Was It Wrong to Ask Ex-Colleague for The Winning Bid In a Tender That My Relative Was Unsuccessful in?

meantolive on 31/01/2019 - 13:34
Last edited 31/01/2019 - 14:40 by 1 other user

Hi OzB Community,
Just wanting to get a general view of what people think out there.

The story flow is as follows:
1) I heard that my ex-company was planning to perform major renovation works and I know a relative who owns a company that does renovations.
2) I introduced my relative to the company and he was invited to tender for the renovations works. Unfortunately, he did not get shortlisted.
3) In order to help my relative out. I asked my ex-colleague to whom the contract was awarded to and at what price (renovations work already completed). My relative could then know his competition and if he priced too high.
4) My ex-colleague politely refused with no reason.

Notes to consider about my ex-colleague.
One of the closer colleagues of a small group that had lunch together nearly everyday.
Accounts department that makes the invoice payments. Not part of the decision making committee.

Why do you think my ex-colleague politely refused to let me know? Was it ethically wrong to give this information? Would my ex-colleague get in trouble if found?

Thanks in advance!

Education & Work

Comments

  • [Deactivated] on 31/01/2019 - 13:45
    +45

    Pricing is part of business strategy especially if the business depends on winning tenders.

    You don't get to know what other bidders' autobids are set to on eBay. Same reason.

    Also, it could be part of the contract as per employment contract - Do not discuss your pay. It is a private company, they do not have to be transparent to the public.

      • DarthAntz on 31/01/2019 - 14:01
        +34

        Your relative didn't already know this? Being a financial motive, it's best to never share this information. As soon as you share it, more questions get asked. Your ex-coworker did the right thing. You should care about the company, what if it was your own company? Do you want people treating your company like that? Loose lips sink ships.

      • HighAndDry on 31/01/2019 - 14:22
        +23

        The only "loser" would be the company that won the contract which I wouldn't really care about.

        The same company that's now doing work for your colleague's company? You can't understand why they might want to have a good business relationship with that company?

        This makes you a bad employee. If anyone in our company were giving information on our company's contracts with third parties, that'd be grounds for a warning. It'd be absolutely out of line.

        And in this case it makes you a bad friend to have asked.

        • Third_Gear on 31/01/2019 - 16:51
          +9

          Grounds for a warning? Ha. Immediate firing more like it.

          • gromit on 02/02/2019 - 08:29

            @Third_Gear: exactly, this is not a warning where I work it is grounds for immediate dismissal and in some commercially in confidence contracts it would also be grounds for legal action.

        • meantolive on 31/01/2019 - 22:27
          +5

          If it were vendors that you deal with for business operations, then I totally agree with this.

          Anyway, note taken. I thought that it was "no biggie" and fine to ask. But I guess it's not. Will be tactful in the future.

          • lonewolf on 01/02/2019 - 10:59
            +3

            @meantolive: Of course on the flip side with transparency comes less corruption, from my own experience A lot of the tender processes are very corrupt where the decision making people are treated to various monetary gifts or experiences prior and post decision making on which company gets the tender.

      • Engineer13 on 01/02/2019 - 12:07
        +3

        An argument could be made that it could hurt your ex company. Maybe even then winning contractor had a lot of markup in their price. If there was future work, companies might come in with much lower margins to try to win the work. If everyone knows what a recent winning price is then they will likely only come in just under that instead of significantly under it.

  • psyren89 on 31/01/2019 - 13:59
    +25

    Why do you think my ex-colleague politely refused to let me know?

    Whole process is under NDA, most likely.

    Was it ethically wrong to give this information?

    Ambiguous.

    Would my ex-colleague get in trouble if found?

    Yep.

  • Caped Baldy on 31/01/2019 - 14:03
    +26

    Commercial in confidence. I'm guessing you didn't assess tenders in the old role.

      • cansydint on 31/01/2019 - 15:30
        +11

        him discussing salaries and other costs of the companies is him gossiping and being a fool. He probably also doesnt expect anyone to rat him out

        then you come along and ask for information on a tender where you are going to be providing confidential information to an unsuccessful company. He would be an idiot to open that can of worms

        HAVE YOUR RELATIVE ASK FOR FEEDBACK ON THE TENDER. JESUS

        • meantolive on 31/01/2019 - 15:42

          HAVE YOUR RELATIVE ASK FOR FEEDBACK ON THE TENDER. JESUS

          Yes I will.

      • Caped Baldy on 31/01/2019 - 15:32
        +2

        So because this staff mouth has a big mouth you thought you could get sensitive information to benefit a relative?

  • HighAndDry on 31/01/2019 - 14:20
    +15

    Yes. It's completely unrelated to you, and you're effectively using your position in the company to ask for information you wouldn't be entitled to even ask for, much less obtain, otherwise.

