How to decide between two vendors?

MichaelT21 (Arkansas)
Posts: 501

Posted:

For the first time, we have two proposals for a big landscaping project with dramatically different prices. The landscaping company recommended by the landscape architect who did our plans is about 40% higher than the economy landscaper that has done work for another Board member.

I am curious how we evaluate the two proposals. Does anyone know of any good resources we can use to frame our discussion?

BarbaraT1 (Texas)
Posts: 821

Posted:

Get more bids.

In my experience very low bids mean the vendor has misunderstood the bid instructions or left something out, and very high bids mean the vendor doesn’t want the job, but doesn’t want to risk our future relationship by refusing the bid at all.

You don’t know whether these are very high or very low yet.

PatJ1 (North Carolina)
Posts: 568

Posted:

We solicited 3 bids for masonry retaining walls replacement. They were $20,000, $24,000, and $60,000. Same area, same brick. We honestly thought the $60,000 bid just didn't want the work until they called 2 weeks later asking for their status.

If bids are all over the place, get more bids, and verify the scope of the complete project with the vendor.

SteveH35 (Washington)
Posts: 339

Posted:

Quote:

Posted By BarbaraT1 on 06/17/2022 7:23 AM
Get more bids.

In my experience very low bids mean the vendor has misunderstood the bid instructions or left something out, and very high bids mean the vendor doesn’t want the job, but doesn’t want to risk our future relationship by refusing the bid at all.

You don’t know whether these are very high or very low yet.

Great advice from Barbara! Get. More. Bids.

And, for obvious reasons, think thrice before using the landscaping company that a volunteer director uses or used in the past.

MarkM19 (Texas)
Posts: 1,459

Posted:

Michael,
I also agree that additional bid or two needs to be received. My first thought about the high bidder would be that the Landscape Architect probably has a commission built into that price. The low bidder probably wants the job a little more IMO. I assume when you guys went out to bid you had a written "Scope of Work" sheet that each vendor used to come back with these bids. This is very important since I was mentioned if anything was left out of one of the vendors, they will blame your HOA and then charge for the extras.

Always check references. I call them all and even though they are usually handpicked if you ask good questions, you can learn things.

Pat J.
Of course, the 60K vendor wants the job at that price. That does not mean that is the best quote it just means that if you bite on the price they Win.

MichaelT21 (Arkansas)
Posts: 501

Posted:

Quote:

Posted By PatJ1 on 06/17/2022 7:31 AM
We solicited 3 bids for masonry retaining walls replacement. They were $20,000, $24,000, and $60,000. Same area, same brick. We honestly thought the $60,000 bid just didn't want the work until they called 2 weeks later asking for their status.

If bids are all over the place, get more bids, and verify the scope of the complete project with the vendor.

Pat,

Which of the three proposals did you go with?

SheliaH (Indiana)
Posts: 6,964

Posted:

As you should know by now, you can't make this decision based solely on price, so in addition to getting more bids, here's what else to consider on all of them:

First, did you ask references and check them - ask for previous HOA customers? Have you checked the BBB or other resources to see what sort of complaint history the vendors have? Just because there may be complaints doesn't necessarily put them out of the running - you'll want to consider what the complaints were about, if they were resolved and how (remember, the customer isn't always right).

Take a good look at the bids - are they proposing to do the same amount of work - if so, it may be helpful to dig for more details. The one with the higher price may be getting materials from a place that's more expensive than the other. Labor costs are increasing for everyone - the one whose less expensive may not be having the same problems in recruiting and hanging on to employees.

Regarding the bid that came from the company who did work for the board member - tell the board member to abstain from participating in any discussion regarding that vendor since there's a conflict of interest. Make sure he/she leaves the room when the discussion takes place so there's no indirect influence upon the other board members - and he/she doesn't run back to the vendor to report what was said.

If it is not right do not do it; if it is not true do not say it. Marcus Aurelius

MarkR21 (North Carolina)
Posts: 710

Posted:

Make your request to for quote extremely specific
For example 9 yards of double hammered oak tree mulch need spread 3” deep. Instead of just something vague like add mulch to planted areas

The more you understand the job the better you can judge the vendor

I get bids all over the place and generally go with the lowest ones
For some reason many commercial vendors are much more expensive than residential

PatJ1 (North Carolina)
Posts: 568

Posted:

Quote:

Posted By MichaelT21 on 06/17/2022 8:12 AM

Posted By PatJ1 on 06/17/2022 7:31 AM
We solicited 3 bids for masonry retaining walls replacement. They were $20,000, $24,000, and $60,000. Same area, same brick. We honestly thought the $60,000 bid just didn't want the work until they called 2 weeks later asking for their status.

If bids are all over the place, get more bids, and verify the scope of the complete project with the vendor.

Pat,

Which of the three proposals did you go with?

