Dealing with service vendors is a daily necessity for any community association -- there are always things that need to be repaired, replaced, replenished, serviced, cleaned or renovated. Among the laundry list of vendors that associations should expect to work with are landscapers, painters, roofers, pavers, snow removers, elevator repairmen, boiler cleaners, and many, many more. That’s why it’s vital for boards and management companies to establish strong relationships with its vendors.
Elaine Warga-Murray, CEO and managing partner with Regency Management Group in Howell, New Jersey, says that when dealing with vendors, associations should always provide detailed specifications and be honest when requesting proposals, price quotes, or services.
"It is important to let vendors know if a board is truly seeking to select a bidder, or if the board is simply price-checking," says Warga-Murray. "Being truthful about expectations is essential in developing relationships. In addition, once a vendor is selected, a board should always make sure that every bidder is notified and advised as to why the selection didn't fall in its favor."
"If everyone is clear about their expectations and abilities,” adds Katharine A. Coffey, legal counsel with the law firm of Porzio, Bromberg & Newman, P.C. in Morristown, New Jersey, “a lot of miscommunication, disappointment and drama can be avoided."
A vendor treated fairly can become an association. In fact, an association that maintains positive working relationships with vendors could benefit when it needs help the most.
Steven Pinchasick, president of AMJ Equities in Great Neck, New York, believes strong relationships with vendors are built on honesty, fair treatment, and rational performance evaluation. “Performance, on the part of the vendor as well as the client, cements those relationships,” he says. “There may be times when issues arise, but dealing with them on a one-to-one basis, honestly, and in a timely manner will cement that relationship further.”
Peter von Simson, chief executive officer of New Bedford Management in New York City, explains that strong vendor relationships develop over time. “The secret to success with vendors is to provide them with as much information as possible for their bids, and to carefully review the proposed vendor services for price, scope of work, and proposed completion dates,” he says. “Then, after the work is completed, it's imperative to quickly review, and once signed off on, make sure the vendor is paid promptly.”
Depending on the building, vendors are selected by management companies, boards, or a combination of both. Generally, industry insiders agree that constructing solid working relationships means eliminating areas possible to cause ambiguity and disagreement.
For instance, Josh Koppel, CPM, the president of HSC Management in Yonkers, New York, manages over 100 buildings, and is on the phone with vendors daily. In his opinion, proper communication is vital.
Vendors like to be paid on time, and if you can’t pay them on time, communicating with them helps,” he says. “If you ignore your vendor, they will get very angry. If you tell them what’s going on, and are honest, that builds a strong relationship.” Most problems arise when collaboration is not prioritized or if a contract is unclear, resulting in both an association and a vendor pointing fingers at one another in blame.
Also, Warga-Murray explains that it helps to have a single point of contact, ideally someone in a senior position in the organization, to maintain an open and honest line of communication. "Make sure all information is in writing," she continues, "so that there is no conflicting information and/or direction, and that all history between vendor and client is documented."
The physical attributes of a particular building are critical when selecting a vendor. After all, a high- or mid-rise building differs greatly from a more suburban development. “Many vendors have a particular expertise when formulating their assessment of the work,” Pinchasick says.
“For instance, a waterproofing contractor must account for pedestrian pathways not normally found in a mid-rise building, or a boiler contractor would need to properly estimate the appropriate boiler to push heat to all areas of a garden apartment complex consisting of long runs of piping to multiple buildings,” he continues.
Finding Service Providers
In today’s Internet age, the yellow pages have become mostly obsolete, thanks to a plethora of websites devoted to praising the merits of different vendors. Still, while online reviews are important, most new vendors are hired from old-fashioned word-of-mouth.
"Referrals are generally the best and most reliable manner to find good vendors," says Warga-Murray. "However, online searches and background checks can provide excellent information. Membership in professional organizations that demonstrate best practices and ethical performance is also a good way to link with potential vendors."
According to Pinchasick, a board has several methods through which to find the appropriate service provider. “A good vendor can be found by speaking with a board's management company, fellow board members, organizations and trade shows, etc.,” he says. Before working with a new vendor, management will check references; however, if a reference is not someone they have worked with already, the value of the reference is limited.
“Vendors should be researched by the management company, individual board members, or a sub-committee chairperson assigned to that particular vendor type, if such a committee is set up,” Pinchasick says.
Koppel claims that managers of HSC Management will approach service providers on the street if they witness amazing work. “You may see a façade job that is nice and clean, and the building looks good, so we grab the responsible party's info,” he says. “Of course, referrals and the Internet are the other ways we will find people.”
Stuart Halper, the president of Stuart Halper & Associates in Briarcliff Manor, New York, explains that it’s important to ensure that a company is reputable, licensed, and insured; and of course, vetting new vendors is essential. “You have to know who you’re dealing with; the personality, their reputation, how long they’ve been in business,” he says. “It’s a constant process. People come and go, entities come and go, and no one can rest on their laurels because it’s a constantly changing market.”
Securing a Fair Price
If something goes wrong and needs fixing at an association, the board or managing agent will normally choose the appropriate contractor by gathering bids.
Naturally, costs are almost always going to play into a vendor relationship. But there are some tricks for securing a fair price without cutting corners or doing something unethical, and education and preparation are paramount.
“The preferred way to negotiate pricing is to speak with other vendors that provide the same or equivalent goods and services,” Pinchasick says. “This is something we typically do for our clients, and it almost always yields a positive outcome.”
The best ways to negotiate better prices with vendors is, after bids are reviewed, select the one that is most enticing, and tell that vendor where they have to get to on their price to get the business. “No vendors like to negotiate against themselves, so simply asking for a lower price has limited benefit,” von Simson says. “Also, let a vendor know you are prepared to pay a deposit on the work, and be prepared to pay the open balance within five business days after confirmation that the work was completed properly.”
It’s important for management to constantly assess vendors and their service contracts for pricing, service, and response times. Although there is no set time frame for assessing service contracts, most in the industry feel every two to three years is the best option.
Obviously, communication is important throughout a relationship between building and vendor; it especially comes into play when a board or management is unhappy with the work that has been performed. This can be handled by phone or email, but a record of all communication should be kept.
"Raise issues when you see them," says Coffey. "If the vendor doesn't know that an association is unhappy, they won't know to change their work or fix the problem. Although confrontation can be difficult, it is better to communicate concerns up front rather than to wait until a situation becomes intolerable."
Koppel says vendors who charge too much, do not communicate, or report issues improperly will quickly find themselves with one less client. Additionally, vendors who are unprofessional, miss deadlines, are messy at the job site, or are slow in response time will most likely lose the job.
At the end of the day, says Warga-Murray, "a good relationship and reputation with vendors will always result in excellent prices, excellent loyalty and service, and a willingness to maintain the relationship by working together on payment programs, extra work, and availability. If a vendor has a good rapport with an association, it is more likely to accommodate special requests."
Staff writer Michael Odenthal contributed to this article.