  • MrHyde on 31/01/2019 - 14:20
    +21

    definately wrong to ask. Revealing any information around tenders would be grounds for dismissal.

    Your ex-relative has the right to ask for a debrief session on why they were not selected, but they need to ask that and they will not be told who won and for how much. That information would be commercial in confidence.

      • HighAndDry on 31/01/2019 - 14:53
        +27

        I did not ask for details of the tender

        …

        I just asked how much was the contract and who was it awarded to.

        Yeah. Just the two most important details of the tender.

          • HighAndDry on 31/01/2019 - 16:02
            +4

            @meantolive: The rest of the tender document is also important. That does not make the price unimportant.

            Plus - it's one thing to gossip about this stuff to someone who doesn't care about it. It's another entirely to disclose this information to someone who your ex-colleague knows to be a competitor in the business wanting to use that information to gain a competitive advantage.

  • Baysew on 31/01/2019 - 14:30
    +23

    Tender contracts are not always given to the lowest bidder. Reputation plays a part as well eg. Connection to dodgy ex-employee.

    • HighAndDry on 31/01/2019 - 14:35
      +5

      And literally any other number of factors - competitor could've guaranteed an earlier completion date, free inclusions, had provided advice on the tender which demonstrated special expertise or competence, was able to source materials for cheaper (if the tender was for labour only), etc. All of which are/could be sensitive competitively. And the fact that OP's relative wasn't short-listed makes me think it wasn't just price that was the issue.

    • JelIyfish on 01/02/2019 - 13:23
      +3

      “Connection to dodgy ex-employee“

      Hahaha

  • Topdog on 31/01/2019 - 14:33

    Maybe a do not disclose agreement/contract had to be signed.

    • meantolive on 31/01/2019 - 14:48
      -6

      Ex-Colleague only makes the payments. Not part of committee, no NDA signed.

      • HighAndDry on 31/01/2019 - 14:53
        +3

        Your colleague works for the company. The company may have signed an NDA. A lot of these contracts include confidentiality provisions by default anyway - AND EVEN IF IT DIDN'T - there's no reason your ex-colleague should've told you anything.

      • MrHyde on 31/01/2019 - 17:11
        +1

        It doesn't matter if he was part of the committee or not. Every employee is covered by the tender rules. In places I have worked, every employee had to declare conflict of interests with any other business that was responding to tenders - no matter if you were part of the process or not. If you had a conflict of interest, then processes were put in place to ensure Chinese walls between anything to do with the tender and you.

      • p1 ama on 01/02/2019 - 02:32
        +3

        NDA or not, why are you acting like your ex-colleague owes you something? He answers if he wants to answer, he doesn't answer if he doesn't want to. End of thread.

  • Fier2 on 31/01/2019 - 14:42
    +12

    This is so wrong to ask your "ex-colleague" about it. And that person did the right thing by not disclosing the information to you as it doesn't concern you at all. If it was you in the same position, the company have the right to "fired" you on the ground you disclosed "private informations" related to the company.
    You relative's company should win the contract on merit and ideas and not trying to take shortcuts. I wouldn't hire a company that suddenly change their prices because they "overheard" something.

    • Adz81 on 31/01/2019 - 15:03
      +2

      I was going to actually write a reply, but this pretty much closes the case out.

    • meantolive on 31/01/2019 - 15:15
      -7

      (renovations work already completed)

      Knowing the price was not about winning the contract. It was already a done deal.
      It was more of knowing who the competition is out there. e.g. If they were priced lower, maybe my relative should start revising his prices.

      If it was you in the same position, the company have the right to "fired" you on the ground you disclosed "private informations" related to the company.

      "Private Information" seems very grey. Same employee makes remarks of another vendor charging X amount for simple work done. Makes remarks on Y employee being underpaid by the company. Is that considered private? I'm sure some people here are guilty of these. But I guess you choose what "Private information" to share and what not to. Voluntary VS Obliging.

      This is so wrong to ask your "ex-colleague" about it.

      If the same was asked to me, I would provide to help my ex-colleague.
      My train of thought is that it doesn't harm my employer and I'm helping a friend.
      If my moral compass is off-tangent, I would like to know.

      • HighAndDry on 31/01/2019 - 16:01
        +3

        You concede this:

        The only "loser" would be the company that won the contract which I wouldn't really care about.

        You fail to realise that if word gets out that the leak gets back to this company it would reflect badly on your ex-company, and you understand that you're doing this to give your relative a competitive advantage at the expense of another company.

        If my moral compass is off-tangent

        Just a tad.

        • meantolive on 31/01/2019 - 22:37

          You fail to realise that if word gets out that the leak gets back to this company it would reflect badly on your ex-company

          This is something I did not consider. Which is a very good point.

