When buying an expensive item, you probably shop around a bit to try and find the best price. Similarly, it’s common to shop around for different HOA services to get competitive bids and save the HOA money. If your association is considering getting competitive bids, check out these three facts.
You May Not Have to Get Competitive Bids
You may think it is required for an HOA to get competitive bids before hiring a vendor. However, that may not be the case. You’ll want to check with your state and local laws. For example, in Florida, there is a law regarding getting competitive bids if the amount exceeds five percent of the total annual budget, but it specifically excludes attorneys, accountants, architects, community managers, and landscape architects. Therefore, if your neighborhood and association were located in Florida, you wouldn’t need competitive bids for these services.
Just Comparing Prices Isn’t Always the Best Angle
Getting competitive bids is about getting the best price, but comparing prices isn’t always the best angle. You may find someone who charges dirt cheap prices, but if that’s all you compare, you won’t realize they offer fewer services. If you do seek competitive bids for different services, make sure you know what services are included in that bid. You aren’t saving money if you choose a vendor who doesn’t provide what you want or charges extra fees for what you need.
Sometimes Competitive Bids Are a Good Idea
While competitive bids aren’t always necessary, sometimes they are a good idea. Providers who offer services like landscaping or bulk cable, and building contractors can typically offer the same services at different prices. If these costs exceed five percent of your HOA’s annual budget, it’s a good idea to get competitive bids. These providers can lower their prices to compete with each other for your patronage without cutting out services.
Everyone wants to get a low price for services and items, but remember to also check what you are getting for that price. Check with your state’s laws to see when you do and do not need to get competitive bids. You can pursue competitive bids on any service, but make sure you don’t waste money on an agreement that doesn’t meet your association’s needs.