Customer shopped concept proposal to others 17

[Richard63]

A potential customer asked me for a proposal for a special turn-key machine.

I suggested and submitted a proposal for an entirely different concept that I thought would be much better than what he asked for. I spent a lot of time researching vendors for some of the components, including spending an extra day and night in Chicago speaking with the major vendors of two of the components, and a lot of time putting together a concept CAD model and proposal. This was done without cost to them, and the email containing the proposal was marked confidential.

He reviewed it, liked it and after a couple weeks said a purchase order was coming.

Time went by, no PO. He said he still wanted to do it, but had to wait till a later date.

After several months, I get an email from a 3rd party consultant, whom has also been a customer, letting me know that they are reviewing proposals, but want me to quote portions of my own original proposal, while they parse out portions to others, and go direct to the suppliers that I previously researched.

I feel it was unethical to take my original concepts, shop it around and parse out some of the pieces to others, and then have the nerve to ask me to requote some portions. When I was a younger engineer on the recieving end of quotes, my boss taught me to never share suppliers plans and quotes or use them as leverage for requotes. I have since found that this whole concept seems foriegn to some people.

My gut reaction is to let these two know that I believe this was an unethical use of my proposal, and that I no longer want to do business with them (even though they are throwing me a bone by allowing me to now quote on a portion of my own concept).

Before I burn these two bridges permanently, I'd like to find out what others think; Did they cross a line in taking my concept and proposal, seek quotes from others for it, and then try to parse it out to others in whatever way that suites them best? Or am I being too unrealistic, and should I take whatever scraps I can get?

 

[patprimmer]

Yes they did cross a line, but it happens all the time. If you refuse to do business with such characters you will have a small but very good customer base.

In future you need to supply just enough or have a contract in place. Some will just breach the contract and in effect dare you to sue them. Being right and winning a law suit (winning is a very relative term in this regard) will still leave you with a stigma no matter how right you were.

Bottom line, try to only deal with ethical clients, but when dealing with unethical ones, limit your input, use contracts and be prepared to get done over to what you decide is an acceptable extent.

Oh, and if you see a chance to even the score, think twice. If you lower yourself to their level what have you gained, also you may get a name as bad as theirs, but then again, you just may get a chance to getaway clean, if so in that case take it.



Regards
Pat
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[rowingengineer]

Did they cross a line? My bloody oath they did.

I have had this happen to me once before, I outlined what I believed was my original concepts in the design and sent him a note, I made it very clear if these items showed up on the final design there would be questions from my lawyer. I then sent a note to the engineer informing him that i hadn’t been paid for my preliminary work, and as professional courtesy I suggested that he not continue to work on this project until i had been paid.

In the end, i ended up getting half my quote price as a payout. In addition, another half from the engineer that won the project, because he did not have the technical skills to complete the design.

So get your side in writing and ensure your facts are straight. Then start the writing your hard but fair notes to the client and engineer. Have your lawyer look them over and make a few suggestions. Even get him to do the follow up call, makes people notice that your serious.

When in doubt, just take the next small step.

 

[SomptingGuy]

The bottom line is to not put anything of tangible value into a quote.

The only time I was bitten was when I wrote a proposal for digging a potential customer out of a hole they'd dug. It contained a project plan. They thanked us and then used my plan themselves.

- Steve

 

[JLSeagull]

Yes, it happens all the time - and ome people don't even see anything wrong.

 

[controlsdude]

I have seen this over and over. A lot of unethical people out there. Give little detail as possible in a quote, also give warnings about the use of your quote other than its intention inside the quote.

Give an overall price but alot of customers won't accept this either.

Your lawyer calling them is probably the best idea, since you have no perspective or you are very angry with them, so you contacting them will just be unprofessional or turn that way.

I do not know how much time I have seen wasted on my end on quoting where the customer goes thru the concept stage to go have it competively bidded by other similar companies.

I think the best way to handle this is to put a price on the concept inside the quote if they go this route and competively bid your quote out to others. That way you take it to the lawyer and you get paid that price. Otherwise I do not think you more than a leg to stand on.

 

[IRstuff]

Sadly, yes, it's absurdly common. We briefly a GOVERNMENT customer once, on a concept, and nothing came of it. Years later, I run across a patent on our concept awarded to the same customer.

This is where the lawyers come in.

