This is a true story! How do I know this? I was involved. I know the readers of Spend Matters will love this example of almost getting ... well almost paying too much.
I own a "New York style loft" (whatever that means) in a building in Philadelphia. 30 large condo's were created in an abandoned factory and sold in 2005. Big spaces, lot's of windows, soaring ceilings, great location and a fun place to live. Like most rehabs of this type, the developer had a tight budget and in some cases did the minimal amount work to update the building.
Take for instance the exterior brickwork. The building is a six story "post and beam" turn of the century structure (1900 of course) with telescoping walls that start 6 bricks thick at the bottom floor and decrease to 3 bricks at the top floor. The building is 80’ wide, 130’ long and 82’ in height. Needless to say, that's a lot of bricks.
Outer wall mortar joints for buildings of this type need regular maintenance which consists of re-pointing mortar (commonly known as "tuck" pointing). A really good exterior mortar joint might last 25 years but many begin failing after 15 years. Another problem with buildings of this type -- and from this era -- is "soft brick" that over time flakes, crumbles and takes on an appearance of significant surface degradation. This combined with failing mortar joints creates water penetration issues and the potential for progressive structural damage. So with a building in excess of 100 years and one which had set abandoned for over a decade, it is no surprise that the developer had a lot of repairs to do. The correct way to repair brick is to replace soft brick with new and to cut out and replace all failing mortar. The developer did do some of the repair correctly but he also used a "patch and paint" method where instead of cutting brick out, cement patching was performed, false mortar lines drawn and the patch stained to look like brick. It didn't look bad until after 3 or 4 freeze/thaw cycles which caused the patching to begin breaking loose.
Late last year a decision was made to get a quotation to re-point the building and replace soft brick. The condo board asked the management company to secure the bid. They came back with a proposal for $675,000. The condo board was concerned with this price. It would have meant an assessment of $22,500 for each unit owner. Of course a recommendation was made to conduct a competitive bidding process. We found 9 local masonry contractors, held a pre-bid conference, solicited bids, reduced the competition to 4 contractors after the initial bids were received, met face to face with each finalist, tightened our specification and rebid. The result ... we selected an established and very qualified mason contractor who bid $180,000.
Seems impossible doesn’t it. Well not actually. Folks pay too much everyday whether they are individual consumers, small business or large corporations. It's simple ... if you don't make suppliers compete, you will pay more than you need to pay. I could say and assume a lot of things about the management company and the supplier that gave us the $675,000 bid. But I won't to protect the guilty. By the way ... we've changed management companies.