What does the CPA say about quotes, written and verbal?

[adrianh]

@Justloadit - why are you not willing to stand by your quote?

[Justloadit]

Hi Adrian,

Not saying I am willing to stand by my quote. If you make a genuine mistake, you are now taken to the cleaners.

I had a recent experience in which I made an error in my quote, I only counted for 2 pins at R5 each on a job which actually had 12 pins in total. It seems insignificant, but the error was more than my profit, and having been over 70 systems supplied it hurt. I kept to my quote, simply because it is a regular customer, and purchases a huge amount from me on a monthly basis, however if it was a customer which I only see once in my lifetime, I feel that the loss would not be worthwhile, and I probably would have rejected the acceptance of the order.

That is all I am saying, as a supplier I would like to still be in control of my business, and have the final say if I wish to accept the order or not.

Ifwe are referring to a multimillion Rand tender, and acceptance means the business is bankrupt if it continues with the order, surely if the tender is accepted as the supplier you still have the right to refusal of the order, surely they can award it to the next tenderer.

[adrianh]

But at what point do you stand by your word. Is the point of preparing the quote not to ascertain exactly what it would entail to complete a task. You should be certain of your facts when you hand the quote to the customer.

The point that I am making is that you are trying to add a step to the process to double check yourself, if you did what you were supposed to correctly in the first place then the step won't be necessary. What happens if you still get it wrong the second time round, will you add a third chance?

Look, I am also in business and I also get it wrong, sometimes I bite the bullet and sometimes I try to get the customer to agree to a compromise. The best one can do is to be more careful next time but I certainly don't want to say to my customer that I am unwilling to stand by my quote because I am unsure of myself.

[Justloadit]

It's not about double checking myself, sh!t happens, and if continuation of the task becomes detrimental to the business, then the decision is about ensuring that you are available to your other loyal customers.

In my business, I have to create a new product from scratch, no past repeats, and then calculate the cost for mass production from an unfinished item, and this all is usually from the first take when not even a prototype has been done, with the emphasis of competing with the east. So it becomes extremely challenging.

Now a situation arises that we do not get every quote we do, so it requires intense concentration for a return of maybe 1 in every 10 quotes, there is bound to have errors that creep up, which arises due to the amount of information that has to be collated, each item used, which can arise to over 150 individual parts from a number of different suppliers.

Once a quote is accepted, I then do a thorough check of my initial quote. I have found that in the majority of cases I have done everything correctly, and on a small number of cases I made an error, and out of that on a rare occasion I reject the quote.

I feel as a supplier that I also have a right to accept an order or not, and this is what I am on about.

As a supplier even if my price has been quoted correctly I feel that I have a right to supply a customer or not, and this is what I feel is what I am trying to bring up in my discussion. The fact that a customer is happy with my price and accepts it, does not mean that I have now supply the goods or services, however if I have already supplied goods, and try to change the cost there off, then I feel the customer has a right to fight for the original price quoted .

There are customers who I will not supply my goods even at a higher price, simply because they are not capable of using my goods, and are constantly demanding free training or warranties, which are not due to manufacturing , but rather due to ignorance or misuse of the equipment. At this time it is cheaper to reject the sale.

[adrianh]

I still disagree with you. You are simply trying to protect yourself from yourself at the customers expense. You want to add a layer that shouldn't be there. You commit to your word when you present the quote,thats just the way that it is.

Its like getting engaged, if you are unsure about your intention or ability to stand by the commitment then you shouldnt commit, you should delay until you are ready or you should pass.

Another analogy is to point a firearm at somebody, you have to be willing to follow through and shoot the guy otherwise you shouldn't point the firearm at him.

All the above examples are the same in that there comes a commonly accepted time when there is no turning back. You are trying to change the rules to protect yourself from yourself.

[Justloadit]

Hi Adrian,

It's your right to disagree, just as it is my right to not accept your order

What I am saying is that once I accept your order, I keep to my word, up till then I have the choice to accept your order or not, as far as I am concerned a quotation is an intention to commit if you accept the quote based on information available at the time, up till then if circumstances change which may affect the initial terms and conditions of the quote, then I feel that I have the right to change the quote as well, just as you have the right to accept the revised quote or not.

[adrianh]

The problem is that your view goes against generally accepted norms. I suppose you could get away with it if you make it clear on your quote that that is the way that you operate.

[Dave A]

Hi Dave,

The sections you quoted really refer to a retail store, and not so much to a written quote.

The trouble is there are bits and pieces relating to pricing and authorisation issues all over the CPA, but I believe this is the most appropriate section to consider when it comes to quotes.

However, I think where you and I (together with Adrian by the looks of things) are actually getting crossed up is you keep referring to a "quote" rather than an "estimate".

Forget the CPA for a moment - what words you use are important beyond just the CPA. Here's something that was drilled into me at a very early stage in my business career:
There is a material difference between a "quote" (or quotation) and an "estimate", just as there is a material difference between a "guarantee" and a "warranty".

A quote is a firm offer - so you better make sure you've dotted all the i's and crossed all the t's.
An estimate inherently implies the potential for variances between the original estimate and the final charge raised.

If you were talking about an estimate and suggesting this was subject to final acceptance, I wouldn't be nearly as concerned. You may have not had a problem in your situation so far (which I gather relates to manufacturing), but I'm really concerned that someone else accepts your position and ends up paying the price as a result.

If you're not willing to be held to the precise letter of your offer, make sure you give an estimate, not a quote.

[sterne.law@gmail.com]

As Dave raise, a quote an an estimate are seperate issues.
A quote is an offer, which if accepted, becomes a contract, albeit pre CPA or post.
As Justloadit says, many people have their own operating procedures, which in the end determines their rise or fall, the key here is the legal standpoint.
There are many things we dont agree with, take having to join the bargaining council, but the legal position is the legal position. This is such a case.
Reading the post again, "your right to disagree just as is my choice to accept" ....But once I ACCEPT I keep my word is the offer and acceptance paradigm. Again, there is a big difference between merely increasing the price, and "revising" a quote because there is additional work, this brings a new contract into play. I call you and offer to perform the extra work for X, and you either accept or decline.