A Guide to Vendor Management & Procurement for HOA & Condos

Community associations have become a way of life for millions of North Americans. In the U.S. alone, more than 74 million people now live in neighborhoods governed by an HOA or condo board. FCAR estimates there are roughly 365,000 community associations overseeing 28.2 million housing units as of 2023. Up north in Canada, condominium living dominates. For example, in Ontario, over 940,000 condo units are registered, and around 47% of the homes currently under construction are condos. Manitoba alone has 1,500 condo corporations managing at least 50,000 units.

This growth puts a lot of responsibility in the hands of HOAs and condominium corporations. Boards don't just make policy decisions. They have to make sure day-to-day life in their communities runs smoothly. That means everything from landscaping and janitorial services to laundry room upkeep and small repair projects. And nearly all of that work flows through vendors.

Now, all these tasks require reviewing vendor bids, negotiating contracts, and managing vendor relationships.  This is where many volunteer boards struggle most, and it's not surprising to see well-meaning boards sign the wrong contract, only to lose money on poor workmanship. But don't worry. That's why we have put together this guide. 

We'll walk you through the best practices we've learned from years of working with HOAs and condos. We'll talk about why vendor management matters, how to structure the process, and how technology can make the job far easier than it used to be. 

A Guide to Vendor Management & Procurement for HOA & Condos

As property managers and HOA leaders, you have a duty to spend association funds wisely. Maintenance and upkeep typically represent your largest expenses. That means vendor selection and management are the primary decisions that affect your budget, your residents' satisfaction, and your community's long-term stability. And as board members, you're legally obligated to follow a defined process for soliciting, reviewing, and approving vendor proposals, whether those rules come from your state or your own CC&Rs (Covenants, Conditions, and Restrictions). 

At the same time, you need to balance three things that don't always align: quality work, timely delivery of services, and staying on budget. But before we show you how to navigate these complexities, let's first talk about the importance of vendor management for associations. 

Importance of Vendor Management for Associations

A board is elected to serve the interests of the community. That doesn't mean board members are out there cleaning stairwells, mowing lawns, and painting common areas. The bulk of that work is handled by outside vendors. However, vendor management still rests squarely with the board, from selecting the right service providers to managing relationships and making sure payments go out on time. Here are the key benefits of proper vendor management for associations:

Building Trust With Residents

Residents notice consistency. When they see a cleaning crew working on schedule or landscapers keeping the grounds sharp, it sends a message that the board is doing its job. That reliability builds confidence in both the board and the community. The community knows its fees are being put to good use.

Stronger Vendor Vetting and Selection

Proper vetting means checking licenses, insurance, references, and past performance. By vetting vendors thoroughly, you reduce risks like accidents or shoddy work and ensure your community gets the services of reliable, reputable professionals.

Smarter Contract Negotiation and Oversight

Once you've chosen a vendor, the contract sets the tone. Vague agreements almost always lead to conflict. Make sure all terms, work scopes, timelines, and payment structures are explicitly defined upfront. Being proactive with contracts puts community funds to their best use and prevents issues with vendors.

Stronger Compliance and Risk Protection

Vendor management also means making sure vendors follow local, state, and federal laws, along with your community's own rules. That includes insurance coverage and safety practices. Taking compliance seriously helps prevent fines, lawsuits, and liability headaches down the road.

Setting Clear Expectations Before You Start

Now, good vendor management doesn't start when the first bid comes in. It starts with the board agreeing on what's actually needed. Before you even reach out to a vendor, you should have a clear picture of the job. For example, if you're contracting a cleaning company, ask the right questions upfront:

• Which areas of the property need service?
• How large are those spaces?
• How many staff members will be required?
• How often should they clean: daily, weekly, or a few times a week?

Vendors can't deliver on expectations they don't know about. When you define the scope clearly, the vendor understands your association's vision and will be able to consistently deliver quality work on time and within budget. Once your expectations are locked in, you're ready for the bidding process.

Bidding: RFP vs. Informal Bids

A strong bid package gives every vendor the same framework to work from, which makes comparisons fair and straightforward. Before requesting bids, it's advisable for the board to review the HOA's governing documents to confirm the process complies with community rules. As a best practice, we recommend requesting at least three bids for any project so the board has a true comparison. At a minimum, your package should include:

• A clear scope of work: Spell out the specifications for each phase of the project, including required materials, tools, timelines, cleanup schedules, and expectations from both parties.
• Change and emergency protocols: Outline what happens if the scope shifts mid-project or an urgent situation arises.
• References and warranties: Request proof of experience, sample warranties, and guarantees upfront.

Boards typically handle bidding in two ways: through a Request for Proposal or by collecting informal bids. Here's a breakdown of the two approaches. 

Request for Proposal (RFP)

An RFP is a document used to solicit vendor proposals for a project. It outlines the specifications, expectations, and requirements for the job. A well-prepared RFP gives the board an apples-to-apples comparison of contractors so you can choose the vendor who delivers the best value.

When reviewing proposals, keep in mind that cost is only one factor. Look at professionalism, accountability, responsiveness, and overall fit with your community. And no matter how confident you feel, always put service and contract agreements in writing. Here are some RFP best practices. 

