Our BOD refuses to obtain competitive bids

Hello,

Just joined so this is my first post.

Long story short ... I'm torn between resigning (as the recently appointed Treasurer on our condo HOA board) and continuing to fight with our President who insists that obtaining competitive bids for property maintenance is unnecessary at best, and a waste of time and energy at worst.

Hardly a minor detail, our management company owns the maintenance company that is awarded more close to 100% of all work contracted out to be performed. In other words, we make no effort (that I can see) to obtain ANY competitive bids on ANY work approved by our Board for ANY amount of money that could potentially be performed by our MC. And frankly, I can't decide if it's more likely that our President has been duped by our MC (the other three Board members seem to be more bobble-heads than free-thinkers), or -- perish the thought -- kickbacks might be involved. I doubt it's the latter, but wouldn't want to bet my life on it.

Although the benefits of obtaining competitive bids are obvious and the practice is standard operating procedure for HOA's (esp. for larger amounts, say, >$1,000), my Board refuses to adopt the practice. Some of the reasons/excuses would be laughable if the matter was not so serious (e.g. "one time we requested three bids and only two of those companies even bothered to submit a bid").

To make matters even more frustrating, our MC touts the benefits of competitive bidding on their website, and how their extensive database of pre-qualified licensed vendors, bla bla bla ... yet we're denied this benefit ourselves (and our MC rep offers the same lame brained reasons for just using their in-house maintenance company as our President). I feel like I'm arguing with a brick wall over something that should almost go without saying.

When a recent fence repair quote came in for ~$2,000 I wrote to our MC rep to request they postpone the work for a few days so I could arrange to get two other bids and set my mind at ease that their in-house quote was reasonable. I cc'd the Board on this email and the President quickly replied saying "We already voted on this and the work will proceed immediately. We don't need any other bids. The price is fair, the work is guaranteed, yada yada." Mind you there's no urgency at all to get this work completed, so the President is either trying to cover up an excessive quote, or just making a power-play. Either way, I'm tired and frustrated over the whole thing.

I should also mention that I identified another HOA that uses the same MC, so I contacted one of their Board members to see if they, too, funnel the lion share of their work to MC's maintenance division. NOT AT ALL! They not only routinely get competitive bids FROM THE MC (typically anything over $1,000, and required in their by-laws for anything >$2K). So it's not that our MC gets all the work as standard operating procedure, but only from HOA's like ours that have been duped into (or paid) to do so.

I want to do the right thing and faithfully serve my community, but so much frustration and stress is beginning to take a toll on my concentration and work (something I should be doing right now instead of composing this post ;-).

I guess my question is, short of trying to initiate a hostile takeover of the Board (which I have neither the time, inclination or resources to do), should I continue the good fight .. or face the fact that I may win a small battle or two, but I'll lose the war -- so I'd might as well just resign and spare myself any further pointless aggravation? One other consideration is that I fear the potential fallout down the line if I remain on a Board that may be engaged in malfeasance; and that (perhaps) I had a duty to make my concerns known to the community (but how?). Yes, we have Director's insurance (one million for each director, the first thing I checked), but there is such a thing as guilt by association, and I'm concerned that participating in the status quo might come back to haunt me in the future.

Any suggestions/advice would be much appreciated!
{and I apologize for the long-winded post}

I agree with Tim. I suspect your board (well, your president anyway) doesn't want to review three bids because they're lazy and are assuming the management company provides the best deal. That may very well be the case, but I think it's part of a HOA board's fiduciary duty to ensure money spent on maintaining and improving the common area is done so in a cost effective manner. That means getting bids - how do you know the property manager has the best deal unless you can compare it with something.

To make sure the management company doesn't manipulate things, you may want to have the bids sealed until the board meeting. Once upon a time, we would get various bids which would be faxed to our property manager. The fax machine was near the maintenance director's office so he'd see what the other companies were doing and then adjust the property manager's bid accordingly. Fortunately, we have a honest property manager who will let us know if she thinks the management company's services are too expensive, so we now have the bids sent directly to her

Wow! Thanks so much to everyone for their thoughtful and helpful replies (and so quickly, too)! What a great resource this is!

This goes to the whole transparency issue. You want the community to be fully informed and know that they are getting the best value for their dollar. Our Budget committee drew up a resolution and mandated that anything over $5,000 had to go out for 3 bids. Also, don't use a G.C. (general contractor) unless it's a huge job that uses multiple trades and subcontractors. They just tend to mark up the job 100% and charge more. If you need an Electrician, Plumber, Concrete/Asphalt contractor, go directly to that type of Licensed and insured contractor that does that kind of work. Yes, unfortunately, the P.M.'s have their favorite contractors that they like to use (some of which are very high in my experience). It would be nice to use sealed bids and I agree with that concept, but we have not be able to sell that to the board. There is no doubt that the P.M.s will get 2 or 3 bids on something, disclose these to a 4th contractor and ask them to beat these bids. IMO, this is not ethical, but I know it goes on. The if the 4th contractor gets the job by being low bidder, the contractor may be doing at cost or at a loss, just to establish a relationship in hopes of getting more business. Also, make sure that you get COI's (certificates of Insurance) on all your contractors. You might want to make a motion to the board that they adopt a resolution and make this a standard practice. Also maybe you might want to make a motion to include other specialized contractors based on your research and suggestions. IMO $1,000 might be on the low side.

Just to add another note... Never ever sign contracts for over a year. Even your PM should have to rebid each year. Multi year contracts may look to save money but a contractor may let things decline after the first year. Your stuck. It is hard but worth it...

LloydM,

Nothing is ever “easy” about being on a Condominium Board. And most “things” take time. You sound like a responsible, knowledgeable, with life experience, person, and I would think that the Board “needs you”. Maybe reconsider your resignation?

I assume you are a Director (Board Member), who was elected by the Board to office of Treasurer.

For interest’s sake – how large is your Condominium Association? And how many Board Members?

So you would rather have these people represent you and have no equal input? Quiting your position does this. Think about it and go to another wall...

Great ... now I'm starting to feel guilty and that I ought to reconsider. ;-)

Of course, having dished out at least as much as I've had to take, the other directors might just vote to give me the boot anyway. But I'll hold off on resigning for awhile at least. If it wasn't for the fact that when I'm p-ssed off I don't get a lot done, I'd hang in there just to be a thorn in their side and work to improve things little by little. But this is pretty much ALL I think about lately; and that's not good.

Despite my strong inclination to walk away altogether, I do appreciate being reminded of not only of my civic duty, but that I have skin in the game as well. The next few days (esp. Tues when our next meeting is scheduled) will tell the tale. I'll post here again once the dust has settled.

What’s that saying – you can only eat an elephant one bite at a time? This is probably the heart of what you’re dealing with in your association. Lots of “we’ve done it this way for years” thinking – and I still maintain it’s a lazy way of thinking because there’s always room for improvement (even a tweak is better than nothing).

As Kevin suggested, get your fellow homeowners in the loop so they can start asking questions. The board might stonewall you, but stonewalling dozens of homeowners is another story. I’ve always felt any board member should be able to explain why the board made a certain decision – if they can’t say more than “er, uh, John said we should do this, so….” one should seriously ponder whether that person should be on the board.

I’m treasurer of my own board and yes, it can be difficult to get people to consider thinking a different way, but stick with it – it’ll take time, but things can and will change. Good luck!