Higher price for old contractor

Dwight,

Tough call.

Are you familiar with the work of the other two vendors? Could you contact another HOA or two for each for references, pricing histories, length of service?

We're currently soliciting bids for 2009, and a couple firms known to us have expressed no interest, their reasoning (?) being that while they might get the 2009 contract, they might have to purchase extra equipment & hire more workers, only to be underbid in 2010.

Is proven quality at a higher price worth keeping as opposed to taking a chance on an unknown lower bidder? Might your current guy lower his bid in return for a 2-3 year contract?

Another thing we're looking at is cutting back from one mowing every week for our common areas and going to once every two weeks in the drier months of J, A, S and O.

Then again the guy at 48K could be low-balling the bid in order to get the contract. In addition to the increase in fertilizer, remember mowers and the trucks to get them onsite run on gas and the past year has shown how volatile those prices are. Or he could simply want out and this is his way of pricing himself out of the running.

Dwight, my first move would be to check out the references, and if possible the quality of work, for the contractor whose bid is 20% less than your current landscaper. I have found quite a variance is cost for landscapers and in one case changed to one who was 35% less and they did a better job than the previous landscaping company. For HOA bids we have found less cost does not mean less results.

We go with 3 year contracts which contain a cost of living adjustment for the 2nd and 3rd years (2.5% if I recall correctly). We do same for both landscaper and snow removal contracts (same company). Over the ~14 years we have had our (same) landscaper, we have built a good relationship. When we renew we (HOA) receive a bonus. We have also received other considerations (just minor stuff such as extra pruning or snow removal, etc.).

With a 3 year contract, sometimes we come out ahead (especially right now with higher fuel costs) and sometimes the contractor does.

We do same with MC and repair contractor. Other contractors, though, we solicit 3 bids although for regular periodic work (painting, driveways) we have stayed with same contractors due to quality of work. For our last reserve study update we tried someone different to save $$ and were disappointed (even though came well referenced).

If you are happy with their work, keep them. They may also be willing to work out an agreeable price if you think their new bid is too high. Try a longer contract to keep the costs down.

Finally, we have a cost of living increase each year in our HOA dues. If for nothing else, the reserve fund sees an increase to keep up with inflation.

Bonnie

Dwight - NEGOTIATE!!

Tell your old guy about the other bid and see if he can match it or at least meet you half-way on the price increase.

Getting a good landscaper takes time and since no one wants to "break in" a new company, I'd do everything to keep the same company.

Believe me, any company should and will work with their customer base to keep it going. HE should be wooing the board IMHO.

Dwight,

I don't know if the following will be helpful (unless you decide to have the Contract re-bid).

Here's the story: in past years, our former PM (we're now self-managed) would get a single-price bid (if, in fact, competing bids were sought; we don't know).

This year, our first, here's how we're handling it. 3 vendors expressed interest in our business.

2009 Landscaping
Bid Proposal Information
Bids should be submitted before 15 Nov 08

Thank you for your interest in bidding on our 2009 Common Areas Landscaping Contract.

Please submit bids for each of the following individual items that you are interested in bidding on. The HOA Board will determine which individual items will be contracted for with your firm depending on our budget and competing bids, if any. Final contracting may be made with one or more firms on an item by item basis.

1. Lawn mowing each week of April, May & June then every other week of July, August, September, October with a last cut 1st week of November.

$ _______________

2. Fertilization/weed killer (which can be subcontracted by your firm) of three treatments (Spring, follow-up & Autumn).

$ _______________

3. Mulch for the trees/shrubs within and/or bordering the Retention Basin.

$ _______________

4. Mulch for the trees/shrubs within and/or bordering the northern berm Entrance.

$ _______________

5. Trimming (once) of shrubbery surrounding/adjacent to our Sign.

$ _______________

6. Trimming (once) of all other shrubbery within and/or bordering the northern berm.

$ _______________

Bids must include any projected sales taxes.

Bids should be submitted before 15 Nov 08

We require evidence of a business license and insurance. If your bid is accepted for #1, payments will be made as billed by your firm in 8 equal installments of the agreed Contract price, the first payment to be made in May 08, the final payment to be billed then paid by us no later than 01 Dec 09. Otherwise, payments will be made as invoices are received.

Hello All,

I stumbled across this site, and as the salesperson for a mid-size landscape maintenance company, I can give you a vendor's point of view. We do high-end work, and our price typical falls on the higher end too, so price is often an issue that I have to address.

First, forget about what is actually in the contract -just because it is in there and appears to be an apples to apples comparison does not mean that each contractor will complete every item. The fact is, there are a dozen ways to skimp on servicing your property and this type of cheating will probably go unnoticed until the cumulative effect is very visible in a few seasons... advantage of staying with someone who has proven their performance to you

Second, with the cost of fuel being so high until recently, raw cost of fertilizer up 60% in the last year, etc... be weary of bids that come in drastically lower. Those of us that are true professionals running a service business have to cover our costs... including future equipment replacement. There are few barriers to entry in my industry, and half of the "companies" in it have literally no idea of what their costs are and will parish... it is a constant cycle. Even with a few refernces, unless they have been in business for a substantial length of time, I would again be leary of decisions on price alone.

Lastly, the economy has drastically changed the landscape (pardon the pun) of my industry. With a record winter last year in the Northeast, and many tradesmen out of work, they have all seemed to purchase plows and mowers. Aside from these new entries to the market, there is more going on. Larger vendors have seen the writing on the wall and based on what I have heard they have been "hoarding" properties by bidding as much as 40% lower than the market. Here is a case where they may have a decent and long-standing reputation with great references, BUT the strategy is survival and the only way they can run their business at these prices is by providing as little service as possible. Sure, they hoard alot of business, use your HOA to get through the tough times, and then cherry-pick or raise prices when times get better... probaly nickel-and-dimeing all the way.

Sorry this has turned into such a rant, but my industry (which I love) is taking a beating this year. I cannot think of a similar industry which involves a fleet of vehicles that has regressed twenty years on their pricing. Usually, the price difference per unit between a low-baller and a good contractor is about the price of one latte' from Starbucks. Surely, if you were a single family home (not in an HOA) you would not change from proven qaulity to the great unknown over five bucks a month... so why do it as an HOA? Thanks for listening.