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Tips for an HOA Board of Directors when Hiring a Contractor

Black Diamond Services General Contractors (BDS) has consulted with Home Owner Associations for many years, and understand the process they go through when it is time to hire a Contractor. Below are some tips for HOA Board of Directors to consider when undertaking a project that involves hiring of a Contractor.

History & References

Along with the HOA manager, board members are required to seek contractors that have an excellent reputation in their market. Projects are walked along with board members or a maintenance/construction committee. All contractors should be able to provide references for work recently completed in the market and similar in scope.

License, Bonding, Liability Insurance, Workers Compensation Insurance

It is common practice for the proposal to include the details and contact information about the License, Bond, General Insurance, and Workers Compensation Insurance for the Contractor. If their proposal does not include this information you may want to eliminate them from consideration, or you can ask them to provide this information if you want to give them the opportunity to continue in the bidding process.

Bid Process

The most important part of the bidding process is to create a scope of work that each Contractor should base their bid on. An ‘Apples to Apples’ bid is imperative to accurately compare each bid. If a scope is not written typically, one of two things happen:

1. The lowest bid is used resulting in many change orders that will sometime exceed a more qualified bid.

2. The bids vary 100%, 200%... resulting in confusion and inaction. The project gets delayed for months while a qualified scope is written and the project is sent out to bid again.

Be sure to get a least 3 bids from qualified contractors with proven records. Getting the best value for the best price is the goal, but also how you ‘feel’ about a Contractor. Are they on-time? Are they considerate? How well will they work with the community? Are they listening to your concerns? Choosing the best contractor for the job might save an earful of complaints down the road.

Project Timeline/LD’s

Ask the Contractor for a proposed timeline. Once it is agreed upon include liquidated damages in the contract. Liquidated damaged (LD’s) are financial penalties for not completing the work in the agreed upon time frame. LD’s can be any amount, typically $250-$1,000 per day depending on the size of the project. Contractors tend to show up and finish the work if they know there are penalties involved for not finishing the project on time.

Review The CC&Rs for your HOA regarding existing relationships from submitting Contractors

Depending on your specific CC&R's, you may need to request full disclosure from all submitting contractors to identify any existing relationships they have with members of the Board of Directors, and follow your procedures regarding possible conflicts of interest.

Take Your Time & Ask Questions

There are no bad questions. If any Board member has something they want to know they should feel very comfortable asking. The more you ask, the more you learn about the project, the process, and the Contractors you are considering. Invite your contractors to your board meetings so the members can ask questions regarding their bid or their company. You are going to be in a relationship with this company, make sure it feels comfortable.

BDS is a member of CAI-San Diego and CAI-Palm Desert. Our team of experts have years of experience on a variety of HOA projects. Our commitment to quality is above the average standard and we stand by all of our work. We work to create a transparent environment where creativity, quality, and communication are paramount.

Contact us today: 858-888-5688 and we will walk you through your next project and provide a detailed bid.



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