      • p1 ama on 01/02/2019 - 02:34
        +6

        If my moral compass is off-tangent, I would like to know.

        The fact that you put a mate in this situation AND don't even realise what you've done…

  • Tech5 on 31/01/2019 - 15:06
    +4

    The first rule of companies is: You do not talk about the companies business to non-employees. This is legit written in bold words in every company hand book I have ever seen. The fact that you sound offended in OP and are defending your opinion to other posters here reeks of self centered-ness

  • blitz on 31/01/2019 - 15:08
    +2

    I asked my ex-colleague to whom the contract was awarded to

    Had his answer been anything other than "no comment", what would you have done with this information? Pointless to know the amount without knowing the agreements behind it. And had this person disclosed anything else, they could have really stuffed the process up, jeopardizing their job, the contract, the tender process and your relationship.

    Myself, I would not have asked my ex-colleague so as not to put them in an awkward position.

  • Baysew on 31/01/2019 - 15:13
    +1

    If you think its all above board, why not just ask the boss for the details of the tenders?

    • meantolive on 31/01/2019 - 15:33

      Very good point.
      I would ask the boss for feedback on my relative's tender.
      He should be able to provide feedback other than just price, like what HighAndDry commented above e.g. competitor could've guaranteed an earlier completion date

      • Toons on 31/01/2019 - 17:25

        He should be the one asking? it makes it much more transparent and he will probably have more success in gaining useful feedback.

        He won't get the answers to the point or specifics like your example, but he could get pointed in the right direction.

  • Ugly on 31/01/2019 - 15:24
    +8

    From The Australian Standard Code of Tendering AS 4120-1994:

    All clients emphasise the need for ethical behaviour at all levels of a project. These expectations are essentially based on the following nine ethical principles:
    - all aspects of the tendering process must be conducted with honesty and fairness at all levels of the industry
    - parties must conform to all legal obligations
    - parties must not engage in any practice which gives one party an improper advantage over another
    - tenderers must not engage in any form of collusive practice and must be prepared to attest to their probity
    - conditions of tendering must be the same for each tenderer on any particular project
    - clients must clearly specify their requirements in the tender documents and indicate criteria for evaluation
    - evaluation of tenders must be based on the conditions of tendering and selection criteria defined in the tender documents
    - the confidentiality of all information provided in the course of tendering must be preserved
    - any party with a conflict of interest must declare that interest as soon as the conflict is known to that party

  • swapsey on 31/01/2019 - 15:29
    +10

    I wouldn't share that info either. You should send the ex-colleague a gift for being a person of integrity and ask to be forgiven for putting them in the uncomfortable situation of saying no to an obvious question.

  • jjjaar on 31/01/2019 - 16:00
    +3

    Not wrong to ask, but not wrong to not tell. I think they were being professional by saying no. In my company we always ask why we weren’t successful and very few say who won the bid and for how much.

    • HighAndDry on 31/01/2019 - 16:04
      +1

      What bothers me about this, is - as opposed to the losing tenderer asking upfront for feedback - this is OP obliquely asking an ex-colleague he knows tends to gossip to get this information. It's underhanded and implies OP knows this is unethical.

      • meantolive on 31/01/2019 - 16:29
        -2

        Not really.
        I'm didn't target my colleague because I know he gossips. I'm asking because he makes payments on company invoices.
        Also, we just met up and he spoke about where the staff worked when office renovations were going on.

        • HighAndDry on 31/01/2019 - 16:31

          Ah, okay. My bad then. Still - he definitely did the right thing by not telling. Your relative should ask the company directly for feedback.

      • jjjaar on 31/01/2019 - 16:42

        That’s very true. The relative could (and should) have just asked themselves.

    • gromit on 02/02/2019 - 08:51
      +2

      No it is actually VERY wrong to ask. You are in effect asking for confidential information to which you have no entitlement and putting a supposed friend in a awkward situation where they must legally refuse your request. The company itself can ask for feedback on their failed tender, as a 3rd party he has no rights to information on the successful OR failed tenders.

  • hikaru78 on 31/01/2019 - 16:29
    +3

    The ex - colleague doesn't have to give you a reason, what makes you think he owes you that.

    Why didny you family member ask via official channels, if the there werent given an answer, guess what that is the only answer your going to get

    • meantolive on 31/01/2019 - 17:17
      -3

      I was just surprised that this information wouldn't be shared as I thought it would be fine.
      But I guess the consensus here is that it is considered private company information and will land you in trouble if shared without external parties. Guess that's the reason why my ex-colleague didn't share as well.

      Why didn't you family member ask via official channels

      I don't know if they did or not. I thought to just provide information I thought would help them if they did not already have it.

