Guide for Procurement and Project Management of Construction Projects in Condominium Associations

Brief Summary

Carrying out construction projects in a condominium association requires careful planning and effective project management. Start by identifying the property’s renovation needs and prioritizing projects in the right order. Financing is a central aspect – bank loans are common and require solid documentation. To select the right contractor, a detailed request for proposal (RFP) is essential, followed by a thorough review of at least three bids. Always use industry-standard contract templates and clarify the distribution of responsibilities, with one main person overseeing legal, financial, technical, and communication aspects.

A well-thought-out communication strategy keeps members informed and minimizes disruptions. Accurate planning reduces the risk of costly additional work (ÄTA). Always end the project with an independent final inspection to ensure quality and compliance with the agreement. By following these steps, you create optimal conditions for successful construction projects and long-term sustainable solutions for the association.

1. Create an Overview of the Property's Needs

Start by mapping out the renovation needs of the property or properties. Identify how different projects are connected and which sequence is the most cost-effective. For example, plumbing replacement should be done before bathroom renovations, and drainage work should precede asphalt paving. A well-thought-out prioritization saves both time and money.

2. Plan the Financing

Financing is critical for all construction projects. Condominium associations typically take out bank loans for major renovations. To obtain favorable loan terms, you need to present well-prepared documentation to the bank that clearly describes:

• The project’s scope and purpose
• Detailed cost estimates
• A timeline for execution
• Expected outcomes and effects

A structured financing plan increases the chances of both loan approval and favorable terms.

3. Develop a Clear Request for Proposal (RFP)

A well-structured RFP is essential to attract competent contractors and get comparable bids. The RFP should include:

• A detailed description of the scope of work and sub-tasks
• Technical standards and expected results
• A realistic timeline with milestones and final dates
• Administrative guidelines according to industry standards
• Requirements for documentation and warranties

Focus on describing the desired results rather than micromanaging technical solutions. Let contractors propose how to best achieve the desired outcome.

4. Evaluate and Quality Assure-Bids

Request at least three bids to create a competitive procurement process. When evaluating, make sure to:

• Compare bids systematically against the same criteria
• Ensure all bid proposals cover the same scope of work
• Carefully review reservations and terms
• Contact references from previous, similar projects
• Ask follow-up questions if anything is unclear

Ensure you are comparing equivalent offers by "resetting" bids against the RFP.

5. Establish a Construction Contract

Always use standardized construction contracts according to industry practice:

• ABT 06 for turnkey contracts (where the contractor is responsible for both design and execution)
• AB 04 for execution contracts (where the client is responsible for the design)

A properly formulated agreement protects the association in case of disputes and ensures both parties understand their commitments.

6. Clarify Distribution of Responsibilities

Appoint a primary project manager—either from the board or an external consultant. This person should have expertise in several areas:

• Law: Ensure compliance with industry regulations and legal requirements, handle contract matters
• Construction Technology: Make technical decisions and assess the contractor’s work
• Finance: Monitor costs, manage invoicing flows, and handle additional work (ÄTA)
• Communication: Inform members and handle questions from stakeholders

A clear division of responsibilities helps prevent misunderstandings and ensures that no important aspects are overlooked.

7. Create a Communication Plan

Construction projects affect everyone living or working in the property. A well-thought-out communication plan should specify:

• Which target groups are affected (members, tenants, business owners)
• Which communication channels are appropriate (meetings, notices, digital platforms, mailings)
• What information is needed before, during, and after project implementation
• How feedback and questions should be handled and responded to
• Who the contact persons are for different issues

Regular and clear communication increases understanding of the project and reduces the risk of dissatisfaction.

8. Conduct Final Negotiation and Contract Signing

Before signing the contract, you should:

• Hold a final negotiation where all details are finalized
• Ensure all parties have the same understanding of the project's scope
• Adjust the contract if necessary and revise prices if scope changes
• Clarify procedures for changes, additional work, and removed tasks (ÄTA)

A carefully conducted final negotiation prevents future disputes.

9. Prioritize Project Design

Give great importance to project design—it’s the foundation for successful execution. Accurate design:

• Reduces the risk of unforeseen costs and delays
• Provides clear guidelines for the contractor to follow
• Facilitates follow-up and quality control
• Provides better documentation in case of future disputes

Invest time and resources in the design phase to save costs during execution.

10. Conduct Inspection and Follow-up

When the project is completed, hire an independent inspector for the final inspection.

The inspection should:

• Checks that the work meets agreed requirements and technical specifications
• Identify any deficiencies that need to be addressed by the contractor
• Documents completed work as a basis for future maintenance planning

After a successful final inspection, a warranty period typically lasts for five years, followed by an additional five-year liability period. Plan for a warranty inspection before the warranty period expires.

Summary

Successful construction projects in condominium associations are built on careful planning, professional procurement, and clear project management. By following these ten steps, you can minimize risks, optimize resource utilization, and ensure long-term sustainable solutions for the association and its members.