# Independant Contractor - legality of dictating bids?



## FearlessTeapot (Oct 12, 2012)

I'm not sure if this has come up yet, as I haven't seen it here. I was always under the impression that a client may not dictate bid prices to an independent contractor, in any industry. Am I incorrect, or should things like grass bids be actual bids? Nationals require you to submit a bid under your own name, following their price sheet. (For some, it is literally a Kelly Blue Book which asks for things like dimensions and grass height, and spits out the required bid price.)


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## BPWY (Apr 12, 2012)

Telling some one what they can bid is not legal in my book. 
That would make them your employer and you their employee. 
I tell my employees all the time what I will pay them, whether its by the hour or by the job.


This how ever is my opinion, you may wish to consult a lawyer.


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## GTX63 (Apr 12, 2012)

FearlessTeapot said:


> I was always under the impression that a client may not dictate bid prices to an independent contractor, in any industry.


They can solicit contractors and lay out a framework of what they will pay, then it is up to you to accept or decline the terms.
Where I see the line crossed is when you submit a detailed estimate to a National/Regional, only to have them alter or dictate wording, pricing, and specific discriptions of your scope of work and then submit it to their client. You are not bound to anything, regardless of what they may tell you, and that can actually constitute fraud.


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## BamaPPC (May 7, 2012)

you need to really read and understand your vendor agreement. When you signed up with the company, you signed an agreement or contract. It will specify what is allowed and what isn't.

Check it out. If they aren't allowed to dictate...it's a breach of contract and a lawsuit waiting to happen.


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## FearlessTeapot (Oct 12, 2012)

BamaPPC said:


> you need to really read and understand your vendor agreement. When you signed up with the company, you signed an agreement or contract. It will specify what is allowed and what isn't.
> 
> Check it out. If they aren't allowed to dictate...it's a breach of contract and a lawsuit waiting to happen.


Not sure how much that applies. For example, even if you sign an agreement to, say, work for $1/hour, it still isn't legal. 

I'm simply wondering what the dividing line is for bids. I guess it's close enough that one would need to have a judge worry over it. The Nationals are just sort of pushing the boundaries, as it were, of what constitutes an independent contractor. They dictate prices and timetables pretty heavily. They require 'bids' to show to their investors, that are actually not bids at all, but set prices based off a blue book value. I mainly posted here wondering if anyone has questioned this in a legal setting yet.


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## BamaPPC (May 7, 2012)

I haven't asked about the independant contractor status, but I have asked about dictating prices in the sense of reducing bids before they are sent to the client.

Short answer - read your agreement. Possible breach of contract. Not fraud. Fraud is criminal, breach of contract is civil.


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## SwiftRes (Apr 12, 2012)

I am not sure how they do it but my 2 cents:

If you bid $1000, and they tell you that you are approved at $800, you have the choice to accept/decline, I don't see an issue with that. I have done that with vendors, essentially telling them their price is too high and if they will accept $X, they can start.

If you submit a bid for $1000, and they submit $800 on their letterhead, again nothing wrong with that.

My only issue would be if they submitted $800, somehow indicated that you bid that amount. But, really that's not in their best interests. If anything, I would see them INFLATING your bid to the client, then getting you to do it for less. Which again, really, isn't wrong unless they are telling the client that you specifically bid more or less than you really did.

Bottom line, nobody is dictating you to work for that price. They are offering a job at a specified price for you to accept or decline. They may threaten reducing future work by not accepting, but I don't see that as illegal either.


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## P3+ (Aug 16, 2012)

Forcing you to bid $xxx is not necessarily illegal, but it is borderline. By legal definition a Bid is essentially an invitation to solicit services/goods for a set parameter. Neither party is bound to fulfill set parameters until a binding contract is in place. Once set contract is executed, that is when it gets very convoluted. 

As Swift has already eluded to, my issue has never been with Company A (general) trying to haggle with Company B (sub) over bid amounts.
However, I do have serious problem with Company A dictating that for Y purposes your bid must be X amount of dollars. At that point it is simply a NOT a contractor-sub contractor relationship any longer.


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## FearlessTeapot (Oct 12, 2012)

P3+ said:


> However, I do have serious problem with Company A dictating that for Y purposes your bid must be X amount of dollars. At that point it is simply a NOT a contractor-sub contractor relationship any longer.


