An Ethical Question

by Evil HR Lady on September 8, 2008

I’ve been tapped to choose an important service provider for our small business. In taking bids, I’ve discovered that one of the bidders may have run afoul of the law in another state, but likely settled without any criminal charges (a white collar crime). I learned this from a competing bidder, but believe it to be true. I know this person, and have worked with them before in another business (the incident was a few years before that, evidently). Their work was always of an excellent quality. The person does NOT know that I’m aware of the incident, and the bid is in line with the others.

First, should I notify my boss of this, even if I believe it will not affect the providing of this critical service?

Next, should I use this person in the first place if the offense may be interpreted as having to do with a lack of character? I know frighteningly little about the facts of the case, I’m afraid.

Lastly, if we reject the bid for this reason, do I have an ethical responsibility to tell this person why, and how I found out?

I’m not sure I’m the right person to ask an ethical question to. Why? Because I spent a good part of Saturday trying to figure out how to cheat at Candyland. Not because I wanted to win, mind you. But because I wanted the game to end. As soon as one of us would get in striking distance of the blessed end of the game, that person would draw Mr. Mint or Grandma Nutt or some other blasted character that would send you backwards. Aaargh! Could somebody just win the darn thing?

But, for the record, I didn’t cheat and fortunately, the offspring won, so there was no tears and (horrors) demand for a re-match. So, I guess I am an ethical sort.

So, you heard a rumor that someone who you have worked with in the past did something extra bad in their past–not that you are very clear on what–and you wonder what to do with that information. This is a horrible gut-wrenching situation to be in. You want to do what is right. You don’t want to embarrass somebody needlessly. What if you tell your boss, the guy doesn’t get the contract and it turns out that his competitor is lying? Aaargh!

Here is what I suggest: Talk to the vendor directly. Tell him you heard a rumor and you are very sorry, but you need to talk to him about it. This stops the gossip altogether and gets to the heart of things. If he says yes, that was him, then he gets an opportunity to explain and you take all the information to your boss and decide if you wish to continue working with him.

If he says no, that’s not true, well then you’ve got a more difficult situation. You’ve got one vendor saying his direct competitor is a criminal and that vendor denying it. Oy. I still say your boss needs to know. I’m not a fan of gossip, but this situation speaks to the character of one of them, it’s just hard to tell which one.

Since you don’t believe this “problem” will affect his performance, you could just let it all go. But, the problem I see with that is that any criminal behavior reflects on the integrity of the person. (Incidentally, the rules around criminal CONVICTIONS and hiring don’t apply–to the best of my knowledge–when you are seeking a vendor, rather than an employee. Since he wasn’t convicted, this is moot anyway, but I thought I’d bring it up.) And telling you this information reflects on the integrity of the competitor. (Not saying he’s a bad person, mind you, just saying “why is he telling me this? Is it to give himself an advantage? Or does he really think it’s important.)

So, now that I’ve given a long winded answer, I’ll summarize your three questions.

1. Yes, you should notify your boss. But, first speak to the vendor directly.

2. Depending on what you find out, it speaks to someone’s character, and I think that’s important to know. Keep in mind that lots of people have made mistakes in life and if it’s been a while and he’s done good work for you in the past, you probably don’t care.

3. Yes, I believe if you are going to take this information into consideration, you need to talk to the person. I’m into being open and honest. If he did this, it’s lurking in the back of his mind anyway and you bringing it up won’t devastate him (I hope!). It will allow you to clear the air.

4. And no matter what, investigate this yourself. This means more than google.

I’m feeling a bit uneasy about my answer now. Someone else chime in and give a better one. I hate situations like this!

{ 11 comments… read them below or add one }

The Engineer September 8, 2008 at 3:27 pm

The "informer" would loose credibility with me unless they are backing it up with hard evidence. Without any proof, all you have is a vicious rumor (from a competitor no less). The known and verifiable experience with the vendor is positive (excellent work quality). The only reason to give any heed to the gossip is if the "work quality" statement isn't quite true. Do some research (other than asking the accused if it is true) if that little voice in your head is unsure.

However, the question is moot if they aren't the top choice for the contract.

Remember too that you have been "tapped" to make this decision. Do your homework. Make a decision. Report your action. If this is a "first" for you, then your boss should expect to review your choice (nice summary of the pros & cons with the data available if asked for).

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Anonymous September 8, 2008 at 4:23 pm

Depending on how your bidding process works, I would have to agree with “the engineer”. You don’t need to do anything unless the competitor looks like they’re going to win the bid. It would really bother me if it came down to either the competitor or the person who gave you this info.

Without knowing exactly what the “informer” said to you, it sounds like the sort of thing that would be almost impossible to prove. If the person reached some sort of settlement, then it’s probably sealed and there’s no public record. You’re sort of in an awkward situation. My gut instinct would be to say nothing to my boss. However, if the “informer” happened to mention the same info to your boss AND included that he told you previously, your boss might be mad at you for not passing that info along. You almost don’t have a choice but to tell your boss just to CYA.

Even though it seems like the fair thing to do, I don’t think I would mention any of this to the competitor because of the potential to get mixed up in drama andor a lawsuit.

