Creative Project Management Techniques

Recently, an association I manage undertook a roof replacement project.  After careful consideration of their financial position and the results of a roofing survey, we were able to have the work commence one year in advance of the outlined reserve study target date.

Management negotiated a termed payment schedule with the contractor, which avoided the need to special assessment each owner.  In today’s economy, unless a loan is considered, the chances of recovering a large special assessment are very low.  Associations should consider their present delinquency rates along with vacant units.  If unit owner expenses are attributed to a capital improvement project, it is preferred to build in a “contingency fund” to offset any potential shortfalls pertaining to those delinquent/vacant units.

Educating owners is the key to a successful project and will help avoid conflicts.   In an effort to be transparent throughout the process, I included these three items in all project mailings:

1. Payment Terms. The below is an example for communicating payment terms.  By including payment terms information, owners understood that their finances were being managed responsibly.  They also appreciated knowing that the project management was in dependable hands.  For this particular project, the total contracted price was broken out into four installments with the final payment being the least amount.  Deadline dates were also determined, setting clear expectations for the contractor.

Payment Terms and Inspections

The Contractor will be paid by the association according to the terms and conditions as shown below:

First payment due at contract signing                                                                                                  $XX,XXX.XX

Second Payment due once mid inspection is complete and board approved                      $XX,XXX.XX

Third payment will be made by December 5, 2012                                                                        $XX,XXX.XX

Final payment will be released to contractor no later than May 31, 2013                         +  $X,XXX.XX

TOTAL CONTRACT PRICE                                                                                                                       $XXX,XXX.XX

2. Roofing Terminology and Roof diagrams.  Detailed diagrams illustrated the work to be done and the areas affected.  Labels, explanations and terminology provided a level playing ground of communication between owners, board members and the contractor.

DIAGRAM

TERMINOLOGY

Stepped Flashing:

A metal flashing used at the intersection of a wall and a sloping roof; the upper edge of the vertical part of the flashing steps down, following the general inclination of the roof; the horizontal edges are fastened to raggle cut in the brickwork of masonry walls.

3. Contractor Bid Comparison Sheet.  The below example of a bid comparison showed the apple-to-apple comparison among three contractors and validated the final decision.  The communication limited confusion and ensured confidence in the project.

Furthermore, a “contractor provisions agreement” should be adopted for any projects over a certain threshold.  This agreement protects the association and is added as an addendum to the contractor’s contract.  During your initial bid solicitation, a sample of this document should be included for the vendor’s review and added as a requirement to the “Request for Proposal.”  A comprehensive roof RFP can be found on the intranet under “Resource Library” maintenance-sample specifications.

Certain projects warrant a certified project manager, at the board’s discretion this should be considered for large scale capital improvement projects.    In this economic climate there are other avenues to consider prior to implementation of a “special assessment.” BE CREATIVE!!

Continue to review your current reserve study fundamentals annually and provide a sound financial strategy that works best for your community.   Strive to achieve these goals!!

Kristine Clancy, CMCA
Regional Manager
MAMCO
Mt. Laurel, NJ