I walked away from a $20,000 sole-source contract last year.
I should have run, and a lot sooner than I did. The lure of use-or-lose year-end budget almost led to a bad decision for both me and my client.
There's no excuse, ever, for taking on work you know you can't do. It's unethical, fraudulent, and just plain bad business.
My prospective government client liked the idea I'd developed for a project. We agreed that nobody else could do it. It was priced under the legal sole-source threshold. We'd have nearly three months to get it done before his funding lapsed at fiscal year-end.
Then, things stalled.
The contract administrators were nervous about sole sourcing anyway. (3 lost weeks.) I offered to subcontract through an existing contract vehicle, and take a cut in profit but still do the project (3 more lost weeks. "Can we still do it?" he asked. "Sure," I said). The client wanted to use business processes unrelated to how the prime contract vehicle actually worked. (3 more lost weeks. "Can we still do it?" he asked. "Sure," I said). Still no contract...and now, only four weeks left until fiscal year end.
Finally, the client called and said, "Okay, we're ready. We can move to contract. Are you sure we can still get the project done?" The Prime Contractor asked, "Are you REALLY sure you can get it done?"
"Sure," I said.
I was working with a business management coach when I took the call. She looked at me and said, "What was that about? You look like something awful is about to happen to you!"
"A big contract that took forever to nail down is finally going ahead...but I feel just horrible! That doesn't make any sense!" So we talked it over, and the moment I laid out all the tasks that would be ahead, and the days remaining, and all the other people who would have to do things they weren't even committed to yet, I got really scared.
Well, no one had signed anything yet, I realized, and thought through my options. Even if I could pull it off, the work would be painful and the quality of work at serious risk. I didn't want to perform poorly for my client, nor to damage my reputation and default on a contract. Now what?
- Call him back and tell him I'd change my mind, when he had spent months of effort securing use-or-lose funds and negotiating contract provisions, embarrassing him and leaving him with the inconvenience of dispensing with money he couldn't spend before fiscal year end? or
- Proceed with what had become a gut-wrenching high-risk contract, and then fail to perform?
Far from being embarrassed, my client was relieved. "That's why I kept asking you," he said. "It's okay. We'll try it again next fiscal year." Six months later, maybe we're almost ready to contract. Maybe it'll happen. Maybe not. But it sure beats not performing...legally, morally, and ethically.
In retrospect, I shouldn't have needed a coach to figure this out. A plain ordinary gut check would have sufficed. I am grateful for the advice and counsel of my consultant, Terry Monaghan, Organizing for Your Life, for reminding me of the value of listening to my own wisdom.