By Meaghan Brown, EmpireWorks Reconstruction
How many times have you been forced to push a project back to the following year? This can happen as a result of weather, contractor capacity, delays in receiving the bids, the board members feeling like they don’t have enough information to make a decision; the list goes on. This article examines what causes these delays, how to avoid them, and ultimately, the importance of starting the bidding process early.
The first defense against delaying the bidding process is to provide a detailed request for proposal (or RFP). Although submitting an RFP is a near daily activity for a Community Manager, as a contractor, we see RFPs come across our desks in various forms and various degrees of detail. It is not uncommon to receive a few words scratched onto a sticky note, with the expectation of accurately submitting a bid based on that limited information alone.
A properly written RFP is important for various reasons. Not only does it help vendors understand the board’s expectations and how they would like the job to be outlined or broken out, but it also helps the Manager in obtaining apples-to-apples bids from the various contractors. This reduces back and forth questions from the contractor to the Manager, resulting in a quicker turnaround time for the estimate. It also allows the board to make a clear decision and to better understand what they are investing in. You may want to ask a trusted business partner (such as a contractor or engineer) for assistance.
The first step to efficiently developing an RFP is understanding your Board of Directors (or BOD). It is not uncommon for Board Members to change their mind during the bidding process, thus causing further delays. At a minimum, the BOD should take a physical look at the work and agree on the desired outcome. A community’s needs must be fully addressed in the scope and specifications. The BOD should be involved in the scope development, so they know exactly what they are investing in and to ensure proper expectations are set. Ideally, the BOD should walk the project with the Manager and bidding contractors to determine details prior to the formal RFP being issued.
Subsequently, to ensure everyone is on the same page, the Community Manager should schedule a pre-bid site-walk with all bidding contractors. Ideally, this happens all at once, with all bidding contractors present at the same time. By doing this, you will ensure that the same details are explained to each of the bidding contractors. Not only that, but other ideas, product recommendations, or a more efficient way to attain the desired outcome may be recommended by a contractor, which can then be relayed to everyone on the walk. For these reasons, walking the project with all bidding contractors will ensure you obtain apples-to-apples bids and make it easier for the Board to make a clear and well informed decision.
Recognizing how this process works for the bidding contractors will assist in setting proper expectations for your board and the contractors alike. Once the RFP is received by the Account Executive or Business Development Representative, the estimating team reviews the RFP and scope of work to clarify details. The estimator will then inspect the property and determine the means/methods for project execution. Once the estimating team quantifies and calculates the scope of work, the team then reviews the bid for accuracy, feasibility, schedule, exclusions, and unforeseen conditions.
Next, the Account Executive formats this information into a bid-packet presentation and delivers the proposal to the Manager. It is important to note that on average, the bidding process takes contractors 40+ hours on a $100k project. This is not including the Community Manager’s time or any revisions. During our busy season, it may take up to four weeks to turn around a bid. From there, it usually takes about 30 days to start the project from the time the executed contract is received. Not to mention, if the project requires engineered drawings, the Community Manager should allocate another three to four weeks on the front end for the drawings to be prepared. Below is a general timeline showing how this all pans out.
|
|
TASK
|
TIMELINE
|
|
1
|
Community Manager and Board of Directors (BOD) identifies the issue and agrees upon a desired outcome.
|
Dependent on BOD
|
|
2
|
If applicable, Community Manager and BOD involves an engineering firm to attain engineered drawings. The firm reviews the project and submits a proposal to the BOD for signature.
|
2 weeks
|
|
3
|
If applicable, the BOD signs the proposal and hires the engineering firm to develop the scope of work and drawings.
|
2-4 weeks
|
|
4
|
The Community Manager, BOD, and/or engineering firm submits the RFPs to bidding contactors. The bidding contactors reviews the scope, clarifies details, puts together the estimate and submits their bid to the BOD.
|
3-4 weeks
|
|
5
|
The Community Manager, BOD, and/or engineering firm reviews and compares the bids. They clarify any questionable details, select a contractor, and submit the signed contract.
|
Dependent on BOD
|
|
6
|
The contactor receives the signed contract and begins planning logistics. If applicable, they will submit applications for any necessary permits (timeline on this can be several weeks or even months.) They will then order materials, and depending on the project, this can also take several weeks.
|
4 weeks
|
|
|
TOTAL: 2-4 months from RFP to Project Commencement
|
|
If the project at hand is on the larger side, it is especially vital to start the bidding process early on. For example, if you want to start the project in the Spring of 2021, you’d want to start the bidding process in Q4 of 2020. Additionally, one typically gets better pricing if the contract is signed in the off-season. This will also guarantee that the project is one of the first on the schedule once weather permits.
Lastly, upon receipt of these bids and once a general investment cost is determined, knowing where you are obtaining funding is crucial. If the cost is higher than expected or outside of the amount budgeted in their reserves, getting these bids sooner rather than later will help you to plan accordingly, whether that be getting a loan, doing a special assessment, or raising the monthly HOA dues.
Taking all of this into consideration, it is easy to see how a project can quickly be pushed back to the following year. By setting the right expectations for your board, identifying potential pitfalls, and starting the process early on, you can help to better serve your communities and board members alike.
Meaghan Brown is an Account Executive at EmpireWorks Reconstruction, working with HOAs, multifamily, and commercial properties for their exterior, community-wide reconstruction projects. As an Account Executive, Meaghan acts as the liaison between their production team, the community/property manager, board of directors, and residents throughout the course of each project. Some of their core services include roofing, carpentry, EIFS/stucco, concrete, painting, decks/walkways, steel fabrication, and construction defect services.
