The Bidding Process

November 2022

All high-rise communities have certain truisms.  One is that, no matter how large or small your community, something always requires fixing or upgrading.  If the lobby and common areas need to be updated then unexpectedly an elevator is malfunctioning, HVAC system requires maintenance, roof requires repair or water pipes are leaking.  Finding contractors willing and able to get the work done when needed, correctly and at a competitive price is a challenge.

Work in high-rise communities can be one-time major improvements or repairs such as window or elevator replacements, or smaller recurring maintenance including cleaning, pest control, landscaping and waste management.  In each case vendors and contractors are selected and engaged.

One-Time Major Projects

The bidding process is similar regardless of the type or scope of work.  The difference is in what happens prior to bidding.  For larger and more complex projects such as elevator or roof replacement, paving work, parking area repairs, or major common area renovations it is best to bring in an experienced individual, often an engineer, possessing specialized skills capable of inspecting an area requiring work and preparing a detailed request for proposal, or RFP.  This is a complete package, often requiring detailed project specifications, sent to a limited number of vendors.  Some vendors will respond.

Responses are collected, typically in a sealed enveloped by a stated deadline, and delivered to the board or manager.  Bids may be unsealed at a board meeting or reviewed by management and board president, with assistance by an expert in the field.  Selection of a vendor is by directors at a board meeting.

While price is important, it is not the sole consideration.  Certain vendors have more relevant expertise, better reputation or referrals, more timely execution and fewer variables which can affect the final cost.  After paring the list down to about three vendors, it comes time to meet with each one to discuss their bid in detail.  Price may be negotiated along with a final schedule.  Contingencies or concerns will be discussed.  Then final revised bids are provided and a vendor selected by the board.

A minimum of three vendor responses is desirable to better compare competing bids.  Be suspicious if one price is much lower than the others.  Something is likely wrong with their bid.  Ensure your vendors maintain insurance since your corporation’s insurance policy is unlikely to cover vendors.

A manager or management company managing multiple properties will likely be more successful in negotiating a better price or schedule.

The greatest challenge lies in finding vendors willing to bid on a project.  Vendors can be identified based on past experiences and personal knowledge, references or vendor directories such as Condo Resource Guide.  Some vendors will decline to bid after reviewing specifications, current workload, or if they have had poor experiences dealing with a particular building or individual.  Others may not be capable of doing the work.

Bids are more common when things are not going well with current vendors.  With a long-trusted and reliable vendor available, the cost of going through a bidding process is unlikely to outweigh the value of maintaining a good working relationship with someone offering a competitive price.

Smaller and Ongoing Work

Not all work merits the time, effort and cost of soliciting multiple bids.  When immediate or emergency work is required, it may not be practical to obtain bids.  When there is a water leak in the building, the leak needs to be plugged as quickly as possible and damage repaired to avoid a worsening situation.

For smaller jobs, those under about $15,000, it may not be worthwhile going through a bidding process.  It is easier and faster to work with a trusted vendor or to hire someone without preparing an RFP and searching for multiple vendors.

Landscaping and snow removal is unique in that both are frequently bid together.  If landscaping is damaged during snow removal, the same vendor is responsible for repairs.  Pest control, odour control, waste management and cleaning services can be employed using a contract covering one or more years.

Requesting bids, used appropriately, provide a practical mechanism for identifying quality vendors.