This is line from Dilbert. It is meant as a joke, but to me it’s not funny.

Not Funny Because It’s True
The first and most disturbing reason is that it is true. And, that realization makes my blood boil. It’s true that companies, whether large or small, often employ this tactic. Those who do are met with everything from frustration to black listing. Yes, you read it correctly. Black listing.

I had a conversation with some purchasers from some of the nations’ largest corporations some months ago. We were having an informal chat at a trade show after a speech I had given. Several purchasers said that bidding low and then coming back for increases meant that the offending company could face being black listed. Yet, the crazy, unreasonable system that we have in America with lowest bid and reverse auctions actually encourages the “bid low and make it up later” mentality. Go Figure! We’ll blacklist you if you get caught, but we encourage it whole heartedly.

Not Funny Because It Is Fraud
The second reason is that it is tantamount to fraud. Yes, fraud. If you intentionally induce someone into a contract and knowingly mislead them, and they then rely on that information to their detriment and suffer for it, it is a fraud. Most companies do not sue for fraud because it is hard to defend against the “extenuating circumstances” argument. I know because I’ve litigated these cases. It is really too bad because this “bid low and make it up later” attitude runs rampant within both small companies and large companies and it is just wrong. In the end, it hurts the customer, whether the customer is a large or small company. It hurts them financially and it makes everyone cynical, suspicious and aggressive with one another. Score one for the lawyers who get to sort it all out. We’re the ones making the money on these deals!

This entry was posted on Wednesday, August 29th, 2007 at 11:24 pm and is filed under Tactics. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.