  • bargainhunter87 on 31/01/2019 - 16:51

    Having lunch with someone in order to obtain important company information… tsk tsk tsk

    • meantolive on 31/01/2019 - 16:59
      -4

      Come on… in all honesty, that wasn't the agenda. Besides it was a meeting with my lunch group

  • Toons on 31/01/2019 - 17:20

    I can only go from my own experience and the code of conduct in the places I've worked, we can't divulge that kind of information without written permission from whoever controls that area of the business as it's generally bound by confidentiality, this is to prevent unsucessful bidders from taking unjust action because the bid comes down to a lot more than just dollars and cents for any decent business. (this also could possibly be why they choose not to ask the question it could make things awkward for them at work).

    The ex colleague did you a favour getting your uncle's company in the mix, sometimes getting on the list can be hard work itself, it's a starting point. He has to keep trying to win not just the big ticket items but get some runs on the board, even subcontracting to the company that won will start revealing a lot and get his name and face known.

    Unfortunately this is where his own understanding of costs comes in, he would or should know his normal opposition and networking will enable him to query some of these things, including with whoever he was dealing with for the bid ask the questions, if they are fair they may not give the full run down but they may provide some useful feedback. Also utilising the suppliers for information and building those relationships may give him insight, they might have a better pricing structure negotiated on materials based on consumption, rather than low volume ad-hoc for example.

    I used to work in a bid team and the amount of work that goes into large tenders is unreal, the amount of information, presentation all come into play.

    I mean even if for arguments sake his bid was identical to the winning company in reality who would you go with, the known quantity or the new player?

    I say that with no disrespect it's an honest answer at times.

  • Wystri Warrick on 31/01/2019 - 20:30
    +1

    Was It Wrong to Ask Ex-Colleague for The Winning Bid In a Tender That My Relative Was Unsuccessful in?

    Misread that as Tinder, came here for something juicy but was disappointed…

  • Domingo on 01/02/2019 - 00:24

    It is not wrong for you to have asked, as the requirement to keep things commercial in confidence private is on your ex-colleague, not you.

    However you shouldn't be annoyed that he declined to answer. He was following the rules around his position and the sensitive information he had access to.

    The requirement is on those with the information not to disclose, not on those who want to know it to not ask.

  • [Deactivated] on 01/02/2019 - 01:09
    +1

    Was it ethically wrong to give this information?

    YES!

    Also almost certainly a criminal offence ('white collar crime' , yet still crime) . Not sure what section of law it would come under, but to shareholders and/or owners of company, this would be a very serious act against their interests and the companies interest, for personal gain of your relative at the expense of the company and shareholders.
    Maybe it would be classed as 'fraud' , definitely unlawful and unethical.
    Think yourself lucky he didn't report you and your relative to authorities.
    Everyone should quote their best price in bidding for the contract. Simple as that. Fine to negotiate from there, if that's how things are done, but negotiate fairly not with dodgy anticompetitive tactics.

  • p1 ama on 01/02/2019 - 02:29
    +13

    You've been terrible to your ex-colleague. You put him in between a rock and a hard place by asking him something he could be fired for disclosing, whilst not answering makes him look like a bad friend. And on top of that, it wasn't just a conversation or curiosity, you were clearly in it for personal (or your relative's) gain.

    After all that, you still have the nerve to go on and complain on a public forum about your interactions with the poor guy. This is probably such an oddball case that he'd realise exactly you were talking about him if he read this thread. What right do you have to make him respond anyway? You even went on to describe his lunch behaviours and that he works in an accounts department. So now most people in that lunch group can probably identify him.

    Get your act together OP. You owe your ex-colleague an apology.

    • Bobby Hill on 01/02/2019 - 06:26
      +12

      Agree p1 ama.

      Was it ethically wrong to give this information?

      OP, if we put legal guidelines, codes of conducts and standards aside, surely you would have been able to answer your own question and realised that your actions were ethically wrong?

      Facts:

      • You asked an ex-colleague, of whom you knew had access to confidential company material, for tender pricing information in order to make a financial gain.

      • You stated that "the only "loser" would be the company that won the contract which I wouldn't really care about".

      • You appear so nonchalant about putting your ex-colleague in an uncomfortable position, let alone putting his employment at risk.

      • You seem oblivious to the role of an employee. They are being paid and trusted to access sensitive company information in order to benefit the company, not so they can make a secret financial gain for themselves, let alone provide information so that their ex-colleague could profit.

      • You see, for yourself, the value and importance of knowing the tender price and to whom the tender was awarded to, but completely ignore and dismiss the value that it may have to others.

      • You don't consider the information you requested to be private, but you ask an ex-colleague who is "not part of the decision making committee" for this information, instead of going through the official channels and asking the appropriate people.

      • Irrespective of whether or not laws were broken or whether contracts were breached, you fail to see the impact of anti-competitive behaviour.

