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Is a Bid Required?

Certain contracts entered into by a condominium association require competitive bidding. Section 718.3026(1) of the Florida Condominium Act requires competitive bidding for contracts related to the purchase, lease, or renting of materials or equipment, or for the provision of services, which require payment by the association which (in the aggregate) exceeds 5% of the total annual budget of the association, including reserves. Under this statute contracts with the association’s attorney, accountant, architect, community association manager, engineering, and landscape architect services are exempt from competitive bidding requirements.

Understanding when bids are required, the next question is how many bids are required. The Statute does not provide a minimum or maximum number but it does say competitive bids. Competitive means more than one bid so the Association should get enough bids to assure it is aware of its pricing options. There is no legal requirement however to accept the lowest bid.

There is a similar requirement for homeowners associations contained in Section 720.3055 of the Florida Homeowners’ Association Act. It should be noted that the percentage referenced in this statute (applicable to homeowners associations) is 10% of the annual budget including reserves.

There are also certain exceptions to the requirement to obtain competitive bids, including an exception for emergency situations. So you should always double check with the Association’s legal counsel to see if an exception applies.

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