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post #1 of 23 (permalink) Old 08-05-2014, 06:39 AM Thread Starter
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Reduced Bids

Reputable National (working with for over 3 yrs) informs me that "HUD has reduced your bid". The reduced bid is excessively low. HUD reviewed my appeal (according to the National) and the appeal was denied. National informs me that according to HUD regs, I have to complete at the reduced rate.

Questions:
Is there a HUD reg that requires subs to complete work when bids are reduced? (I doubt it. It is probably a new rule that the National is trying to implement), but since I am not sure, I have asked the question.

Is there a way to see the appeals process between the National and HUD?

We are still undecided on whether or not to complete this item at the reduced rate. I am undecided because the relationship with this National is very profitable and I don't want to ruin it because of this, however, reduced bids from HUD are becoming increasingly common. Because we have to rely on the National to plead our appeals to HUD, we don't know if the National is really processing the appeal, we don't get to see the results of the appeal directly from HUD, etc. I would prefer not to be in a situation where I have to "trust" or depend on a National to justify my pricing to HUD.

Most contractors dealing with FHA properties have experienced this. How are you dealing with this problem?
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post #2 of 23 (permalink) Old 08-05-2014, 08:35 AM
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You would not be ruining a relationship with the national. From your description, thru fraud and deception they would be.

HUD doesn't cut bids, nor do they have an appeals process.

Ask to see the "HUD regs" that require you to complete work for someone else's dictated price.

The national is fully aware of how much volume they send you, and they expect this is leverage to force you to bend under their will.

How did I deal with it? We have preprinted letters that we sent via postal service and pdf email informing companies that tried this scheme that altering and or/reducing any letterhead bid from my company would void that quote and we would hold them liable for wire fraud, including the poor little girl in the cubicle sending out such emails. Sometimes the young lady would quickly respond and say she is only doing what she was told. Other times management would contact us. A few ignored us. It all boils down who you are willing to lay down for and for how long. That became a deal breaker for us, no matter how much business we did with someone.
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post #3 of 23 (permalink) Old 08-05-2014, 10:45 AM
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I have had work orders where the bid was reduced by 20 or 30.00 those we look at and most of the time can live with and it doesn't happen to often. Anything else we reply that no permission was ever given to change our price and therefore the original bid is void.
I had 1 company threaten me with a back charge if we didn't do the work at the reduced bid.
Put in writing about no permission to change the amount and under no business case law would a back charge stand. Gave them to somebody else.
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post #4 of 23 (permalink) Old 08-05-2014, 11:16 AM
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I should have mentioned that those letters we sent out were ccd to our attorney as well. Helps for them to know you are serious.
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post #5 of 23 (permalink) Old 08-05-2014, 02:41 PM
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you lost me at
"reputable National"



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post #6 of 23 (permalink) Old 08-06-2014, 03:43 AM
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No one can force you to accept, or perform on, a reduced bid. Period. Anyone that attempts to issue a "charge-back" because of this is opening themselves up to a lawsuit.

The Consumer Financial Protection Bureau would love to hear about such an occurance.

And any barrister worth his salt would be drooling listening to such shenanigans.

Yes, I have regrets. There are things I wish I hadn't done . . ..things I should have done, but indeed, there are many things I'm happy to have done. It's all in a lifetime.
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post #7 of 23 (permalink) Old 08-06-2014, 10:32 PM
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They lied like the proverbial rug to you.

If some one takes such fraud and abuse and continues to work for a company doing this to them, then I'd say they deserve the bid cuts etc.
Sooner or later the bid cuts will become straight up $0 invoices due to some BS excuse.
Because they know this "contractor" puts up with their fraudulent actions.

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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post #8 of 23 (permalink) Old 08-08-2014, 09:56 AM
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Quote:
Originally Posted by brisbenea View Post
Reputable National (working with for over 3 yrs) informs me that "HUD has reduced your bid". The reduced bid is excessively low. HUD reviewed my appeal (according to the National) and the appeal was denied. National informs me that according to HUD regs, I have to complete at the reduced rate.

Questions:
Is there a HUD reg that requires subs to complete work when bids are reduced? (I doubt it. It is probably a new rule that the National is trying to implement), but since I am not sure, I have asked the question.

Is there a way to see the appeals process between the National and HUD?

We are still undecided on whether or not to complete this item at the reduced rate. I am undecided because the relationship with this National is very profitable and I don't want to ruin it because of this, however, reduced bids from HUD are becoming increasingly common. Because we have to rely on the National to plead our appeals to HUD, we don't know if the National is really processing the appeal, we don't get to see the results of the appeal directly from HUD, etc. I would prefer not to be in a situation where I have to "trust" or depend on a National to justify my pricing to HUD.

Most contractors dealing with FHA properties have experienced this. How are you dealing with this problem?

HUD can reduce the pricing, we had seen documents from HUD. Further more, we had seen documents from HUD when they didn't think that specific city violations should have been addressed and asked for sign off on the repairs from the city after completing 2 items out of 20. Made me laugh. Not even starting anything unless approval comes the way it should. You are sub, not their employee, you can say no. We said no to many of these when they didn't make sense. If HUD knows better, they can do work themselves. If national can't negotiate, too bad. We are not doing 500.00 exterior doors for the price of 175.00 minus discount.
We started seeing better approvals recently, but too bad, we left P&P, as we can't deal with this any more. Especially ethic on the regional side. Which one of the nationals is now profitable? Just interested in finding one. Just say no, can't complete, give them breakdown why and ask to reassign the work order.
Reputable natioanals have multiple vendors they can try to assign it.
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post #9 of 23 (permalink) Old 08-08-2014, 02:24 PM
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Quote:
Originally Posted by newreo View Post
HUD can reduce the pricing, we had seen documents from HUD. Further more, we had seen documents from HUD when they didn't think that specific city violations should have been addressed and asked for sign off on the repairs from the city after completing 2 items out of 20.
Please post those HUD docs.
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post #10 of 23 (permalink) Old 08-08-2014, 06:52 PM
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Quote:
Originally Posted by GTX63 View Post
Please post those HUD docs.



No kidding, in all my time associated with the industry this is the first time ever of hearing that such docs even exist.

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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