Making Big Bucks 2.Construction Tendering

This is part two of an occasional series on how to make money with minimum effort and how to be a corporate bandit.

Imagine that you are a construction company and you have been asked by a Hospital or Education Authority, Local Council or any Government Department to tender for an expensive construction job. You know that three other companies have been asked to tender or quote for the same job because it is supposed to be a competitive tender. You have the names of the opposition.

Firstly, you have the advantage of presenting to public sector managers and you know that they are definitely NOT business people. However, they do enjoy the vanity of talking big bucks to entrepreneurial businessmen. After all, it is only the taxpayers money that they will be dishing out. So here is what you do:

You have the identity of the three other companies who have also been asked to submit sealed (secret) quotes to the YOTFLS  (Senior Managers and Directors in the Public Sector often acquire the honorary title “Your Out To Free Luchness”).

You know the opposition well , so you get together for lunch with the three other companies and the conversation goes something like this: ” Right, we all agree that this job is worth about £5 million and we all want to make on this one, don’t we?”

(Lots of drooling, wiping grease off chin and nodding)

“OK. It’s our turn to do this job so we will quote £10 million. You over there can quote £12million, you lot £15 million and ( pause for a slug of Blue Nun) you other lot are Irish – you quote £25 million.”

The Irish one lifts his hard hat and scratches his head ” But dat means that yorr  bind to get the job ‘n’ make £5million profit”

(Shouts of “Yeh….er…profit” and banging of spoons on the table)

“If we all agree then we will make £2million but we’ll give you one million each for your trouble. As long as you do the same for us when it’s your turn.”

The following week the YOTFLS open the sealed bids and “save” the taxpayer lots of money by giving the job to the lowest quote because all of the quotes (apart from the Irish one…hee..hee) are roughly in the same ball-park so they must be right.

You can also make a few million more because there will be delays, public enquiries, endless meetings, people wanting to save great-crested newts, archaeologists finding Saxon burial sites etc. So by the time the job starts, materials costs will have been driven up, sub-contractor costs will have increased etc etc. 

You and your chums will be quids in.

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