The Benefits of Using Trusted Vendors

board room

By Pamela Lytle, CMCA,
of Vanguard Community Management, Inc., an Associa Member Company

We’ve all said it…”If it ain’t broke, don’t fix it.” Why is it that when a manager acquires a new property, the files are turned over from the prior manager with expired contracts and bids from the same vendors the new manager uses?

The obvious reason is that, as is the case in any industry, good vendors make names for themselves. But that doesn’t mean there aren’t better vendors out there. So why do associations continue to use the same vendors when there may be vendors who can do the job better and cheaper?

Often when I am presenting vendor options to a board to make a decision, I will ask them to approach the decision as a single family homeowner might. If a single family owner has used a cleaning service or a landscaping company for years, will they bid out that service annually as a matter of protocol? Likely not. So under what circumstances might a single family owner seek a new provider? The most obvious answer is when they are dissatisfied with the level of service. Sometimes a long-time vendor will send a new crew to provide a service. Or, perhaps the old crew, who did a great job initially, becomes complacent and begins to take your business for granted, resulting in a decline in the level of service. The owner would likely address the issue with a supervisor first and give them an opportunity to correct the issues, but if that proved to be ineffective, a vendor change might be necessary.

Another reason a single family owner may choose to replace a long-time service provider is cost. A vendor might increase their rates to a level the owner may not be able to afford, or something about the owner’s financial situation may change, requiring them to seek a vendor that charges less for the service. Although if the owners are pleased with the service being provided and feel an extreme sense of loyalty to the vendor, they may opt to change something about the service that reduces the cost so that they don’t have to change vendors. For example, perhaps the cleaning service comes every other week rather than every week.

In reference to a service that is performed periodically, single family owners will, in all likelihood, use a vendor that has provided good, reasonably priced service in the past, and will not seek bids. They will call the same plumber to rod the drain that fixed the leak under the sink last year. They will use the same HVAC company to perform annual preventive maintenance on the air conditioning unit that they’ve used in the past. For relatively small-ticket items, it’s just not worth the time and effort to find a new vendor, nor the risk of receiving poor service, just to save $50.

For larger jobs, it’s typically the cost of the job that necessitates seeking competitive bids. While certainly there are owners who will simply hire the same contractor who did an outstanding job remodeling their bathroom to put the addition on their house; in most cases, single family owners will obtain multiple bids for a project of that magnitude.

These single family scenarios, for the most part, will translate into a community association
environment. A board won’t change law firms if they are satisfied with their current attorney. They may opt to have the driveways seal coated every three years, instead of every two years, rather than using a less costly vendor if finances are an issue. But there are some differences in vendor selection for single family homeowners that don’t apply in a community association environment.

The biggest difference between a community association and a single family homeowner when it comes to hiring vendors is the number of opinions that have to be reconciled. Not only do you need to have a consensus among a board of three or more directors when selecting a vendor, but homeowners tend to be very forthcoming with their opinions about a vendor…especially those whose services with which they are not satisfied. Boards will place great weight on the opinion of a good community association manager, whose job it is to provide input about vendors so that the board can make sound decisions. Managers know what’s out there, and the grass isn’t always greener.

Managers should always speak their minds when it comes to recommending vendors or whether it’s in the association’s best interest to obtain bids. Do not be concerned that you may be perceived as “lazy” if you advise your boards that, in some cases, seeking competitive bids simply does not make the best sense. The fact is, while not obtaining competitive bids on the front end may save time, the fallout that results from working with a less expensive vendor who provides poor service ultimately increases a manager’s workload.

As community association managers, one of the most important parts of our jobs is to educate our boards. We are the experts, and we have been hired to advise our boards on the most efficient way to run their associations. Board members certainly can observe vendors during the course of doing a job, and they can see the finished product. What they don’t see is how a vendor compares to other vendors in the industry, or the level of responsiveness and professionalism the vendor provides from an administrative perspective. Some managers believe that these strengths account for at least 50% of what makes a top notch vendor. The benefits of having a vendor who is familiar with the property, whether it’s the knowledge of how to please that “difficult” homeowner, or the quirks of how the windows were installed by the developer, cannot be overlooked.

I once had a boss whom I often quote. He said, “People trust in two ways: they don’t trust anybody until they prove that they can be trusted; or they trust everybody until they show that they can’t be trusted.” It may not be that cut and dry, but generally speaking, it’s a good approach as it pertains to vendors. However a board forms its trust, once it’s been established, the benefits of testing the waters is nominal, and the risk of changing a long trusted vendor can be great. Is it really worth it?

A version of this article first appeared in CAI Illinois’ Common Interest Magazine.