Procuring contractor services Part 2: choosing a winning bid
By AdvocateDaily.com Staff
In the second instalment of a three-part series, Toronto condominium and commercial litigator Megan Mackey discusses how to choose a winning bid.
In this series, Mackey, a partner with Shibley Righton LLP, shares some of her tips to help the process run smoothly.
Once the bids are in, it’s time to pick a winner, she says, but boards should resist the temptation to automatically go with the lowest price.
“Not all bids are equal and you can get a wide discrepancy in prices, depending on the quality of the work and differences in scope and timing, among other things,” Mackey says. “Simply focusing on the cheapest option is not always going to be the best choice for the corporation.”
To help boards see through the weeds, she recommends engineers or the property management company help review the bids, since they may have a better sense of whether each one is capable of delivering what the corporation wants to achieve.
If one of the bidders sits on the board — which happens more often than you might think, Mackey says — then that person should recuse themselves from the process.
“It’s an obvious conflict and they shouldn’t be voting on the selection of a contractor,” she says.
And Mackey says board members shouldn't be afraid to schedule meetings with bidders before making a final decision.
“It can take some time to get a feel for how involved or hands-on the company’s management will be and what their priorities are,” she explains. “You may find that some have no time or interest in finding long-term clients.”
In addition, Mackey says boards may want to consult with other condo corporations who have worked with the contractors.
“You want to get a sense of the quality of their work and how they might respond if there are any issues during the project, which is something that will always come up,” she says.
“You will also want to look at things like timing and how well they supervised their workers because sometimes you'll find that quality slips when there is less oversight," says Mackey.
“The good ones will stand behind their work,” she says.
Stay tuned for Part 3 of the series, where Mackey will look at service agreements and penalty clauses.
For Part 1 in the series, where she discussed best practices for the tendering process, click here.