A request for proposal (RFP) is meant to give direction to a contractor or vendor regarding the scope of service for a project and the association with a focused cost to complete the identified scope. While RFPs are used for everything from landscaping contracts to full scale roof replacements, a properly prepared RFP can make all the difference in getting quality proposals from service providers and give the association the ability to make an informed decision just as a poorly crafted one will lead to confusion among contractors and decision makers.

The scope of work is the most important aspect of a RFP. This defines the project. It lets everyone involved know what the expectation is for the project. There are three keys to keep in mind when you are getting ready to develop the RFP for an upcoming project or contract.

  • Who should prepare the RFP?
  • What unforeseen conditions may arise?
  • What documents should you receive from the contractors?

Who should prepare the RFP? Not all projects or contracts are the same. What works to prepare a RFP for one may not work for another. Requesting proposals for a spring and fall gutter clean out is quite different that soliciting proposals for a balcony replacement project. Typically, the RFP for routine maintenance, landscaping contracts and similar projects can be prepared by the community manager, board of directors or committee members assuming they have the knowledge in the area.

Other projects need more expertise and require a professional in the service are to get involved in preparing the RFP. For example, let’s examine a roof replacement project. The RFP for a scheduled roof replacement has many moving parts and there are many code stipulations which vary by municipality. Many managers will have a qualified roofer, who would have knowledge of applicable codes and will typically be of assistance for no cost, inspect the roof and provide a proposal for the replacement and provide the scope of work received to other roofers to obtain additional proposals. While this is a commonly used technique to develop a scope of work, it does have its potential pitfalls. Contractors typically have their favorite materials, methods and so on. Care must be taken when evaluating the proposals to ensure the submitted materials and procedures are “apples-to-apples” and the proposals are complete.

Another option for associations to consider is retaining a third-party professional to prepare a bid package. A licensed design professional can prepare a full written specification with drawings to send out to bid to selected contractors. The benefits of hiring a professional to prepare the RFP package are many and include a thorough specification designed to ensure all codes are met, the best performance standards are requested and “apples-to-apples” proposals are received. Of course, there are costs associated with hiring a professional to evaluate the property and develop the scope of work.

What unforeseen conditions may arise? Many times, there are portions of a project that are out of plain site and cannot be known until the project starts. The extent of damage behind walls and conditions underground cannot be accurately quantified until these areas are uncovered. Change orders for unforeseen conditions can add up to be a significant portion of a project.

Since this cannot be accurately quantified, a unit cost should be requested in the RFP for items that are unknown, i.e. per sheet costs for plywood in a roof replacement or full depth concrete repairs on a per square foot basis. An allowance or estimated amount of an item can be included in the base bid of a project, i.e. two sheets of plywood replacement per building. Unit costs can also be used to differentiate contractors during the bidding process. Some contractors may have a lower cost proposal to complete the base scope of work but may have significantly higher unit costs, which can escalate quickly.

What documents should you receive from contractors? Obviously, a completed proposal or bid form should be received from the contractors. This is where the cost to perform the requested scope of work is provided as well as other important information that should be requested, such as number of working days the project will take, unit costs, whether subcontractors will be used and so on.

It is a good idea to request additional information in the RFP to get a better picture of the contractor. Associations vary greatly in what documentation they request from contractors; some only expect a business card and an invoice, others expect your first born. This is a slight exaggeration, obviously, although it does beg the question, what should a contractor provide with their proposal?

A pretty standard place to start is to request, in the RFP, a copy of the company’s W-9 form and a current certificate of insurance. Also, a list of three references for similar projects completed in the last 2 years should be requested to help verify the contractor is qualified to handle the project. Copies of applicable licenses should also be requested.

The RFP process is a very important part of any project or contract. It sets the tone and expectation for all parties. Preparing a quality RFP provides decision makers with comparable information to select a contractor to complete a project or service in an effective manner. If the RFP is garbage, the output will be garbage. Spending time up front creating a quality RFP will pay off.

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Michael Roche

Michael Roche, PCAM, CPA Chief Executive Officer Waldman Engineering Consultants, Inc....

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