Whether you have a single task or an ongoing project, selecting a vendor to perform work for your association can be a daunting process, but it doesn’t have to be! In choosing a vendor, it is important to consider various factors such as dependability, liability, cost-to-quality ratio, reviews, and expertise. Fortunately for Spectrum Association Management customers, your community manager can do most of the heavy lifting.
When selecting a vendor, you typically have two choices: either hire an employee to be paid by the association or hire an independent contractor. Hiring an employee usually only makes sense if the project is an ongoing service or needs to be performed on a regular basis. However, by hiring an employee, the association is bound by the legal conditions of employment. On the other hand, by hiring an independent contractor, the association is free to simply keep record of a 1099 form. To ensure quality and mitigate risk, SpectrumAM requires COI (certification of insurance), W-9 (federal tax form), Workers’ Compensation, and MSA (Master Service Agreement). Regardless of which route your association chooses, the processes are similar.
By following these seven simple, yet significant, steps to complete the vendor selection process, you can reduce stress and increase your chance of a successful outcome:
Step 1: Establish Your Criteria
First, you should recognize which services are required. What maintenance needs to be conducted? Do you need routine landscaping? Holiday decorations? Pool cleaning? Also, you should determine how long the service will be provided. Is it a one-time service, or is it recurring? Figuring out the specifics can help narrow the search for companies and contractors.
Step 2: Create Scope of Work
Before diving into the search for vendors, use your criteria to identify exactly which vendor contract best matches the needs of your community. Find details regarding requirement quality, resource quantity, and labor frequency. How will the work be completed? When will the contract end? For example, for a waste collection contract, look for the collection schedule, whether collecting bins are included (and, if so, will they provide both waste and recycling), and the frequency of bulk pick-ups. Note the length of the contract and what specifics are included.
Step 3: Identify the Proper Vendor
After you establish your criteria and scope of work, you can search online directories or even consider recommendations from people you know. If you work with an HOA management company, such as SpectrumAM, your property manager can be a huge resource. Using a third-party management catalog, such as VendorSmart, could aid in finding the right match for you. VendorSmart helps keep you in compliance by confirming and updating vendor compliance documents for you. These tools can help you avoid taking the risk on uninsured vendors.
Step 4: Call for Multiple Bids
Next, it remains important to consider multiple options. Invite the vendors you researched in the previous step to bid. Ideally, an association should avoid calling for less than three bids. If one bid does not meet your standards or another falls through, it is important to have other possibilities.
Step 5: Discuss Value Offered
Following the bids, make sure to discuss with the invited vendors the criteria you established in Step 1 and identify the value offered by each vendor. Is one bid above your budget, but their reviews are outstanding? Perhaps another bid is under your budget, but they have less experience than the rest. In this step, you should consider the cost-to-quality ratio of each bid and review the request for proposals. Price is a powerful factor, but value is a vital trait!
Step 6: Review All Aspects and Pick Two
The next phase involves reducing your possible bids down to a few key contenders. Say you have four bids; try to pick your top two. Ease the weight of your final decision by lessening the field of options.
Step 7: Make a Final Decision
In the last and most important step, the board makes its anticipated decision. For advice, the board can ask for referrals from current clients and, if you have a management company, lean on them for advice. However, the decision ultimately belongs in the hands of the board. Considering the various factors and steps that go into selecting the right vendor for your association, the choice should be easier than it appeared to be at the beginning of the process!
Regardless of the type of vendor you need, SpectrumAM strongly encourages associations to select vendors through the tool VendorSmart. Hiring friends or family can create a conflict of interest and trying to save $100 by using a vendor without proper insurance and documentation can result in $50,000 in legal costs.
VendorSmart serves as a buffer for these potential mistakes. If you are already a SpectrumAM client and you find a vendor who has yet to enroll in the system, VendorSmart will confirm that they have the necessary compliance documents needed before engaging in the project.
With VendorSmart, not only can your association ensure that the vendors are verified, but vendors can benefit from the exposure and organized structure VendorSmart provides.
There are no guarantees with vendor selection, but it doesn’t have to be a gamble, either. With a little preparation, you can find a quality choice for your association by looking for reliable, insured, cost-efficient, top-rated, and experienced vendors; if SpectrumAM is your partner, we can do most of the legwork for you.