This is the main thing I was talking about. They require us to fill out a "bid." The way we do this is by going to their website, entering a portal to an online estimator site (which is created by Blue Book,) and entering in the parameters of whatever we are 'bidding.' 

For example, if we want to bid trimming trees off a house... Instead of providing a true estimate, we go to an online estimator, select from a listing of services "Trim Tree 1 ft off home", list it as a 10 ft tree, and hit enter. It spits out our bid for us. It doesn't matter how thick the hanging branches were or how much it costs to dispose of the branches. The site says $70 (I don't remember the amount, just giving an arbitrary number.)

To me, this is already shady. But following this line of example:

A few days later we get a work order. "Go trim tree 1 ft off home for modified bid approval of $35." We have no recourse. If it's truly outrageous, we can refuse to do it, at which point they will get someone else to do it. (I presume.) They are pushing to do away with this, however. We recently received a memo stating that we will no longer be allowed to refuse modified bids. 

How is this even a bid anymore? I seriously doubt HUD is modifying everything to below what their blue book says it's worth.


Edit: A seperate example. Much less severe, but to me, still shady. We get a work order, says "provide bid for grass recuts on X property, 15kSq ft lot." We bid $80 (example, again.) We get it Returned, with the comments, "Kindly modify bid to $50." Again, why did you even ask me for a bid in the first place? It's for their investors to look at, like it was a true competative 3rd party bid.. when in fact it was a dictated price.


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## BPWY (Apr 12, 2012)

FORCING you to accept a bid cut IS NOT in my opinion a proper independent contractor relationship.


Instead of asking a sympathetic peanut gallery look in your local phone book and call a lawyer that specializes in contract law for your state.
Then you'll know for sure.

Once my local summer work slows down a little more I'm going to be getting some legal help with contracts for my state laws.


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## kninegirl (Jun 29, 2012)

Sounds like MCS to me...:glare:


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## GTX63 (Apr 12, 2012)

FearlessTeapot said:


> I'm not sure if this has come up yet, as I haven't seen it here. I was always under the impression that a client may not dictate bid prices to an independent contractor, in any industry. Am I incorrect, or should things like grass bids be actual bids? Nationals require you to submit a bid under your own name, following their price sheet. (For some, it is literally a Kelly Blue Book which asks for things like dimensions and grass height, and spits out the required bid price.)


 
I am not an attorney, although I have stayed in a Holiday Inn Express.

People, this subject is going down a rabbit trail. Mr. Teapot is only asking how they are able to modify your bid and hold you to it. There are no contracts that in any way enable the client to force a sub to use their pricing matrix.
If any are written they are bogus. It doesn't matter if it is XYZ Inc in NY or Joe Smith next door. If they alter your bid without your consent it is no longer valid. If not, then what is to prevent XYZ Inc from altering the scope of services, possibly outside of your qualifications, and your insurance coverage? Yes, if your still uncertain, by all means consult with a lawyer, but there is a reason why your name is on the door of your truck and not them.

And Kninegirl, its MCS, its Five Brothers, its Safeguard, its FAS, it is all of them.


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## P3+ (Aug 16, 2012)

I interpreted it that FT was asking what the legality is of company XYZ forcing you to use "their" numbers for a bid, which would exclude it from being YOUR bid, it would now be THEIR bid. I didn't see anything about modifying it...moreover a matter of having to use their estimating system to submit a bid FOR them and not BY them.


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## GTX63 (Apr 12, 2012)

P3+ said:


> I interpreted it that FT was asking what the legality is of company XYZ forcing you to use "their" numbers for a bid, which would exclude it from being YOUR bid, it would now be THEIR bid. I didn't see anything about modifying it...moreover a matter of having to use their estimating system to submit a bid FOR them and not BY them.


If that were the case, then you are simply at a point in which you need not submit any bid. You just discribe the damage, for example, pdf them your letterhead and they input the numbers and send to the client. I know of no National that operates like that. 
"Bid of $10 is above industry standard and has been reduced to $2" and "Bid is outside average pricing and must be adjusted to meet client's expectations" are a couple standard email reponses we have recieved in the past. It has gone so far with companies like Five Brothers that we were threatened with the cost of another contractor to rebid and possible complete the work because we refused to cooperate.
If the National pays $100 tops to cut 4' grass over an acre, and I say "No, it is $250" they cannot hold you liable to complete it at their rates.


