How many times have you been asked by
a client to “get three bids” for a project?
We all do this on a regular basis. And as we strive
to give our ethical best to our clients, we have to
ensure that we navigate away from any kind of unethical behavior with our vendors. Being anything
other than ethical, honest and above-board in
your dealings with vendors hurts your reputation
as a property manager and can end up hurting
If you’ve been managing property for a long
time, you probably have a stable of go-to contractors you use for particular jobs. When you are
bidding out, it doesn’t hurt to bring in a
new company or two, just to stay aware of
what companies are out there. It should go
without saying that each vendor must have licensing and insurance appropriate to the job, and that
you receive from them a copy of any licenses and a
Certificate of Insurance.
Once you know who you will be including in
your bidding process, make sure you provide a
comprehensive Scope of Work (SOW) to each of
the companies. Of course, each company should
receive the same SOW before the bidding begins.
Next, give the vendors a deadline or timeframe in which to return the proposal so they
are all coming in around the same time. Keeping
things timely is helpful to you and to your client
since proposals usually have an expiration date,
and it’s helpful to the companies bidding—those
who worked hard to get their proposals to you on
time—not to have to wait for weeks for a straggler
to send in a proposal. Also, keep in mind that if a
vendor is tardy in submitting their proposal, that
same style might show up in the project itself.
Some managers will automatically throw out
the lowest bid as a move to get the best quality.
You probably don’t need to go that far, but if one
proposal is substantially lower than all the others,
it should prompt you to ask why. Did the vendor
miss items on the SOW? If everything is included
that you asked for, it might call into question the
quality of the work that will be provided or the
materials that will be used. Be thorough and ask
questions if you are doubtful, to ensure your client
gets the best work for the best price.
Finally—and most importantly—never
share one vendor’s bid price with another
vendor and allow the latter to underbid.
That isn’t fair to anyone, including your client,
who may end up with a contractor doing a job for
less than he or she thinks it is worth. You will put
in jeopardy the quality of the work you will be getting, and you run the risk of alienating that entire
contractor community. Chances are high other
companies will hear about or figure out what you
When you deal methodically and ethically with your vendors, you are much
more likely to end up signing a proposal
with a company that is itself ethical. Your
client will thank you and you can hold your head
high as an IREM professional.
LIZ WALKER, CPM,
NET) IS A BROKER
AND OWNER OF
MANAGEMENT, INC. IN
SAN JOSE, CALIF.
WHEN YOU DEAL
ARE MUCH MORE
LIKELY TO END
UP SIGNING A
THAT IS ITSELF