      Yes, your moral compass is off-tangent.

  • ankor on 01/02/2019 - 07:32

    wow.. just wow. p1ama and cryptonator have already said enough.

    But hey, if you ever get found out and fired, let me know how the job search goes afterwards.

  • DiscoJango on 01/02/2019 - 08:40

    Dont mix family/friends with business. Your ex colleauge knows this all too well.

  • 2ndeffort on 01/02/2019 - 09:35
    +2

    Your relative who lost the tender should politely request a debrief from the people doing the shortlist. Most companies are OK to give you some feedback, Government departments are obliged to give you feedback. If granted the feedback opportunity is for you to understand what you can do better int he future, not, unfortunately as some see it, an opportunity to complain and get back at the people that didn't choose them.

    Often in debriefs you can ask about pricing and you will be told that you were in the bottom quartile or were substantially more expensive etc. Rarely would you be told the winning price. if it is a sizeable government contract you can look it up months later (they publish government accounts).

    I have actively submitted bids that I knew wouldnt win just to get a debrief at the end, particularly when i was breaking into a new market or a key new client. As they say with footy, sometimes you have to lose one in order to win in the future. I've had bids that I lost where the debriefing folks told me they loved my bid and asked me if i would like to be shortlisted for another opportunity coming out in a couple of months time etc.

    Dont be bitter, play the long game and never put your network of former workmates in compromising awkward positions

  • Oneguyinmelb on 01/02/2019 - 09:42

    Whomever submitted the tender from you ex-company should be contacting the procurement manager to obtain feedback on why they didn't win the tender. Other than an introduction, you shouldn't have any further part to play.

    If you're currently employed by the government, then the price of the successful bid would likely be published online (depending on the threshold…usually 100K+ must be publicly listed…though if you work for a private company, they have no obligation to publish or share that information.

    Just reading the description of how you went about this feels very unethical. It's fine to refer an open tender to a family member or ex-company, though you should disclose it with your current company and notify them there could be a (perceived) conflict of interest.

    You certainly haven't made the situation better by asking for prices after you ex-company didn't win, and feeling as though you should have access to this information.

  • Slippage on 01/02/2019 - 10:01

    I think you've just tested the friendship and found out it was not as good as you thought, possibly burnt it.

    I suspect all the documents with the information you are requesting are also marked "commercial in confidence" or there abouts and if that's the case, it's non yo business

  • Typical16-bitEnjoyer on 01/02/2019 - 10:19
    +1

    This thread is painful.

    I can hazard a guess why OP is an "ex" employee.

    Tenders are confidential period. It's in the best interests of BOTH parties for numerous reasons already given above.

  • [Deactivated] on 01/02/2019 - 10:54

    He probably refused because it was none of your business.

  • myusername on 01/02/2019 - 11:41

    you'd make a great politician with these morals

  • adante on 01/02/2019 - 11:49

    follow up qn is it wrong to kill and steal??? if so why???

  • snacky09 on 01/02/2019 - 12:30
    +2

    I run tenders for a living. In no way ever would I discuss tender pricing with anyone that is not nominated on the evaluation team. We sign confidentiality agreements as part of this process.

    I provide feedback to all my tenderers who ask. I do provide feedback on whether price was a factor but I do not at any time ever tell losing bidders what the winning price was. I also evaluate tenders on far more items than just price.

    I agree with one of the posters above, you should apologise for putting your colleague in that position, congratulate them on their ethics and get your relative to seek their own feedback via the tender process.

  • pformag on 01/02/2019 - 12:50

    Your relatives' bid was too high or your ex-employer doesn't trust your judgement anymore and thus put in the "too hard basket".

  • drfuzzy on 01/02/2019 - 12:59

    I'm puzzled why you are even asking this.
    You have made a mistake by sticking your nose in this.
    Your colleague may have reported you to the tender team leader - that would be the process in companies I have worked for.

  • berger on 01/02/2019 - 13:01

    The price might not have been the reason your family member missed out.

    Could be any of the reasons below
    Price
    Previous projects the winning builder has done
    Effeciency/time frame to complete
    Quality
    Past history with builder(may have used a few times and been quite happy)

    Sometimes a builder has already been chosen, but they need to put tenders out to keep everyone honest

    I'm currently going through a tender process and its quite annoying not knowing what other parties are doing, but at the end of the day i'll put my best price in and we see what happens. If i miss out, i just have to move on

  • meantolive on 01/02/2019 - 13:27
    +1

    ok. I admit prior to this post, I was clearly oblivious to the sensitivities around such information.

    I would not have put my ex-colleague in a difficult position if I knew my question would have done so. As I said before, if roles were swapped, I would share it (obviously not if I signed a NDA), but now knowing the consequences, will probably not.

