November 2017
Putting a contract out to tender may not be the most effective way to obtain good service at a good price.
While putting contracts out to tender is an accepted practice in government, and serves specific political purposes, it can result in higher prices to condo corporations.
Private businesses often prefer to award a contract or project without receiving bids.
Working with preferred suppliers, and avoiding putting contracts out to tender, may provide a better outcome for condo corporations. Preferred suppliers tend to be preferred for specific reasons. They may have more experience, understand your building better and be more flexible when working with you. All of this can help keep costs down, residents happier and deliver a better outcome.
While there are times it makes sense to seek bids for a project, condo management should also remain open to less formal and more flexible options that may be less routinized and more objective.
A long trusted vendor that understands your building can provide more value than a new vendor competing solely on price.
Neither option is ideal for all situations. Experienced boards and management have sufficient insight to utilize each in its best way. Boards should take a long-term view on costs and risk when deciding which approach to take on major projects and contracts.
Low priced elevator maintenance or snow clearing may not come with fast and reliable service. Using a new engineering firm for reserve fund studies requires extensive time to educate them.
Andrea Mullen, of ADM Design, has spent years working closely with condo directors and management. She explains that, “when selecting among vendors and service providers, an existing provider is likely to know your building better than any new company that may be brought in. They are more likely to provide cost saving and value added services unlikely to be identified using a standardized bidding process.”
