contractor. Having been involved with construction contract bonding
my whole business career, this approach was not taken lightly. It
seems that bonding is not the norm with local dock bidders, so we
would have severely limited competition by requiring a bond, as most
of them are not set up with a bonding company. In addition, bonds are expensive, and would have been added to the bid.
We have taken several steps to protect the association from loss due
to contractor default. There is an inherent factor in the nature of
the project that protects the association. Two thirds of the contract
cost is for the floating docks themselves, and the association is
purchasing them directly from the manufacturer, removing our major
financial contractor risk. We are confident of the financial strength
of the dock supplier, but we are requiring the company to provide
significant financial data, and we will check their credit
references. Since these are made to order docks, a 30% deposit is
normally required with the order, with balance due upon delivery. Our
dock vendor has agreed to reduce the advance payment to 15%, and they agreed to this easily, and they agreed to escrow our deposit in our name until delivery.
Our pending contract with the local contractor doing the work to
complete the project has several stipulations to protect the
association. The contractor will be paid monthly for work actually
performed, less 10% retainage, which will be held until final
approval of the completed project. In addition, before contract
award, the contractor must provide us with financial information and
credit references to convince us of his financial ability to complete
the project.
In addition to the above,, we are subcontracting the electrical and
plumbing ourselves, which further slices the pie, minimizing the
values paid to any one contractor.
Your Dock Committee feels it has taken all reasonable steps to
protect your association from the financial difficulties of the
contractors involved with this project.
