Davis Stirling.com Reader Asks About BID SHOPPING-From Our Friends At Adams Kessler PC

Reprinted from
Davis-Stirling.com by Adams Kessler PLC

BID SHOPPING

QUESTION: I would appreciate your comments on whether bid shopping by a board of directors is a violation California law or a violation of the Code of Ethics by a certified manager.

ANSWER: There are two types of bid shopping and both are considered unethical because of the unfair competition involved.

Pre-Award Shopping. The first type is called pre-award bid shopping and occurs when a board or manager receives bids on a project and instead of awarding the contract to the best bid takes the lowest bid without the contractor's knowledge or approval and discloses it to other contractors. The board or manager "shops" the bid in an effort to get new proposals below the original bid. At that point, the board may award the contract to a new low bidder or squeeze everyone yet again with a another round of bid shopping.

Post-Award Shopping. The second type is called post-award bid shopping. This one is done by the general contractor after the association awards him the contract. It is done without the association's knowledge or approval. The general takes his subcontractors' bids and shops them in an effort to drive down the costs he quoted the association. He does not pass the savings on to the association. Instead, he pockets the difference.

Negative Impact. Using a legitimate bid to chisel down other bidders can significantly impact work quality. Contractors will cut corners by substituting cheaper materials and inexperienced labor in an effort to make a profit. Some states have made efforts to curb this practice. Those efforts have been largely unsuccessful.

Managers. I reviewed the Codes of Professional Conduct posted by the Community Associations Institute (CAI) and the California Association of Community Managers (CACM) on their websites. They don't directly address bid shopping but their ethics standards are broad enough to cover the practice. In 5-01(b) of CACM's Standards of Practice:

[Managers] shall employ a sealed bid process wherein all bids are received sealed and are opened in the presence of the client board or its designated representative other than the Member.

Paragraph 14 of CAI's Professional Manager Code of Ethics states that managers shall "Not engage in any form of price fixing, anti-trust, or anti-competition."

RECOMMENDATION: I know that boards and managers who engage in bid shopping have good intentions but the practice is not ethical. Moreover, using it to save a few dollars may actually backfire and cost the association more money than it saves.

WA Supreme Court: State Statutes of Limitation Do Not Apply in Arbitration on Construction Defects

WA Supreme Court: State Statutes of Limitation Do Not Apply in Arbitration

The Washington Supreme Court handed down a surprising and perhaps monumental holding on Thursday. In Broom v. Morgan Stanley DW, Inc., No. 82311-1 (7/22/10), the Court ruled that Washington statutes of limitations are not applicable to arbitration proceedings. The ruling perhaps creates an opening for claimants who have arbitration clauses, but thought their claims had expired.
The theory behind the Court’s ruling is that the state’s statutes of limitation require “actions” or a “suit” to be filed in order to be effective, do not apply to arbitration proceedings, which are not “actions” or “suits” as defined by law. Absent contractual agreement to the contrary, the Court will not impose those statutes of limitation in an arbitration proceeding.

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No more smoking on the balcony in Santa Monica; personally, I hate cigarettes...my Mom died of cancer, probably from her smoking. Fires and health issues are good reasons to ban smoking on multi-family properties. I don't want to smell or be exposed to your toxic waste wafting into my unit.  Readers, what do you think?

Santa Monica Snuffs Out Patio, Balcony Smoking

Friday, July 30, 2010, by Neal Broverman

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After pushing to end smoking on the Santa Monica pier, the City Council on Tuesday banned "people from lighting up within 25-feet of a door or window in any multi-unit residential building," reports the Santa Monica Daily Press. The action was aimed specifically at those who light up on balconies and patios. The 4-1 move was dissented by Councilman Bobby Shriver, who would have preferred other methods of cessation, including having apartment owners designate certain units as non-smoking. That idea was tabled until November--there's concern that method could scapegoat low-income smokers and encourage landowners to evict them. In November, voters will decide on a renter protection measure which would alleviate eviction concerns. The funny thing about these smoking bans--lighting up is a no-go on the Promenade and at outdoor restaurants--is that for some of them violators can only be punished by being hauled into small-claims court. Fines won't be incurred with this new law, nor are there fees for the ban on smoking in apartment and condo common areas--people have to be sued, and penalties start at $100.

Engrave A Crete Published Idea Book on Decorative Concrete Ideas.

The full-color Concrete Engraving Idea Book from Engrave-A-Crete is full of examples of beautiful decorative concrete floors both stained and engraved.
Some of the most common stain color combinations and the most popular engraved designs are represented.
This is an excellent way for homeowners to see what is possible with decorative concrete staining and engraving.

