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bidding with two companies

Discussion in 'Business Fundamentals' started by PTSolutions, Aug 27, 2012.

  1. PTSolutions

    PTSolutions PlowSite.com Addict
    Messages: 1,533

    we have just had the opportunity to acquire another landscaping/snow company. Name, phone, po box and all. I was just wondering if there are any legal issues of bidding a job with both companies separate. I am planning on keeping the two separate for now. I know this sounds a bit shady but I am tired of losing bids to contractors that the turn around and do not perform the job to the specs outlined. I notify the agent in charge and most often they dont care. My idea is to bid on the higher end of our pricing structure with one company and a bit more modestly with my other company. What are your thoughts.
     
  2. grandview

    grandview PlowSite Fanatic
    Messages: 14,609

    High bid low bid,sounds good. Use the company that you bought this way when you close it down they will be forgotten and you'll have a bigger presents.
     
  3. PTSolutions

    PTSolutions PlowSite.com Addict
    Messages: 1,533

    thats the plan GV! Im keeping them around for a bit so its not a shock to their clients as they are in an uppity area that likes to keep business in the community. When they get used to seeing our guys/equipment for awhile then I can consolidate.
     
  4. grandview

    grandview PlowSite Fanatic
    Messages: 14,609

    Then next season you can send a letter out saying how you bought out the other company last year but your company was servicing their property.Or something to that effect.
     
  5. second income

    second income Member
    Messages: 82

    That is called collusion and it is highly unethical and illegal in most jurisdictions.
     
  6. mulcahy mowing

    mulcahy mowing Senior Member
    Messages: 718

    I don't see how that is collusion as long as he does not own more than 50% of both outfits. Ie he owns 51% of one company and his wife/children/partner owns 51% of the other. That happens all the time and it's called smart business.
     
    Last edited: Aug 29, 2012
  7. JohnnyRoyale

    JohnnyRoyale 2000 Club Member
    Messages: 2,935

    No brainer...Just do it and dont advertise you do it.
    Two seperate companies, two different addresses, two different contacts.
    You're just making your company look better in the bid process.
    A little dirty, but not quite collusion IMO. happens all the time.

    Whats worse? What he's proposing to do or paying off a Property Manager?
     
  8. dfd9

    dfd9 PlowSite.com Addict
    Messages: 1,475

    I would disagree.

    Just perform a higher level of service if the higher priced company wins and vice versa.
     
  9. grandview

    grandview PlowSite Fanatic
    Messages: 14,609

    Besides collusion would be between 2 or more companies and the owner doesn't have any of choice. Kind of like the Boss dealers in my area.
     
  10. TCLA

    TCLA 2000 Club Member
    Messages: 2,699

    Technically collusion is an agreement between two or more parties. In actuality he is the only party...but there are two different entities involved.

    Close call.

    I'm willing to bet that if your prospective clients found out they would not be very happy with you at all. You would have some splaining to do....:laughing:

    From their prospective you could have just given them two different prices based on two different levels of service.
     
  11. basher

    basher PlowSite Fanatic
    from 19707
    Messages: 8,992


    But a bid by definition is a price based on the level of service outlined in the bid request. IMO the only way it would be legal/moral would be if the two were totally independent with separate management and had no knowledge of one another's pricing structures
     
  12. grandview

    grandview PlowSite Fanatic
    Messages: 14,609

    Shi!ts and giggles here, lets say you own a company and you buy out another company and put it in your wife name. Now if she is a certified WOSB and the place your both bidding on has the same bid specs,but the company gives preference to wosb plus a premium on the winning bid and wins but the husband does the work ,The same thing? yes or no?
     
  13. basher

    basher PlowSite Fanatic
    from 19707
    Messages: 8,992

    The Feds smacked a couple big local construction companies hard for playing a very similar game here locally. Setting up their own "minority owned" companies that then "subbed" the work back to them. They changed some of the rules on meeting MOB status based on the case.
     
  14. TCLA

    TCLA 2000 Club Member
    Messages: 2,699

    I think there are just as many clients that don't really know what they want or need, as there are those who have a good handle on what they want with firm specs.

    Options and different levels of service can give you better odds.
     
  15. thelettuceman

    thelettuceman PlowSite.com Addict
    Messages: 1,216

    ProTouchGrounds: I would agree to put in a higher bid and a lower bid based on service level. I have worked part time in the catering business for the past 41 years. One owner / two companies / one does high end catering / one does low end catering. The owner has never been in legal trouble.
     
  16. basher

    basher PlowSite Fanatic
    from 19707
    Messages: 8,992

    But he is not placing competitive bids. having two companies offering different levels of service is far different than two companies bidding the same job to the same specification.
     
  17. 2COR517

    2COR517 PlowSite Fanatic
    Messages: 7,115

    Submitting a dozen bids doesn't prevent Joe Snow from doing poor work when he still gets the job with the lowest bid. And you're still underbidding yourself, acknowledging you can do the job for less money.
    I hope that company you bought came with some existing contracts. Otherwise you just bought some equipment.
     
  18. second income

    second income Member
    Messages: 82

    I am surprised to here on this site what some people think is legal and ethical to do. Everybody slams nationals and rightfully so but what I have read in some of the above posts is pretty shameful. Trying to be slick lands most guys in trouble!
     
  19. second income

    second income Member
    Messages: 82

    Typo-- on above post "here" should read "hear".
     
  20. grandview

    grandview PlowSite Fanatic
    Messages: 14,609

    The owner still has a right to pick other company to plow,not like they can only pick from the to.