Cohousing-L Mailing List: Re: Purchasing: Competition?

[Sharon Villines (sharon]

On Feb 14, 2008, at 12:43 PM, Louis-H. Campagna wrote:

> Hi, Our cohousing project is in the midst of a debate regarding the  
> use of competition in our purchasing process.

This is such a hard topic. Buying things and then getting reimbursed,  
particularly for small items is really a pain. You will be dealing  
with volunteers that after a few years don't want to buy anything  
because it is too much trouble.

Items under $500 that are in the budget can just be purchased. Items  
of $2,000 or not in the team budget must be announced specifically  
(not just noted in the minutes) for objections. Often expenditures are  
approved in the budget but the membership wants it to come back for  
discussion. A training workshop, for example, they will want to  
approve the specific plan but the money is reserved.

I'm on the Facilities Team and we feel differently about bids than the  
Admin Team. The Admin people want bids for just about everything but  
the Facilities Team has to do all the work. Often it just isn't worth  
the time. We have some regular companies that we like dealing with who  
are well known for being fair and responsive and we sometimes contract  
with them without getting bids because they return phone calls and  
come back to complete unfinished work without reminders. A major time  
consuming activity is just tracking workers.

Two plumbing guys left an hour early and charged us for the time --  
two guys at $60 an hour. They then had to come back -- 2 more hours of  
travel time.

On getting bids -- the people often do not show up for the  
appointments, often do not call, and are frequently late. You have to  
review bids very carefully to be sure they included all the work. How  
companies handle the bidding process is a good indicator of how they  
will handle the work process -- but not always. Sometimes the person  
making the promises is much more of a marketer and then doesn't have  
the workers to do the job.

Our management company would get bids but they would be done without  
talking to anyone on site about what needs to be done. To come out to  
do this the company would charge $100 an hour. We have dropped the  
facilities management part of the contract because we were doing a  
better job ourselves. (We just have financial management.)

We have tried to get automatically renewing contracts on many things  
that have to be done regularly -- parking gate maintenance, elevator  
and sprinkler alarm inspections, pest control. We also like to have  
contracts with HVAC cleaners and plumbers so they do the work on an as  
needed basis but also provide services for residents at a discounted  
price.

You still have to supervise these. For example we had a plumbing  
contract that allowed residents to be charged $80 an hour instead of  
$90. Residents would arrange visits to several units so the time could  
be shared but separate bills were sent. The office was charging each  
of us for separate visits at a minimum of $80 per visit (each of which  
may have actually been 15-30 minutes) AND travel time for each one. It  
was a few visits before we discovered what was happening.

We had a renewing contract with a parking gate person for four visits  
a year, billed in four installments. He failed to show up because he  
hadn't been paid for previous visits. The management company and he  
were not clear on when bills had to be sent. Fortunately someone  
noticed that we were under budget for that item and questioned it.  
Normally he comes automatically.

Bids are mainly useful when you don't have experience with providers,  
have no idea what something will cost, are not sure what exactly is  
involved, and it is a major job like building a fence or maintenance  
on the roof. Just talking to people who are making bids is then  
educational and allows you to negotiate prices. Sometimes we prefer a  
more expensive provider and can negotiate a lower price based on the  
lower bids from other providers.

The one area that I think we could save money and angst on is the  
small purchases. I wish we had a person who would do inventory each  
month of cleaning supplies, kitchen supplies, etc., compare commercial  
supply sources, handle those purchases in bulk,  and have them  
delivered. We run out before anyone notices and then someone buys a  
small quantity at a local store and we run out again. Plus we have to  
process all those receipts and payments. But no resident wants to do  
that work.

We do have someone who goes to Home Depot before each workday to buy  
the hardware supplies that we need. And have recently arranged for a  
credit card so people don't have to wait to be reimbursed, as one  
resident did for $2,000 for routers for intranet. Not all residents  
can afford to do that.

> expenses up to 200$.  All that is required is an ok from the finance  
> people. What do you folks think?

This would be a real pain to coordinate and eventually members would  
resent having another member approving all their purchases. Just the  
task of purchasing is bother enough. We solve this by giving each team  
a budget at the beginning of the year. Then expenditures of under $500  
that are in the budget can be done without notice (except if it is an  
item that changes the look or use of common spaces like new furniture)  
and over $2,000 needs to be posted for objections. The Admin Team  
reviews contracts and bids for their legal implications. We once  
received a bid, for example, that had no clause about quality of  
workmanship and the Facilities Team had not noticed.

>  Is all your outsourcing and supplying taken on by a Project Manager  
> or outside developper?

Before move-in this was divided between the developer and the  
community. Some features we could choose from a range of options he  
chose because they were all within his construction budget. For others  
we were given a budget and we made the decisions. All the furnishings  
for the commonhouse were included in the construction budget so we  
had, I think $40,000, to purchase furniture, kitchen equip, etc.  
Individual members shopped and the community chose from examples. I  
think we sat in 10-15 chairs before we chose -- but we have excellent  
very comfortable, stacking dining room chairs.

More than you wanted to know, I'm sure, but it is a major item to get  
under control and how you do it is highly dependent on the skill set,  
judgement, and interests of your particular members.

Sharon
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Sharon Villines
Takoma Village Cohousing,Washington DC
http://www.takomavillage.org