Procurement Conflict, a Family Bidder, and Gala Tickets
You are the property manager for a 250,000 SF office tower. The janitorial contract, $1.2 million per year, is out for bid. The incumbent bids $1.2 million; a new vendor bids $1.05 million; a third bids $1.18 million. The new vendor's sales representative is your brother-in-law. Company procurement policy requires three bids, written conflict disclosure, and manager recusal when a family relationship exists. The owner's asset manager emails: 'Use the low bid; we need the savings.' At the same meeting, the incumbent invites you to a $400-per-ticket charity gala and says it is 'just relationship building.' You have not disclosed the family relationship. The bid tabulation is due in five days. Your bonus is tied to portfolio NOI.
1. What must you do before the bid tabulation is finalized?
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Disclose and recuse
- Submit a written conflict disclosure to the owner and procurement before doing any further bid work.
- Recuse from scoring, negotiating, and approving the janitorial award. Ask an independent manager or the owner to run the evaluation.
- Do not accept the gala tickets. Decline in writing and log the offer; a $400 gift creates an appearance of impropriety and may violate policy.
- Preserve the bid files. Do not share competitor pricing with the brother-in-law.
The family relationship is a conflict even if the low bid is legitimate. The bonus tied to NOI increases the perceived pressure to award on price alone, so independent review is essential.
2. The owner insists on the low bid. How do you respond and protect the process?
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Escalate to compliance or legal and ask the owner to confirm the direction in writing. If the owner still directs award, require an independent review of scope, references, insurance, bonding, staffing, and transition risk. Do not sign or personally approve the contract. Document that you disclosed and recused. If the low bid is nonresponsive, recommend rejection even if it is cheapest. The goal is not to block the vendor; it is to ensure the award can withstand audit and ethics review.
3. Recommend the award and explain how to document the decision.
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Compare $1.05 million, $1.18 million, and $1.2 million. Savings are $150,000 against the incumbent, but only if the low bid meets the same scope. Verify square footage, frequency, supplies, payroll compliance, insurance, and transition costs. If the low bid is responsive, award through the independent committee with the conflict disclosure attached. If not, reject it and document why. Record the disclosure, recusal, gift refusal, and evaluation criteria in the procurement file.