Bad economic news is pretty much inescapable these days. You can’t turn on the TV without hearing about another round of layoffs or shaky consumer confidence. The stock market is unstable, retirement funds are shedding value, the housing market has slipped into reverse and uncertainty is hanging in the air.

Given all that, it’s no surprise that community associations throughout New England are taking a new look at the way they do business – and so are the service providers and vendors with whom they work. The signs of changingtimes have been on the horizon for months now and seem to be growing more prevalent and pervasive.

Signs of Change

Walt Williamsen, owner of Condominium Consulting Services in Torrington, Connecticut, says he is hearing about established vendors being vastly underbid on contracts by industry newcomers.

“I hear they’re losing good size accounts by substantial amounts to newbies, especially in landscaping,” says Williamsen.

Williamsen says that many boards in the past would have passed on newcomerswith lowball deals, but now “the boards are biting on it.”

“Boards are being squeezed,” explains Williamsen. “Almost all of them are woefully under-funded in capital reserves. And what’s happening is a lot of the condos, built in the last 20 years, are really starting to need heavy repairs. And that’s what we’re facing now.”

Many of the new vendors, says Williamsen, are people who have beenlaid off in other fields – like manufacturing – who decide to go into a trade. “All you need is a lawnmower and a couple of rakes, and you’re in the landscaping business,” he says.

Concern Over Quality

With newcomers entering the field – at least on somewhat smaller jobs – there is a concern over the quality of the work being done at condominiums. One Central Connecticut contractor says he was recently underbid on a million-dollar job by a newcomer withvirtually no credentials. “It doesn’t matter how long you’ve been in business, what references you have, the quality of your work, the material you use. It all comes down to who’s giving them (condos) the cheapest price,” he says of the bidding process.

“My rates have been the same for years, and I believe you get what you pay for,” says the contractor who complains he is losing jobs to guys with “a pickup truck, a hammer and no insurance.”

Condos that accept shoddy workmanship for low prices, the contractor says, will be out of luck when the new roof starts leaking, and the guy who performed the work “is out of business next year.” Condominiums “are going down a path that’s going to be very destructive in the years to come,” warns the contractor.

Engineer Ralph Noblin says he advises community associations to pre-approve a list of qualified contractors before getting bids on a project. “Don’t just get bids and be tempted by some low bids and then have to figure out if the guy can do the job,” says Noblin, with Noblin & Associates, LC, in Bridgewater, Massachusetts. By making sure that all contractors who bid are capable of handling the job, the board can feel confident taking any bid, high or low, says Noblin. “In that case, [taking] the low bid isn’t a bad thing.”

Dangers for Contractors

In such a competitive climate, contractors can also be hurt by being forced to underbid on jobs to the pointwhere they don’t make any money, says Noblin.

“I’ve been through many downturns, and unfortunately, it’s survival of the fittest,” says Noblin. Contractors who aren’t very sophisticated with bookkeeping and estimating can be hit “with slap of reality,” he says.

Those who underbid, Noblin says, tend to “forget about the wear and tearon the company truck. They forget about the wear and tear on the major tools. And all of a sudden, they think, ‘I thought I could make money at $100,000 on the job, but I’m losing money.’ ”

One motivation driving underbidding by vendors is the fear of losing their work crews if they can’t get enoughwork, Noblin says. “Contractors will sit down and say, ‘These are the pros and cons of doing this work cheaper. I’ll have work my guys can do, so I’m keeping my guys. But I may break even; I may lose a couple of bucks.”

Because keeping workers is key to being able to get larger contracts in the future, Noblin says many vendors will consider breaking even or even losing money on a job.

Willingness to Haggle

Another area which has been affected by the recession is future contracts. Unlike past years, where a small increase each contract was the norm, boards may now be looking for “discounts” or “special considerations” before awarding or extending contracts.

Contractors, for their part, are considering these offers. According to Noblin, requests or demands to reduce prices could meet any number of responses. “There are some guys who will bargain and talk about changing their numbers. There’s other guys who say, ‘My number is what my number is. I spent a lot of time putting my number together,’” he says.

Those who are willing to drop their price typically do so because of a contractor’s method used to arrive at a bid, says Noblin. “Vendors typically build in some ‘leeway’ in their prices. There’s a number that they’re looking to make, but there’s some leeway there, five percent, for example.”

Noblin sees the current haggling over prices as part of an old dance between those who award contracts and those looking for work. “There has always been a hanging of the carrot in front of the contractor, hoping he’ll be more aggressive. ‘What if we give you two buildings, what if we give you two years?’ That’s all reasonable negotiation.”

Noblin says some contractors will agree to reduce prices, but leave themselvesan out in case materials go up. “I see some contractors say, ‘I’ll lock in the price, but you need to allow me an increase in materials if, in fact, my material prices go up.”

Other Savings

Where buildings can’t negotiate savings – with vendors or utility companies, for example –they’re doing small things like changing over to energy-efficient light bulbs or considering the possibility of submetering units in order to get residents to reduce their energy use.

Other condos are switching food at annual meetings from expansive catered buffets to simple snacks and refreshments. Sometimes the savings come at a more personal cost. Community associations may not be firing or laying off employees, but many of them are holding off on filling vacant positions or eliminating those positions altogether.

The New Civility?

One unusual side effect that nearly everyone mentions is the fact that, well, people are being nicer, especially those individuals on the business-seeking side of the equation. Vendors, some have noted, are nicer to clients these days, realizing that they can’t live off past success.

Vendors who have taken note of the new environment are focused on providing consistent, expert service and advice –genuinely caring about their clients and looking out for their best interests.

Boards are also looking out for themselves and the owners they serve, too, looking for new ways to weather this economic storm. That can mean launching new efforts to raise more revenue to cover income lost from missed monthly fees and foreclosures. Some boards have put cell phone antennas on the roofs, others have even changed laundry room services to earn more income.

Common Sense Strategies

Using common sense should be at the top of any board’s strategic plan — as well as that of management, vendors and service providers alike. Common advice right now is not to buy any more than is needed for the community immediately – skip stocking up, because prices can go down on many of the items needed to run condominiums.

Planning ahead can be key, as is the idea of being consistent and not just reacting to shocks in the market. If work is not needed right away, boards are taking their time before hiring contractors, making sure they’re getting the best deal.

Ultimately, both boards and the vendors that serve them just need to hold on and realize they’re in this together.

Liz Lent is a freelance writer, teacher, and a frequent contributor to New England Condominium magazine.

Managing Editor Jim Douglass contributed to this report.