Company A and Company B quote? 7

[SteelPE]

We were approached by company A to prepare some preliminary drawings for a small office building. The job consisted of running quick calculations and preparing some drawings so the job could be estimated by a fabricator. We quoted company A a small fee to perform the work and get them the information they required (which would take 3-4 days to complete). We submitted a quote to company A and never heard from them again.

Company B comes to us with the same job as company A. We give Company B the same quote to do the same work as company A. Company B gives us the go ahead to perform the work. We complete the work and give a bill to company B (it takes a little longer than estimated but that’s not their fault) and company B pays the bill. Everyone is happy. Company B knows we were in contact with Company A.

If the job goes forward, company B will be paying us to complete the job.

Now we get a call from company A to go ahead on the preliminary drawings for same job we just did with Company B…. and there is the dilemma.

Do we charge company A the agreed to price or do we give a credit to company B and split the bill between the two companies? What would others do in this situation? It’s unfair to only charge B and I believe it’s unfair to the owner (who is getting quotes from Company A and B) to charge 2x for services that were only done once.

 

[Ron]

Who owns the documents? If Company B owns the docs, then you're probably out of luck. If you own the docs, well could be negotiated. Check your contract with Company B. Since the work would be for the same project but with different clients, you must obtain permission from Company B and make disclosure to all, without regard to who owns the docs.

 

[SteelPE]

You bring up a good point.

However, I don't think that ownership of the documents was ever discussed. We submitted a quote based upon the work required and never really discussed the ownership of the documents. They signed our quote and sent it back. The drawings provided have no letterhead.

In fact, what is odd is the fact that we received the exact same architectural documents from company A and company B. However, company A and B are required to develop their own architectural plans.

 

[MacGyverS2000]

Maybe I'm misreading the OP, but it sounds to me like two separate entities want work done... it's not relevant, IMO, that the work done for company B can be used verbatim for company A. If any company wants the results of your work, they should pay for it. If company B requested the work while working on a project for company A, then company A should get those results from company B. If company A requires the results from you directly and no contract ever brought company A into the mix (your original work request was made and paid for by company B), they should pay for those results as if they were a completely different entity.

Dan - Owner

http://www.Hi-TecDesigns.com

 

[IRstuff]

Given that Company B paid you to do the calculations, they "own" them.

I'll leave alone the question of why the owner is paying two companies to do the same, identical, work. To me, that's a bigger source of mispent money than anything that arise from Company A paying you to do the calculations again.

TTFN

FAQ731-376
Chinese prisoner wins Nobel Peace Prize

 

[SteelPE]

IRstuff,

The owner is looking for an accurate price to construct the building. He has asked 3 companies to give him quotes. Two of the three companies have contacted us (randomly) to perform the work. I have no idea what engineering company the other company used to develop their quote (if they even engaged one).

 

[zdas04]

As has been said above, if a company pays you to develop a work product then it is their property unless you have explicitly kept ownership in a contract. Without a contract giving you the ownership of the work product, then even disclosing its existence is violating your relationship. No grey here, it is really black and white.

When I've been in this exact situation, I have taken the second job and been totally scrupulous about not referencing a single piece of paper or computer file that belongs to the first company. A couple of times I was able to improve on the first design by doing it over (I really can't help what I remember), and I absolutely did not provide the improved result to the first company. Once, doing the job a second time uncovered a safety flaw that I missed the first time around. I got a letter from the second company authorizing me to share the improvement with my other client--if they hadn't said yes then I don't know what I would have done, thankfully I didn't have to cross that bridge.

David

 

[jmw]

It sounds to me as if company A and Company B are both bidding for the same job. Possibly there is a company C to make up the usual three bids.

If each company provides you with exactly the same data and requirements, then each presumably has a legitimate right to require a quotation and take up that quotation and each has acquired the data as part of the bidding process from the client. They may have had to pay for the bid documents.

Thus it should not matter if you have two companies, three (it may be a three bid process) or even a dozen quotes to prepare and may get as many orders.

To the extent that each company has costs associated with bidding for the main contract and one of those costs is the work you will do, that is fair enough and each is entitled to have a fair opportunity.

It might be that each could choose independent sub-contractors and it might be that you would not get the work from any one of them. Or you might win the work from all of them.

Unless any one of them has imposed any special clauses precluding you from multiple bidding and multiple contracts, go ahead.

The only thing to do is play fair.
By that I mean that if they all call for exactly the same work, it doesn't matter who first pays for it, they are all entitled to pay for it. You can re-do the work each time if you like, but why? Simply print off the same results for the next person to give you an order.

But: by playing fair I mean that if you expect to make further money on the contract from the successful bidder, then each must be given an equal quote at each stage. You cant quote one a different price for the same work expecting to get an advantage later on; at cost for this stage and with a premium at the later stages....
The only exception is if any one of them imposes a different interpretation on the requirement and you bid against that interpretation. If there is an advantage in this, fine but you do not have the right to introduce a similar innovation in any other bid (unless it is your innovation reached in equal circumstances).

You did the original quote to each of these companies at your cost.
You might not have won the work from any of them. You are then out your costs.
This is swings and roundabouts. In this case you have been able to sell the same commodity twice. Good.

What would be unfair would be to charge the second company simply for the printing out costs where the first company has paid all the non-recurrent costs simply because they got their order in first.

What you can do is look at how often this situation occurs. You might then decide that if every time you go round this loop you get on average 1.5 times the single order value that you can quote a better price to each company that requests a quote. You might then get a legitimate advantage over your own competitors.

I'd say this is par for the course in all sorts of disciplines.
I can't count thee times I have had to issue the same proposals against the same requirement specifications from any number of different main contractors.
Its a fact of life.
The fact is each quote cost me money. But if I bid one, I bid all. Any one might get the business with me or with out me.
I don't play favourites.


