Page 12 - CooperatorNews New Jersey Expo 2021

12 COOPERATORNEWS NEW JERSEY —EXPO 2021 NJ.COOPERATORNEWS.COM BUDGET & FINANCE The Bidding Process Finding the Best People at the Best Price BY A. J. SIDRANSKY One truism of home ownership is that cess for large capital improvements as follows: gardless of a board’s preferred method, at least there is always something that needs to be “Let’s say I need to replace a roof—so I call two people should be charged with unsealing fixed or upgraded. That’s true in condo and in an engineer who specializes in roofs. They the bids together to ensure transparency and co-op communities as well, both large and come out and inspect the property and then accountability. small. There’s always a roof to replace or a create a request for proposal, or RFP. From boiler to upgrade, or a lobby to refurbish. The there, the engineer will draw up project specs sole factor in determining which vendor the challenge is finding the right contractors to and a bid package that will be sent to between board selects, the process of bidding under get these jobs done efficiently and effectively three and five vendors, depending on the pref- at a cost that the building or HOA can handle. Types of Jobs Work in and around multifamily buildings RFP to three, you may not find one.” usually falls into two categories: one-time, big- ticket capital improvements like roof or boiler attorney Hubert Cutolo, founding partner forces.” replacements or façade overhauls, and small- er, recurring maintenance work like pest con- trol and landscaping/snow removal. While submissions—usually around 20 days—after “At this point, we pare it down to three candi- the scale and frequency of the work falling which no other bids will be considered. under each category are different, the vendors and contractors that do the work are identi- fied and engaged through the same process of and/or manager in a sealed format, and all ing with the engineer and companies one at research, bid solicitation, final selection, and opened at the same time. (Opening bids as a time to ‘sharpen the pencil’”—a common awarding of contracts. How Does the Bidding Process Work? Michele Schlossberg is an account execu- tive with Gumley Haft, a management com- pany based in New York City. “The funny thing about the bidding process is that it’s pretty similar for both large capital improve- ment jobs and annual vendor services,” she says. “What’s different are the pre-bid activi- ties.” Schlossberg describes the bidding pro- erences of the board. Also, vendors and con- tractors are very busy—so if you only send an out soliciting multiple bids, the board and To ensure fairness and impartiality, says ably determine if a bid is in line with market of Newark-based law firm Cutolo Barros, LLC, an RFP should stipulate a deadline for is\] not necessarily the best,” adds Schlossberg. Once all the responses are collected, says companies and/or referrals from other people Cutolo, they’re delivered back to the board who have used them. Then comes a meet- they come in could give an early bidder an euphemism for adjusting their proposals to a advantage—or allow other bidders to adjust more favorable price or offering. “We get their their proposals to undercut the known bid.) Some boards elect to unseal bids at a regu- larly scheduled board meeting. Others limit it price for unexpected problems. They come to the manager and the board president (and back with final revised bids, and then the the engineer or other professional if involved), board picks a vendor.” The pros add that this who coordinate the unsealing together ac- cording to their schedules, and then share the to leverage future projects, or suggest bulk results with the rest of the board online. Re- And, says Cutolo, “While price is not the seal ensures that the vendors submitting bids will offer the most competitive prices. With- its management may not be able to reason- “We also tell boards that the lowest \[price dates based on previous experience with the best price and best schedule, check for contin- gencies, and whether there’s a cushion in the ‘pencil-sharpening’ stage is also a good time purchasing or other efficiencies. For example, managers handling multiple properties may be able to negotiate favorable prices when buying large quantities of necessities like snow melt that can be shared among those client properties. Even if a board-management team comes into the bidding process well prepared, with i’s dotted and t’s crossed, there can still be chal- lenges. “The biggest problem today is finding the bidders to do the job,” says Scott Wolf, CEO of Boston-based management firm BRIGS. “We had a situation recently where we went for five bids. Of the five, three vendors backed out, one was just not a great contrac- tor, and the other was outrageously priced. Contractors have so much work these days, they can be that way. We now say we need to know in the bid that the contractor can start within ten days of contract signing.” Smaller Jobs & Long-Term Services How does the bidding process change for smaller jobs—or for potentially long-term service contracts like pest control or landscap- ing maintenance? “Right now,” says Wolf, “smaller jobs are harder to fill, because everything is bottle- necked. We don’t bid out jobs less than $10,000. We just find someone to do it. For smaller buildings we have a $5,000 threshold. Otherwise, it’s the same process.” When seeking long-term vendors, Schloss- berg says, “We speak to other managers and supers, for instance, to find a great extermi- nator. We will go to three vendors to make sure they’re proposing a good deal, then bring the bids straight to the board and review the terms with them. The board will pick based on price and services offered.” Schlossberg says that the bidding process for this type of contract doesn’t require an engineer, and is a less intense process overall, “but it does re- quire a lot of research on our part.” In regions where snow and ice factor into building and grounds maintenance, Wolf ex- plains that landscaping and snow removal are often bid together. In New England, where his firm is based, “It’s one contract per season. A lot of associations do one for both. If you get damage from snow removal, the same guy fixes it. Bids for these types of services are less technical; there’s no RFP drawn up by an engineer. Instead, a request for bids is drawn up by the property manager and goes out to between three and five vendors. The board choses one, and you go forward.” How Are Potential Bidders Identified? So how do managers and boards find all continued on page 28