JackiM (California)
Posts: 14
Posts: 14
Posted:
Our manager discourages us from getting multiple bids and pushes us to use certain companies. Are there regulations that management companies have to abide by?
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Getting Multiple Bids
Started by JackiM • 7 replies • 698 views
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MelissaP1 (Alabama)
Posts: 13,836
Posts: 13,836
Posted:
Well first the MC doesn't control the HOA. They are a paid contractor to do the work of what the HOA wants them to do. So I would say if the board wants 3 bids, then the board does 3 bids and submits the invoice to the MC when done.
Former HOA President
MarkM19 (Texas)
Posts: 1,459
Posts: 1,459
Posted:
Management Companies are there to give you guidance and in this case it should be ignored. I am sure that everyone would agree 3 buds if possible is the normal. In some cases that may not be realistic but that is what the board should push for if possible. Sounds like you have a lazy PM.
This reminds me of my first year on my board. I questioned why we were not getting multiple bids for the Insurance of our HOA. The PM said we use the same person for all of their properties and he is the best guy. I told the PM we can prove that buy getting 2 other bids. Guess what happened? We were paying 25K annually for the policy. The PM told the guy she was going out to bid and he immediately dropped his proposal to 15K for the same coverage. They were ripping our HOA and probably many more for years.
Some might say Trust but Verify. I learned to say Verify and then Trust. Kick backs do happen.
This reminds me of my first year on my board. I questioned why we were not getting multiple bids for the Insurance of our HOA. The PM said we use the same person for all of their properties and he is the best guy. I told the PM we can prove that buy getting 2 other bids. Guess what happened? We were paying 25K annually for the policy. The PM told the guy she was going out to bid and he immediately dropped his proposal to 15K for the same coverage. They were ripping our HOA and probably many more for years.
Some might say Trust but Verify. I learned to say Verify and then Trust. Kick backs do happen.
RichardP13 (California)
Posts: 3,868
Posts: 3,868
Posted:
Jack
So, exactly what types of bids are you looking for?
Even though I own a management company and deals with bids and proposals on a regular basis, I'll answer this as the former president of association.
Here are some examples we dealt with.
1) Sent out bids for a smart irrigation system that would cost us $30K. Received three bids. Current landscaper was in the middle, but was there twice a week to monitor at no charge whereas the other s would charge.
2) Needed to add flowers throughout the community at a cost of about $5K. Do you bid out or just go with the current landscaper. There are installation costs to consider.
3) You have a pool guy and the pool heater goes out in May. It is already budgeted for in the reserves, do you tell the pool guy to get a new heater or send out for bids. Cost is $2400.
4) You want to install security cameras throughout the community at a cost of about $30K. I am going to get at least bids.
The point is some of you have contracts in place with vendors that you hired to handle the repairs to specific areas that you aren't going to bid on. One of our boards went looking for a new management company. Sent a 30 page RFP out to 21 MC's. Only 5 responded. I wonder why.
On insurance I have a policy to re-bid every three years to to keep them honest.
Sorry, I don't think of myself as just another paid contractor like Melissa keeps harping on. I believe she was self-managed and only used a bookkeeper. If that works for you, knock yourself out. But, in reality, doesn't work for most.
So, exactly what types of bids are you looking for?
Even though I own a management company and deals with bids and proposals on a regular basis, I'll answer this as the former president of association.
Here are some examples we dealt with.
1) Sent out bids for a smart irrigation system that would cost us $30K. Received three bids. Current landscaper was in the middle, but was there twice a week to monitor at no charge whereas the other s would charge.
2) Needed to add flowers throughout the community at a cost of about $5K. Do you bid out or just go with the current landscaper. There are installation costs to consider.
3) You have a pool guy and the pool heater goes out in May. It is already budgeted for in the reserves, do you tell the pool guy to get a new heater or send out for bids. Cost is $2400.
4) You want to install security cameras throughout the community at a cost of about $30K. I am going to get at least bids.
The point is some of you have contracts in place with vendors that you hired to handle the repairs to specific areas that you aren't going to bid on. One of our boards went looking for a new management company. Sent a 30 page RFP out to 21 MC's. Only 5 responded. I wonder why.
On insurance I have a policy to re-bid every three years to to keep them honest.
Sorry, I don't think of myself as just another paid contractor like Melissa keeps harping on. I believe she was self-managed and only used a bookkeeper. If that works for you, knock yourself out. But, in reality, doesn't work for most.
KerryL1 (California)
Posts: 14,550
Posts: 14,550
Posted:
Our management company (MC) has a contract with us saying that our property manager should get "up to" three bids. This is reasonable as there are some jobs t where it's hard to find three qualified contractors.
Our GM seeks the vendors to give our RFPs (Requests for Proposals) to as in our urban setting some of the jobs are very specialized. A good PM has a lot of contacts with other PMs and can get good advice about who to seek proposals from.
MCs do have their own Code of Ethics through, I believe, the CAI Community Assoc. Inst., Jacki. Also, your contract with them should say something about what they provide in the area of seeking contracts and other duties the board should expect. Are you on the board, Jacki?
Our GM seeks the vendors to give our RFPs (Requests for Proposals) to as in our urban setting some of the jobs are very specialized. A good PM has a lot of contacts with other PMs and can get good advice about who to seek proposals from.
MCs do have their own Code of Ethics through, I believe, the CAI Community Assoc. Inst., Jacki. Also, your contract with them should say something about what they provide in the area of seeking contracts and other duties the board should expect. Are you on the board, Jacki?
MarkM19 (Texas)
Posts: 1,459
Posts: 1,459
Posted:
Richard,
Once again you make solid points. I hate to type long story on here so I shortened too much. I totally agree that inside the main contract with Vendors you should have negotiated charges for most things that can happen mid year. After all you selected them to be your contractor. IF things change then you adjust. What I did for the last 4 years of my tenure on the board I had our PM send a note to all vendors before our Budget talks started. The letter requested information as to if they were going to have any increases on the renewed contract. In that letter we stated that if they choose to increase the contracted price we would automatically go out for multiple bids. This kept annual increases from Vendors to a minimum.
In the 8 years I was on the Board we did not raise our dues once. I am bragging a bit but I am also very proud of it.
Once again you make solid points. I hate to type long story on here so I shortened too much. I totally agree that inside the main contract with Vendors you should have negotiated charges for most things that can happen mid year. After all you selected them to be your contractor. IF things change then you adjust. What I did for the last 4 years of my tenure on the board I had our PM send a note to all vendors before our Budget talks started. The letter requested information as to if they were going to have any increases on the renewed contract. In that letter we stated that if they choose to increase the contracted price we would automatically go out for multiple bids. This kept annual increases from Vendors to a minimum.
In the 8 years I was on the Board we did not raise our dues once. I am bragging a bit but I am also very proud of it.
BarbaraT1 (Texas)
Posts: 821
Posts: 821
Posted:
Sometimes it makes sense to get multiple bids, sometimes it doesn't. I had a board that insisted on multiple bids for every single project. A storm damaged a tree near the community entrance, the landscaper said it would be $600 to cut it down and haul away. The board told me to get more bids. In the 48 hours it took me to do that, the tree fell over, on a homeowner's car.
JackiM (California)
Posts: 14
Posts: 14
Posted:
Sorry for the late reply. Yes I am on the board.
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