We have been sent an RFP from a university we have some history with on bids. Our history has been, not winning the business. The winning bids sometimes (often) deviate wildly from the specifications as we read them. One thing I have learned from my experience with them is that the singular most important aspect of any bid is the price we present to them.
You might think “well … duh” buts its more subtle than that. That is, if we purposefully underspec’ed our bid, and offered the underspec’ed system, it would likely win. I was in a bid opening when I saw some nameless vendor do exactly this, at this university. And win.
If those were the only issues, we might not have any real conflicts.
Generally university bids are hard. You know a-priori that if you win, you will not make much money. We won’t bid on things that we will lose money on. And we are a business, so we can’t afford to pay a university to take our gear. That makes no sense.
But thats still not why I am conflicted. It was the last thing we bid on … actually the process … that I thought was … well …
This was for a cluster system, back when that was our primary focus. We were working closely with our friends from AMD and a manufacturing partner to create a very physically dense unit. Back then (ignoring the subsequent problems with it) we were projecting 640 Barcelona per rack in the configuration the university requested.
By all accounts it was a very aggressive bid. I pushed all of our partners hard, and we cut projected margins to the bone. Our costs were very good. The only way we were going to get beat on price was if someone wanted to pay the university to take the gear.
So we have this bid in. Curiously, we got it the last time my family and I did the Florida bit (Disney world and then Key West). Just like the last two weeks.
Its an aggressive bid. It uses advanced technologies. It uses concepts that would become commonplace a year later.
This university called me up and asked me to help them with something.
I asked what.
They said that they liked the bid, but they wanted the other vendors to be able to offer this as well.
You see, they didn’t want to be “unfair” to the other vendors.
Yeah, thats right. We came in with an “unfair” technological advantage over the other vendors. At a very aggressive price.
I declined their kind offer to have us teach our competitors how to beat us.
If our offer is superior, then there is an obvious solution and outcome. Buy the damn thing from us.
The purchasing agent was not willing to consider this.
Yup. Thats right. Not willing to consider this. Needless to say I was quite pissed. I remember when I was told this. I was at Epcot center on some ride with my wife and daughter. I remember having to force myself to relax and enjoy my family time, and not think about this after those calls.
Ok, there is quite a bit more, but I won’t get into it.
Fast forward … what … 3 years? New bid. Same university. Same purchasing agent. Same group.
As I said, I am quite conflicted.
Honestly, I think we are simply a stalking horse. A showpiece for them to make a claim about seeking local bids.
But we have to consider exactly what their likely response would be to a realistic bid from us.
My conflict is that this does represent legitimate business, and I want to pursue legitimate business. But at the same time, we have a history with them, and one that is not easy to put blinders on to.
We may simply pass.
I have a strong sense, reinforced by years of trying to sell them stuff, that we wouldn’t win if we presented a strong technological and aggressively priced bid. So bringing pressure to bear on our suppliers to help us with pricing for them is going to be wasted. And that means that when an opportunity with a non-zero probability of winning comes along, we may have expended good-will for no possible upside.
I don’t know what to do here.
And yes, I am perfectly aware that some readers of this blog are from the university in question, may be involved in the purchase, and may know exactly which bid I mean. This is not a subtle back-channel communication.
We may not bid because this effort would in all likelihood, be a wasted effort, and we can’t afford to spend time and effort on things that we know will fail.
Hence my conflict.
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