In a large RFP, a corporate client is asking my small business to pay them the large corporation a retention/signing bonus based on how we

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In a large RFP, a corporate client is asking my small business to pay them the large corporation a retention/signing bonus based on how we

They are asking us to determine what that bonus is, as a part of the RFP. Wouldn’t it be considered a bribe?

Asked on May 3, 2017 under Business Law, Georgia

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

The issue is whether the money they are seeking is being pocketed by an employee of the corporate client and will (or reasonably will) cause him to act against his employer's interests; or whether it is the corporation itself which will get the benefit of the payment.
 
The former is illegal: the law doesn't let an employee take or solicit bribes to act against his employer's interests. The latter, though--the corporation itself soliciting a payment or bonus--is legal, since there is no dishonesty or violation of any duty: it simply the client in essence asking for a better price (since getting a "bonus" to offset what they will pay you is financially and mathematically identical to simply reducing what you would charge them by that same amount). A large company may legally use its size and power to exact concessions from small companies: our current president's company(ies), for example, are well known for doing this.
 
 
The problem is that you may not be able to tell if the "bonus" is for the company itself (legal) or will be diverted to, taken by, etc. an employee as a kickback (illegal). It is probably better, or at least safer, to not offer a separate bonus but simply give them some extra break of the pricing you otherwise offer them, stating in your response, for example, that "the price for our services would normally be X, but because we value our relationship with your corporation, we are offering discounted pricing of Y"--that makes it clear that while you value the business, you are simply going to reflect that in giving them good pricing.


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