You should, however, protect yourself with non-disclosure agreements (NDAs), proprietary information markings and stamps, and so on.

TTFN

FAQ731-376

 

[NomLaser]

I got pushed into our quoting department as cuts were being made 3 months ago. Customers surprise me every day at what they will go through in order to save some money.

 

[ewh]

Yes, NDAs are the rule here also.

"Good to know you got shoes to wear when you find the floor." - [small]Robert Hunter[/small]

 

[pierdesign]

It's an interesting situation, sorry it has happened to you.

In common law countries, UK, Canada, etc, an offer to contract (your proposal) has been interpreted as meeting legal requirements of being a contract. A proposal includes offer-acceptance-consideration, consideration here being acceptance of the proposal.

From there, every case becomes different.

Probably, reasonableness includes your proposal being accepted in total and all the work coming to you. So contract breach could be interpreted in that both the acceptance and consideration aspect have not been executed per the offer. Probably what your client should have done was enter negotiations with you to parcel out work, where you can adjust your scope and price.

Of course, all this assumes legal action.

From the minimal information, I wonder at the statement "submitted a proposal" but from the description it sounds like a design was somewhat completed. The two are quite different, and it's a case by case basis as to how much design information to include in a proposal.

The first course of action is always to request discussion with your client, quietly, professionally, and start documenting everything, dates, times, names.

 

[diarmud]

In the future, do not get so detailed. Don't give them any real meat, obscure it, put smoke around it and give them a very low recommended budget (that you can meet).

Happens all the time. When I first started, I found people using my detailed proposals and going to others.

Changed my way of doing business.

I will submit proposals with details if folks want to pay for them . . . no more freebies.

Good luck.

 

[tkall]

Richard,
I feel for you man. I have been there many times when I was younger and all excited about the great ideas my firm was able to develop for "clients". After the crap you describe happened to us a few times, I took an alternate approach. Now my business is probably different than yours so it may not work as well, but, rather than document with an extensive paper trail, I give them very little in writing. I discuss things and talk with them but generally I resist their request for free drawings, conceptual design, etc. It is a simple fact of human nature, people want what they can't or don't have. I mean why else would hugh grant have fooled around on Elizabeth Hurley with a skanky hooker?
A paper trail in preparation for legal action is one way, but lets be real, the minute the damn attorneys are involved, you loose. This technique has worked so well that sometimes I almost can't get rid of clients I don't even want to work for. I had one such client call me yesterday....I sent him down the road a year and a half ago because I did not want to do his work and suggested that he just go ahead and use the competing firm. He told me he wished he could turn the clock back 18 months and get me to work for him. I guess, i will get the other two pahses of his project and he will be better to work for now that he is softened up. Good luck man.

 

[patprimmer]

It can all go wrong in several ways for several reasons, but then again it can go so right for so long, that it becomes awe inspiring.

Example one.

Working for Bayer as a Market Development Engineer.
Client had an issue where the clear polycarbonate centre section (window) was falling out of a cloths dryer door. It was held into the PPO/styrene alloy outer section by swagging the PPO over the polycarbonate. The PPO quickly solvent stress crack at the swagged over area. As the air then came through the large hole in the door and not over the heating element, the element overheated and set the cloths on fire, resulting in several house fires.

I recommended a one piece clear PC door with the portion required to be opaque to be back painted. You could see the designers eyes light up as he asked if that was possible (ie, and very importantly, he did not know it was possible at the time). Bayer did the mould flow and FEA for them on agreement that their material was specified. The design team specified Bayers Makrolon 2603 and recommended section thickness and detail changes to the hinge and latch areas. Our opposition recommended PPO, which importantly is not available in an opaque grade. They were dismissed out of hand as being stupid in this case. It was their previous recommendation that was failing.

The mould was made using Bayers and my recommendations. It was trialled and worked and passed all tests and marketing was delighted with the back painted look.

Production for their own reasons decided to call in our opposition who then advised it must be in a flame retardant material as previous models had caught fire. Note, the fire never started at the door.

They trialled Flame retardant PC from another source but could not fill the mould (surprise surprise). They then increased section thickness eventually by 50% but still had huge reject numbers due to black specs and flow marks (clear FR PC does not mould very well). After 12 months were lost and the mould modifications caused pice costs to increase by about 50% they eventually went back to the non FR PC, but even then, production used the non specified opposition material. After another 12 months of political infighting between production and design departments and questioning of motives, did production start to use some of the specified material.

