Pavilion from the Ocean

Pavilion from the Ocean

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Does Your Community Association Obtain Competitive Bids?

Board members learn about and evaluate proposed community projects by comparing different products, services, prices, methods and means to accomplish the same objective.   Community leaders should know that the Florida statutes require competitive bidding for significant contracts. For condominiums and cooperatives, the statutes requires competitive bidding for service contracts and contracts for the purchase or lease of materials or equipment that cost more than 5% of the annual budget (including reserves). For a homeowner’s association, the requirement is the same, except there is a higher threshold of 10% of the total annual budget, (including reserves). HOAleader recently published articles about bidding, one of them is Save the HOA Money: Create Bidding Guidelines. The board doesn’t have to accept the lowest bid and the law doesn’t specify how many bids the board must collect and review.   In fact, sometimes a higher bid is the better choice for the association.  Bids must be kept on file as an official record and made available for inspection by owners, upon written request.  The HOA statute requires the association to keep bids on file for one (1) year. The condo statute includes bids in the section governing accounting records – those are kept for at least seven (7) years.  Many associations make the mistake of throwing out rejected bids to reduce the volume of paperwork in the office.  Unfortunately that may lead to trouble when an owner requests to see those bids later on. There are exceptions to bidding requirements in Florida for certain contracts.  Many professional services are exempt such as contracts with attorneys, accountants, CAMs, architects and engineers.  Contracts for emergency service are likewise exempt. What happens if there is only one provider in the area? If the proposed provider is the only source for that service, equipment or material within the county, the board doesn’t need to go through the exercise of obtaining bids from vendors outside the geographic area. Obtaining more than one bid can give the board greater insight into how to approach a problem.  Nonetheless, it is still a good idea to use professional consultants when the bids relate to a significant construction or repair project as the scope of services may be expressed in a highly technical way.  Some bids may contain the use of proprietary products or services that make it very hard to replace or repair in the future unless the association hires the same vendor.  You certainly want to compare “apples to apples” bids when deciding what products or services are best for your association.

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