How a Community Association Should Review Vendor Proposals

As a community association board member, you’re taking on an active role in your community. This covers all the general upkeep issues with gardening, cleaning and laundry room service and any ongoing “handyman” type projects.

A board is bound by many legal mandates set forth in many places (such as state and and your own  CC&Rs) with regard to how to accept vendor proposals and should adhere to these rules when working with your community association manager to correctly see this process through.

The following is a general breakdown of how a community association board should review vendor proposals.

Step 1: Confirm Complete Proposal

• Thoroughly review and anticipate questions: The top two questions from other board members (and possibly residents) will be “how much is it going to cost?” and “how long is it going to take?” If you are presented with a new question from another board member or a homeowner, take note and make a commitment to provide a quick answer.

• Use Appropriate Scope: Not every job will require an exhaustive vendor selection process. You might find that a vendor recommendation from your community association management company or fellow resident will be enough. Yes, you should still perform due diligence but hiring someone to change light bulbs is not the same as hiring a roofing contractor. Keep the scope of the job in perspective. Basics for soliciting bids of any number includes a general description of the job and a general quantification of number and volume or size.  For instance, a bid to “install speed bumps at entries” is not enough information even if you discussed the project in detail with the vendor.  A better description would be, “to install two speed bumps at each of the three entries, each being 8 feet wide and between 4 and 5 inches in height.”Make sure that each vendor has bid the same project.  If one vendor asks for a clarification (i.e. do you want us to include the mailbox kiosks along with all the buildings in the painting bid?), make the same clarification with all of the vendors.

• Licenses and other Basic Assurances: This includes any certifications, licenses, bonds or insurance required by your state or specified by the CC&Rs. Ask for copies of this documentation from each vendor.  Many management companies retain a list of “scrubbed” vendors, so you may be able to have all of the prequalification done in advance.

• Association & Management Insurance: When an outside contractor comes onto the property to do work, you may have to provide them with your HOA’s insurance certification. 

• Injury & Illness Prevention Plan: For California associations an IIPP needs to be in effect for the property, and other states may have similar requirements.

• Tax ID Number: Simple but important. Every vendor needs to provide their tax ID number to get paid.

Step 2: References and Job Checklist

• Check the References: When a vendor provides references you should utilize them. This goes back to another common board question: “Did you check their references?” If it is a major project for your community, the answer should always be “Yes.”

• Job Checklist: As a board member, you might take on a supervisory role for the CAM project if you do not work with an association management company. A new vendor should be asked about any previous experience working with HOAs. When the job begins consider making a job checklist: are they cleaning up after their work sessions? Are they are starting/finishing on time? Are they correcting any mistakes? Would you recommend this vendor for future work?

Step 3: Presentation to the Board and Follow Up

• Summarize Comparison: Before a final decision is made, prepare a comparison chart or list to present the board. This will incorporate the bids, qualifications and references. If you work with a community association management company, they should present this to your board and provide a recommendation of the right vendor for the job.

• Courtesy Letter: Because you don’t want to burn any bridges, it is advisable to send a courtesy letter/email to any vendor who didn’t get the job.