    I would also like to know if it is okay for me to ask questions such as: "How much is the company renting their office space for?"

    • Oneguyinmelb on 01/02/2019 - 13:32
      +1

      You could ask it, but the company or your co-workers that know this information have no obligation to share it with you.

      Why would you be asking this questions anyway and What would you do with it? Is it actually relevant to your role?

      Would you share it with other parties that are looking to tender for work? If so, you're potentially giving them an 'edge' in their tender response which is unethical, as parties responses should only be based off the information provided to them in the request for quote.

      Your expectations and behaviour is probably raising red flags….if you continue, don't be surprised if your overlooked for promotions.

      • meantolive on 01/02/2019 - 13:45
        +1

        You could ask it, but the company or your co-workers that know this information have no obligation to share it with you.

        Yes I understand they have no obligation. But if shared, will this land you in trouble as well?

        Your expectations and behaviour is probably raising red flags….if you continue, don't be surprised if your overlooked for promotions.

        Well, good thing I posted this question. Now I know my faults.

        • p1 ama on 02/02/2019 - 00:51
          +1

          Yes I understand they have no obligation. But if shared, will this land you in trouble as well?

          The answer to this question is incredibly broad because it depends on the framing. For example, will speeding land you in trouble? It can, but it's not likely. Some people choose to speed because of this fact, however, not everyone will choose to do so and it would be morally questionable to encourage (or force) someone to speed when they do not wish to do so.

          Same situation here, really. People can and have been fired for "revealing" secrets, especially when the stakes are high and the information particularly sensitive (as tenders obviously are). In fact, people have probably been let go for much less serious offences. You are right that your mate (or ex-mate after this whole affair) would probably not get in trouble revealing things to you, but there is a risk for him and it's a silly risk to take given he benefits nothing from sharing this information with you.

  • outlander on 01/02/2019 - 13:45

    Its one of those things where it would be better for everyone if it was more open, but on an individual basis there is an advantage to keeping it secret. It allows the bidder to charge higher prices and use (relatively small) bribes to secure the contract, and the tenderer gets access to bribes and avoids having their decisions questioned.

    People will defend the process, mostly because they're stupid and don't really understand how the world works and are so heavy in denial about it that they can't even admit it to themselves, but theres no sacred reason why things like that should be kept secret. The most valid reason is to avoid giving information to enemies that could use it to cause damage to you, but the cure is worse than the disease.

    Even so, what can you do? You're not exactly clean yourself. Sounds like your trying to use your privileged position to facilitate nepotism.
    How much was your relative going to give you as a kick back?

    • meantolive on 01/02/2019 - 13:59

      How much was your relative going to give you as a kick back?

      Probably just brownie points. My relative never asked for it.

    • leiiv on 01/02/2019 - 16:18

      If the tenderer is a private company (which is the case here), is there any benefits in making everything transparent to everyone? Only the supervisors and bosses of the decision maker would really care about the process and results. Imagine an open online tender where everyone can see everyone else prices and submissions. Will such a system work? Is there even any supplier willing to go through that super open process?

      Perhaps we all should get all our plumbers, electricians, and tradies through such process.

      • outlander on 01/02/2019 - 18:31

        Massive benefits. Freedom of information allows everyone to make much more informed choices, and it has positive effects in unpredictable ways. But its just one of those things where the benefits are readily apparent from a societal perspective, but from an individual perspective all you see from participating are the potential losses. The much better strategy seems to be to use whatever information you can get from others, but not give any of your own. Its a strategy that empowers the individual but weakens the group

        I mean, its the same thing everyone goes through with salaries. You want to know what everyone else is making so you can better negotiate your own salary, but nobody wants to reveal what they make because, although your not sure how, you feel that it will come back to bite you in some way. Rude to ask, rude to talk about, but no one can really say why. End result is, employees as a group end up making less.

        So how do you overcome it? What do you do?

    • p1 ama on 02/02/2019 - 01:05
      +2

      People will defend the process, mostly because they're stupid and don't really understand how the world works and are so heavy in denial about it that they can't even admit it to themselves, but theres no sacred reason why things like that should be kept secret. The most valid reason is to avoid giving information to enemies that could use it to cause damage to you, but the cure is worse than the disease.

      You've written a lot using flowery language, but most of what you say is completely untrue based on economic theory. I studied auction theory extensively when I did my PhD and ended up working as an economist specialising in pricing for a government agency for many years.

      I'll try and explain the basics of the matter. Most auctions we see (e.g. eBay auctions) are very similar to (but not exactly the same as) the very well-studied Vickery (or second-price sealed-bid) auction. There are two defining characteristics of this auction - firstly, nobody knows anybody else's bid, and secondly, the winner pays the second-highest bid. You've probably bid on things on eBay so you'll know how this works.

