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Best Practices to Managing Your Vendor Agreements

We have passed the halfway point of the year, and your midyear budget review is complete. While reviewing your budget you may have noticed some expenses paid to vendors, or realized you need to hire vendors for community projects like maintenance, road and sidewalk repairs, landscaping, and more.

Now is a great time to review, assess, and manage your vendor agreements. If you have any vendor contracts about to expire or a job you need to obtain vendor bids for, how do you choose the right vendor to get the best work done within your HOA’s budget? Let’s look at ways to hire the best vendors for the jobs.

Scope of Work

The first step in finding the right vendor is to clearly define the scope of work needed. For example, if your HOA wants to add speed bumps to the community, when creating a proposal for vendors to bid on you want to provide as much detail of the project as possible. Include how many speed bumps, what size you expect them to be, where they should be placed,
and a date you expect the work done by.

This will help your HOA and the bidding vendors to meet expectations on both sides. By providing a detailed scope of work to bidding vendors, your HOA should be able to avoid unexpected costs or having to have jobs redone later on.

Choosing a Vendor

Now that you have bids and vendors to choose from, it’s time to pick the right one. A good first impression is always important. Pay attention to how the vendor presents themselves and their company, how they maintain their equipment, and how much professionalism they show.

Also make sure they have all the necessary paperwork needed. The vendor should have all certifications, licenses, bonds, and insurance that is required by your specific CC&Rs. It’s also important to ask for the contractor’s tax ID number; this information is necessary in order for them to get paid.

Don’t just look for the lowest bid or best offer. Research each vendor you are considering. See if they have good reviews or references you can contact. Make sure they can meet the expectations and that there won’t be any hidden costs or expenses.

Lastly, make sure the vendor has adequate insurance to cover any incidents that may occur. Review the insurance policy of each contractor to make sure it covers potential damages incurred during their job. Also verify that the contract contains a guarantee by the contractor and that their insurance will protect the association’s assets should circumstances arise. This will protect your HOA and relieve them of liability.

Need assistance?

For more assistance in finding the right vendor for your community and your budget, Atlantic and Pacific Management can help you assess vendors and work out all the precise details. For more information, or anything else HOA related, reach out to Atlantic and Pacific Management.

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