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David September 8, 2008 at 5:51 pm

I agree. You have a difficult problem: How do you cheat in Candyland? I usually distract my child and peek at the next cards, being sure to let the child win. Lets face it, the peace is worth the price of cheating.

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Evil HR Lady September 8, 2008 at 5:56 pm

david–that’s the problem. I didn’t cheat and the game took forever. And I can’t do that with the cards because my child insists on each of us having our own stack, so I would really have to distract her.

Chutes and ladders is much the same way, although she’s easily distractable with counting, so you can nudge her piece so it goes up a ladder or misses a slide.

Not that I would do that.

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Wally Bock September 8, 2008 at 7:47 pm

Engineer is dead right that this is a moot point unless the suspect vendor would be your choice.

If I were your boss, though, I would want you do a bit of homework. You say you heard this from another bidder. Do they do this on every bid? What’s their reputation?

You say you “have reason to believe” that the accusation is true. This does not constitute “evidence” in my book or even “reasonable suspicion.” I would expect you to find out more, whether you do it as Evil suggested, through industry contacts or some other way.

This alleged incident was evidently some time ago. You’ve worked with the vendor since and had a good experience. If I were your boss, I would want to know why the older incident should take precedence over more recent experience. Again, details matter.

Engineer is right about this bid. But let’s think of the future. It’s like this vendor will bid on future projects since you’ve used the company in the past.

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Mike Doughty September 8, 2008 at 10:17 pm

Interesting situation.

First, I have to say that without more information it’s really difficult to give a valid opinion on this. Your relationship with your boss and what kind of person he is have a bearing. The specifics (what and how long ago) of what you were told have a bearing. Why it was “settled” instead of prosecuted has a bearing. And so on.

However, I’m not a believer in listening too much to accusations of this kind, especially in cases where the person making the accusation has something to gain. If this wasn’t prosecuted at the time perhaps there were extenuating circumstances that were judged determinative by the people charged with the responsibility of investigating it at the time. If “years” have passed without another problem and the person’s performance with you has been excellent, those facts seem like they’d be a lot more important than what a competitor has to say, especially if you can’t verify anything. I’d investigate to the extent feasible and talk to the person to see what they have to say, but the past performance would be a heavy weight on the scales for me. You almost have to tell your boss about this (as a CYA), but decide who you want to award the bid to first and go in with a recommendation and a “by-the way, this came up during the course of this process and here’s what I did about it” kind of explanation. Don’t lay this on your boss and expect him to make the decision for you…..he probably wouldn’t like that.

Mike Doughty

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Lana September 9, 2008 at 9:25 am

It seems to me you have no ‘facts’ on which to make a discriminatory decision. You are faced with a rumour which you feel bound to accept as having a modicum of truth. This is a mistake. As the Engineer advises, check out the rumour with the person who is supposed to be ‘at fault’. The competitor has something to gain from dissing his very strong opponent. I’d be inclined to investigate the ‘name caller/rumour monger’ for exactly the ‘crime’ claimed against the other. Often you’ll find more fingers pointing to the accuser than the acused.

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Anonymous September 10, 2008 at 12:00 am

In my opinion, the character of the vendor who gave you this information is the one that is most in question. Is their work not quality enough to stand on their own, instead they have to bash other vendors?

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Anonymous September 10, 2008 at 12:26 am

I do not see the problem with getting the reference. I hear all sorts of things about third parties. Some are true, some not, bu I would rather make my own choice: do not complain about the quandary, lest you fail to be informed next time. “Tis better to ignore things than not to be told things.”

In any case, who besides the competitor would know? People DO know their competitors, often better than most other folks. I would check the rumor out, or demand that the informer provide more evidence.

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Anonymous September 16, 2008 at 7:20 pm

Here is what I would do:

1. Do as much research as you can, to see if you can find any “particulars” of the case, if it does indeed exist. Include calling as many references as you can find…you can ask the vendor for references going back to the timeframe of the incident in question – because a) they may know about it, b) they may NOT know about it, c) they can speak about the vendor’s performance in either case. d) you can also ask them if they evaluated the competitor.

If the accusation seems to be true, speak to the vendor, to see what they say.

If it seems to be false, eliminate the competitor from the running as an unethical SOB, and/or call the vendor to question on what is the basis for making such an accusation, then, unless they have a concrete lead to follow, eliminate them.

Based on all you find out, make your recommendation to your boss. Include a summary of this activity, so that he/she knows how it played part in your decision making.

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Kozz September 29, 2008 at 11:35 pm

From the informer’s side of things, I’ve no doubt that they’ve intentionally given this information to you to cast doubt on their competitor. It’s a method of differentiation. Ie: We can’t beat them on price or serviceso we’ll position them as ‘suspect’ and us as ‘trusted advisors’.

I believe you should treat the situation as such. If the suspect vendor is shortlisted based on the contents of their bid / tender, then at the shortlist stage you need to conduct due diligence and contact them about it, saying you were anonymously informed of this situation, please could they supply information etc etc. Tell your boss you’re doing so, and do it.

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