THE FALLACY OF COMPETITIVE BIDDING

Sometimes the exceptions to the rule swallow the rule, rendering the rule virtually meaningless.  Mandatory competitive bidding is a fine example.

The Florida Condominium Act provides:

 

If a contract for the purchase, lease, or renting of materials or equipment, or for the provision of services, requires payment by the association on behalf of any condominium operated by the association in the aggregate that exceeds 5 percent of the total annual budget of the association, including reserves, the association shall obtain competitive bids for the materials, equipment, or services.

 

In an HOA, the competitive bidding requirement kicks in at 10% of the budget.

 

So far so good.  But the next line of the statute reads:

 

 

Nothing contained herein shall be construed to require the association to accept the lowest bid.

 

And here is where the rule basically goes out the window:

 

Notwithstanding the foregoing, contracts with employees of the association, and contracts for attorney, accountant, architect, community association manager, timeshare management firm, engineering, and landscape architect services are not subject to the provisions of this section.

 

If competitive bidding is not required for the attorney, accountant, architect, manager, management firm, engineer and landscape architect services, then when exactly is competitive bidding required?  For the pens and pencils in the office?

 

The concept of competitive bidding sounds nice.  It makes it appear as if the association has to vet numerous companies and only after an exhaustive search, choose the company that makes the most financial sense to the community.  In reality, it is only utilized for major renovation projects.  That’s it.  And, in my experience, the association rarely chooses the contractor with the lowest bid, because most associations know that you get what you pay for.  It also does not prevent someone’s friend or son in law from ultimately getting the job.  For all intents and purposes, it is a statute with no teeth whatsoever.

 

I just want to thank everyone who came to our Condo Craze Board Certification Course, Day of Education and Live Radio Show at The Seminole Hard Rock Hotel and Casino yesterday in Hollywood.  My entire staff and I were flattered by the wonderful turnout at 7:00 in the morning on a Sunday.  It was an honor to spend the day with all of you and I hope you enjoyed being there as much as we did.

Leave a reply

Your email address will not be published.