Supply Chain - Case of the Secret Discount

1. Is there an ethical problem here?

Yes there is a serious ethical problem present. Alternative Technologies are not transparent with all the information that should be present on the face of their bid. They are also attempting to provide Dr. Smith with a kick back in the form of additional software to the value of $ 18 500 in order to enhance their chance of winning the bid above competing suppliers even though their product's price is considerably higher. Alternative Technologies are attempting to conduct business behind closed doors.

2. What additional information does Buylow need, if any?

If Buylow does want to request additional information if must be from all potential suppliers and not just Alternative Technologies. If Buylow wants to enquire as to why Alternative Technologies product & software is superior and warrants a premium price, then he must give the chance for all competition bidders to provide additional information. The better option would not to request any more information but rather just use the information originally provided and evaluate them on that.

3. What are his options?

4.

Mr. Buylow options would be either to disqualify Alternative Technologies bid for unethical practices or to evaluate each bid with the transparent information provided without the kick back in mind and then choose the supplier who meets the businesses supplier evaluation requirements and who can offer the best product at the best price.

5. What advice would you give Buylow?

The advice I would provide would be to terminate the bid form Alternative Technologies for unethical practices and then evaluate the remaining bids on the products price and quality that it can provide. A business policy must be created to ensure that no kick backs will be accepted form any potential bidders and that bids will be turned down if any attempt of kick back is done in the future.