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Subject: Preferred vendors
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TomC14
(Colorado)

Posts:11


08/10/2019 2:32 PM  
The management company we have adamantly "steers us" towards their "Qualified" vendors. Our board has asked for competitive bids, through the management company's agent for our HOA, and "their" vendor is always the lowest, or we are told they couldn't get any other bids. Being a skeptic, this makes me wary. Thoughts?
PatJ1
(North Carolina)

Posts:93


08/10/2019 2:41 PM  
Yes, be wary. We have handled most of our own work order

Board members are volunteers. Many have no idea what they're doing. Educate them. Don't beat them up.
PatJ1
(North Carolina)

Posts:93


08/10/2019 3:01 PM  
Posted By PatJ1 on 08/10/2019 2:41 PM
Yes, be wary. We have handled most of our own work order




Sorry hit submit by mistake. There is nothing wrong with being wary of the MC when it comes to vendors. Especially if you have any avenues to get new vendors. Our best vendor was our roofer who we found on the list advertised on the internet. They are now replacing all our wooden railings with aluminum. Board totally oversees the work. MC just pays the invoices. Saves us a ton of $ in added MC charges for supervising the work. I live on property and oversee everything.

It's also helped that I work in a business to business industry, truck repair, and have made relationships with some of our customers. If they can't help, they may know someone who can. This is extremely helpful as securing quotes is very difficult. No one wants to spend the time to quote something for a HOA.

Example: The Board secured a quote to trim our trees from our repeat vendor. The quote was very detailed and outlined the work needed and why. At our request, our MC secured a 2nd quote. It said "Trim trees in community" and was $1200.00 higher.

This is a new MC company for us. We were hoping to get the Board away from working with vendors, but it doesn't look like that's going to be possible. We already have better vendors than they could ever provide.



Board members are volunteers. Many have no idea what they're doing. Educate them. Don't beat them up.
BillH10
(Texas)

Posts:384


08/10/2019 3:31 PM  
As a management company, we seek bids from those contractors who have previously performed satisfactorily for the client or other clients of ours. We are constantly seeking to add to our 'stable' of contractors we trust and who we know bid competitively.

However . . . we try to counsel our clients to not bid everything. For example, if the landscape contractor calls and says there is a need for a $350 repair to the irrigation system, we do not bid the work. We try not to go bid for anything below $1,000, if the client balks we will drop the figure to $750. Any type of break in a main water supply line will result in a minimum $750 plumbing bill so why bother gathering bids? The bill will be what it is. The same holds true for minor roof repairs, fence repairs, etc.

We are located in the Dallas-Fort Worth area, the amount of commercial and residential construction is astounding. Anyone in this area who wants to work can find work, and there is work going begging. Homeowners and condominium associations are generally pretty small potatoes. Contractors do not wish to continually be asked to bid without being selected or awarded the work. The bid process is time consuming for the contractors and for us. We had a situation two years ago in which we contacted over 30 contractors to replace windows, eventually it was about $50,000 worth of replacement windows. 15 of 30 responded and met with us, 2 submitted bids. One we called flatly told us he will not bid on any job worth less than 1 million.

It is not uncommon for us to tell Boards we were able to obtain only a single bid. We have learned that is the indicator the scope of work is too small to be worth going to bid. Obtaining 3 bids for a scope of work less than $5,000 is nearly impossible.
NpS
(Pennsylvania)

Posts:3572


08/10/2019 6:49 PM  
A word of caution -

Some MCs have a boilerplate clause in their contracts that allows them to pay off any vendor they brought in if the MC gets terminated.

We got burned by such a clause once. We terminated the MC. They paid off the painting contractor they "recommended" in full even though the punch list wasn't taken care of.

Sikubali jukumu. Read all posts at your own risk.
SheliaH
(Indiana)

Posts:2621


08/11/2019 5:34 AM  
Our property manager also gave us a list of qualified vendors - those usually worked for other HOA clients so the property manager could usually persuade them to give us a competitive price. Have you asked your manager what he or she means by "qualified?" If not, why not?