• Use a uniform bid response sheet so all vendors are evaluated against the same criteria.
• Ask for a sample written warranty for workmanship and manufacturer materials.
• Ask for references from recent projects and actually call them. Questions about timelines, communication, and quality can reveal a lot.
• Consult your attorney early in the process, not after a contractor is chosen.
• Have your attorney draft and review the key contract terms and conditions in the RFP, and ensure vendors either agree or raise objections in writing with their proposal.

This approach prevents costly surprises and contract disputes later in the process.

Informal Bids

Not every project calls for a lengthy vendor selection process. Small repairs and routine maintenance often fall into a different category: informal bids. You still need to perform due diligence, but the scope of the work should guide you on how informal the bid can be.

For example, hiring someone to change light bulbs isn't the same as selecting a roofing contractor. In fact, most contractors won't waste time drafting a formal written proposal for a $500 repair. 

For tasks like a plumbing leak, many boards simply call the same plumber who knows the property and pays for the work as needed. Sometimes, a vendor recommendation from your management company or a fellow resident provides enough confidence to move forward. The same logic applies during emergencies, where waiting on paperwork could make the situation worse. In fact, many HOA governing documents spell out when bids are required and when they are not. 

For example, some associations require formal bids if a project exceeds 10% of the annual budget. In certain jurisdictions, like Calvert County, Maryland, informal bids apply when the total cost falls under $30,000 in a fiscal year. The key is to know your governing documents and apply common sense. Formal RFPs protect the association on large, complex projects, but informal bids keep operations quick and efficient for smaller jobs and emergencies.

Contract & Insurance Tracking

Once you've selected a vendor and awarded the project, both parties must sign a contract that solidifies your legal obligations to each other. This contract protects your HOA from unnecessary financial liability and legally binds vendors to complete tasks within defined timeframes. A solid vendor contract should always cover:

• Completion date: A defined deadline, plus what happens if work isn't finished on time.
• Work hours: The days and times crews will be on-site.
• Materials: A list of materials and supplies used.
• Storage: Where tools and equipment will be kept after work hours.
• Break spaces: Designated areas for lunches, breaks, and restroom use.
• Payment terms: Payment schedules and address proof of insurance, liabilities, and workers' compensation requirements.

Contracts should also include guarantees that the vendor's insurance protects the association's assets and relieves you from liability. Delays happen, whether from weather, supply shortages, or other unforeseen circumstances. So it's smart to include clauses for how those situations are handled, including penalties if commitments aren't met.

When it comes to insurance, don't just take the contractor's word for it. The association should always be listed as an additional insured party. Double-check the policy dates to make sure coverage is active before work starts, verify that the contractor's name matches the policy, and confirm the coverage meets your association's requirements. Call the insurance company directly to confirm this info. 

Performance Scorecards

Selecting the right vendor is only half the battle. Tracking their performance is just as important. A vendor scorecard gives boards a clear, objective way to measure how well a vendor is meeting expectations. Over time, it becomes a powerful tool for contract renewals and continuous improvement. Here are the key metrics we recommend including:

• Price: Price isn't everything, but unpredictability can wreak havoc on your budget. Watch for hidden fees, surcharges, or erratic cost changes. Go beyond the invoice price and track the total cost of ownership, including service issues, rework, and defect costs, while comparing across suppliers.
• On-Time Delivery: A project only runs smoothly if vendors deliver as promised. Track delivery accuracy, lead times versus commitments, frequency of delays, and whether shipments arrive complete and undamaged.
• Quality: Quality drives trust in the community and saves money by reducing repairs, defects, and callbacks. Monitor defect rates, frequency of issues, and how quickly vendors respond with corrective actions.
• Compliance: Compliance protects the HOA from liability. Make sure vendors follow industry regulations, provide timely documentation, and avoid violations. Even one lapse can create major legal and financial problems.
• Efficiency: Efficiency reflects how well a vendor uses time and resources. Measure cycle times from order to completion, labor and material utilization, responsiveness to issues, and the percentage of work completed without rework.

How AP & Vendor Portals Integrate

Vendor management ties directly to accounts payable. Once the work is complete, invoices flow in, and the board needs to verify them against purchase orders and receipts, approve them, and make payments. Traditionally, that process has been manual and error-prone.

The good news is that HOAs and condos now have access to platforms built specifically for community management like LeapAP. This platform addresses the unique needs of condo, HOA, commercial, and residential sectors. Instead of juggling paper invoices, spreadsheets, and emails, you can unify the entire process into one system by onboarding vendors in LeapAP after bidding and signing the contract agreement. From there, the system takes over and helps you in the following ways: 

• Invoice capture: Vendors submit invoices to LeapAP through the portal or a dedicated email address. The system scans and extracts data automatically.
• Matching & verification: The AI-powered system checks the invoices against POs and receipts before moving forward. It automatically flags duplicate invoices and discrepancies across the documents.
• Utility automation: LeapAP logs into utility portals and pulls the association's bills directly from the vendor, so the board doesn't have to download them manually. 
• Approvals: The system automatically routes the invoices for approval depending on your HOA's approval workflow. Board members can approve with one click, even from a phone.
• Accounting sync: Approved invoices flow seamlessly into your accounting system.
• Payments: The platform's payment module pays vendors via automated checks, EFT/ACH, or virtual credit cards. Then all this information is recorded for audit trails.

This integration eliminates the manual handoffs that create errors and delays in traditional vendor management processes. It also takes pressure off volunteer board members, who no longer have to track invoices manually and chase down signatures. 

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