      The reason why this auction is ideal is because of two main benefits:

      1) Incentive compatibility, which basically means that each bidder will truthfully reveal what their valuation of the item is through their bid.
      2) Ex-post efficiency, which is that the bidder with the highest valuation will win the auction.

      In other words, the auction is theoretically set up so that people bid honestly. Imagine any other sort of auction and you will see that this is usually not the case. As an example, consider:

      1) A sealed-bid first-price auction, where bids are unknown, but the winner pays his bid, not the second-highest bid. In this situation, you have an incentive to under-bid and only put in a bid slightly higher than what you think the other guy will put because if you bid too high, you'll have to end up paying a much higher amount. E.g. you bid $10 and I bid $15, I'll have to pay $15, so I have an incentive to guess your bid and only put $11.

      Whether bids are revealed or not is actually completely irrelevant. A similar auction where bids are known is known as an English auction. If valuations are private (i.e. your valuation of an item does not depend on mine), then the English and Vickery auctions are theoretically identical.

      • outlander on 02/02/2019 - 12:12

        Hmmm… Well I'm inclined to believe you after you said you studied auction theory and wrote a phd on it, and my own words are, well, just bullshit I cooked up in my head to entertain myself. I'm guessing a lot of members here will react the same way. I'm guess thats why you wrote it.

        However a lot of what you wrote just plain doesn't make sense. In your example 1, how do you guess my bid and put $11? Why not $16, or $5? Also you're talking about it from the opposite perspective, not only from the bidders point of view, but also from the angle of getting the most money for selling something, which is a little confusing. With economies, you want everything sold for the lowest price, not only so there's a constant pressure to lower prices, but also so that the people with the most capability are free to pursue new lines of thought. You want Einstein researching his theories, not working a patent job that any old joe could do.

        Then again, maybe that is the point of your system. Confusion. Your explanation is confusing, but the basic tenants are relatively straightforward. That's generally the sign of a system that has been explicitly designed to confuse people to make them easier to predict and control. You say something unintuitive, wrap it up in authoritative markers while basing it in simple easy to understand terms, and most people, despite having no idea what its about, will go along with it out of a desire to not appear stupid. Not only that, instead of being cautious they go full throttle, because they're scared but can't admit it. Metaphorically they become someone who covers their eyes, steps on the gas, and hopes that the person in charge of the wheel knows how to drive. Its a very, very powerful system.

        Generally if I was a contractor working in the absence of information, my approach would be to adopt a bidding structure of costs+%. I would start by bidding high, but as I failed to secure contracts and my working hours fell I would lower my bid, because an hour spent working at low profitability is better than one spent doing nothing. Then if I was working too much, I would raise my bid, so that I could capture more profit. Eventually after enough iterations you get a sense of where the markets at, and can make bids with a reliable probability of success. I am guessing this is how most companies do it, and so all your secret bidding system really achieves is to keep new players, who don't have that historical data to guide them, out of the market (in addition to the other stuff I mentioned before)

        • p1 ama on 02/02/2019 - 13:37

          In your example 1, how do you guess my bid and put $11? Why not $16, or $5? Also you're talking about it from the opposite perspective, not only from the bidders point of view, but also from the angle of getting the most money for selling something, which is a little confusing.

          How I guess your bid is besides the point, the point is that I do not bid honestly, where an honest bid is defined as what I am willing to pay for the item. This creates inefficiencies in the auction and is generally not good.

          With economies, you want everything sold for the lowest price, not only so there's a constant pressure to lower prices, but also so that the people with the most capability are free to pursue new lines of thought.

          Competition will lower prices, that's a separate issue to how you design an auction.

          Then again, maybe that is the point of your system. Confusion.

          None of this paragraph is actually true. There's a significant amount of research that goes into how people design auctions and what the "optimal" auctions in various systems are. The study of auction theory (or mechanism design) is no different to any other science. Whether something is intuitive is actually irrelevant, just like it may not be intuitive that humans evolved from apes, it is nonetheless the settled science.

          Generally if I was a contractor working in the absence of information, my approach would be to adopt a bidding structure of costs+%. I would start by bidding high, but as I failed to secure contracts and my working hours fell I would lower my bid, because an hour spent working at low profitability is better than one spent doing nothing. Then if I was working too much, I would raise my bid, so that I could capture more profit. Eventually after enough iterations you get a sense of where the markets at, and can make bids with a reliable probability of success. I am guessing this is how most companies do it, and so all your secret bidding system really achieves is to keep new players, who don't have that historical data to guide them, out of the market (in addition to the other stuff I mentioned before)

          This demonstrates that you understood nothing of what I wrote. The point is that you honestly bid how much you are willing to do the job for. If you are willing to do the job for $1500, you bid $1500. If you are willing to do the job for $1100, you bid $1100. This is the entire point of designing an efficient auction. What a good auction system weeds out are people who are willing to do the job for $1100, but will bid $1500 because they believe that the next lowest bid is $1501, hence, they are being paid more than what they would accept.

