Contractor Disclosures

I am interested in learning how other HOAs handle information about the disclosure of contractor information.

We prepare RFPs (request for proposals). We solicit bids. The board typically selects 3 or 4 bidders to meet in person. If non-board members helped to prepare the RFP, they are invited to sit in on the vetting process. Selection is made. Contract is formalized and awarded. Contractors are notified.

Decisions, but not necessarily the discussions that led up to the decisions, are recorded in the meeting minutes. Sometimes, the minutes will state who was awarded the contract without stating the price.

We are comfortable with this approach because we believe that we do better with a closed-bid process - without any advance notice of our present costs. All of our contracts are available for inspection. But some of our HOs are contractors. And if one of them asked to inspect our contracts, we would probably turn down the request because it could create an unfair advantage.

We have no statutory or organizing doc obligation to do anything more.

I am wondering whether open meeting states allow an exception for contractor vetting. I am also wondering if other HOAs, open or not, have a better approach to balancing their need for transparency and competitive non-disclosure.

I know that CA has similar allowances for contracts in their statutes as VA does.

I suspect that it's like that for all States that have an open meeting requirement.

I don't know of any legal requirement anywhere about putting that in the minutes but why would you not? It's a question members will ask so put this information out there.

BTW, there seems to be some unfounded belief that associations are required to obtain a certain number of bids and/or that they must hire the lowest bidder. I am unaware of any legal requirement for do so. When hiring contractors the cost should be low on the list of priorities. I would be far more concerned about the quality of work or the contractor's reliability than getting the work done at the lowest price.

You mentioned that you have some contractors residing in your association and expressed a concern that they would see the bids. So what? You should adopt a policy that prohibits resident contractors from bidding. What happens if you hire Paul the Plumber in unit 13 and discover he is totally incompetent? Are you going to feel comfortable seeing him on a day-to-day basis after you fired his worthless butt and sued him to recover your costs? Avoid those kind of problems by not doing business with members.

Indirectly.

That is to say we identify who the contract is awarded to (not who bid). The price of the contract, which (at least for the contracts we have)require monthly payments, could easily be figured out be looking at the Treasurers report (income/expense statement and budget summary). As I said, if a member is really interested, all they have to do is request to view the contracts and, by law, we would have to show them.

As I think Tim mentioned, in CA we may deal with contracts in formation in open meetings or executive session. We have many due to our twin high rise situation, and the small ones are discussed and voted on in open session, sometimes with multiple is, e.g. copier service, postage meter, annual audit, reserve analyst. Larger ones, generally specula projects, are done by an interview process, much like yours NpS, in executive session.

Once we vote to accept a bid, we generally announce the award ("subject to our attorney's review") in open session so it is recorded in the minutes. There is no requirement to do so, but I don't know why you wouldn't record that information, NpS.

Also, in CA as in many states, owners legally may request a copy of executed contracts to copy/review.

All: Davis-stirling.com, put together by an HOA law firm, has some excellent examples of RPFs, etc., re: contracts. Much of this advice is NOT specific to CA and is especially useful to self-managed HOAs.

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