Contract Kickback?

kamannn

I am a GC in Colorado. I have a chance at obtaining a large residential project. The architect for the project whom I have known for 12 years and built about 10 of his designs emailed me recently asking me if I would pay him a 1-2% kickback if I where successful in winning this project. I talked to him today and told him I don't feel this would be ethical to the clients. He acts as if it is a common procedure among professionals. ( Not me). He said he would reccomend me whether I agree to the kickback or not. I think he is falling on hard times and is trying to get a cut of my project.
I suggested to the arch. that we tell the clients that we have this % agreement.
Any thoughts??

rbsremodeling

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Gus Dering

Thats not cool If you feel funny at all about it, don't do it.

He is probably already getting 8 -10% of construction costs. Whats he waant with a piece of your hide?

How would you write that off? Maybe you can ask that politician from Illinois that is an expert on these types of things

Ed the Roofer

Only if you get a guaranteed percentage of the job if you are NOT awarded the contract.

Whats good for the goose is good for the gander.

Thats legal talk, by the way, .....Well.....Sort of.....Any contract is supposed to be recipricol in benefits to both parties.

Ed

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Ivinni

If you have to "compete" to get the job, why would you give the douche bag anything?

If he can guarantee success, maybe you should tell him, then you can deal.

That way he will feel as greasy as he is trying to make you feel.

Not that you would go through with it anyway. Just a good way to give him some of his own medicine.

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JTMcC

Riiiiiight.
Place the money (cash only) in a crumpled McDonalds sack, under the third table from the left at Starbucks, at exactly the prescribed time.
Nope, nope and NOPE.

JTMcC.

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bwalley

It is unethical and probably illegal.

The Architect is being paid a percentage of 8%- 10% of the job cost already, I am sure if his clients knew about this there would be a problem with it.

I am a Profesional and it is NOT a common prcedure.

If the Architect gave you the lead and you end up winning the bid, there is nothing wrong with showing him your apprectiation.

D.A.S.Anthony

Kickbacks NO! Finder's fee? yes. Sales fee? Yes

Another poster is right about showing gratitude. My architects get the biggest gifts from me for the holidays, but that is it.

Ethically speaking it is tough. The economy sucks and I am sure you can use the work. It would really suck to lose the job based on 1%.

Does he want this kick back in cash? I only ask because you may be able to come up with some legal and ethical deal that is mutually beneficial. You do not want to lose the job. This is a 12 year relationship after all and this is the first time he has asked for a percentage.

Honestly this economy will make people do crazy things and he has put you in a tough position.

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Anthony
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D.A.S.Anthony

Jut posted the above reply about 10 minutes ago and I have been reading posts etc. Even posting the above is not sitting right with me! It's funny how that works. I am just not comfortable giving ANY body a kickback.

So I am going back on what I said and make NO deals with this architect. Relationship or not, economy or not. You have a job to do and so does he. He gets paid and you will as well. Things happen for a reason and just because he cannot manage his finances does not mean you have to bail him out. Karma ALWAYS comes back around and if you lose the job another one will turn up for you.

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Anthony
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chris klee

i know a gc that has a million dollar renovation on a cost plus contract. he thinks the 12% wasnt enough so he has the subs marking their invoices up a couple % to submit to the HO, then gets the % back from the subs. i told them that was not a good idea cause if the HO find out there is no doubt he would be pissed enough to taks action. the gc seems to think this is the way to get ahead and is nothing wrong with it. he will even give a roof job to his roofer and asks them to pad the estimate so he can have some money from it and do nothing. rediculious if you ask me. completly un-ethical and like mentioned above, prolly illegal.

Stone Mountain

My feelings are mixed about this.
I have worked on and off for 25 years for a major high rise builder in Toronto. For all these years, the estimator/contracts manager has been the same guy. Never been promoted.
I have been awarded a rather large 6 figure job (around $150,000) from these people. It's a difficult one, so I built in lots and lots of margin.
Anyway, along about the same time, the estimator asked me to build him a small deck at his(modest) house. My cost around $3000. 3 guesses as to how he implied I should get paid for that deck.

about 7 years ago, I built some specialized fencing at the owner's(rather big and expensive)house. He paid with a company cheque, but did not insist on me billing any specific project.

This is the first time EVER that the estimator has suggested such a thing. I'm inclined to build his deck and then just "forget" to collect on it.
I'd probably get the big job anyway, but this does and doesn't bother me.

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Brickie

Paying "finders fees" or "consulting fees" is quite common in Chicago. I guess it all boils down to how bad you want the project. If the guy has any influence on to whom the project is awarded, I doubt you would get it since you didn't pay the "finders/consulting fee"

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bwalley

it is unethical and it is Illegal, he is in breach of contract, on a cost plus contract you can not run up the costs or pad the costs, or take kick backs, I hope the client finds out and fires the douchebag GC.

skyhook

........................

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Greg Di

Stone, surely you can lose $3k in a $150k job, no?

Human nature is human nature, don't try to fight it.

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silvertree

I wouldn't do it. That's me, nothing noble about that. Its part of whats wrong with this country. I quit a profitable insurance repair business for that reason.
Do what your comfortable with. Some would say its just business, and its only $3000. Whatever.

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boman47k

And he is just now asking for this?

Someone said maybe you can find a legal way to do this. I tend to think people finding legal ways to do things which otherwise are illegal may have contributed to the problems the country is facing now. Sounds like double dipping to me.

That being said, since he wants a percentage and not a set amount, how do you know how to bid? Low? High? Middle?