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## BPWY (Apr 12, 2012)

GTX63 said:


> it is all of them.



Yup. They are all guilty.

Seems like every time a national dreams up some thing new and stupid with in 6 months they are all doing it.


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## BamaPPC (May 7, 2012)

It' the email that says - ..."your bid has been deemed to be excessive and has been reduced prior to sending it to the client..." that really chaps my buns.

Here it is I went to all the trouble to work up a bid that might make me a little profit, and because their estimating software says that's too much, I'm supposed to just grovel and be glad they let me work for them. pfft.

And I heard SG is leaning toward that - you can't refuse reduced bids tactic. Ain't gonna work.


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## mtmtnman (May 1, 2012)

It's gotta be borderline illegal. I have sent a link to this thread to the Huffington Post guy..........


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## BPWY (Apr 12, 2012)

BamaPPC said:


> It' the email that says - ..."your bid has been deemed to be excessive and has been reduced prior to sending it to the client..." that really chaps my buns.
> 
> Here it is I went to all the trouble to work up a bid that might make me a little profit, and because their estimating software says that's too much, I'm supposed to just grovel and be glad they let me work for them. pfft.
> 
> And I heard SG is leaning toward that - you can't refuse reduced bids tactic. Ain't gonna work.





Any company that does that will be told to permanently loose my number.


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## GTX63 (Apr 12, 2012)

I think the real issue here is the _fear of losing work_ over this matter. I will tell you that even if a company was sending me repeat business every month, I would not agree to anyone strong arming my pricing.


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## BamaPPC (May 7, 2012)

I know I read this somewhere, probably one of you guys posted it.

"I can go broke sitting at home."

So true.

But, the best advice I ever got in this business - "Don't get mad, get paid." That was a lot easier to do back when we got paid for hazards by the item (tires,paint, gas cans) Getting harder to do now. But still possible if you look for the opportunities. :yes:


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## JFMURFY (Sep 16, 2012)

BPWY said:


> FORCING you to accept a bid cut IS NOT in my opinion a proper independent contractor relationship.
> 
> 
> Instead of asking a sympathetic peanut gallery look in your local phone book and call a lawyer that specializes in contract law for your state.
> ...


 
Your are right... A bid is an offer or a price. independantly arrived at... So to have these Num-nuts tell you where they want to be in terms of price is "Collusion". It has been my experience in the contracting world, that collusion is in contracting is "unethical" if not "illegal".

Being that this industry does nothing accordance with common business practices or contracting you just need to weigh the situation and value it if its in the best interest of your business to do the work for what they telling you to do it for.


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## FieldServices (Oct 12, 2012)

*IRS and Independent Contractor.*

This should help. :thumbup:

http://www.irs.gov/Businesses/Small...ndent-Contractor-(Self-Employed)-or-Employee?


http://www.irs.gov/taxtopics/tc762.html



FearlessTeapot said:


> I'm not sure if this has come up yet, as I haven't seen it here. I was always under the impression that a client may not dictate bid prices to an independent contractor, in any industry. Am I incorrect, or should things like grass bids be actual bids? Nationals require you to submit a bid under your own name, following their price sheet. (For some, it is literally a Kelly Blue Book which asks for things like dimensions and grass height, and spits out the required bid price.)


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## JFMURFY (Sep 16, 2012)

How is this even a bid anymore? I seriously doubt HUD is modifying everything to below...

Experience the same all the time with the Brothers... Contacted an old associate who was out of the HUD office in Hartford, now in the Regional HUD in Philly.
Explained the bid cutting, his response was that "HUD does not cut bids". They either accepet them or decline them. They may request clarification so they can see apples and apples on a bid, but " in no manner do they "modify" a firm's bid.
The long an short of it is that when a firm submits a bid it is an offer to perform a certain service for a specific price. 
I have learned to add the following to all our bids... "this bid/offer is not subject to change or modification without the express "written" consent of ProRem, LLC"

Your comment of a firm "not allowing" to refuse a modified bid is laughable. You can't accept something that is no longer "your bid"


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