Morality Dilemma.

Couchpotato82

Hi all,
This question is directed mainly to sub contractors involved in house building.

Recently I was a nominated sub contractor (plumbing and heating) in the construction of a house for an acquaintance of mine. The engineer who was project managing the job was initially quite hesitant in dealing with me despite reassurances from the client that I was competent and professional in my field.
The job went well, in regards to targets being met, customer satisfaction etc and the engineer who seemed a bit put out with my nomination initially, but who I've got on quite well with subsequently has forwarded 4 more projects to me to tender for.


The engineer in question is well respected and is very much in demand. The moral dilemma I'm in is as follows...

The engineer has a client base of high earning professionals with decent budgets for one off self builds. He is project managing the self builds and is in charge of negotiating the prices for the sub contractors. He has given me the expected budget for the heating and plumbing for these jobs.
One of the jobs I priced came in at 21.5k + vat. He called me on mobile saying he had given an allowance to his client for the plumbing and heating of the dwelling of 25k. He said the job is mine but to quote 23k for it and he'll nominate me for the job but that I'd have to give him the the €1500 balance in cash.

In his eyes he'll be able to "save" his client 2k in expected costs. I'm very happy to get the job at 21.5k. It's factored in €40 per hour and 15% margin. My concern is finding €1500 cash to give to engineer. I can't put it down as an expense and I don't deal in cash for revenue purposes. (I've already gotten a thread ban over asking a question about accepting cash as a wedding gift. Long story. Don't go there)

Basically, what I'm asking is, is this the norm? Or am I dealing with a bit of a gangster ? If client is happy to pay €25k but engineer gets it done for €23k and I'm happy to accept €21,5k should I care where the balance goes? I'm aware it's basically a kick back. Is it common though?

Cheers in advance for any advice.

Gumbo

Kick backs. Very common.
No facts and figures to produce here to back up my opinion though, just personal experience.

BryanF

Is this guy a chartered. If so read what his membership says in this regard.

Tefral

More common than you would think but, highly unethical. If he is chartered he would lose his Chartership status as a start and heavily fined.

From a business sense, if you don't do what he asks then realistically he wont ask you to tender another job. It would appear from the info in your OP that the reason he was hesitant in the first place dealing with you is he probably had this arrangement with another subbie and given the fact his client on that occasion was a friend he had no choice but to go with you.

Up to you, you can behave ethically and tell the client and not be a part of defrauding revenue or do the job at €21.5k and in all likelihood not deal with this guy again...

Pkiernan

If be recording every phone all and conversation with this cowboy.
His actions are criminal.

Tefral

Pkiernan wrote: »

.
His actions are criminal.

Pretty much this one line covers the ops question really.

As someone who is chartered myself, I would strongly advise the OP to report this person to their relevant regulatory body.

This shít boils my blood really because it skews the real cost of construction.

Ill tell you what though, not withstanding the above, this is a symptom of clients going for the cheapest option with professionals. The fees are so low that some people are resorting to this behavior.

This was rife in the days of the Celtic Tiger, but that was out of greed more than anything.

Couchpotato82

Tefral wrote: »

Pretty much this one line covers the ops question really.

As someone who is chartered myself, I would strongly advise the OP to report this person to their relevant regulatory body.

This shít boils my blood really because it skews the real cost of construction.

Ill tell you what though, not withstanding the above, this is a symptom of clients going for the cheapest option with professionals. The fees are so low that some people are resorting to this behavior.

This was rife in the days of the Celtic Tiger, but that was out of greed more than anything.

Do you know what? I've just spoken to him and told him I haven't time to take on anymore work this side of Christmas. He's going to have go with someone else.

I was psyching myself up to tell him it was dishonest but I bottled it! Don't want or need the hassle .

vandriver

The €1500 would all be profit,generating extra tax of over €750 for you to pay.

scwazrh

kceire wrote: »

Kick backs. Very common.
No facts and figures to produce here to back up my opinion though, just personal experience.

Completely agree with you , Its becoming more and more common .Have had a few sales reps offer to sign at cut throat rates in return of a kickback this year and an architect near demand a kickback if we wanted to win his contract.The brown envelope culture is thriving again .

lostcat

I really have no idea why people building houses opt for a 'project managed ' solution, rather than just hiring a main contractor. I have yet to see that it is any cheaper or results in a better product.

Any professional who is offering two competing services to the same client at the same time has to be compromised.