All bids must be presented to HOA membership

Q: In an article dated July 12, 2012, you discussed opening bids at a board meeting in front of the homeowners. I read Nevada Revised Statue 116.31086 which you cited. If bids must be sealed and opened at a board meeting, must they be mailed to the homeowners association in the U.S. postal service?

Someone on our board solicited bids and brought them to the office. They were sealed but delivered by a board member. How does the rest of the board know that she/he has not read the bids and then sealed them and/or already discarded others that were not to that person’s preference? It is further compounded by the fact that this board member is employed in the same field as the bids were sought. Should that person be allowed to vote or should abstain?

I would feel more comfortable if the bids were mailed and sought by someone not connected in that business. Homeowners are losing trust in board members that are involved in unethical processes. It is our money that is being spent; plus companies who bid on projects should be treated fairly.

A: The law does not state the bids must be mailed to the association. The law states that the bids are to be opened at a board meeting and read aloud to the membership. There are many times when a bid is handdelivered, most often because the contractor wants to make sure that her bid has reached the board or the management company in time for board consideration.

Either you trust your board and its members or you don’t trust them. If the you do not trust this board member, can you substantiate any events where she betrayed her trust and violated her fiduciary responsibilities? If not, you have to work on the assumption that the board member has followed the letter of the law.

If you want to go one step further, you could always double check with each vendor on their pricing and submissions of bids.

In many cases, if a board member has a working knowledge of a specific field, such as, landscape, pool maintenance or roof replacement, where the association is procuring bids, the board member’s knowledge and insight can be of great benefit. If the board member works or is associated with one of the vendors that provided the bid, then that board member should definitely abstain from voting in order to avoid a conflict of interest.

Whenever possible, boards should develop an RFP (request for proposal), which would allow each vendor or contractor to work on the “same page” in preparing their bids. All bids should be brought to the board meetings. If a vendor or contractor is rejected, it should be by board vote.