We went with the lowest. Not because it was the lowest, but because we had a relationship with the vendor as they had done previous work for us. Sadly, he's retired now and won't be able to finish up our remaining retaining walls. It was a grant project and we were required to submit 2 quotes, but not required to choose the lowest one.

We have often found that our previous vendors usually give us the best price.

KellyM3 (North Carolina)
Posts: 2,239

Posted:

Quote:

Posted By MichaelT21 on 06/17/2022 7:15 AM
For the first time, we have two proposals for a big landscaping project with dramatically different prices. The landscaping company recommended by the landscape architect who did our plans is about 40% higher than the economy landscaper that has done work for another Board member.

I am curious how we evaluate the two proposals. Does anyone know of any good resources we can use to frame our discussion?

Michael,

Why did you call the one vendor and "economy landscaper?" That's an interesting descriptor.

MichaelT21 (Arkansas)
Posts: 501

Posted:

Quote:

Posted By KellyM3 on 06/19/2022 7:53 PM

Posted By MichaelT21 on 06/17/2022 7:15 AM
For the first time, we have two proposals for a big landscaping project with dramatically different prices. The landscaping company recommended by the landscape architect who did our plans is about 40% higher than the economy landscaper that has done work for another Board member.

I am curious how we evaluate the two proposals. Does anyone know of any good resources we can use to frame our discussion?

Michael,

Why did you call the one vendor and "economy landscaper?" That's an interesting descriptor.

Oh, you are perceptive. Let me try to explain.

More expensive vendors (full service or economy) have sales staff, administrative assistants, receiptionists, and do-nothing Presidents that run the company. They have high overhead but are easy to do business with because they have people sitting behind computers all day answering phones and responding to e-mails.

Economy vendors work with far less overhead. No sales staff. No estimators. No do-nothing presidents. Minimum administrative staff. Their President is out there in the field as a team leader, directing crews and telling everyone how to do the work. May even be willing to pick up a shovel now and then.

By finding the economy vendor without the overhead, you often can get the same quality work for less money. It's generally a win-win situation.

So when I look for landscaping vendors, I tend to ignore any one that has a professional estimator, sales crew, or skilled phone receptionist because that is all overhead and non-value added. I prefer the ones that may not speak the best English when they answer the phone but do excellent work as proven by their large portfolio of work that they do. I prefer the companies whose owner answers the phone on a Saturday because he wants the business and knows that is when the customers are calling. I like the guy who estimates on a Sunday because he is driven to get more work.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Quote:

Posted By MichaelT21 on 06/20/2022 1:37 PM

Posted By KellyM3 on 06/19/2022 7:53 PM

Posted By MichaelT21 on 06/17/2022 7:15 AM
For the first time, we have two proposals for a big landscaping project with dramatically different prices. The landscaping company recommended by the landscape architect who did our plans is about 40% higher than the economy landscaper that has done work for another Board member.

I am curious how we evaluate the two proposals. Does anyone know of any good resources we can use to frame our discussion?

Michael,

Why did you call the one vendor and "economy landscaper?" That's an interesting descriptor.

Oh, you are perceptive. Let me try to explain.

More expensive vendors (full service or economy) have sales staff, administrative assistants, receiptionists, and do-nothing Presidents that run the company. They have high overhead but are easy to do business with because they have people sitting behind computers all day answering phones and responding to e-mails.

Economy vendors work with far less overhead. No sales staff. No estimators. No do-nothing presidents. Minimum administrative staff. Their President is out there in the field as a team leader, directing crews and telling everyone how to do the work. May even be willing to pick up a shovel now and then.

By finding the economy vendor without the overhead, you often can get the same quality work for less money. It's generally a win-win situation.

So when I look for landscaping vendors, I tend to ignore any one that has a professional estimator, sales crew, or skilled phone receptionist because that is all overhead and non-value added. I prefer the ones that may not speak the best English when they answer the phone but do excellent work as proven by their large portfolio of work that they do. I prefer the companies whose owner answers the phone on a Saturday because he wants the business and knows that is when the customers are calling. I like the guy who estimates on a Sunday because he is driven to get more work.

We chose our present landscaper as the owner is one of the working crew. It is called pride of ownership.

KellyM3 (North Carolina)
Posts: 2,239

Posted:

Honestly, we have a "full service" grounds company that absorbed our previous vendor and service has declined in spite of corporate "efficiencies."

MichaelS56 (Minnesota)
Posts: 858

Posted:

Were the same specs used by both vendors and did both vendors use the same materials, same number of shrubs etc.

MichaelT21 (Arkansas)
Posts: 501

Posted:

Quote:

Posted By MichaelS56 on 06/20/2022 4:39 PM
Were the same specs used by both vendors and did both vendors use the same materials, same number of shrubs etc.

Both vendors were given the same plans drawn by the landscape architect. When we sign the contract, I will include the plans on the contract and ensure that the vendor commits to build per plan for the cost stated.