That being said, you need to remember that the property manager works at the behest of the board, so if yours isn't soliciting bids as you've requested, it may be time to get another property manager. In the meantime, is there a reason why YOU can't look for other bids? If you're on the board, you already know what's in the RFP (if you don't know, that's a bigger problem in my opinion). Call a few places and see if they work with HOAs, and if so, send them an RFP and see what happens. Don't forget due diligence - ask for references and check them, check if they're licensed and bonded, depending on what you want them to do, etc. You should be doing that for all the bids anyway.
ND
(PA)

Posts:330


08/12/2019 1:04 PM  
Posted By TomC14 on 08/10/2019 2:32 PM
The management company we have adamantly "steers us" towards their "Qualified" vendors. Our board has asked for competitive bids, through the management company's agent for our HOA, and "their" vendor is always the lowest, or we are told they couldn't get any other bids. Being a skeptic, this makes me wary. Thoughts?




Tom,
I agree you may have reason to question the results. Need to tread lightly though as you want both a fair bidding process and to keep good relationship with your MC. I assume it's in the MC's contract that they assist w/ writing the specifications for the work you need in addition to soliciting possible contractors to do the work. A few suggestions:
- Assuming cost of job makes receiving multiple bids appropriate . . . require the MC to solicit bids from their "qualified" vendors as well as a certain number of other vendors.
- Board Members can search for possible vendors as well, do some screening on them, and request MC send them the specification for bid.
- If MC is recipient of bids, ensure they receive and supply to the Board (or a single Board POC) SEALED bids. This ensures they can't see other contractors' pricing and pass along to their "qualified" vendors.
- Instead of having MC do all of this, have a single Board POC be the recipient of bids (if you suspect possible inappropriate activity by MC).

ND
(PA)

Posts:330


08/12/2019 1:11 PM  
Additionally, while it's good to be wary of possible ulterior motives of others in the process (e.g., the MC in this case) . . . it's also good to trust the knowledge, skills, abilities, and prior experience of someone you've hired to help manage your property. Many times the relationships they've built with vendors is a positive thing for both the MC and the HOA.

And you should trust, but also verify. Even if their "qualified" vendor appears to be best on paper, there's nothing stopping the Board from doing interviews, asking for references, etc.

Or it could be a money-grab and the MC's getting kickbacks. But in my experience, things like that don't end well for anyone involved. The HOA gets a bad product at an increased cost, the vendor gets fired (eventually and makes a bad name for themselves), and the MC gets replaced (eventually and makes a bad name for themselves). For a reputable MC who has been in business for a long time, I doubt they would intentionally steer you wrong for a quick buck that puts their reputation and business at risk.
KellyM3
(North Carolina)

Posts:1418


08/14/2019 9:31 AM  
Posted By TomC14 on 08/10/2019 2:32 PM
The management company we have adamantly "steers us" towards their "Qualified" vendors. Our board has asked for competitive bids, through the management company's agent for our HOA, and "their" vendor is always the lowest, or we are told they couldn't get any other bids. Being a skeptic, this makes me wary. Thoughts?




I would expect the management company to recommend their "trusted" vendors and assume (unless proven otherwise) that the management company works in your best interest. That said, if your HOA board wants separate bids, get them yourselves independently of the management company.

If there's hesitation to trust the management company's recommendations, why would the board steer all quotes through the same "questionable" bid process?

My management company recommends great companies but I truly believe there is a "HOA tax" that applies to projects where a potential vendor works w/ a manager and never deals w/ an actual resident of the community. Prices do tend to be higher, admittedly, and sometimes it's worth every extra penny.
JohnC46
(South Carolina)

Posts:8550


08/14/2019 9:38 AM  
Had a situation concerning repairs to our retention pond. One company I interviewed said they do not do work for homeowner associations. He said they are looking to get things done cheap. To many people have a say in the process. A new BOD come in and re-questions everything.
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