Thursday, June 16, 2005

Hold Your Ground & Take The High Road

I just read an interesting article about underground workers undermining the contracting business. In the article it noted that companies are underbidding on projects by as much as 50% and getting the jobs. How do they do it? Well they hire illegal immigrants or pay people under the table (cash), and therefore keep their overhead low. The problem is becoming so big the government is getting involved. Read the article, it's fascinating. Notes From the Underground Economy

In the article a contractor is optimistic.

Although he gets underbid by competitors using underground workers, McLaughlin, the contractor in San Francisco, says he has found a viable niche: homeowners who want proof that the contractors they hire are licensed and covered by
workers' compensation policies, but don't want to pay the prices that larger contracting firms charge
. Until the government settles on a way to assimilate the stealth labor force, McLaughlin says, he'll refrain from turning to the day workers who line the sidewalks of San Francisco's Cesar Chavez Street every morning, gesturing to passing pickup trucks in hope of landing a job for a few hours. But once he can hire them legally, he's looking forward to it. "The work ethic of those guys is unbelievable," says McLaughlin, who regularly logs 12-hour days. "They put me to shame."

This story really made me think about our system and why bidding is not always the best answer. Obviously, there are times you have to place a bid. However, without developing a relationship with the client/prospect and getting a full understanding of the project and their decision making process, it is a no-win situation. And if they are only looking for the lowest price no matter what the consequence, does it make sense to play in their game. I think not.

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