HELP - Contract vs Bid Approval

Hello all – as I stated in a few other topics, I am the new President of our HOA. Our complex is in financial ruin in addition to several other issues. I am trying my best and learning as I go, but this is all new to me. The other two board members are completely useless. They do not even reply to emails. That being said, I have a question for you all. We have a large roofing project – four roofs need entirely replaced – the total is $438K. The project was approved in an open session as well as the bid. We received three bids and selected one in open session using a vendor we have for years who does great work and is giving us a huge discount if he gets all four of the roofs. This obnoxious management company wanted legal to review. I saw no issue. They came back today with a contract that changes some of the conditions in the bid. They want to be the point of contract, which is ridiculous since we have a full-time on-site property manager that we pay with our HOA fees. This makes no sense. Why would the roofers contact them if there's an issue and not the on-site manager? They also want to change the payment terms in the bid provided by the vendor. My question is, since the project and the bid were already approved by the board is a contract necessary? They’re also saying we need to have a board meeting in order to approve the contract. Is that necessary? Can I just tell them to move forward with the bid and nix the contract altogether? I’ve been trying to be firm with them and put my foot down, but they are very difficult to deal with and make several arguments that I never know if it’s just their opinion or an actual civil code or something legally required. Lastly, I finally received their invoices and they have been charging us almost $2K per month and additional fees! This is on top of their $1730 monthly fee. This is why they want to be the point of contact so they can charge us for every little interaction they have with the roofer. Any input would be greatly appreciated.

Thanks!!

Additionally, if you are ever concerned that what they are telling you is their opinion or not ask them.
If they say it's statute - have them give you the statute number (trust but verify).
If they say it's in their contract, ask that they show you - then verify with the copy the board should have.
Once they provide reference, thank them and say the board will need to discuss.

If something goes wrong you'll want a contract imho

Agreed but I need backup from the other 2 board members. I suggested a sit down of the board to review each and every additional charge, especially for items we did not ask them to do. One member replied "this seems like a lot". The other said nothing. It's so difficult but i am going to stuck it out!

thanks!

A bid once accepted become a contract. It is not uncommon for an association's legal counsel to review a bid/contract before it is officially signed. But, it should never be the management's legal firm, if they have one. I don't employ a law firm for my business. I have had to use one, but it was covered under my insurance policy.

Not sure how this arrangement is between your on-site manager and your management company, but I feel at this time the on-site manager should be the contact point. A management company shouldn't be in the project management business unless specially trained. As far as the extra fees, they are taking you for a ride, one, apparently, your association can't afford.

Based on what you stated, your association did everything right in approving the bid.

It appears that you are unfamiliar with contracts and the contracting process. As someone else pointed out, a "bid" becomes a "contract" once you sign it. It doesn't matter how good your vendor is, stuff happens and you have a fiduciary duty to protect your community. That's what you signed up for once you got on the board. For a contract this large, especially because this isn't something you understand very well, you really should have your association attorney (one chosen and paid for by your community) review the contract. There are many clauses that protect your community in case something goes wrong - arbitration clauses, good workmanship clauses and payment clauses. How much was the vendor asking for up front? Were there commencement and completion dates? All that will be reviewed by the attorney (we just signed a big roofing contract so I am familiar with this).

I have a couple of questions. Is your PM independent? Or do you pay the PM company to have him/her on site? Who is the one who usually deals with vendors - the PM or the PM company?

Most likely the PM and the PM company will do whatever you want them to do in these cases. The PM company does not have to be your enemy. If they are a large company, they have resources that can help you. You need to read their contract. You might want to have a board meeting where they do a review of what they can offer and how they handle other communities. And where is your PM in all of this? That person must workly closely with your PM company or how else did they get the contract for review?

Last year we had a pool refinishing project that went bad. Very reputable contractor who sub-contracted out the job. The pool finish failed and the job had to be redone. We had not had our attorney look at the contract and it left us in a bad situation because the contract favored the contractor. Luckily he was willing to compromise, but if he had stuck by the contract we signed (which was just the original bid) it would have cost us much more money. Lesson learned - all major contracts are reviewed by our attorney. It costs very little and is worth it to protect the community.