LouH1 (Michigan)
Posts: 214
Posts: 214
Posted:
Where does it say that an Association needs to have 3 vendor bids before making a decision on which vendor to use? Nowhere in any of our documents does it say any such thing. Thanks.
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HOA Bidding process
Started by LouH1 • 14 replies • 725 views
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ChrisE8
Posts: 454
Posts: 454
Posted:
Quote:
Posted By LouH1 on 10/18/2020 1:33 PM
Where does it say that an Association needs to have 3 vendor bids before making a decision on which vendor to use? Nowhere in any of our documents does it say any such thing. Thanks.
Where does it say that an Association needs to have 3 vendor bids before making a decision on which vendor to use? Nowhere in any of our documents does it say any such thing. Thanks.
The board's "duty of care", which is a legal obligation that often applies to HOA boards, means that the board has to run its business in a careful way, as a reasonable person would. I'd say that means getting more than one bid for a project.
GeorgeS21 (Florida)
Posts: 3,808
Posts: 3,808
Posted:
I would add that all associations are somewhat different. Mainly alike, though.
Most will have a limit for non-bids, recognizing not every project warrants a bidding process.
Most will have a limit for non-bids, recognizing not every project warrants a bidding process.
MelissaP1 (Alabama)
Posts: 13,836
Posts: 13,836
Posted:
Your most likely never going to see that statement. It's just the best way of conducting business. You can always take the first and only bidder if you all want to. However, most members will NOT feel very comfortable with that process. Most believe should get multiple bids for large projects.
Now if you have an MC some of the larger ones already have built-in contractors. So not necessarily a 3 bid process in HOA's with MC's.
Now if you have an MC some of the larger ones already have built-in contractors. So not necessarily a 3 bid process in HOA's with MC's.
Former HOA President
KellyM3 (North Carolina)
Posts: 2,239
Posts: 2,239
Posted:
Quote:
Posted By LouH1 on 10/18/2020 1:33 PM
Where does it say that an Association needs to have 3 vendor bids before making a decision on which vendor to use? Nowhere in any of our documents does it say any such thing. Thanks.
Where does it say that an Association needs to have 3 vendor bids before making a decision on which vendor to use? Nowhere in any of our documents does it say any such thing. Thanks.
Lou,
Good observation. Most jobs would benefit from seeing three qualified bids. Some jobs should be handled by a contracted vendor with a proven record of serving a community even if the price isn't lowest (but it shouldn't be overly high)
JohnC46 (South Carolina)
Posts: 14,265
Posts: 14,265
Posted:
Lou
All of the above posts are no the money. I agree with them.
All of the above posts are no the money. I agree with them.
ND (PA)
Posts: 792
Posts: 792
Posted:
Agree that most comments so far provide good advice.
Also you need to consider that not all "projects" are created equal. You could have an estimated $500 landscaping project to replace a tree or two, or an estimated $50,000 landscaping project to replace significant landscaping elements within your HOA.
Likely the $500 project does not warrant the time and effort to solicit, provide (from contractor perspective), collect, review, and select bids; but the $50,000 one likely does.
And 3 bids is by no means mandatory, but is a logical and acceptable number to give the bid recipient (the HOA Board in this case) some level of comfort and confidence in the results they receive.
But for a more major project or one where there may be a lot of interest in bidding (e.g., a landscaping contract), it may be worth the time and effort to solicit as many bids as you feel like requesting and evaluating. No reason to exclude likely competition because you're so fixated on soliciting only 3 bids.
Think of it this way . . . if you only get a single bid for a project, then that's all you know. You don't know if any other contractor can do the job better, faster, cheaper. So the more bids you have to evaluate, the more options you have to consider for the project.
Also you need to consider that not all "projects" are created equal. You could have an estimated $500 landscaping project to replace a tree or two, or an estimated $50,000 landscaping project to replace significant landscaping elements within your HOA.
