Page 10 - New England Condominium January 2020

10 NEW ENGLAND CONDOMINIUM
-JANUARY 2020
NEWENGLANDCONDO.COM
BOARD OPERATIONS
Bidding Basics
Procuring Vendors the Right Way
BY DARCEY GERSTEIN
The boards that direct co-ops, condo-
miniums, and HOAs across the country want to purchase the equipment, or lease
are made up of volunteers who donate it? Have residents who use the gym made
time to help govern their communities. specific requests? All of this might go
Among their duties is selecting vendors to into what is known as a statement/scope
provide goods or services for those com-
munities—everything from lawn care to ager and any relevant professionals will
roof repair; surveillance to extermination. produce a request for proposal (RFP) and
As volunteers, board members often have distribute it to a list of bidders deemed
limited expertise in the wide variety of in-
dustries and occupations related to their
properties—so they may be at a loss as to pends on a number of factors. For some
how to even find qualified vendors, let jobs, there might be only a couple of play-
alone evaluate and choose the best prod-
uct or service at the best price.
Tap the Manager
According to Steven R. Wagner, prin-
cipal at law firm Wagner Berkow in New than might seem necessary, because there
York and also president of his own Man-
hattan co-op, your property manager is dors might not meet requirements and
a key asset in the process, because “You others might not respond at all. Keep in
need somebody who’s familiar with build-
ing systems to help you cover what needs demand for a reason, and may not be able
to be done.” For most projects, the prop-
erty manager can make use of their con-
tacts and relationships in the industry, from the prospective pool.
and draw on personal experience with
contract negotiations and procurement.
He or she will also act as an intermediary shake, their responses to the RFP should
between the board and the vendors they be delivered in a sealed format. Depend-
engage. The process usually goes more or ing on the community’s process, some
less as follows:
First comes some version of a needs sent to every member of the board, plus
assessment. The board, a committee, the the property manager, who then all simul-
manager, or another building professional taneously unseal the bids at a scheduled
such as an engineer or architect will alert board meeting. Others, like those man-
the board to a maintenance or compli-
ance issue. Next, the board and its advi-
sors will determine the parameters of the Realty in Queens, limit it to the man-
project. Do they want a full gym upgrade, ager and the board president, and some-
or just some updated equipment? Do they
of work. Using this as a guide, the man-
qualified for the task.
How many bidders get the RFP de-
ers with the needed expertise. For other
categories, like painters or insurance pro-
viders, the field could be vast. Most pros
advise soliciting a higher number of bids
is always the possibility that some ven-
mind that well-regarded companies are in
to accommodate your project in the time-
frame required, thus eliminating them
Seal the Deal
To ensure that all bidders get a fair
boards elect to have a copy of the RFP
aged by Claudine Gruen, Vice President
Director of Operations for Garthchester
times the engineer or other professional get clarification on aspects of the propos-
involved. They coordinate the unsealing als that might not have been clear. And
together, and then share with the rest of not least of all, in-person impressions
the board online. Gruen says at least two are important. Body language, physical
people should be charged with unsealing presentation, and other subtleties speak
the bids together. This provides transpar-
ency and accountability.
The RFP will also spell out other sub-
mission requirements, such as how the der might also present a physical example
proposal should be formatted and what of their wares, or technology that makes
details it should include. Proposals that do them stand out.
not meet the requirements or the deadline
are disqualified. Those that remain can be manager or owner’s rep might go back
considered on their merits, which are as-
sessed in a variety of ways.
Stay on the Level
Once the bids are open, the process of able price or offering. This is also a good
evaluation and elimination begins. This is time to leverage future projects or suggest
another area where the manager’s exper-
tise comes into play. He or she, in con-
sultation with any relevant professionals,
will create a bid leveling sheet. If the RFP to avoiding even the appearance of a con-
was thorough and well composed, and the flict of interest when it comes to bidding.
responses met all the criteria, then the Having a board member who is a plumber,
leveling can be straightforward. But there for example, really helps when something
are often variables that the RFP didn’t comes up regarding the building’s pipes.
include, or idiosyncracies among ven-
dors that cannot be captured within the a formal plumbing contract, having that
specified format. In those circumstances, board member involved in the process be-
leveling is even more important. A board comes complicated.
may have to assess a dozen proposals, and
comparing them can be complicated. One sonally in any way through their posi-
might include materials costs; one might tion—say through their business getting
not. There could be a wide disparity be-
tween estimated time to completion. War-
ranties might vary. Interpretations of the to every association member or share-
scope of work could differ among the bid-
ders. It’s rarely apples-to-apples.
If a project is especially complex, or Law [BCL] 727 went into effect), but that
beyond the expertise of the property man-
ager, Wagner recommends investing in an themselves from any discussion and votes
owner’s rep. An owner’s rep is a dedicated involving the contract. And, as Gruen
manager with particular knowledge of a notes, “Perception is reality, especially in
specific project who can distill the pro-
posals and align the variables to make and recusals, by skirting the usual bid-
them easier to capture and compare. ding process, a board risks the trust of its
There may still be discrepancies, but the membership—which, as fiduciaries, is its
basic elements for weighing each proposal main function.
evenly are there. Any remaining questions
can be addressed in the next step, which
is inviting select bidders for a board in-
terview.
Face to Face
Depending on the number of qualified double wave of corruption-related in-
bids, the board might interview all or only dictments brought by Manhattan District
the top few. This allows the board and Attorney Robert M. Morgenthau back
manager to get to know the people with in the 1990s. A three-year investigation
whom they will be working. It also gives ended in charges for more than 80 New
them an opportunity to ask questions or
volumes on a professional’s preparedness,
commitment, and soft skills like com-
munication or problem-solving. A bid-
Before and after the bid leveling, the
to each bidder and ask them to “sharpen
their pencils”—a common euphemism for
adjusting their proposals to a more favor-
bulk purchasing or other efficiencies.
Avoid Even the Appearance of Conflict
Even seasoned boards have to be alert
But when it comes to actually procuring
If a board member stands to gain per-
the building’s plumbing contract—not
only would that need to be disclosed
holder (at least in New York as of Janu-
ary 1, 2018, when Business Corporation
board member would then need to recuse
this business.” So even with disclosures
Don’t Forget the Past
This brings us to another important
caveat. It may seem like ancient history,
but today’s New York property profes-
sionals are still feeling the sting from a
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