Independant Contractor - legality of dictating bids? - REO Property Preservation Forum
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post #1 of 23 (permalink) Old 10-12-2012, 09:35 AM Thread Starter
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Independant Contractor - legality of dictating bids?

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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post #2 of 23 (permalink) Old 10-12-2012, 09:41 AM
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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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post #3 of 23 (permalink) Old 10-12-2012, 09:51 AM
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Quote:
Originally Posted by FearlessTeapot View Post
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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post #4 of 23 (permalink) Old 10-12-2012, 10:33 AM
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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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post #5 of 23 (permalink) Old 10-12-2012, 11:06 AM Thread Starter
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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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post #6 of 23 (permalink) Old 10-12-2012, 11:59 AM
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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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post #7 of 23 (permalink) Old 10-12-2012, 12:58 PM
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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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post #8 of 23 (permalink) Old 10-12-2012, 01:12 PM
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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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post #9 of 23 (permalink) Old 10-12-2012, 01:29 PM Thread Starter
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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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post #10 of 23 (permalink) Old 10-12-2012, 02:24 PM
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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.

Professionals are people who can do their job when they don't feel like it.
Amateurs are people that can't do their job even when they do feel like it.
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