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How to Prepare a Bid Request and Nab the Best Contractor

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May 5, 2015

By: Frank Lovece

Your board has done its homework, and there’s nothing left to do except approve that capital project — that roof replacement, new boiler, or structural work on your façade. You want the best contractor you can find and at the right price. So what are the next steps? The first is preparing a bid request — a “request for proposal” (RFP) — to send to contractors. The second is analyzing the bids and choosing a vendor. Doing the two things correctly is the basis of all successful capital projects.

“The key to a board successfully managing a bid process is to craft the RFP so that you’re getting back bids that are apples to apples,” says director of operations and compliance for Akam Associates. “If there’s no well-crafted RFP, you’ll get bids back that are all over the place.”

Then once you do get a set of good, comparable bids, have your professionals — your managing agent, architect, engineer — analyze them and prepare a spreadsheet. “Just giving the board copies of the bids doesn’t help them any,” says Providente. “We give them that, but a spreadsheet is a one-page takeaway that hopefully will give them the information they need to make a decision on a timely basis.”

In simplest terms, the general overall process involves the architect or engineer drawing specifications, the managing agent sending those specifications out to bid, and the board “selecting a prevailing bidder based on the board’s criteria,” says an attorney. After this, you contact your attorney and have him or her “draft a construction agreement between the prevailing contractor and the co-op or condo,” he says.

Within that overview are several important steps:

  1. Putting together the RFP
  2. Choosing which and how many contractors or other vendors will be invited to bid
  3. Meeting with candidates and doing a walk-through of your building
  4. Receiving the bids, sometimes making changes and asking for updated bids
  5. Choosing a vendor and negotiating the final contract

It can be tedious and time-consuming, but your professionals will do a lot of the heavy lifting — and since tens or hundreds of thousands of dollars’ difference between bids could be at stake, it’s important you keep watch over each step and pertinent detail.

Starting Up

You’ll hear different terms for what are more or less the same thing: “bid request,” “bid package and specifications,” “request for proposal,” and so on. One engineering consultant considers an RFP “a short form, and a bid package and specifications a long form.” Conversely, says one attorney, “I consider a bid request and an RFP [to be] the same thing.” Don’t worry. Just pick one term and stick with it.

Assuming you’ve already taken all the necessary preparatory steps before proceeding with a capital project — feasibility study or engineering report, looking into whether to repair or replace — you’re ready to have your architect or engineer prepare the plans and specifications. These, together with a cover letter, alternately called the “bid sheet” or an “invitation to bid,” make up your RFP.

“The building’s architect/engineer develops clear specifications and formats a bid sheet,” says director of property management at Buchbinder & Warren. This bid sheet, says Providente, is “the cover letter outlining what type of project it is, who the building owner is, who the engineer and/or architect [is/are], and the bidding criteria — for example, information on how the bid is to be submitted, if there’s a mandatory walk-through of the job site, or that all contractors are required to attend an interview meeting at such-and-such [date] and time.”

“We like to see a full set of specifications detailing what the building is looking for,” says vendor Matthew Kraus, senior vice president of Skyline Windows. In the case of windows, for example, “it’s going to lay out all the details and requirements of [the] windows, from energy performance to acoustical performance to waterproofing, and it may even get into the details of the installation.”

But an important consideration that’s often missing in residential buildings’ requests, he says, is a logistics plan. How many apartments do you want done in a day? Who’s going to assist in getting into the apartments? Are there several elevators with one dedicated to the workers or a single elevator for which hours of use have yet to be determined?

“Where’s our storage and setup area — a room of some sort to have tools, materials, and equipment in place for guys to set up in the morning?” he asks. “What is the procedure [for] protecting the hallways and apartments? If someone has built-ins installed around a window, how is that dealt with? What are the building work hours and building holidays? Some observe certain holidays and some don’t. And some don’t mention it to us until the day before.”

There’s nothing that you’re legally required to include in your RFP, according to [attorney]. However, cautions Leonard H. Ritz, of counsel at the law firm of Adam Leitman Bailey, “every co-op and condo should look at its own bylaws to make sure they themselves don’t have some kind of internal requirements. There might be times where boards can’t start a certain project above a certain dollar amount without [shareholders’ or unit-owners’] approval, or there may be strictures on borrowing, for example.”

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