Real Estate

Procuring contractor services Part 1: tendering

By AdvocateDaily.com Staff

In the first instalment of a three-part series, Toronto condominium and commercial litigator Megan Mackey discusses what condominium corporations should know about procuring contractor services.

Securing a contractor for a project is one of the most important jobs a condominium corporation’s board has, says Toronto condominium and commercial litigator Megan Mackey.

There are ways to help the process run smoothly, says Mackey, a partner with Shibley Righton LLP.

When it comes to tendering, condo corporations can save themselves trouble by skipping the process altogether for smaller jobs, she says

“Tendering can be a significant amount of work, so if it’s a relatively small contract — and you have a good, trusted contractor that you turn to for those types of jobs — it may be better to hire them. It’s very helpful if you can develop a relationship with someone who’s reliable for small jobs,” Mackey tells AdvocateDaily.com.

“It’s also work for contractors to respond to tenders, so there are a good number who will not want to bother bidding on smaller jobs anyway," she says.

For larger jobs, Mackey says it’s likely that recent changes to the Condominium Act will force boards to put projects worth a certain dollar value out to tender once the law’s final regulations are released.

“We will see what happens with the amendments now that we have a new provincial government,” she adds.

Regardless, Mackey says tenders are a must for the high-dollar renovation and repair projects that inevitably emerge as condo buildings age.

"This helps ensure the condominium gets the work done for a reasonable price and provides some certainty regarding the total cost of the project," she says.

“The board should determine the exact scope of the work up front, which can be labour-intensive,” Mackey says. “Some boards like to start the work and see how it goes, which can lead to problems. That's not an option when tendering, because you need the whole project defined.”

For that reason, she says it’s best in appropriate cases to get an engineer involved in preparing the tender documents, in order to make sure they include all necessary work.

“Otherwise, there’s a risk that the contract will have to be changed or extras become necessary if something was missed,” Mackey says.

She also advises against a scattergun approach to tenders, saying condo boards are better served by a more targeted process.

“Only invite contractors to bid who you will feel comfortable awarding the contract to,” Mackey says. “This may involve a certain amount of pre-vetting and reference-checking beforehand, but if they come in with a great price, you can feel better about handing them the job.

“Many boards work with good property management companies who will have their own list of vetted contractors. That is a good place to start, but at the same time, boards should not feel they are restricted to using only companies on that list,” she adds.

Mackey says tender documents should include details on the board’s preferred timing for the project, including start and finish dates, and invite contractors to make their own availability known in their responding materials.

“It will vary from contractor to contractor, but it’s better to know it all ahead of time. Depending on your priorities, it may be worthwhile to pay more for someone who can do the work faster,” she says.

Stay tuned for Part 2 in the series, where Mackey explains how to choose your winning bid.

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