bid mentality" or the "let's make a deal" syndrome. So certain ones of us try to raise the bar over the ones that will be in business a short period of time.
Tark, comparing your dealing with a home improvement specialist of any sort to buying a car is stupid. The car, no matter what dealer you buy from is the same car built at the same location, by the same factory. Home improvement is done by proffesionals of varying skills. With the car you get a fixed known level of quality for your money. With home improvement you generally get what you pay for. As I said from the beginning I have no problem with you questioning the price, just the fact you didn't ask the person who gave you the price. But later you said you did. DanT
Don't confuse ethics with risk management.
By risk mangement I mean If four contractors bid on a project and one price is substantialy different (higher OR lower) than the others, the client IMO has a responsibility to determine why there is a difference. Is it because the low bidder has missed pricing part of the work and hence runs the risk of loosing their shirt on the job. In which case the work will suffer and likely not run smoothly, or have they seen a way to reduce costs that the others have missed? It's the reverse for the high bidder. With houses it's unlikely that the high bidder is pricing the job on the basis that "I don't particularly want this job but I'm want to stay on your list of bidders", so the question is – have they seen a difficulty with the project that the others have missed? Again the client should want to know so the difficulty does not come as a complete surprise part way through the project.
Bad ethics is asking the high bidder to reduce his price to below that of the lowest bidder "because I really want you to get the job"
just my .02
Ian
Eskals,
Interesting thread. Let me throw out a related question.
If the law requires a contract to be in writing (due to $ amount or because it involves real estate) and you verbally AGREE to terms, mull it over after the fact, and realize ,after the fact, AND PRIOR to signing the contract that you made a mistake, is it unethical to reneg?
Throw one more in to complicate things. You set the wheels in motion that the person you gave the verbal to begins to take you at your word, and incur expenses based on your word.
We are talking about two people who have only met once to strike a deal, and there is no potential long term relationship.
I know the law is on the side of the reneger, this was more a question of ethics.
Jon
Edited 4/16/2004 9:02 am ET by WorkshopJon
Edited 4/16/2004 4:09 pm ET by WorkshopJon
Edited 4/16/2004 4:09 pm ET by WorkshopJon
>>If a contractor submits a bid based on particular scope of work, and that bid comes in higher than you expected, is it ethical to ask the contractor to lower his price?
Let me rephrase your question . . . If a contractor is negotiating with me is it ethical for me to negotiate with him?
Yes.
SamT
Just like a car dealer. It's not unethical to ask for a better price, is it? Unethical would be if you took some proprietary information that one bidder provided, and shared it with others in order to get a better price.
Negotiating price on fixed items like a car are easy. The dealer knows what he paid to the last cent, knows his overhead, profit etc all to the cent. Asking for a deal simply means he takes off some profit, but still makes enough to live and prosper.
DanT covered this elsewhere.
Carpentry. I dont consider it unethical to ask questions about the price at all. My thinking is that if the carp is above board then such a question wont phase him at all. Nothing to hide right?
If the carp makes his explanation of what problems are expected, etc etc and sticks to his price, then that price is IT.
Trying to get a breakdown on the numbers, work out how much the guy is making and then judging on whether is it "too much" etc.....unethical. I dont see anyone wanting a price breakdown for a doctor or a lawyer.
I dont drop my price unless I made a mistake somehwere. I dont give breakdowns either. My response to customers who ask ( few do ) is that my years of experience and quality of work are worth the money. If they want cheap, need to call someone else. Dont complain if the job is crappy.
If dealing with a doctor and you need surgery, do you want a cheap one working on you or the expensive one? Personally I would pay the money.
Nobody goes to the supermarket and loads up, then when at the checkout says "I will only pay for 1/2 as I think it's too expensive"
They would get arrested fast. With the trades it is almost standard to try to get things screwed right down tight. The ethics of that suck.
Everything, 100% of it, depends on how you look at it.
DW
>I think it is certainly unethical to do so.
I sub work all the time, and I have no problem whatsoever with it. Sometimes I'll get a quote from a guy knowing what I'm going to offer him, just to see how much I'll hurt his feelings.
On the flip side, I have once this year and occasionally in the past told a guy to look at his prices to the upside. I want a fair price, but I don't want a sub I'm working with over the years not getting enough margin to cover his costs and have enough to keep up. Or if I thought he missed something.
Who would you rather work with? The guy who'll take your low number without saying a word, when you forgot to add the cost of all your windows in? But won't haggle on the high side? Or someone who'll come to a fair agreement after seeing what you put on the table...
Piffin- why has that become a peeve? My terminology is an estimate is the work I do to prepare a bid, and the bid is what goes out the door to the client. Job cost has no relationship to either, that's my peeve - someone saying "I don't have any money for this obscure contingency that has come up", it's a d*(n estimate, not an actual!
remodeler
I bid you good night.
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