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.
December 30, 2006
December 29, 2006
Optimistic about 2007
I wonder if it's an entrepreneur's disease to always believe things will be better tomorrow than they are today. Every year I am convinced that the following year will be the best and this time is no different. I am really looking forward to 2007, and not just because 2006 was so difficult.
I don't think business will get any easier but I do believe that it will be easier to deal with. I am more mature; I better understand the environment and know better how to protect myself. I have also learned not to stress myself out as much.
In January 2004 I came to this country to handle an issue I thought would take two weeks and I am still here almost three years later. Now I understand that certain issues, no matter how simple they may seem, cannot be resolved in two weeks, or two years, or at all. I have learned to choose my battles and have not just accepted the daily struggles but have embraced them.
From a non philosophical sense too, I am more confident about 2007. The last couple of weeks I have actually spent most of my time on our core business. Working on proposals, meeting with clients... This is quite different from the rest of the year where 90% of my time was dealing with problems that had absolutely nothing to do with our core business which is technology.
So from now until Tuesday, I will set aside reality and dream about how fantastic 2007 will be...
I don't think business will get any easier but I do believe that it will be easier to deal with. I am more mature; I better understand the environment and know better how to protect myself. I have also learned not to stress myself out as much.
In January 2004 I came to this country to handle an issue I thought would take two weeks and I am still here almost three years later. Now I understand that certain issues, no matter how simple they may seem, cannot be resolved in two weeks, or two years, or at all. I have learned to choose my battles and have not just accepted the daily struggles but have embraced them.
From a non philosophical sense too, I am more confident about 2007. The last couple of weeks I have actually spent most of my time on our core business. Working on proposals, meeting with clients... This is quite different from the rest of the year where 90% of my time was dealing with problems that had absolutely nothing to do with our core business which is technology.
So from now until Tuesday, I will set aside reality and dream about how fantastic 2007 will be...
December 27, 2006
Illegal Arrest
Our plumber is in jail right now. Last night around 10 PM, some gendarmes (police) picked up up from his house and locked him up. Motive: none. One of his neighbors with whom he has recurring disagreements saw a group of gendarmes patrolling the area, he gave them a little cash to have his neighbor put in jail.
This morning, we sent a bailiff to the jail to report on the plumber's presence there. There is no written record of the plumber being held. There is no police report. There is not a single document to attest that he was arrested, why he was arrested or that he is actually being held.
Upon seeing the bailiff and one of our employees who went to the jail, the gendarmes tried to explain that he they arrested him for being drunk and that they would release him as soon as he is sober. Hen? You arrest someone in his house, half dressed because you say he was inebriated? No complaint filed, no report?
We are doing what we can to have the plumber released and we will likely succeed. Unfortunately, this is a story we hear all too often. Police officers will arrest anyone with just a few dollars. There is a new criminal code that goes into effect in a few days that is supposed to prevent such arbitrary arrests. But like everything else in this country, the problem is not the law, it is the application of the laws. The current laws do not allow people to be arrested for no motive, yet our plumber has already spent one night in jail.
In a recent Transparency International report on corruption in this country, the police was held as the most corrupt institution, followed closely by the judiciary. If the two institutions that are there to uphold the law are the ones most responsible for breaking it, what good is the law? I have never heard that any police officer has ever been arrested for corruption. A couple judges were disciplined for being corrupt. They were placed on early retirement and for the most egregious case, without pension. Basically, total impunity.
Until police officers and judges are made to pay for their crimes, they will continue to disregard the law.
Our plumber is lucky. We are around to help him. What about the others who have no voice and no possibility to speak out?
This place is nuts... Or is it me?
This morning, we sent a bailiff to the jail to report on the plumber's presence there. There is no written record of the plumber being held. There is no police report. There is not a single document to attest that he was arrested, why he was arrested or that he is actually being held.
Upon seeing the bailiff and one of our employees who went to the jail, the gendarmes tried to explain that he they arrested him for being drunk and that they would release him as soon as he is sober. Hen? You arrest someone in his house, half dressed because you say he was inebriated? No complaint filed, no report?
We are doing what we can to have the plumber released and we will likely succeed. Unfortunately, this is a story we hear all too often. Police officers will arrest anyone with just a few dollars. There is a new criminal code that goes into effect in a few days that is supposed to prevent such arbitrary arrests. But like everything else in this country, the problem is not the law, it is the application of the laws. The current laws do not allow people to be arrested for no motive, yet our plumber has already spent one night in jail.
In a recent Transparency International report on corruption in this country, the police was held as the most corrupt institution, followed closely by the judiciary. If the two institutions that are there to uphold the law are the ones most responsible for breaking it, what good is the law? I have never heard that any police officer has ever been arrested for corruption. A couple judges were disciplined for being corrupt. They were placed on early retirement and for the most egregious case, without pension. Basically, total impunity.
Until police officers and judges are made to pay for their crimes, they will continue to disregard the law.
Our plumber is lucky. We are around to help him. What about the others who have no voice and no possibility to speak out?
This place is nuts... Or is it me?
December 22, 2006
Have a Merry Crocodile!
I live in a small apartment in a high-rise building that has no garden. My cleaning lady decided that since it was the holiday season, she would bring me a gift. The next day, I come home and there is a LIVE crocodile on my balcony.
I had never heard of anyone giving anyone else a live crocodile. What was I to do with it? If I gave it away, it would probably be eaten but I could not possibly keep it. She had tied the mouth so that it would not bite but that also meant that I could not feed it.
