Regardless of whether they’re self-managed or employ a management company, a co-op or condominium board of  directors will at some point have to make decisions about how and from whom the  building gets its supplies and services.  

 Maintaining a good relationship with a vendor is Business 101. It is based on  mutual respect, clear communication, and responsiveness.  

 “Vendors with a willingness to establish a lasting, mutually-beneficial  relationship are available when we need them, provide the personal cell phone  and contact information of their decision-makers or front-line representatives  so they can always be reached, and demonstrate a genuine interest in helping us  grow our businesses,” says Michael Berenson, president of Manhattan-based AKAM Associates, Inc. “For our part, prompt payment and reasonableness in negotiations help keep the  relationship strong.”  

 Bill Jebaily, owner of Aggressive Energy & Mechanical Group in Brooklyn, says the key to keeping a good relationship is  communication.  

 “You have to communicate to the client what’s going on. I call it putting my clients in a comfort zone,” Jebaily says. “The liaison for vendors should be the property manager. I think that boards  should allow the property managers to run the building because they are the  point-man. To have 12 people trying to run the building could get confusing.”  

 Finding Vendors

 When it’s time to look for new vendors, contacts are established through ads, the media,  word-of-mouth, personal recommendations and manager research.  

 “Advertising attracts interest; Word-of-mouth and personal recommendations  provide free positive publicity,” Berenson says. “Manager research allows a knowledgeable professional to evaluate candidates on  the most salient criteria, which board members may not know.”  

 A smart board will utilize comparison shopping, uniform requests for proposals  that allow apples-to-apples comparisons quantification, face-to-face meetings,  and all methods of negotiation employed to ensure that they are receiving the  best value for their dollars spent.  

 “Competitive bidding is always the best way to find the vendor that’s hungry, but quality is always a concern,” says Hilary Becker, CPM and president of Long Island-based Becker Real Estate. “Asking the lowest bidder to come down on their price usually assures that the  best deal is achieved, but it’s never a good idea to beat up on a vendor since this can cause them to ‘cut corners.’ As always, you get what you pay for, so beware of the deal that sounds to good  to be true.”  

 While the managing agent may recommend contractors, the final decision is  ultimately the responsibility of the board. In a good working relationship, the  managing agent may make recommendations based on past experience.  

 At AKAM, its management executives rely on its Buildings Operations and  Compliance Department to vet, investigate, and report on all client properties’ potential and selected new vendors.  

 “Our Operations and Compliance professionals pre-qualify candidate vendors by  checking references, running Better Business Bureau and Dun & Bradstreet checks, requesting documentation of fiscal stability and integrity  from three or four financial institutions, and seeking performance references  and reviews,” Berenson says. “All gathered information is shared with the subject property’s AKAM management executive, who can then present to the client board a  thorough, 360 degree report about the vendor.”  

 While boards do have some preferences based upon previous experience with  certain vendors, it is usually the management company they look to for  recommendations and typically the research it takes to establish new contacts  falls to the management company.  

 “The super and I will conduct our due diligence and research with each vendor,  Becker says. “References are always a good thing, but sometimes it’s the interview process that tells us if the organization is qualified. We also  conduct our research using the Internet in some cases.”  

 Jack Ippolito, president of Primo Uniform Service Co. in Brooklyn, which  provides uniforms for staff members of condos and co-ops, says his company is  often contacted thanks to word of mouth and personal recommendations.  

 “Uniform supply is a personalized service and most of the large national  providers cannot provide the personal service that an independent company can,” Ippolito says. “Building owners and managers enjoy the personal relationship and excellent  service they experience with small business owners.”  

 Size Matters

 Vendor relationships can be affected by the size of a condo or co-op building.  With a high- or mid-rise building, the relationship can be different than a  more spread-out development, depending upon the components of the building.  

 “A smaller development is usually preferred because the service provided is  vastly improved when dealing with one building manager instead of having  several managers wanting different services or uniform styles, colors, etc.,” Ippolito says. “Some large management companies can be great to deal with when both parties can  agree on services and prices in advance.”  

 The number of units has more to do with the situation than anything else, but as  always, it’s the relationship and trust that drives the transaction, and not the  transaction that drives the relationship.  

 A Better Deal?

 Depending upon the contract, boards should reassess their vendors every year to  two years to ensure they are getting the best deal possible.  

 “Contracts should be reviewed annually, but it depends on the monetary amount  involved,” Becker says. “Smaller contracts are tougher to review since qualified bidders can sometimes be  tough to motivate if the project is too small.”  

 If the vendor relationship is a strong one, it’s more advisable to invite the vendor to attend a board meeting to discuss any  issues that concern the board and work to rectify those issues.  

 In Bulk

 Although it seems like a logical business step, obtaining bulk purchases with  other managed properties is never an easy thing to accomplish, but it does help  keep costs lower.  

 “Retailers and vendors are very aggressive with their prices these days since a  simple search on the Internet can show you what competitors are charging for  certain products. Everyone knows what everyone’s pricing is, so the market helps to keep prices down,” Becker says. “Volume discounts are available for bulk items so there can be a savings when  services are consolidated.”  

 At AKAM, bulk purchasing is offered on goods such goods as janitorial supplies,  and calcium chloride (street salt for melting ice and snow), as well as  services such as boiler and roof tank cleanings.  

 “We do not re-sell. Rather, we offer the benefits of group, or bulk, purchasing  to all of our clients and, in the case of goods, we have the manufacturer drop  ship them directly to the client,” Berenson says. “The benefit is realized exclusively by our clients.”  

 Ippolito says that prices for large purchases and large rental orders can be  volume discounted in some cases, but it’s important to ask about these deals up front.  

 “Unfortunately, in today’s environment, inflation has hit every corner of business,” he says. “Sale prices can be negotiated to a certain extent. Most prices that are quoted  are already discounted and unless it is a special order for oversize garments  or a custom item like a logo mat, prices will stay where they are. Uniform  rental can be discounted and negotiated since this is a service and therefore  can be customized to the customer’s needs.”  

 While many associations remain with management companies on a long-term basis,  some do not for a variety of reasons, and that can certainly complicate  matters. Therefore, it is difficult at best to bundle properties to take  advantage of bulk pricing and expect the relationship to last over time.  

 The fact is that associations prefer to operate autonomously and achieve the  best pricing for services rendered rather than teaming up with other  associations to accomplish that. Occasionally, an association will take  advantage of bulk pricing to some degree by linking up with a vendor who  services an immediate neighbor of theirs.  

 Final Thoughts

 If the board has a long-standing history with a contractor and there are not any  price increases and service is meeting expectations, the board may want to  periodically solicit proposals from a few competitors to serve as a benchmark.  

 For routine maintenance contracts such as landscaping and snow removal, many  boards enter into multi-year contracts and those should be re-evaluated at the  end of the contract term to determine if pricing and service still meet the  association’s expectations.  

 Whether it’s a company supplying heat, elevator service or refuse removal, a good vendor  will work with a building to ensure that both parties are happy and remain so.   

 Keith Loria is a freelance writer and a frequent contributor to The Cooperator.