Ethics of overbidding

Subject: Ethics of overbidding
From: geoff-h -at- MTL -dot- FERIC -dot- CA
Date: Thu, 6 Feb 1997 13:32:39 -0600

David Castro wondered about the ethics of charging full
price for a job that took less time than expected.

David, in ethical terms, you're completely guiltless if you
charge the full rate: the company didn't select you based
on an hourly rate, but rather based on a fixed bid. Since
you both understood this when you negotiated the contract,
you have no ethical obligation to change the terms of the
contract. OTOH, if your bid explicitly included a number of
hours at a fixed price per hour, then you're on shakier
ground, and should at least consider reducing your fee or
giving them credit against the next job. The fact that
they'd expect you to swallow your losses if it took longer
isn't really relevant; it's emotionally satisfying, yes,
but it's not ethical per se.

Ethics aside, there may be sound business reasons to give
them a credit. If the client's purchasing department is
smart enough to award contracts based on merit and not just
on price, the person who awarded the contract is likely
(but not guaranteed) to remember your deeds, and may offer
you more work solely because they like the way you behaved.
I've done that before, and it's the way I work with our
current print contractors. If the client works exclusively
by lowest-cost bids, as many companies do, returning the
money won't help you at all the next time you bid; all that
they'll assess is the bottom line. Which situation applies
to you?

--Geoff Hart @8^{)} geoff-h -at- mtl -dot- feric -dot- ca
Disclaimer: Speaking for myself, not FERIC.

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