I kept it for a couple of days but it kept struggling all night long to get away and the noise was simply haunting. I finally took the easy way out and sent it to my Dad who has a yard. He also has dogs but I just don't want to know.
This place is nuts... Or is it me?
Do me a favor: Don't do me any favors
A couple weeks ago, a judge in a small town in this country, awarded the US$ equivalent of over $330,000 in a labor matter against us.
Beyond the obvious jurisdictional issues of a former "employee" who is based in Canada and had a contract with our parent company in the US; beyond the fact that we heard about the lawsuit by happenstance six months after it had been filed, that it was not filed in the city we are in; beyond the fact that this former employee was not eligible for any commission, the judge awarded him commission because "it was as a result of [employee]'s sister who worked for the [client]" that we got the contract.
In the judgment, the judge explains that if employee's sister had not given him inside information, we would not have had the contract and therefore, we need to pay him a commission.
I won't get into the fact that the commission was based on amounts that we never even received, or that it was an international tender that took us six months to respond to with a team of 8 full time employees working on the tender alone, or that the sister was a secretary who did not really provide information that was not widely available.
Back to the issue at hand. In the judge's mind, and in the minds of many people, if someone does you a "favor," it automatically generates a financial obligation towards that person that is a percentage of the benefits you might have received from that "favor."
A couple years ago, after we had won the first procedures in a big lawsuit, we started to be visited by all sorts of folks who claimed that it was thanks to them that we had won. We had never even met most of these people. And they all wanted money. One of them claimed to be the President's nephew. He said that he called someone at the Presidency and that official had called the judge. He said that the official had sent him to collect his due and that if we did not comply, we would be forever blacklisted. I told the nephew to tell that official that he should call back the judge and instruct him to do the opposite of what he had done, we would not pay.
Another young person introduced by a friend of mine did make a few calls for us. He said that he thought that what was happening to us was unfair and that he really wanted to help. Well, of course, story is now that we are ingrates because we never gave him any money after everything he had done for us.
About 5 years ago, while on a business trip here, I was asked to appear on a national television program. It was an hour long interview and it went well. A couple months ago, I met the father of the employee who had arranged the interview. He went on and on about how he (the father) had arranged the interview and how he had not even asked for any money. The suggestion was that we really owed him money but he was not forcing us to pay him.
And the amounts are not small. Once someone told us that he realized that we did not have much money but that $60,000 would be enough. Another offered his assistance if we gave him $400,000. One of our neighbors is a Certified Public Accountant. We needed someone to certify the arithmetic on an excel spreadsheet for the court. We offered to pay him at the time. He said no, it was nothing and in a few minutes, he certified the calculation. When we won the lawsuit, we received a bill for the equivalent of $175,000 for services rendered but as he stated, it was "negotiable."
There are many more similar stories. As a result, not only do we never ask for favors but even when offered, we refuse. It seems like such a sad way to operate but it is self preservation.
This place is nuts. Or is it me?
Beyond the obvious jurisdictional issues of a former "employee" who is based in Canada and had a contract with our parent company in the US; beyond the fact that we heard about the lawsuit by happenstance six months after it had been filed, that it was not filed in the city we are in; beyond the fact that this former employee was not eligible for any commission, the judge awarded him commission because "it was as a result of [employee]'s sister who worked for the [client]" that we got the contract.
In the judgment, the judge explains that if employee's sister had not given him inside information, we would not have had the contract and therefore, we need to pay him a commission.
I won't get into the fact that the commission was based on amounts that we never even received, or that it was an international tender that took us six months to respond to with a team of 8 full time employees working on the tender alone, or that the sister was a secretary who did not really provide information that was not widely available.
Back to the issue at hand. In the judge's mind, and in the minds of many people, if someone does you a "favor," it automatically generates a financial obligation towards that person that is a percentage of the benefits you might have received from that "favor."
A couple years ago, after we had won the first procedures in a big lawsuit, we started to be visited by all sorts of folks who claimed that it was thanks to them that we had won. We had never even met most of these people. And they all wanted money. One of them claimed to be the President's nephew. He said that he called someone at the Presidency and that official had called the judge. He said that the official had sent him to collect his due and that if we did not comply, we would be forever blacklisted. I told the nephew to tell that official that he should call back the judge and instruct him to do the opposite of what he had done, we would not pay.
Another young person introduced by a friend of mine did make a few calls for us. He said that he thought that what was happening to us was unfair and that he really wanted to help. Well, of course, story is now that we are ingrates because we never gave him any money after everything he had done for us.
About 5 years ago, while on a business trip here, I was asked to appear on a national television program. It was an hour long interview and it went well. A couple months ago, I met the father of the employee who had arranged the interview. He went on and on about how he (the father) had arranged the interview and how he had not even asked for any money. The suggestion was that we really owed him money but he was not forcing us to pay him.
And the amounts are not small. Once someone told us that he realized that we did not have much money but that $60,000 would be enough. Another offered his assistance if we gave him $400,000. One of our neighbors is a Certified Public Accountant. We needed someone to certify the arithmetic on an excel spreadsheet for the court. We offered to pay him at the time. He said no, it was nothing and in a few minutes, he certified the calculation. When we won the lawsuit, we received a bill for the equivalent of $175,000 for services rendered but as he stated, it was "negotiable."
There are many more similar stories. As a result, not only do we never ask for favors but even when offered, we refuse. It seems like such a sad way to operate but it is self preservation.
This place is nuts. Or is it me?
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