Every dollar means more to Florida associations than ever. With higher costs for labor, supplies, insurance, property taxes…it’s important to make your budget go as far as possible. Knowing that you’re getting the best value from your vendors is part of that process.
“The best value” is not the same as “the lowest price.” It’s tempting to go with the lowest bid for a project, but if the work is substandard and must be repaired, replaced or redone in less time than it normally would be, your board may spend more than going with a higher priced but better-quality option in the first place.
When do you actually need to go through a bidding process for your association vendors?
It’s a good idea to get a number of bids when you’re looking for vendors for
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Major capital projects
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Service contracts
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Professional services
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Non-emergency work
Check with your association’s legal counsel to make sure you are in compliance with any statutory bidding requirements at all times!
Obviously, you can do that any time you feel it’s time to take a look at available resources to make sure you’re getting the most for your money.
Avoiding conflict of interest with board members and vendors has always been best practice and avoids violation of law. Now, that extends to community association managers, property management firms and their relatives. Passed by the Florida legislature in March 2024, HB 1021 established requirements similar to the conflict of interest provisions for associations and their officers and directors.
Lucy Acevedo, a regional director at FirstService Residential in Jacksonville, notes that vendors can become complacent over time. “Even if you’re happy with the service and price, it doesn’t hurt to take a closer look and compare what you’re getting with other options in your area,” she says. “Whenever you’re considering a new vendor, get at least 3 options from reputable vendors.”
What kind of questions should your board be asking those potential association vendors?
The answers may matter more than you know. Make sure any potential vendor can answer the following questions to your satisfaction:
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Are they licensed, bonded, and insured?
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How many years have they been in business?
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Do their services fit within your required budget?
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Do they have excellent references from similar associations?
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What is their online reputation like?
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Have they communicated with you before and after the interview process?
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Have they provided a clear roadmap for successful project completion?
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Do they offer a warranty?
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Are they the right fit for your association?
A good property management partner will help you create a clear scope of work and then fairly evaluate your vendors and their bids across a matrix. “I use a forced ranking sheet,” Acevedo says. “We assign points in each category we’re comparing. The longer a business has been operating, the more points it gets for longevity. Immediately providing proof of insurance of every type – not just liability - at the requested levels earns more points than delaying that proof. Immediate proof of required licensing earns more points. At the end of the process, we see how many points each vendor gets, and the highest scorer earns the contract.”
Of course, completing that evaluation spreadsheet requires effort up front. What should your board do before you get to the comparison stage for vendor bids?
Research, research, research
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Word of mouth: Your neighbors' experiences can be invaluable. Seek out companies with a solid reputation in similar communities nearby. Utilize online resources like Google, the Better Business Bureau, and even Yelp to gather insights.
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Schedule walk-throughs: Before you request formal bids, invite each potential vendor for an individual walk-through of the project area. This allows them to grasp the project's scope and provides your board with an opportunity to assess their expertise and professionalism. It's also a chance to gauge their familiarity and comfort level with the specific type of work required.
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Go beyond the list: Don't just accept a list of references or photocopied letters; take the time to call them and ask probing questions. It's a good practice to involve multiple board members in the reference-checking process. This not only distributes the workload but also fosters a sense of shared responsibility and engagement among board members, providing a variety of perspectives that go into the decision-making process.
Leverage your management company
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Ask for expert advice: Your management team can offer valuable insights and recommendations based on their experience. They can work with your association counsel and insurance broker to determine what insurances and licenses are required for the work you need done, and ensure your contracts and warranties are reviewed by association counsel prior to execution.
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Utilize established relationships: Many management companies have trusted vendor partnerships and can provide several options for your board to choose from. The management company should never dictate what vendor to use, just provide options for you.
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Benefit from Vendor Certification: Some management companies have their own vendor certification process, ensuring quality and adherence to high service standards. Even if the management company has simply worked with the vendor before, your manager can get insights from colleagues to help shape your view and expectations of their work. Again, these are options, not dictates from the management company.
Set and follow standards in acquiring HOA and Condo association vendors.
Establishing a clear and consistent procedure helps simplify vendor selection and improves your outcomes. To ensure a fair comparison, request that each bidder submits a proposal that adheres to the same scope of work. Consider creating a template for vendors to complete, either in place of or alongside their standard proposal. This template should outline specifics such as materials, tools and equipment, project timeline, total cost, and communication protocols in case of any unforeseen issues. (That can become your forced ranking sheet!)
It's your community’s money and you want to be careful with it. That’s part of your fiduciary responsibility and commitment to that community. Contracting with the right vendors is a critical part of that responsibility. Download our vendor checklist to learn more about the questions you should ask any potential vendor for your association. To learn more about how the right property management partner can help simplify that process for your board, contact FirstService Residential today.