The Trainer

BIDDING OUT LANDSCAPE MAINTENANCE; DEALING WITH IOI CONTRACTORS OR VENDORS

In this month's feature, we gave you seven steps to follow to bid out landscaping services. HUD requires you to ask for cost estimates or bids before you hire contractors, including landscape contractors, to show that you're paying a reasonable price for their services. If you don't follow HUD's rules, or don't keep records showing that you've shopped around, you could end up being scrutinized by HUD auditors and risk having to pay back any costs HUD finds excessive.

This month we also discussed how to follow HUD rules when doing business with “identity-of-interest” (IOI) contractors or vendors. HUD says that an IOI relationship exists between the site's staff and a vendor when a site owner or managing agent is also a partner in, for example, the site's landscaping contractor or owns over 10 percent of that company. HUD has several rules you must follow when doing business with IOI vendors to make sure that the site owner or managing agent isn't unfairly profiting—by overcharging the site or funneling business to vendors it controls. If such IOI abuse is uncovered, the site owner or manager will have to repay the site operating account for any unreasonable expenses.

TRAINER'S QUIZ

INSTRUCTIONS: Each of the questions below has only one correct answer. On a separate sheet of paper, write down the number of each question, followed by the answer you have chosen—for example, (1) b, (2) a, and so on. The correct answers (with explanations) follow the quiz. Good luck!

QUESTION #1

The bid package you give to competing landscape contractors should require them to submit line item bids. True or false?

1. True.

2. False.

QUESTION #2

Landscape contractors usually don't need to be licensed. True or false?

1. True.

2. False.

QUESTION #3

According to HUD rules, you must always accept the lowest bid when choosing a contractor. True or false?

1. True.

2. False.

QUESTION #4

HUD requires you to keep the documentation of all bids for 10 years after the work is complete. True or false?

1. True.

2. False.

QUESTION #5

As long as you disclose the names of the identity-of-interest companies your site uses, you don't have to get competitive bids for their services. True or false?

1. True.

2. False.

QUESTION #6

You must disclose the amount paid to an IOI vendor in the annual financial statements you submit to HUD only if you paid that vendor more than $10,000 from site funds during your fiscal year. True or false?

1. True.

2. False.

QUESTION #7

In addition to listing IOI vendors in the site's annual financial statements, you must also disclose the names of IOI vendors in your Management Entity Profile. True or false?

1. True.

2. False.