Ethics in Bid Seeking: Question for Managers and Owners

[Wesley Sherow]

Hey Bigger Pockets People,

I was thinking about this in the morning today. My property management company is located in Albany, NY with about 350-500 apartments fluctuating. I have a few large clients that make up the majority of my portfolio. In many cases, they are purchasing buildings to fix/flip by apartment, raise the value, and refinance. BRRR in a nutshell.

Here's the question. I have a bunch of in-house labor that I can throw between work-order management and renovations. They're skilled enough to do a majority of a renovation job. For now i've just been billing their time hourly plus materials, regardless of work orders or renovation, however I was considering pivoting to a "Quote" system where I charge a pre-determined rate for a reno project, similar to how most other companies do it. 

If I seek multiple quotes for a renovation job, that makes me inherently biased. I've now seen everyone else's cards, know what they're charging and quoting, and if it works I can theoretically come in under the smallest reputable quote. Is this ethical? Is it even okay? I imagine that it can be viewed as a win-win all around for owners & management alike. Has anyone else considered this possible conflict of interest? 

Very Respectfully,
Wes

[Samantha Cash]

Jamie brings up some great points. I agree that transparency, specifically with contractors, is the key takeaway. I'm wondering if the in-house team has fewer insurance, bond, or licensing costs than the other contractors you are getting quotes from. If so, that could be the reason for any price discrepancies. For smaller jobs it might not make a difference but might be something to consider for bigger jobs.