Page 2 - New York Cooperator February 2020

2 THE COOPERATOR — FEBRUARY 2020 COOPERATOR.COM We do all the work while you sit on your asset. Offer your residents an exceptional onsite storage amenity! We will turn your unused building space into a secure, state-of-the-art storage facility FOR FREE . We will handle everything from start to finish, and we’ll PAY YOU monthly. CALL BARGOLD! (718) 247-7000 www.bargold.com Storage4u@bargold.com 41-41 38th Street Long Island City, NY 11101 Our Investment. Your return. licit more bids than might seem necessary, be- cause some vendors may turn out to not meet member to fi x it would be a defi nite confl ict. RFP should stipulate a deadline for submis- requirements, some may not be available in Not only would it raise questions about self- the time-frame needed, and others may not dealing on the board, such a move would sidered. Once all the responses are collected, respond to the RFP at all. Avoid Confl ict Regardless of the type of job, one of the as of January 1, 2018, when Business Corpo- most important things to get right in the bid- ding process is avoiding confl icts of inter- est—in both fact and appearance. Because to recuse him- or herself from any discussion dercut the known bid.) as Claudine Gruen, Vice President Direc- tor of Operations for Garthchester Realty in to the pros, the benefi t of having a seasoned larly scheduled board meeting. Others, like Queens, notes, “Perception is reality, especial- ly in this business.” Th at means that while having a board weighs whatever savings they might get from member who happens to be a plumber defi - nitely helps when deciding what to do about a recurring leak, hiring that same board also need to be disclosed to every association they’re delivered back to the board/manager member or shareholder (at least in New York in a sealed format, and all opened at the same ration Law \[BCL\] 727 went into eff ect), and give an early bidder an advantage – or allow would require the board member-plumber other bidders to adjust their proposals to un- or votes involving that contract. According professional on the board’s side to advise on a those managed by Gruen, limit it to the man- project without the burden of recusal far out- hiring an ‘inside’ contractor to carry it out. Seal the Deal To ensure fairness and impartiality, an sions, aft er which no other bids will be con- time. (Opening bids as they come in could Some boards elect to unseal bids at a regu- ager and the board president (and the engi- neer or other professional if involved), who coordinate the unsealing together according to their schedules and then share with the rest of the board online. Regardless, at least two people should be charged with unsealing the bids together, for the benefi t of transparency and accountability. Stay on the Level Once the bids are open, a process of evalu- ation and elimination begins – which is an- other area where the manager’s expertise comes into play. He or she, along with any rel- evant professional advisers, will create what is called a bid leveling sheet. If the initial RFP was thorough and well-composed, and the responses adhered to the requested formats and inclusions, the leveling process is pretty straightforward. But oft en there are variables that the RFP might not have considered, or idiosyncracies among vendors that cannot be captured within the format specifi ed. In those circumstances, bid leveling is even more im- portant in order to help a board make a fully- informed, prudent decision. If a project is especially complex or be- yond the expertise of the property manager, Wagner advises investing in an owner’s rep. An owner’s rep is a dedicated manager with particular knowledge of a specifi c project, who can distill the proposals and align the variables so that they are easier to capture and compare. Th ere may still be discrepancies that preclude direct one-to-one comparison between bidders, but the basic elements for weighing each proposal evenly are there. Any remaining questions can be addressed in the next step, which is inviting select bidders for an interview with the board. Before and aft er the bid leveling, the manager or owner’s rep might go back to each bidder and ask them to “sharpen their pencils”—a common euphemism for adjust- ing their proposals to a more favorable price or off ering. Th is is also a good time to lever- age future projects, or suggest bulk purchas- ing or other effi ciencies. Gruen, for example, manages multiple properties and can negoti- ate favorable prices when buying large quan- tities of necessities like snow melt that can be shared among the properties. Tread carefully here, though: if this cost-cutting measure is not adequately communicated to the boards in question, they might be concerned that some sort of skimming or kickback were oc- curring when they see the purchase order that exceeds their needs. Don’t Forget the Past Th is brings us to an important caveat. It may seem like a distant memory to most of us (if it was on our radar at all), but today’s New York property professionals are still feeling the sting from a double wave of corruption- related indictments brought by Manhattan District Attorney Robert M. Morgenthau back in the 1990s. Th at ended in charges for more than 80 New York real estate manag- ers and management companies. Five years later, 30 more individuals and 10 corpora- tions were charged with stealing $4 million BIDDING... continued from page 1 continued on page 6