The bottom feeder gets nailed!

If you’ve been following my blog for any length of time, you know one of my pet peeves is Satcom providers pricing phones and services at rock-bottom prices, at near no-margin rates.  It very well could be that there has been a miscommunication between the purchaser and the provider.  Or it could be that there is a lack of understanding of the product, maybe the purchase agent doesn’t know what is involved with the goods that they are putting out to bid.  Whatever the cause, these prices are unrealistic, at least if you want to be able to use your phone!  As I’ve said before “the lowest rate doesn’t equal the best value.”

Last week I shared a story about a proposal being too good to be true.  To re-cap; a state agency had a bid for phones and minutes to pool–minutes, no service.  Those of us in the Satcom world understand that you must have service in order to have your phones active so you can use the minutes.  The ‘winning’ bidder submitted pricing for only minutes which made their bid look the lowest.  When the agency awarded the contract, the provider told them that they would have to pay for monthly service at a total cost ABOVE the total price of the other bids: at a cost of over $1,500 (ouch!).  In response the state agency has said “No! You will honor your bid or you will be blacklisted.”  Bigger ouch!

In the end, the lowest bidder ‘won’ the contract but it will cost them more than their profit because they were not clear about the true cost of the bid.  While there is some satisfaction to be had in this scenario, the preferable option is for bidders to provide accurate pricing and information to those who are buying satellite phones.  As well as a responsibility to make sure that they are clear on what they are asking for in their bids.

There certainly is far less cost in that route and much more value in the final outcome.