Has anyone ever caught a contractor rigging the bidding for a trade?
I'm sensing some shenanigans on a single family residential job I'm working on.
First we asked for another hvac bid and the contractor said that someone named "jones" would bid it. We never got a first name, never met the guy and never even saw anything on paper. Another one of the hvac bidders only did commercial work and wasn't even in the ballpark with his price. That left us with only the contractor's preferred sub and we wanted to give the client a choice so we asked for one more bidder and this time we got a legit one who ended up being the low bidder by a wide margin.
Now we're on to millwork and again there's a preferred sub who we have met. I noticed several mistakes that worked against us in his bid yet the other bidders, once again shadowy figures we have never met came in just higher than the winning bid. I've asked for backup of the higher bids and if I even get it I have this suspicion that it will contain the same mistakes (rounded up or down a couple linear feet of course.)
I'm sure this kind of thing happens all the time- I've sensed it before on jobs- but this time I have a feeling I may catch the contractor red handed.
Has anyone ever caught a contractor manipulating the bidding? What would you do if you were me? I need to protect the client obviously but getting him all worked up would make the job a lot more complicated. I'm thinking I might subtly hint to the contractor I know what's going on and say that there better be a new legit bid or there will be major issues.
I had one that a GC was selected to negotiate the project with the Owner. The deal was that he would solicit 3 bids for each trade and had a fixed GC's fee. Something didn't seem right when he presented teh pricing, so I called up a couple of the subcontractors that he listed (that I knew from other past projects). I found out that the GC had demanded a 5-10% kickback from them (and presumably others). The Owner ended the negotiation right there and ended up putting the project out to Bid (to other GC's).
If you know any of the subs he is listing, see if you can have a direct conversation with them to learn anything more. I'd probably recommend just discussing your suspicions with the Owner and let them deal with it as they see fit, rather than making veiled threats to the GC. Its your role to just inform the Owner, not to try and remedy the situation. Its one of those best intentions / bad consequences deals.
I told the client I always recommend fixed price contracts. Contractors love to give the sales pitch about how if they give an estimate and then work cost-plus, they will save the client money. basically they're just transferring all the risk to the client though and eliminating most cost accountability.
This contractor had a good reputation. I never got a great vibe though. I still don't have any concrete proof of manipulation but there's definitely circumstantial evidence.
If I tell the client I know he'll get paranoid and possibly flip out which will make my job much harder... but I think druf is right that I have a responsibility to be open.
bid rigging
Has anyone ever caught a contractor rigging the bidding for a trade?
I'm sensing some shenanigans on a single family residential job I'm working on.
First we asked for another hvac bid and the contractor said that someone named "jones" would bid it. We never got a first name, never met the guy and never even saw anything on paper. Another one of the hvac bidders only did commercial work and wasn't even in the ballpark with his price. That left us with only the contractor's preferred sub and we wanted to give the client a choice so we asked for one more bidder and this time we got a legit one who ended up being the low bidder by a wide margin.
Now we're on to millwork and again there's a preferred sub who we have met. I noticed several mistakes that worked against us in his bid yet the other bidders, once again shadowy figures we have never met came in just higher than the winning bid. I've asked for backup of the higher bids and if I even get it I have this suspicion that it will contain the same mistakes (rounded up or down a couple linear feet of course.)
I'm sure this kind of thing happens all the time- I've sensed it before on jobs- but this time I have a feeling I may catch the contractor red handed.
Has anyone ever caught a contractor manipulating the bidding? What would you do if you were me? I need to protect the client obviously but getting him all worked up would make the job a lot more complicated. I'm thinking I might subtly hint to the contractor I know what's going on and say that there better be a new legit bid or there will be major issues.
I had one that a GC was selected to negotiate the project with the Owner. The deal was that he would solicit 3 bids for each trade and had a fixed GC's fee. Something didn't seem right when he presented teh pricing, so I called up a couple of the subcontractors that he listed (that I knew from other past projects). I found out that the GC had demanded a 5-10% kickback from them (and presumably others). The Owner ended the negotiation right there and ended up putting the project out to Bid (to other GC's).
If you know any of the subs he is listing, see if you can have a direct conversation with them to learn anything more. I'd probably recommend just discussing your suspicions with the Owner and let them deal with it as they see fit, rather than making veiled threats to the GC. Its your role to just inform the Owner, not to try and remedy the situation. Its one of those best intentions / bad consequences deals.
this is precisely why i tell clients to select a contractor based upon:
1. reputation
2. how well they communicate and trust them.
3. cost.
in that order.
I told the client I always recommend fixed price contracts. Contractors love to give the sales pitch about how if they give an estimate and then work cost-plus, they will save the client money. basically they're just transferring all the risk to the client though and eliminating most cost accountability.
This contractor had a good reputation. I never got a great vibe though. I still don't have any concrete proof of manipulation but there's definitely circumstantial evidence.
If I tell the client I know he'll get paranoid and possibly flip out which will make my job much harder... but I think druf is right that I have a responsibility to be open.
Confront the GC and demand a 5-10% kickback or else you're telling on him to his mom.
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