Making Price the Number One Criteria
Another common board mistake is choosing vendors by price alone. With projects in excess of $3000.00 our firm gets proposals from at least 3 vendors (unless the project is of an emergency nature). We check to see each vendor is properly licensed, has liability insurance, workers compensation insurance, and if it’s a vendor we have not worked with before we check references and find out what we can about them. All of this information is then turned over to the board along with our thoughts and recommendations.
In some cases all vendors are equal and choosing based on price alone may be ok. But in many cases the lowest price is not always the best deal. For example a long time plumber for the association may quote a higher price for a project because he knows the building and the problems he will run into doing the job. A painter may have the staff to get the job done is a shorter amount of time causing less inconvenience to residents and owners, or the association may just have years of experience with one vendor and know that no matter what they make things right.
While is some cases the law requires the association to get competitive bids in no case does the law require boards to use the lowest bidder. In fact when you have a number of bids that all come in close together and one that just seems way to cheap you should be on your guard, as the bidding may not be able to finish the work for the price quoted. One thing is for certain if you think the other bids were high to do the job, that’s nothing compared to what they will be to have someone fix someone else’s work.
It’s not a board members job to get the cheapest price, it’s their job to get the best value for every dollar the association spends and to educate themselves on what each agreement includes while making the best business decision possible based on the information available.