# bidding with two companies



## PTSolutions (Dec 8, 2007)

we have just had the opportunity to acquire another landscaping/snow company. Name, phone, po box and all. I was just wondering if there are any legal issues of bidding a job with both companies separate. I am planning on keeping the two separate for now. I know this sounds a bit shady but I am tired of losing bids to contractors that the turn around and do not perform the job to the specs outlined. I notify the agent in charge and most often they dont care. My idea is to bid on the higher end of our pricing structure with one company and a bit more modestly with my other company. What are your thoughts.


----------



## grandview (Oct 9, 2005)

High bid low bid,sounds good. Use the company that you bought this way when you close it down they will be forgotten and you'll have a bigger presents.


----------



## PTSolutions (Dec 8, 2007)

thats the plan GV! Im keeping them around for a bit so its not a shock to their clients as they are in an uppity area that likes to keep business in the community. When they get used to seeing our guys/equipment for awhile then I can consolidate.


----------



## grandview (Oct 9, 2005)

Then next season you can send a letter out saying how you bought out the other company last year but your company was servicing their property.Or something to that effect.


----------



## second income (Sep 19, 2010)

That is called collusion and it is highly unethical and illegal in most jurisdictions.


----------



## mulcahy mowing (Jan 16, 2006)

I don't see how that is collusion as long as he does not own more than 50% of both outfits. Ie he owns 51% of one company and his wife/children/partner owns 51% of the other. That happens all the time and it's called smart business.


----------



## JohnnyRoyale (Jun 18, 2006)

No brainer...Just do it and dont advertise you do it. 
Two seperate companies, two different addresses, two different contacts. 
You're just making your company look better in the bid process. 
A little dirty, but not quite collusion IMO. happens all the time. 

Whats worse? What he's proposing to do or paying off a Property Manager?


----------



## dfd9 (Aug 18, 2010)

second income;1486743 said:


> That is called collusion and it is highly unethical and illegal in most jurisdictions.


I would disagree.

Just perform a higher level of service if the higher priced company wins and vice versa.


----------



## grandview (Oct 9, 2005)

Besides collusion would be between 2 or more companies and the owner doesn't have any of choice. Kind of like the Boss dealers in my area.


----------



## Luther (Oct 31, 2007)

Technically collusion is an agreement between two or more parties. In actuality he is the only party...but there are two different entities involved.

Close call.

I'm willing to bet that if your prospective clients found out they would not be very happy with you at all. You would have some splaining to do....:laughing:

From their prospective you could have just given them two different prices based on two different levels of service.


----------



## basher (Nov 13, 2004)

TCLA;1486842 said:


> Technically collusion is an agreement between two or more parties. In actuality he is the only party.. falsely representing himself as two different unrelated parties, that right there constitutes fraud.,
> 
> .but there are two different entities involved.
> 
> ...


But a bid by definition is a price based on the level of service outlined in the bid request. IMO the only way it would be legal/moral would be if the two were totally independent with separate management and had no knowledge of one another's pricing structures


----------



## grandview (Oct 9, 2005)

Shi!ts and giggles here, lets say you own a company and you buy out another company and put it in your wife name. Now if she is a certified WOSB and the place your both bidding on has the same bid specs,but the company gives preference to wosb plus a premium on the winning bid and wins but the husband does the work ,The same thing? yes or no?


----------



## basher (Nov 13, 2004)

grandview;1486863 said:


> Shi!ts and giggles here, lets say you own a company and you buy out another company and put it in your wife name. Now if she is a certified WOSB and the place your both bidding on has the same bid specs,but the company gives preference to wosb plus a premium on the winning bid and wins but the husband does the work ,The same thing? yes or no?


The Feds smacked a couple big local construction companies hard for playing a very similar game here locally. Setting up their own "minority owned" companies that then "subbed" the work back to them. They changed some of the rules on meeting MOB status based on the case.


----------



## Luther (Oct 31, 2007)

basher;1486856 said:


> But a bid by definition is a price based on the level of service outlined in the bid request.


I think there are just as many clients that don't really know what they want or need, as there are those who have a good handle on what they want with firm specs.

Options and different levels of service can give you better odds.


----------



## thelettuceman (Nov 23, 2010)

ProTouchGrounds: I would agree to put in a higher bid and a lower bid based on service level. I have worked part time in the catering business for the past 41 years. One owner / two companies / one does high end catering / one does low end catering. The owner has never been in legal trouble.


----------



## basher (Nov 13, 2004)

thelettuceman;1487111 said:


> ProTouchGrounds: I would agree to put in a higher bid and a lower bid based on service level. I have worked part time in the catering business for the past 41 years. One owner / two companies / one does high end catering / one does low end catering. The owner has never been in legal trouble.


But he is not placing competitive bids. having two companies offering different levels of service is far different than two companies bidding the same job to the same specification.