This Concrete Engraving Idea Book is in Adobe PDF Reader format, and is free to download.

Help Wanted Ad On Craigslist --Waterproofing Company Will Pay A Percentage of Job as Compensation-Could That Cause Shortcuts?

 The ad below is/was on Craigslist...if you read down through, you'll see under the "compensation" section that the pay is a percentage of the job...

If this company is going to do your work, be careful...the foreman and his 2-3 guys that show up to do the work will be motivated to get in and get out as FAST as possible...

Your job could be at risk because the company's foreman's sole motivation is to make as much per hour as possible.   Lets say your job is contracted at $10,000.00. The crew foreman is probably going to get 50-60% of the total cost of the job...and the house keeps 40-50%. Lets say in this example the foreman will get "paid" $6,000.00. Out of the foreman's share is going to come the labor for his helpers...maybe $2,500.00 in labor costs. Or lower your costs even further and pick up some guys at Home Depot?

Then he has to buy the materials too...typically 25-30% of the costs of a job, so that's apx $2,500.00. Hmm, how does one reduce his costs? Buy cheaper materials...better be sure your getting what's stated on the contract. If even any specific product is called out for. Those scopes of work that say "metal lath, polymer modified cement, fiberglass and acrylic resin...you ain't getting a brand name system, your getting Jet Coatings or Home Depot cements and resins.

So now your down to $1,000.00 out of the 6k. That will have to pay any gas and misc expenses too. Say $150.00 on that...Now your foreman on the job is down to $850 in his pocket. How hard do you think he's going to be driving his crew to finish? Hard.

 Will your job be done right? Maybe...maybe not. The devil is in the details...did they spend time on those details or did they say "good enough? and not worry about the details? Even a bad job can last a year or two before going bad.

I can't say that this is the case here, but it would give me cause for concern...just saying.

deck coating waterproofing (laguna beach and surround orange county )

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Date: 2010-07-29, 11:07AM PDT
Reply to: rcmetcalf@upcom.net ^{[Errors when replying to ads?]}

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looking for responsible reliable person to perform all deck coating and related responsibilities ie; metal flashing, removal and replacement of damaged areas, must know and be skilled to perform all and or partial processes of fiberglass, urethane, and epoxy deck coating systems, must have own tools and transportation. those without these and no experiece need not apply thanks 1800 559-5482

• Location: laguna beach and surround orange county
• Compensation: percentage of job
• This is a part-time job.
• Principals only. Recruiters, please don't contact this job poster.
• Phone calls about this job are ok.
• Please do not contact job poster about other services, products or commercial interests.

PostingID: 1870014945

Deck Expert Recommends You Read DURADEK President John Oglivie's White Paper on Waterproofing and Tile Decks-BEFORE YOU TILE, Not After.

One of our advertisers (full disclosure here) has just published a white paper on the waterproofing and tiling of decks over living space.

Entitled "COMMON SOURCES OF FAILURE OF TILE DECKS ON WOOD FRAME CONSTRUCTION" the article discusses the issues and problems that result when one cheaps out on properly preparing and waterproofing the deck, the importance of drainage planes and Duradeks recommendations. John Oglivie, president of Duradek, is the author.

Here's an excerpt from John's article. 

There are few outdoor surfaces as attractive and durable as tile or stone and they can be used outdoors even in very extreme climates providing there is a great deal of care put into the choices of materials and trades people. As so often happens, attempts to cut corners on costs or by taking shortcuts, even ones that seem to make sense, result in the most expensive installations. The common themes in this report are to follow the manufacturer’s recommendations to the letter and employ only experienced professionals for each part of the job. The chances of a successful, long lasting installation increase exponentially if you do.

 The most surprising thing we discovered was that that if you were willing to research the issue and look to the industry experts and follow the recommended “best practice” standards, the success rate would be dramatically increased. Simply knowing the questions to ask and who to ask is the first step to getting the right answers.
Some of the best advice given to us by a “long in the tooth” tile contractor was this: He tells his customers who are interested in having tile or stone outdoors (especially on a wood frame building) that if they don’t have a budget sufficient to do it properly they should not even consider it. Taking money-saving short cuts with an “assembly” that requires all the components to work together could prove to be extremely expensive in the long run.


Click here to read the rest of this article at Duradek.com
 read this article or you'll probably pay a heavy price to fix the failures that commonly occur...