Guide to HOA RFPs

Writing requests for proposal and handling bids for contract work

A request for proposal, or RFP, is a written description of what an association needs, sent to companies that may want to provide it. A clear RFP produces proposals that can be compared side by side, whether the association is choosing a management company or a roofing contractor.

This article is general information and is not legal advice. The association's attorney should be consulted.

When Florida Law Requires Competitive Bids

Contracts for materials, equipment, and services must be in writing under section 720.3055 for homeowners associations and section 718.3026 for condominiums. Competitive bids are required in these cases:

• Homeowners associations. Bids must be obtained when a contract requires payment that exceeds 10 percent of the total annual budget, including reserves.
• Condominiums. Bids must be obtained when a contract requires payment that exceeds 5 percent of the total annual budget, including reserves. A condominium association with 10 or fewer units may opt out of the section by a two-thirds vote of the unit owners.

In both cases, the lowest bid does not have to be accepted. Contracts with employees and for certain professional services, such as attorneys, accountants, architects, engineers, and community association managers, are exempt, and the law does not limit the ability to obtain services in an emergency. Bids received are official records and must be kept for at least 1 year.

RFPs for Management Services

Management contracts are exempt from the statutory bid requirement, but an RFP is still the best way to compare companies. A management RFP should include:

1. Community basics. Type of community, number of homes or units, age of the property, and any special features.
2. Amenities. Pools, clubhouse, gates, private roads, docks, and parking.
3. Board information. Number of directors, committees, and how the board prefers to communicate.
4. Meetings. How often board and member meetings are held and whether the manager is expected to attend.
5. Finances. Budget size, assessment schedule, reserve status, and any expected special assessments.
6. Services wanted. Financial services only, or full service with an on-site or portfolio manager.
7. Goals and concerns. Recent problems and what the board wants to improve.

The RFP should be sent with a deadline and a single contact person. Proposals should be compared on the same terms, a short list interviewed, and references checked before a decision is made. More on what managers do can be found in what tasks community association management companies handle.

How Many Bids Contract Work Needs

Some boards require three bids for every job, no matter how small. That practice can backfire. Preparing a bid costs a contractor time and money, and many will not bid on small jobs that are unlikely to be awarded. It also slows repairs.

A board should adopt a simple written policy that sets bidding thresholds by dollar amount, contract length, and complexity, and that always meets the statutory minimum. Small repairs can be handled with one quote from a qualified vendor. Larger or recurring work, such as the following, should be bid:

• Exterior painting
• Landscaping
• Pest control
• Pool maintenance
• Roofing
• Road, sidewalk, and drainage repairs

Writing Clear Specifications

Bids can be compared only when every contractor prices the same work. Specifications should describe the scope, materials, schedule, warranty, insurance requirements, and payment terms. For technical projects, an engineer, architect, or other qualified professional should prepare the scope rather than the manager or board.

Working With the Selected Contractor

• Insurance certificates and licenses should be verified before work begins.
• Annual service costs can be spread over 12 months to smooth cash flow.
• Some work can be scheduled in the off season for better pricing.
• Communication should go through one designated contact, and complaints should be directed through that channel.
• Work beyond the contract should not be expected without a written change order.
• Conflicts of interest must be disclosed, and contracts involving a director require special approval under state law.

Signs of problems in vendor selection are covered in HOA fraud: know the signs.

Request a Proposal

Bid coordination and vendor management are handled for the communities managed by Condominium Associates. Boards seeking management services may request a proposal or contact us.