What is the board's obligation in regard to obtaining bids for contractors? 

During the association's budgeting process and retention of contractors, the board may need to obtain competitive bids in relation to work that will be performed in the community.  If bids are needed, the board should try to obtain a minimum of three separate bids for each service to be performed.  When considering the bids the board is not obligated to accept the lowest bidder but may consider other factors such as availability, scope of work, reputation of the contractor, and the financial stability of the contractor.  The board of directors should include findings in their minutes as to the reasoning for selection of a contractor especially for work not previously done by the association.  But, bids are generally not necessary for ongoing service relationships such as management, attorneys, accountants, etc.

What should be included in a bid request for a contractor?

When an association is requesting bids from contractors to perform work within the community, such requests should clearly state what work is being sought.  Maps of the property should also be given to contractors when the requested work involves maintenance of the property such as landscaping, snow removal, or paving projects.  Additionally, the bid should request the candidate contractors to conduct a site visit of the community to present the most accurate bid.

What should the board review when presented with the bid?

The board should look at the contract to ensure that the association's needs are being met and that the proposal is for the scope of work requested.  Prior to entering into a contract, it is advisaeable to have the association's legal counsel review the contract to ensure the association is adequately protected from liability exposure.

Community E-ssentials, November 2008