Likely the $500 project does not warrant the time and effort to solicit, provide (from contractor perspective), collect, review, and select bids; but the $50,000 one likely does.
And 3 bids is by no means mandatory, but is a logical and acceptable number to give the bid recipient (the HOA Board in this case) some level of comfort and confidence in the results they receive.
But for a more major project or one where there may be a lot of interest in bidding (e.g., a landscaping contract), it may be worth the time and effort to solicit as many bids as you feel like requesting and evaluating. No reason to exclude likely competition because you're so fixated on soliciting only 3 bids.
Think of it this way . . . if you only get a single bid for a project, then that's all you know. You don't know if any other contractor can do the job better, faster, cheaper. So the more bids you have to evaluate, the more options you have to consider for the project.
LouH1 (Michigan)
Posts: 214
Posts: 214
Posted:
Thank you all for your thoughtful answers. You all have helped me a great deal
JohnC77 (California)
Posts: 562
Posts: 562
Posted:
A policy for how bids are secured and how many are needed would in separate documents many would call a Board Resolution. Many well run HOA's would have them voted on and placed on their website under governing documents.
SheliaH (Indiana)
Posts: 6,964
Posts: 6,964
Posted:
You're kidding right? Why in the hell would anyone pick the first vendor they see out of a phone book or came up during a Google search to do anything, especially if the project will cost hundreds or thousands of dollars?
When you live in a HOA and serve on the board, you have a duty to spend assessments in a prudent manner. This means getting second and maybe third opinions on expensive projucts, checking out the backgrounds of contractors, asking for references and checking them and more. That doesn't mean you won't make mistakes, but at least you've done your due diligence and are in a better position to identify and resolve problems should they arise.
Feel free to spend your own money on your house any way you please, but if this is how you feel, I'd suggest you stay away from board membership until you learn about fiduciary duty and what that means.
When you live in a HOA and serve on the board, you have a duty to spend assessments in a prudent manner. This means getting second and maybe third opinions on expensive projucts, checking out the backgrounds of contractors, asking for references and checking them and more. That doesn't mean you won't make mistakes, but at least you've done your due diligence and are in a better position to identify and resolve problems should they arise.
Feel free to spend your own money on your house any way you please, but if this is how you feel, I'd suggest you stay away from board membership until you learn about fiduciary duty and what that means.
If it is not right do not do it; if it is not true do not say it. Marcus Aurelius
LouH1 (Michigan)
Posts: 214
Posts: 214
Posted:
Who are you talking to. SHEILA? I TOTALLY AGREE WITH YOU! Where did you get the idea that I thought any differently? Thank you for your comments. Again....I, personally agree with everything you said, why the nasty response?
JohnC77 (California)
Posts: 562
Posts: 562
Posted:
I was wondering the same thing. Nowhere did I see the poster mentioned advocating for taking just one bid. Talk about a tongue lashing at its finest.
KerryL1 (California)
Posts: 14,550
Posts: 14,550
Posted:
Not sure, but I think Sheila was replying to Melissa waaay above.
MelissaP1 (Alabama)
Posts: 13,836
Posts: 13,836
Posted:
If so, took it the wrong way. I am actually the one in our HOA that enforced and created the 3 bid rule. However, as it is NOT a steadfast rule in itself or documented, 1 bid can suffice. It's NOT the optimal way to do business. There is just nothing written officially in one's documents on how bidding process works.
Some HOA's are so large their MC is basically their contractor for various services. So there isn't going to be much in the way of multiple bids in that situation. As it is a service the MC provides.
Just saying that it is BEST business practice for 3 bids. It is not always practical and sometimes 3 bids may not happen.
Some HOA's are so large their MC is basically their contractor for various services. So there isn't going to be much in the way of multiple bids in that situation. As it is a service the MC provides.
Just saying that it is BEST business practice for 3 bids. It is not always practical and sometimes 3 bids may not happen.
Former HOA President
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