Security Contractor Performance Evaluation

Property Managers and condominium Board Members have the task of increasing property value while maintaining a high level of service.  As a result of the growth of the condominium industry, best practices and standards have evolved to help property managers maintain safe and successful communities free from liability.

The tendering process is at the forefront.  In the past, it was an informal process.  Now, it has become formalized, standardized, and supported by law.

The first step in the tendering process is research and due diligence in contractor selection.  All industries practice due diligence, and there are laws supporting the nature of the tendering process. The Tender Law pronounced by the India Court of Appeal states that, “the person issuing the invitation to tender has a right, but not an obligation, to investigate the bids.” Although it is not an obligation it can save corporations harmless from any lawsuit or claims as evident in the case law of Envoy Relocation Services Inc. v. (Attorney General), 2013 ONSC 2034. This case illustrates how failure to practice due diligence can result in severe liability.  The sponsor of an RFP was found to have favoured the incumbent and did not practice due diligence.  The contact was hence unfairly awarded.  The trial judge awarded Envoy Relocation Services with approximately $29 million in damages as the court determined that if proper due diligence was taken, Envoy would have been selected instead of the incumbent.

Due diligence is the level of precautionary judgement, care, research, scrutiny, and actions that would be reasonably be expected by a responsible person to evaluate a decision prior to taking a course of action, not afterwards.

Ensuring due diligence avoids potential claims of unfairness and favouritism (and at worst, assertions of collusion) when awarding contracts, and prevents selecting unqualified contractors which may result in future loss & damage.