bids

Our management company is not renewing our contract due to cost issues. They have served us with the contracted 30 day notice. We are negotiating with a new management company to replace the current and it looks like a good deal. My question is: Is it necessary to go out for multiple bids(Is there a state law?)or can we(the Board)just go ahead and contract the new Management Company. His proposal is well within the monies budgeted for a Management Company...DennisO

don't know every state law, but I doubt there are many that require a private company to get multiple bids before spending money. that would be anti-capitalistic, and excessively regulatory.

However, states have laws that regulate how much companies can sell products for, how much profit they must make on a sale, and who they can and cannot sell to, so... it's possible.

There are often accusations against HOAs that they give business to friends, relatives, etc. Soliciting bids avoids the possibility of this.

You can accept your current bidder as an interm mgmt. co and still go to bid. I highly suggest you do. It is reasonable to do so and generally accepted business practice to have more than one bidder. If you do not get more bids you will not be able to effectively compare the vendors services, and price. You will not have a good response when someone in the community objects to this. You will not enjoy the cost savings that you may incorage the vendors to provide you under a copetitive bid. We had a landscape contract that was put in place by a previous board without competiive bidding @$140,000 when it came time to renew the vendor raised to $175,000. At that point I demanded that it go to bid, and it was a fight, but when the smoke cleared we had a new vendor @$109,000 who has for the last three years done a superioir job. $66,000 x 3yrs = $198,000 and thats some real money to use twards other projects !!! GO TO COMPETITIVE BID, IT IS THE RIGHT THING TO DO AND IT MAY SAVE YOU THE BIG BUCKS YOU NEEDED TO INHANCE YOUR COMMINITY.

Low bids should allways be very carefully and cautiously considered before they are accepted. The old saying "you get what you pay for" is usually absolutely true. There has to be a reason one vendor can do the same job for less. One obvious solution from the vendors perspective is to not do the same job. Cutting corners to make the low -ball figure that gets the attention of the BOD is risky for both the communinty and you as a board member.

I think that it is an unfortunately true fact that many times specific vendors are shown favoritism by members who know them, and are awarded contracts based on the who you know factor. I believe that this is due to the fact that many board members do not come from a business managment background. We have had an issue in our community involving a landscape contractor that used to reside in our community and has friends here. This issue has been traced back almost 8 years now, and has been an ongoing battle within the community. This attachment to community members resulted in our community spending more for sevices than necessary, and the inability of the prop. mgmt. to inforce the contract. While it initially seems like a good idea to hire vendors that reside in the community, in practice it has turned out to be very, very, bad idea. The additional emotional connection between a vendor and the members is counter productive, and it opens up the possibility of things going wrong.