Best Practice – Quoting
When and How Many are needed?
Obtaining quotations for repair works can help show that the amount you are to be charged is ‘not excessive’ and is ‘fair and reasonable.’
Always be cautious of the cheapest quotations which fall well under other provided for the same works. Cheapest isn’t always best and there are many cases where it ends up costing Owners Corporations much more in the long run.
We frequently get asked to provide a number of quotations for works and accordingly we have developed a guide into how many quotations are needed for works based on our experience in pricing jobs.
StrataCo’s Standard Quoting Guidelines*:
Works valued under $1,500 – 1 quotation
Works valued between $1,500 and $5,000 – 2 quotations
Works valued over $5,000 – 3 quotations
*Amounts can vary depending on the type and size of the Owners Corporation. For example a 500 Lot Apartment building may only require 3 quotations for amount over $10-15,000.
Exceptions (because there always are)
For specialized works there may not even be an option for seeking alternative quotes and you must use that particular supplier/contractor.
For plant and equipment that is subject to a Maintenance agreement (e.g. Lifts), generally only the maintenance contractor can perform the works, especially if under a comprehensive maintenance agreement. This would also include some Fire Equipment where its preferable that some works are completed by the existing ESM contractor to ensure correct records are maintained and Annual reporting requirements are satisfied.
When it comes to insurance claims its always best to ask the insurer about how many quotations they require to process the claim – they may even send their own contractors in to quote for the job.
In some occasion it may be best to ask for an Estimate rather than a quote – which are non-binding educated guesses of the cost of works.
StrataCo also have internal practises in place to reduce costs to our Clients which goes unseen in the background. Services such as Waste, Caretaking, Electricity, Essential Services are tendered in geographic groups to provide the most efficient service delivery by contractors enabling the best possible prices for you, the client.
On the flip side it is not advisable to get too many quotes as you need to remember, if you get 3 quotes there is going to be 2 contractors who miss out in the end. If this continues quote after quote, those contractors who miss out end up refusing to quote for that particular building as it does take them a lot of time and effort to formulate and submit the desired quote. Hence why its not a good idea to get too many quotes for low valued work.
In summary just take note of the works you are needing a quote and make sure the number of quotes requested is reasonable. If in doubt your Owners Corporation Manager can guide you as we deal with these maintenance issues regularly and will have a good grip on what is a fair price to pay.