          What you are describing is what we want to avoid, i.e. people playing games and trying to do things for a higher price than what they would actually be willing to accept. If they bid honestly and they get rejected, it means that they're charging too much and they should (rightfully) be overlooked in favour of someone who can do it more efficiently. In fact, this is what you said at the beginning of your post, that we're interested in reducing prices.

  • filfa on 01/02/2019 - 14:06

    Yes, and your ex-colleague was justified to not tell you. It is very unprofessional.

  • trapper on 01/02/2019 - 14:36
    +1

    Absolutely unethical even asking this.

  • JimmyF on 01/02/2019 - 14:42
    +1

    I asked my ex-colleague to whom the contract was awarded to and at what price

    Oh..

    My ex-colleague politely refused with no reason.

    Your ex-colleague did the right thing. Surely you don't need to ask the 'public' why this is wrong on so many different levels!?

  • TheBigShort on 01/02/2019 - 15:15

    I guess there weren't nearly enough lunches you've had together…

  • Micko179 on 01/02/2019 - 15:40

    You're not a Politician by any chance?! 🤔

  • innov on 01/02/2019 - 16:34
    +1

    Was it ethically wrong to give this information?

    Definitely ethically wrong to ask.

  • Ononono on 01/02/2019 - 19:21

    The whole thing is dodgy and it seems to surprise you that people don't want to get involved? I'm sure they didn't even want to let your relative bid in the first place. Cut out the bullshit, people can smell it from a mile away

  • Maxxjet on 01/02/2019 - 19:54

    Your ex colleague’s refusal keeps the commercial environment in Australia clean and away from corruption. He/she is so commendable !

  • lookingforTV on 01/02/2019 - 22:15

    I can’t believe the audacity in this question…

  • UFO on 02/02/2019 - 01:29
    +3

    This ex-colleague of yours that you had lunch with in a small group… your lack of concern for his employment is disturbing.

    Yes he may not be part of the decision making process on who got the tender, or subject to the tender non disclosure restrictions specifically, but he certainly has access to financial records that are no business of yours- and not to be shared with outsiders.

    The fact you thought it ok to ask him to risk his job for you is a big concern.

    He is in the Accounts Department, and there is a huge expectation that people in that area DO NOT share financial information with outsiders. Especially not ex-employees looking to further their relatives future income prospects. Your friend could not only lose his job, but if any financial damage was caused by leaking that information as you've asked, he could be sued for damages!!

    I know you've asked this question openly and honestly, but the lack of morality on your part is quite scary to be honest. You obviously don't consider anything you've done to be wrong, but you've put your ex-colleague/friend in a very compromising position, and thankfully he did the right thing.

    I don't know if it's a culture thing? But this is definitely not good business acumen here in Australia.
    That's not to be misconstrued as a racist comment. I'm a first generation Australian myself. But your lack of understanding in business ethics leads me to believe that they way you've been brought up in business is different to how business is done in Australia.

    You're probably surprised at the negative votes to a lot of your comments, am I right?

    It's not how its done mate. Not good.

  • h4zey on 02/02/2019 - 09:37

    seems OP doesn't get the answer he wanted, so here we go.

    yes he is a prick, he should have told you what you wanted! hope you didn't pay for the lunch.

    so can we move on now?

  • SpotTheOzzie on 02/02/2019 - 10:37

    Put yourself in his shoes. If you got asked what the lowest bid was by a former colleague would you give that information up? Nah because you enjoy employment right.

    • meantolive on 02/02/2019 - 23:11

      Not really. I would because I was oblivious of the sensitivies around that information. But i guess that's gonna change now.

  • sillyguy on 02/02/2019 - 11:24

    Honestly, were you pissed when your colleague politely refused to answer your question?

    And I guess in their book right now you're the nosy guy.

    • meantolive on 02/02/2019 - 22:57

      I wasn't pissed at all. More of puzzled, hence my post. As I said earlier above, I would tell if roles were swapped as I didn't have a clue of this sensitivities around this.

  • mychips on 02/02/2019 - 11:30
    +1

    Its a huge conflict of interest. In case your ex-colleague has no obligation and in fact probably has a direct interest not to let you know due to NDAs.

  • ThadtheChad on 02/02/2019 - 11:43

    Yep that would be commercial-in-confidence information. Your buddy would have been up the creek without a paddle if that got found out. Depending on the type of organisation, there may actually be charges filed.

    It was very poor form asking him to disclose commercially sensitive information. As someone else mentioned in this thread, you should probably apologise to your mate for putting them in such a situation.

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