JMW

http://www.ViscoAnalyser.com

 

[Ron]

SteelPE...if your standard contract doesn't address ownership of documents...it should. Check your general conditions and make sure that you get that cleared up.

It would appear that Company A and Company B will be competing for the project based on your preliminary design. If they are both clear on your involvement, I would approach them and get them to share your fee as well as the documents, since you have no plan to change the design for Company A.

Disclosure is the key to maintaining your relationship with both companies.

 

[zdas04]

Ron,
This is one of those VERY rare times that I find myself disagreeing with you.

Work that you do for Company A is between you and them. Work that you do for Company B is between you and THEM. Neither has a right to know even the existence of a relationship between you and the other one. Saying to Company A "hey this is exactly the same bid packager I quoted for Comapny B, we can work out a special rate" would be a HUGE violation of the right to confidentiality that Company B has every reason to expect. What if Company C hasn't told Company A and B that they are both bidding on the project? You telling one that the other is bidding could even open you up to price fixing charges.

David

 

[MiketheEngineer]

And thats how you can make money in this stupid economy. Charge them both the same. You will get screwed somewhere else....

 

[MintJulep]

Imagine that instead of supplying a design you were supplying a physical item.

Two customers ask you for the same item. You charge each full price. You don't even think twice.

Why should it be any different just because your item is a design?

 

[Ron]

zdas04...David, you are exactly correct as usual; however, both know of the other's involvement, so you can't get around that. I agree that if these were discreet (and discrete) clients, it would be different, but they appear to be intertwined and somewhat inextricable at this point.

Ron

 

[BAretired]

SteelPE,

Maybe you should tell Company A that you cannot perform the job for him as it would be a conflict of interest, having been retained by another company for the same work.

BA

 

[zdas04]

What Company A and/or Company B knows really doesn't have any bearing on your responsibilities to maintain the confidentiality of the one(s) that are paying you.

Let's move to my field, Company X knows that I work for Company Y. Company Y knows I work for Company X. Let's say that I'm THE GUY to look at field facilities choices in low pressure unconventional field development. If Company X asked me to do a facilities study for a potential new field that Company Y has also asked me to do a facilities study, then I absolutely could not tell either of them even the fact that I was doing the study for the other. Violating that trust would let the each of them know who they will be bidding against and could swing the price of a deal by several million dollars--I could easily end up in court over that. Same deal here on a smaller scale, even if you KNOW that the two companies know about each other you can't tell the other unless your client has directed you to tell the other. Getting that wrong can be really expensive.

David

 

[patprimmer]

I agree pretty much with David, but I can see Rons point and it depends a bit on circumstances and there are probably conflicting laws revolving around anti trust issues and confidentiality and ownership.

One extreme example of one aspect of this.

If you buy a book, you don't expect discount depending on the numbers sold. There might be a price calculation made by the publisher re cost, price, volume sales and profit, but the publisher will do his sums based on maximising the bottom line, not equal share of costs between customers.

If someone pays you for work, they own that produce and they certainly own their input into that. When you work on something together and ideas bounce around and evolve, kinda like a thread here (how much is this answer dependent on reading all the previous answers), it becomes very difficult to attribute ownership of some aspects. You have to seriously ask yourself, did I already know that and even more difficult, would I have thought of that without the influence of A.

Our Trade Practices Act requires that you treat all customers equally, but also that you do not collude or fix prices. Your antitrust laws may differ somewhat, but I expect not to much.

You must treat all parties equally otherwise here you are guilty of restrictive trading and anti competitive activities.

You cannot sell someone else's property, intellectual or otherwise without their express permission.

You cannot breach confidentiality if it is stated or even implied. I think in this case it certainly is implied.

It will be difficult to get permission without some level of breach of confidentiality. Even asking "hypothetically" has an implication that compromises to some extent the confidentiality unless it is written into terms and conditions as a standard clause known to be there every time even if there is no potential third party.

Bottom line, do the work for the second customer being careful not to use the first customers IP, but the exact same question very often gets the exact same answer as the calculation is obvious to someone of your skill level. You should not cut and paste as that will possibly carry over the first customers input and even your errors if they exist. This my, one, get you caught, and two,is not doing the work the second customer paid you to do and to which he is entitled to.

The experienced gained doing job one may well assist you to do job two quicker and even better, but then so might have the experience you gained on a previous non related job. That is called on the job experience and is a major part of what qualifies us to do our jobs and is VERY likely the major part of the reason both customers came to you.

You are entitled to charge both for the result you gave them or charge for hours reasonably required to perform the work.

You are also entitled to offer an equal discount to both if you so choose for commercial reasons, however doing that without breaching confidentiality is probably impossible now for this case.

Regards
Pat
See FAQ731-376 for tips on use of eng-tips by professional engineers &

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[patprimmer]

BA, that in itself may be a breach of confidentiality by implication.

Regards
Pat
See FAQ731-376 for tips on use of eng-tips by professional engineers &

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[BAretired]

patprimmer, there is no breach of confidentiality in telling Company A that accepting the work with them might be construed as a conflict of interst. To state that you were working for Company B on the same project would be a breach of confidentiality.

BA

 

[patprimmer]

The mere statement that there might be a conflict of interest implies you are working for someone else on this project. That may or may not identify them, depending on how big the ballpark is that you play in.

Regards
Pat
See FAQ731-376 for tips on use of eng-tips by professional engineers &

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for site rules

 

[BAretired]

It does not imply you are working for someone else. It states that you are, but it does not name the party you are working for. No professional discipline committee would find that to be a breach of confidentiality.

BA