It ain't over 'til its over..

I thought that 2006 was over; at least from a business perspective... This afternoon the last Saturday of the year, I get a call from a project manager with one of the government agencies. He is desperately trying to reach one of my colleagues who is busy at a wedding. He explains that the minister and the head of this government agency are in town and they want to sign the contract today.

Background:
For the last year or so, we have been trying to get in on a project financed by an international organization for this government agency. For about six months, we could not even get in to submit a quotation which was for a small part of the overall project (software licenses). Finally, we wrote to the international organization that was sponsoring the project, and a couple weeks later, we were called by the agency to submit a quote. Our very first quote, for the exact same products as our competitor, without any discounts on our part, was less than one third what our competitor's was. That got us a meeting. During this meeting, and a few working sessions after that, it became clear that the list of products that the client wanted and the quantity of each, was excessive. We actually had to convince them that they did not need everything they said they wanted. In our normal naïveté, we explained that as much as we wanted to sell, this was also an act of citizenship since we knew that this part of the project was paid out of the agency’s budget, thus out of the country’s own funds. Our final quote was for less than 10% of the quote from our main competitor.

For months, we never heard anything back. There were suggestions that we needed to “motivate” the decision-makers but we resisted and decided that we would prefer to lose, rather than to engage in any form of corruption. Then around the end of August, we get an urgent call from the agency saying that we need to bring them our administrative documents immediately, and that we should come “personally” to deliver them. This issue of administrative documents is one that I will definitely address in a future blog because it is a definite impediment to doing business, at least doing business ethically. In any case, one of our guys immediately took over the administrative documents. While there, the project manager begins asking him about whether or not we are sure that our quote is final and wants to know if it “includes everything.” Since the person responsible for that account had traveled out of the country, the guy that we sent called me urgently to come join him in the meeting.

I hate these types of meetings and I avoid them at all costs. But our guy was not familiar with the account so I had to go. As soon as I walk into the project manager’s office, I realize something is up. Our guy seems confused. The project manager meets me with a snake-like smile. I hate him already. Our account manager had told me about his very first encounter with him. During their meeting, the project manager had turned his computer screen towards him showing him the picture of a BMW X5, suggesting that it was the “gift” he expected. Our guy pretended not to understand. That is our general strategy, “act stupid.”

After niceties, the project manager tells us that of all the vendors, they chose us. He repeated that several times, mentioning the names of our competitors. He was uncomfortable. He was not getting to the point. I thanked him for the trust his team had placed in us. “But,” he says “are you sure that you included everything in this quote? Because, you know, we have an additional $30,000 (equivalent) in the budget.” I answered that everything was included. He insisted again. “You know, the government is not like the private sector, it might take time to get paid, did you add a provision to account for collecting your payment?” I understood full well what he was trying to do but I put on my naïve American hat and answered that the amount was before tax so that with tax, it would even exceed the $30,000. I offered to give a discount to get the amount under budget. “NO, NO, NO, don’t do that!” he answered. “You obviously do not have experience with government accounts; let me school you with government deals.” I continue to act stupid, and so does my colleague. I thank him for offering to “teach us.” He instructs us to go back and redo the quotation, adding the tax and a “little something extra.” We smiled, said ok, and left. The next day, we sent the new quote with tax, and nothing extra.

By then, our account manager had returned. The project manager called him for an urgent meeting. We knew what it was about, and decided that the three of us would go (the colleague that took the documents, the account manager, and me). We spent an hour in the project manager’s office and he never really said anything. He was beating around the bush. We played stupid. Finally, he said that this was a direct deal that would not go through a normal tender process and that HE would be the one that would draft the letter to explain why we should be selected. We offered to provide references. “NO, NO, NO, you don’t need that. I am the person that makes the decision.” We pretended not to get it. Eventually, there was no more small talk to be made and we left.

The following day, they called our account manager and insisted that he should come alone. It might be useful to know that the other colleague and I both spent many years abroad so the account manager was the only “local” guy which meant he would better understand "local" business practices, at least, in the eyes of the project manager. During that meeting, the client went straight to the point. How much would go to the project manager? Our account manager maneuvered his way through by saying that he would not want to insult someone of the project manager’s stature by offering him money. He flattered him and added that in these times (anti-corruption drive by government) it would be exposing the project manager and we wanted to protect him. The project manager thanked him profusely for wanting to “protect” him. Our account manager came back happy that he had convinced the project manager that a bribe would be against his interests.

Well, we did not hear back from that project manager until today, five months later. Our letters and phone calls during these months were left unanswered. About three weeks ago, they announced the launch of the project on television and in the press. The project would go live on January 1, 2007. They still did not have the software licenses. Last week, we finally called the minister himself to warn him that if they launched without acquiring the software licenses, they could face penalties. He said he would look into it. I guess he did.

The project manager was panicked as he spoke to me today. The minister did not want them to be in a situation of illegality and he absolutely wanted to sign today. Unfortunately, they could not prepare a purchase order and would not be able to make any advance payment. However, he asked that we prepare a letter that included the terms we wanted and the minister would sign it. So I pulled my colleague out of the wedding, we prepared a letter where the minister promised payment in full by Tuesday, January 2, 2007. In the midst of the reception for the launch of the project, the minister signed the letter without changing a comma. We delivered the software licenses. Of course, we know that we won’t get paid on Tuesday but hopefully we will get paid soon after that.

Today is a victory of sorts. This agency is known as one of the most corrupt ones in the country. We got a contract without any bribe. It is a miracle and no one will ever believe us, but we held our ground and we won. That’s one for the good guys… Now hope we get paid.