When does a project deserve competitive bids?

Why "we're small" doesn't change the math

Project cost tracks the size of the contract, not the size of the association. A 16-unit townhome association replacing its roofs writes checks on the same scale as a big community, and a full reroof on even a small property routinely runs six figures. A smaller budget makes each of those dollars matter more.

That is the squeeze small self-managed boards feel: big-community projects without big-community staff. Most of the fix is process discipline, and process is learnable.

The three ways project costs sneak up on boards

• Multi-year contracts that add up. A "small" $15,000-a-year landscaping or maintenance contract that renews for four years is a $60,000 relationship. Look at the total relationship value, not the annual line.
• Change orders that grow the job. A $45,000 project that takes a $10,000 change order mid-job was never really a $45,000 project. Thin scopes rarely shrink; a complete scope up front is the best defense.
• Splitting one project into pieces. Turning one $80,000 roofing project into two $40,000 "phases" saves nothing and costs plenty: two mobilizations, two rounds of access, and a record that reads poorly to an owner asking questions later. If the work is really one project, scope it and bid it as one project.

What to do this month

Three things moving:

• One list of every contract the association has: amount, term, renewal date. It is the master document for seeing where the money goes.
• Which of those contracts cross $50,000, and when each one comes up.
• Renewal dates on the board calendar. A contract the board wants to re-bid at renewal should not ambush you thirty days out.

When a significant project is on the horizon, start with the scope, then take it to market through a clean competitive bid.

Who runs the bid matters too

Boards also ask who should run the bid. Our answer is about process: a bid is most credible when the party running it has no bid in the envelope. Bids come to us sealed, openings are recorded, and the fee is agreed up front and stays the same whichever contractor wins. That is what a bid administrator is for.

Back to SF 1750 and your board.