There was a contract, but production claimed it was not binding as Bayer never offered a FR version. The fact was they had one but recommended not to use it as it was unnecessary, expensive and could not be moulded in the design. This was enough to muddy the waters from a legal point of view.

Example 2

I worked for ICI who in Australia represented Mitsubishi Gas Chemical for their PC range.

I visited a customer who was trying to mould transparent tint PC surf board fins. Transparent tint was a fashion MUST HAVE for surfboard fins in the day. The major player in the PC market made recommendations for a big fan gate into the top of the fin. This resulted in flow marks that could not be eliminated. I recommended a different gate design and explained why. As it was a simple on the spot recommendation and was part of our free technical service for customers, there was no written contract, but a simple understanding that if advice was used to good effect, it would be rewarded with orders for materials. He made the changes and was the first in the world to mould transparent PC fins without flow marks. For two years he exported fins to the rest of the world including Germany, Japan and the USA as they could not mould fins locally without flow marks. This was in the late 1970s. As fins evolved, he stayed one jump ahead and was a major supplier to the world market for about ten to fifteen years. He always consulted me on any new project and still occasionally directs consulting work my way. He still buys any materials he can from whomever I recommend or whoever I am associated with.

He now lives about 500 miles away in Qld on 15 acres at Currumbin Creek in the Gold Coast hinterland and I stay at his house when I visit there. He is offended if I try to pay anything. His comment when I tried to pay was "Pat, see all this, without your help, I would not have any of it". I think he overstates my role in his success, but it is encouraging to see the appreciation and loyalty.

I could go on with many more examples on both sides of the argument, but basically, you win some you lose some, contract or not.

Oh.

The one who honoured the understanding beyond all expectations was a small independent part time toolmaker, part time moulder, part time surfer who bought 20 tonnes per year of material at his peak. He continues to grow and thrive.

The one who welshed on the contract was the largest whitegoods manufacturer in the country. They bought hundreds of tonns of material per year. They have been restructured, merged, divested and taken over until they are now only a badge used by a European owned company on Chinese made machines.


Regards
Pat
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[SomptingGuy]

NDA's are fairly common. Has anyone here ever been involved in using one in anger?

- Steve

 

[rowingengineer]

Pat,
If I could I would start a "story time" thread for the blokes that have been around the block a few times could relay their tales of life, because as far as I can see, ron, Hokie, Big H..... and you plus a few others (the list would get to long to name all), have got some great stories inside yourselfs that would make for great reading/book.


When in doubt, just take the next small step.

 

[patprimmer]

The std defense of prior knowledge often makes NDA difficult to enforce. Often the prior knowledge is fair dinkum.

I have certainly been shown some very Ho Hum secrets that were already well known to me and several others. Some were even pretty much straight out of our technical manuals.

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

http://eng-tips.com/market.cfm

for site rules

 

[kontiki99]

Maybe start using non-disaclosure/proprietary information agreements. Make sure they are signed by a company officer and contain a recourse for expensive enforcement liability if violated.

 

[jmw]

Yes, it has happened to me too.
I visited a client with a problem and thoroughly investigated, put together recommendations, sourced the various components, detailed the installation and operation procedures and then heard no more about it till I discovered he was using my proposal to source all his components and was going to do the engineering himself and not use my sub-contractor.
I got nothing out of it.

However, it is just one of those things and if at the end of the year you are still alive and out of jail, what more can you ask? You sometimes need to be philosophical and realistic.

The biggest problem is when people are not realistic. They then make bad decisions for the wrong reasons because they don't understand the nature of business life which is sometimes going to be hard and very unfair.



JMW

http://www.ViscoAnalyser.com

 

[Richard63]

Thanks everyone for the insightful information. Sounds like I'm not alone, but lots of you have learned ways to deal with it.

 

[MikeHalloran]

I was once on the other side of the fence.

I was working for a big-ish company, that I thought was pretty classy overall. One fine day a couple of proposals were dumped on my desk for evaluation and comment.

It took me a while to figure out that my company had taken one supplier's proposal and reproduced it as their own RFP.

It took me a while after that to stop feeling sleazy about it.

Oh. I still have no idea who, if anyone, got the contract, or why the proposals ended up on my desk. Maybe a freak accident.



Mike Halloran
Pembroke Pines, FL, USA