The boards that direct co-ops, condominiums, and HOAs across the country are made up of volunteers who donate time to help govern their communities. Among their duties is selecting vendors to provide goods or services for those communities—everything from lawn care to roof repair; surveillance to extermination. As volunteers, board members often have limited expertise in the wide variety of industries and occupations related to their properties—so they may be at a loss as to how to even find qualified vendors, let alone evaluate and choose the best product or service at the best price.
Tap the Manager
According to Steven R. Wagner, principal at law firm Wagner Berkow in New York and also president of his own Manhattan co-op, your property manager is a key asset in the process, because “You need somebody who’s familiar with building systems to help you cover what needs to be done.” For most projects, the property manager can make use of their contacts and relationships in the industry, and draw on personal experience with contract negotiations and procurement. He or she will also act as an intermediary between the board and the vendors they engage. The process usually goes more or less as follows:
First comes some version of a needs assessment. The board, a committee, the manager, or another building professional such as an engineer or architect will alert the board to a maintenance or compliance issue. Next, the board and its advisors will determine the parameters of the project. Do they want a full gym upgrade, or just some updated equipment? Do they want to purchase the equipment, or lease it? Have residents who use the gym made specific requests? All of this might go into what is known as a statement/scope of work. Using this as a guide, the manager and any relevant professionals will produce a request for proposal (RFP) and distribute it to a list of bidders deemed qualified for the task.
How many bidders get the RFP depends on a number of factors. For some jobs, there might be only a couple of players with the needed expertise. For other categories, like painters or insurance providers, the field could be vast. Most pros advise soliciting a higher number of bids than might seem necessary, because there is always the possibility that some vendors might not meet requirements and others might not respond at all. Keep in mind that well-regarded companies are in demand for a reason, and may not be able to accommodate your project in the timeframe required, thus eliminating them from the prospective pool.
Seal the Deal
To ensure that all bidders get a fair shake, their responses to the RFP should be delivered in a sealed format. Depending on the community’s process, some boards elect to have a copy of the RFP sent to every member of the board, plus the property manager, who then all simultaneously unseal the bids at a scheduled board meeting. Others, like those managed by Claudine Gruen, Vice President Director of Operations for Garthchester Realty in Queens, limit it to the manager and the board president, and sometimes the engineer or other professional involved. They coordinate the unsealing together, and then share with the rest of the board online. Gruen says at least two people should be charged with unsealing the bids together. This provides transparency and accountability.