Vendor included confidential information in a quote. What to do?

June 17, 2009 1:59 PM

Vendor sends a quote which unintentionally includes their cost, markup, and gross profit amounts. What action, if any, would be the proper course?

I've received a quote for a bunch of IBM BladeCenter stuff from one of their official resellers. The PDF not only contains the normal columns of information, but their "CONFIDENTIAL, INTERNAL USE ONLY" columns as well. It looks like they just "hid" the columns in Excel and then printed to PDF. So the on-screen quote is normal for half of the pages, then the other half of the pages are the confidential information. I didn't even notice this until I printed the document and got more pages than I thought were supposed to be there. I am quite sure this was unintentional on their part.

So, I now have a quote during the preliminary purchasing stage of this project which includes these details. Two problems: I can't honestly negotiate at this point, even if I wanted to, because I know their costs. Second problem, which is honestly surprising to me, is that their margins are razor thin. This makes me want to just deal directly with IBM, but apparently this reseller thing is the way these products are sold. Is this normal?

Ethically, do I alert the vendor to this fact? I don't see any evidence that my quote was handled in a special manner, so I suspect their other customers would be getting the same information (but may never notice, due to the quirk mentioned above).

Would it be ethical to do business with this vendor, even if we did not negotiate on price?

If I do proceed would I put the company* in any legal danger, given that the information is obviously confidential?

* Additional wrinkle: I work for A, but A subcontracts me to B. B is who will be paying for the equipment, and is on whose behalf I am doing this project.

posted by anonymous to human relations (14 comments total)

alert the vendor, they need to know.

i'm confused why you wouldn't be able to deal with them. you saw the man behind the curtain, but you see that the margins are razor thin so you see that bargaining won't get you far. if you like the price quoted, pay for the merchandise.

maybe i'm ignorant in the ways of business, but the emails that i get with confidential notices say something like "destroy all copies (digital or otherwise) and alert us that you received the confidential email". it doesn't seem like your company would be legally on the hook for anything, unless you disseminated the information.
posted by nadawi at 2:11 PM on June 17

Since you know their profits are very thin and there's not much there you could even possibly be exploiting, I would personally:

a) Let the person who sent you the quote know that there was an issue with the confidential information, in a friendly way. Don't make a big deal of it, don't refer to the data itself, just alert them and add a note saying:

"If this is an issue for you, I am happy to delete the documents you've sent me and wait for a fresh set of docs from you. Let me know either way."

b) Not negotiate on price, as long as you consider the markup you can see there to be fair.

C) Yes, buying via a reseller is the way these things are normally done for IBM. It is, obviously, different for Dell, but that's how IBM rolls.
posted by DarlingBri at 2:15 PM on June 17

Ask this question of the company contracting you. It is their decision and they fully and properly expect that you would inform them and let them make the decision.
posted by Ironmouth at 2:54 PM on June 17 [2 favorites]

Let whoever sent you the email know that you received this information. Request the pre-markup price.
posted by KokuRyu at 3:00 PM on June 17

Relax, it ain't that big of a deal - everyone knows that margins on hardware are razor thin. The hardware is the loss leader. Bundled services or accesories are where the money is made.
posted by randomstriker at 3:01 PM on June 17 [1 favorite]

You're a contractor? Hand this information to your superior/supervisor and do whatever he says with it, even if that disagrees with the advice here.

Using your judgment here doesn't really have a "win" for you as any possible outcome, and there are many possible "lose" scenarios if you make that judgment call on your own.
posted by rokusan at 3:16 PM on June 17

KokuRyu: "Let whoever sent you the email know that you received this information. Request the pre-markup price."

and watch them shoot you down...
posted by Gravitus at 3:34 PM on June 17

This happened with a contract employee I was working with. He did what I would have done, wen to another reseller and tell them you know exactly what you want and if they can make it happen for the midway point between their cost and the markup, they'll walk away with the sale.

I gave the extra $800 saved as a bonus to the contractor.
posted by geoff. at 4:08 PM on June 17

This really seems like the moment to run, don't walk, to your corporate lawyer or outside counsel for advice.

In terms of ethics, I've always thought that negotiation in arms-length business deals was a caveat emptor thing -- it's the norm in business in general that people use whatever information they've legally acquired, and it's their responsibility to make sure they don't slip up and reveal their negotiating position, non? I mean, if the norms of your industry are different, you wouldn't want to ruin your reputation, but it doesn't seem like you really have an *ethical* obligation to not use information they gave you.
posted by paultopia at 4:12 PM on June 17

If the margins are so thin on the materials that you don't think you can negotiate much of a better price, then use your upfront disclosure (and the subsequent gratitude on the part of the vendor) to get something else for a lower cost/thrown in.

Can you get a service contract extension? One year free say. Or get a 4 hour onsite rather than 24 hour shipped.
Needless to say, you should at least get some vendor bennies and a lunch out of this.

If your reseller offers you nothing, then, well, at least you know the kind of people you are going to be dealing with when you screw up (miss a warranty date by a week or so, etc).
posted by madajb at 4:26 PM on June 17

Just fyi, you can often buy bladecenters directly from ibm. IBM.com sells packages, and do the .com reps (I'm assuming you're a smaller company/purchase here).*

Ethically I think you're obligated to let the reseller know what they're sending out; resellers do it pretty tough as is in an incredibly competitive environment, something like that could really hurt their business.

*declaration: I work for IBM, but not in this area of the business, or any area that sells things.
posted by smoke at 5:17 PM on June 17

Most likely this is accidental, but I wouldn't rule out that that the confidential numbers are fake and you got sent this information on purpose to lower your negotiation amount, since you "know" their profit margin. Business is pretty bad all around, companies may be trying anything to make an extra buck.
posted by Spurious Packets at 5:37 PM on June 17 [2 favorites]

I can't honestly negotiate at this point, even if I wanted to, because I know their costs.

I don't agree. Prospective car buyers often find out how much a car cost the dealer before they go into negotiate on it. That information doesn't make their negotiation any less honest. Even if you hadn't had their exact numbers, you probably could have, with a little research on your own, come up with a very good estimate of what their costs are if you had wanted to.

Plus, if you make a counteroffer, no one is holding a gun to their head forcing them to accept it. If they like your counteroffer, they can accept it; if they don't, they can decline or make a countercounteroffer, just the same as if you didn't have the information.

Ethically, do I alert the vendor to this fact?

Yes.
posted by DevilsAdvocate at 9:09 PM on June 17

This really seems like the moment to run, don't walk, to your corporate lawyer or outside counsel for advice.

What?!?!? You want to lawyer up for THIS??? Are you also gonna check your rear view mirror for men in dark glasses driving black cars pointing silenced pistols at you???

Come on, folks. Get a grip. So you found the wholesale prices. So you shed some light on their business model. Like I said, relax. IT AIN'T A BIG DEAL. Anyway who does even the most cursory sleuthing will be able to find this information.
posted by randomstriker at 11:39 PM on June 17 [1 favorite]