----------



## 2COR517 (Oct 23, 2008)

ProTouchGrounds;1486384 said:


> we have just had the opportunity to acquire another landscaping/snow company. Name, phone, po box and all. I was just wondering if there are any legal issues of bidding a job with both companies separate. I am planning on keeping the two separate for now. I know this sounds a bit shady but I am tired of losing bids to contractors that the turn around and do not perform the job to the specs outlined. I notify the agent in charge and most often they dont care. My idea is to bid on the higher end of our pricing structure with one company and a bit more modestly with my other company. What are your thoughts.


Submitting a dozen bids doesn't prevent Joe Snow from doing poor work when he still gets the job with the lowest bid. And you're still underbidding yourself, acknowledging you can do the job for less money. 
I hope that company you bought came with some existing contracts. Otherwise you just bought some equipment.


----------



## second income (Sep 19, 2010)

I am surprised to here on this site what some people think is legal and ethical to do. Everybody slams nationals and rightfully so but what I have read in some of the above posts is pretty shameful. Trying to be slick lands most guys in trouble!


----------



## second income (Sep 19, 2010)

Typo-- on above post "here" should read "hear".


----------



## grandview (Oct 9, 2005)

The owner still has a right to pick other company to plow,not like they can only pick from the to.


----------



## WIPensFan (Jan 31, 2009)

ProTouchGrounds;1486384 said:


> we have just had the opportunity to acquire another landscaping/snow company. Name, phone, po box and all. I was just wondering if there are any legal issues of bidding a job with both companies separate. I am planning on keeping the two separate for now. I know this sounds a bit shady but I am tired of losing bids to contractors that the turn around and do not perform the job to the specs outlined. I notify the agent in charge and most often they dont care. My idea is to bid on the higher end of our pricing structure with one company and a bit more modestly with my other company. What are your thoughts.


ProTouch, I've always respected your opinion on this site as fair and level headed. That said, this idea of yours is extremely unethical and out of bounds. I understand your frustration with losing bids and contractors not performing to the outlined specs. You don't need to deceive people to be successful. I'd like to think you're a better man than that.

BTW, I don't care if it's legal or not, it's just not right.


----------



## snocrete (Feb 28, 2009)

WIPensFan;1487560 said:


> ProTouch, I've always respected your opinion on this site as fair and level headed. That said, this idea of yours is extremely unethical and out of bounds. I understand your frustration with losing bids and contractors not performing to the outlined specs. You don't need to deceive people to be successful. I'd like to think you're a better man than that.
> 
> BTW, I don't care if it's legal or not, it's just not right.


Well said.

I'm suprised by some of the other posts.....kind of.


----------



## buildinon (Oct 6, 2011)

I know here in Illinois that alot of people do what you are talkig about and I know alot of guys have gone to jail as well for what you are talking about. Some call it "The Chicago Way"...lol...but they have tried every variation of it here and some have gotten away with it and still do, while some others have not been so lucky and gone to the clinker. I don't agree with it at all. I think that if you bought the other company out you hvae the obligation to let the customers know, and let them decide who they want to do buisness with. It is hopefully you, but sometimes its not


----------



## wewille (Jan 20, 2009)

I would agree with the naysayers. It sounds shady to me if you dont inform customers of the affiliation.

I dsont see a problem with owning two businesses, but it kind of sounds like your decieving people. I say no to this. However I feel if you can keep people informed and the affiliation between the two businesses is well known that would be ok. Just so everybody knows they are spending money with YOU. Maybe some of these new clients you have, went with this other company for a reason, like they dont like you.(im not saying thats true, I have no idea) Look at SNAP-On Tools, they are high quality and expensive. Look at Blue Point, they are cheaper and many cases foreign made, but they are owned and sold by Snap-On. They do this very succesfully, but everybody knows about the affiliation. 

I wouldnt want to have a high grade business and a lower grade business. In the landscaping/snow industry its a terrible idea who wants lower grade landscaping amd snow removal? If you do decide to offer a service at a cheaper price with this second business make sure the quality is subpar. People get what they pay for. If your second company offers cheap prices and does great work like your other company, wont consumers think your other company is gouging them?

For the most part I think your idea is foolish. Its great to own two companies, but dont decieve people and dont offer one company as cheaper. Thats just dumb. It works for snap-on and bluepoint because bluepoint is made overseas and they can offer it cheaper. You CANT offer your services cheaper.


----------



## born2farm (Dec 24, 2007)

I'm going to have to agree that this sounds shady and like a bad idea. You say after a few years you are going to merge the companies. How are your customers going to feel when they find out they have been tricked into thinking they were separate companies for the last couple years?

I say your best bet is to buy the other company out, buy what equipment you feel reasonable and hopefully sign all of the contracts. This will grow YOUR business without having to trick people into thinking your company is superior.

I do feel your pain as far as losing bids to people who do not perform the work to specs, but there has to be a level of self image and pride in your work somewhere. You don't want to make yourself look like a shady business over trying to prove a point.


----------

