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Starjim
11-09-2014, 11:43 AM
There are two companies under one ownership. Each company operates independently with office and sales staff. However the on-site crews and repair facilities are shared. The business is high end decorative windows. Bids are submitted by both companies and have different values. The one owner sets all the pricing. The sales staff is not aware of the final pricing and competes against each other as they would against any other competitor. There is only one commission paid to the winning bid.

It seems this should be illegal and research points to the practice known as complementary bidding. Any advice on how I could deal with this?

Freelancier
11-09-2014, 12:20 PM
How you should deal with it... why? What's your role in all this that you would feel you have to "deal with it"?

Starjim
11-09-2014, 04:12 PM
How you should deal with it... why? What's your role in all this that you would feel you have to "deal with it"?

Not sure what my role has to do with this. The question is this a legitimate practice? If two competitors collude to control a bid it is illegal. If two companies under single ownership control two bid submissions is it illegal? As a third bidder I would be at a disadvantage.

billbenson
11-09-2014, 07:12 PM
I was told at one time that if you give a price to a customer on a bid, you can't give a different price to another customer on the same bid. I have no idea if that is correct though.

Beyond that, pitting worker against worker is horrible for employee moral. I'd look for a new place to work.

Freelancier
11-09-2014, 07:26 PM
If two companies under single ownership control two bid submissions is it illegal?If the company accepting the bids has no rules against it, it's not illegal. Some government entities may have rules against it, which would then make it a fraud on the bidding process for that; but that's because government bidding has rules everyone has to follow. For private entities, I've never heard of anything preventing submitting more than one bid, provided the rules don't forbid it.

Brian Altenhofel
11-09-2014, 08:40 PM
If two companies under single ownership control two bid submissions is it illegal?

The two companies might be selling different manufactures/brands or different processes, too.


I was told at one time that if you give a price to a customer on a bid, you can't give a different price to another customer on the same bid.

That probably depends on the state. The key is that all pending contracts remain negotiable based on the totality of the circumstances. For example, in the startup world there are a lot of concessions made just to land "big name customer" that can be included in advertisements as a user of the product or service. Some companies will underbid a job to get a foot in the door with a certain organization, especially with government contracts.

Of course, some organizations know how to abuse that when they get in touch with that over-zealous salesperson. (For example, a city government that seems to change vendors for emergency response vehicles every couple of years. it's not because they don't like the vendors - it's because they have such a big fleet that they call sales departments until they find someone who swallows the "foot-in-the-door" bait and sells at a deep discount - often a loss.)

billbenson
11-09-2014, 08:42 PM
If the company accepting the bids has no rules against it, it's not illegal. Some government entities may have rules against it, which would then make it a fraud on the bidding process for that; but that's because government bidding has rules everyone has to follow. For private entities, I've never heard of anything preventing submitting more than one bid, provided the rules don't forbid it.

Bids at different prices which could seem as preferential??

tallen
11-09-2014, 09:27 PM
I was told at one time that if you give a price to a customer on a bid, you can't give a different price to another customer on the same bid.

It's not the same customer, so by default it is not the same bid even if the second customer is asking for exactly the same goods/services as the first customer (which seems unlikely). Each customer gets a unique bid tailored to that customer's particular solicitation for bids (request for quote, request for proposals, or whatever you want to call it).

But to the OP's question, two different companies are bidding against each other for the same contract - as long as the two companies are legally independent business entities what does it matter whether they might ultimately be owned by the same owner(s)? How does this have any impact on any other companies that might also be submitting bids? I am assuming a sealed bid competition (or are you talking about an open bid auction?).

Freelancier
11-10-2014, 07:20 AM
Bids at different prices which could seem as preferential??Preferential to whom exactly? If the bidding process allows both companies to bid even though the ownership of both is similar or the same, and one bid wins... how does it make anything "preferential"? I'm just not following the complaint here. Even if those are the only two companies bidding, the customer is free to accept or reject the bids. And the companies bidding are free to make a profit or not.

Starjim
11-10-2014, 09:31 AM
Just reading the couple of responses here tell me that the practice is most likely not illegal though it is onerous to the employees. One point to clarify is that the companies are operated on paper as two separate entities but the share resources and often overlap in coverage. Two sales forces work the same territory and the pricing is scaled in favor of one company over the other. I think this might be an issue at state level for a wage and labor board.

Thanks for the help here.

Freelancier
11-10-2014, 09:44 AM
I think this might be an issue at state level for a wage and labor board.
No, it's not. I really think you're worrying over nothing. So what if one company bids better than another on some projects? How is the losing company able to stay in business if they're not winning some of the bids? You say they are two different companies owned by the same person or persons.... so what? For a while there, a company called AFC Enterprises owned both Popeye's and Church's Chicken -- both operated in the same market looking for the same customers with similar products and pricing. Nothing wrong with that either.

If you're an employee and feeling disgruntled about the situation, quit and go find a different company to work for. If you're on the receiving end of the bids and want to prevent the situation, change the rules of the bids. Otherwise, you're just complaining about nothing that's any of your business.

Brian Altenhofel
11-10-2014, 11:34 AM
I think this might be an issue at state level for a wage and labor board.

Why would it be?

Several of these brands operate as separate entities on paper - http://images.forwallpaper.com/files/images/5/5312/5312e46d/156212/brands-brand-advertising-manufacturers-kraft-coca-cola-nestle-pepsico-mars-weigley-pepsi.jpg

That graphic doesn't even get into who actually manufactures the products. I know for certain that several of these companies cross-manufacture... including where it's the same product just getting different packaging at the end of the conveyor belt.

Paul
11-12-2014, 04:12 AM
I don't think it's an issue at any level. Companies often acquire competiors and continue to operate both seperatly. Unless you get to the level of national monopoly/anti trust I don't see any issue. Look at the General Motors brands or chain restaurant holding companies that own McDonalds, Burger King and Wendy's stores.