Procurement is the process of purchasing goods and services, often using a competitive bidding process. Condo procurement can range from simple contract renewals to complex multi-million dollar retrofit projects. The process can sometimes feel overwhelming – requiring what can feel like an endless number of decisions.

With proper planning before the procurement process, we can learn to maximize value for project stakeholders (i.e., the condo’s owners and occupants), reduce project-related stress, and help avoid common pitfalls that can lead to unnecessary project costs.

By exploring the phases of a typical procurement project, with a focus on key decisions along the way, we can learn how to best collaborate with and get the most out of professionals and contractors.

The procurement process always follows the following four steps:

1. Understanding the project requirements
2. Selecting the right procurement approach
3. Running the procurement process
4. Making the purchase or awarding the contract

Issuing a request for proposal (or quotation) doesn’t happen until the third step of the process. There’s a lot of work that needs to be done before reaching that stage. Let’s take a closer look at each of the steps in the process.

Understanding the Project Requirements

Before you can make a purchase, you need to understand what it is you’re trying to buy – or what problem you’re trying to solve. Do you need to renew your annual contract for your cleaning company or fix a leaking roof?

Not only is it important to clearly state the problem, but also what a successful solution looks like. For example, do you need to patch your leaky roof, or does your reserve fund study show that it needs to be replaced?

Being precise at this stage is your best defence against scope creep and budget overruns later in the project. It’s also important to establish a budget at this stage. The budget might change as the project progresses, but it’s important to establish a baseline to help identify when changes are made and why they are required. When in doubt, consult your reserve fund study as a starting point.

Understanding the project requirements will also help you decide whether you first need to procure a professional to help with procurement of the main project. For example, you might require an engineer to put together bidding documents for a large roof replacement project, but not to hire a roofer to perform a small patch.

Selecting the Right Procurement Approach

Once you have defined the project and the budget, you must select the procurement approach. Three of the most common approaches to procurement are:

5. Direct Purchase
6. Request for Quotation/Proposal
7. Competitive Bid

Different types of projects will require different procurement approaches. Direct purchase is the simplest of all the procurement methods and involves going directly to a trusted supplier. This approach is commonly used for smaller purchases, where the benefits of a competitive procurement process are limited or may even be harmful by slowing down routine maintenance.

Examples of projects where direct purchase is preferred include small or regular maintenance projects like tree trimming or windowpane replacement. It could also include smaller investigations or routine studies by the building’s engineer.

The advantage of direct purchase is speed. Once you find a vendor that you trust, you can obtain pricing and complete routine work with minimal fuss.

For larger projects, a competitive process may be required. There are two general approaches to competitive procurement:

8. Request for Quotation (RFQ) or Request for Proposal (RFP), and
9. Competitive Bidding.

The RFQ process is often used for smaller projects where the exact scope of work is not critical to the project, such as hiring a landscaper to maintain the property and clear snow.

The RFP process is similarly used when the scope of work is not clearly known ahead of time – such as when hiring a professional, like an engineer or lawyer. In this case, condo managers will rely on professionals to provide proposed scopes of work along with their pricing.

Competitive bidding is used for larger or more complex projects, where the scope of work is clearly defined, and the condo is looking to secure the most competitive price to carry it out. Examples include large capital replacement projects, such as replacing roofs or parking garage repairs.

Bidding involves providing the same scope of work to multiple companies and having them provide their best price to complete the work. This process is used when selecting contractors for large projects and will commonly involve bid documents (drawings and specifications) prepared by professional architects or engineers.

Running the Procurement Process

Once you have decided what and how to purchase, it’s time to run the procurement process. At this stage, most of the major decisions have been made, and now the plan needs to be executed.

The process will differ depending on the options selected in the previous stages, but generally, this step involves obtaining pricing, interviewing and negotiating with potential suppliers, and awarding the work.

This is where strategic vendor selection comes into play. While it is tempting to simply award the contract to the lowest bidder, smart procurement requires looking beyond the bottom line to assess overall value. Evaluate each vendor’s track record with similar projects, check their references, verify their insurance and WSIB coverage, and review their proposed schedules.

For larger projects, remember that architects and engineers will often include running the procurement process as part of their scope of work. If your architect or engineer is involved in the procurement process, you can rely on their expertise during this stage. They can help ensure you are making an “apples-to-apples” comparison when selecting a contractor.

Once you have identified a preferred vendor, you can also work with them to refine the contract terms. Discuss payment schedules, warranty periods, and protocols for handling change orders. Where possible, use standard industry-approved contracts, like Canadian Construction Documents Committee (CCDC) contracts. Securing favourable terms upfront is one of the most effective ways a manager can deliver value for their owners and residents.

Making the Purchase/Awarding the Contract

That’s it! You’ve now finished the procurement process. Make sure that award decisions are clearly communicated to the successful proponent. This might involve issuing a purchase order, formal award letter, or signing a contract.

Ultimately, smart procurement is about more than just finding the lowest price – it’s about delivering lasting value and peace of mind. By understanding your project requirements, selecting the appropriate procurement method, running a competitive procurement process, and formally awarding the contract, managers can protect their condos from unnecessary risks and budget overruns. Embracing these steps transforms procurement from an overwhelming chore into a clear workflow that ensures quality, compliance, and efficiency for the community you serve.<

Mitchell Gerskup, P.Eng., is a Canadian Professional Engineer specializing in building science, building engineering, and restoration engineering. He has spent the last 20 years applying building science principles to investigate and repair existing buildings and structures. He is also a contributing author to the Condominium Authority of Ontario’s Best Practices Guide for Procurement.

www.bestconsultants.ca

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