Society Vendor Selection: Quotations, Tenders and Committee Approval

Selecting vendors in a housing society

The painting contract is where societies get into trouble. It is the largest discretionary spend most committees ever make, it is technically opaque to members, and the process is usually three quotations of which two were obtained as a formality.

Members are right to be suspicious of that process, and committee members who ran it honestly have no way to prove they did. Both problems are solved by the same thing: a procurement process that produces a record.

Match the process to the value

Not everything needs a tender. Over-processing small purchases is how societies become unable to replace a light fitting.

Set the actual figures against your society's size in a written procurement policy adopted by the general body. What matters is that the thresholds exist and are applied — not the specific numbers.

Never split a purchase to stay under a threshold. Three ₹40,000 orders for one ₹1.2 lakh job is the classic audit finding, and it is what it looks like.

Write the scope before you ask for prices

Most bad procurement is caused by a vague scope, not a dishonest committee. Three quotations for "painting the building" are not comparable, because each contractor has assumed a different specification.

A usable scope of work states: exactly what is included and excluded; specifications and brands or equivalent; quantities and measurement basis; timeline and milestones; who supplies materials, water and power; site conditions and working hours; safety and insurance requirements; warranty period; and payment terms.

For technical works — waterproofing, structural repair, lift modernisation — consider paying a consultant to write the specification. A few tens of thousands spent on a proper scope routinely saves several lakhs, because it makes the quotes genuinely comparable.

Getting quotations that mean something

• Same scope to every bidder, in writing, at the same time. A vendor given extra information has an unfair advantage and the process is compromised.
• A stated deadline, with quotes opened together — ideally in the presence of more than one committee member.
• At least three genuine bidders. Not two real ones and a courtesy quote from the incumbent's friend.
• Check the bidders are real: registration, GST where applicable, past work, and references from societies you can actually call.
• Retain the losing quotes. They are the evidence that a choice was made, and they answer the AGM question in one sentence.

The comparative statement

Put every quote side by side, on the same line items. This is what turns three PDFs into a decision.

Include, per bidder: line-item pricing, total, GST treatment, payment terms, timeline, warranty, exclusions, and any deviations from the specification.

Deviations are the most important column. The cheapest quote is frequently cheapest because it excluded scaffolding, or quoted a lesser-grade material, or offered a one-year warranty against five. A comparative statement that shows only totals hides exactly the information the committee needs.

And be explicit: the lowest quote need not be accepted. Recording why a higher quote was chosen — better warranty, verified track record, shorter timeline — is entirely legitimate and is precisely the reasoning that protects the committee later. What is not legitimate is choosing a higher quote and recording nothing.

Conflict of interest

Declare and record. A committee member related to a bidder, or with any interest in the outcome, should declare it and take no part in the evaluation or the vote. Note the recusal in the minutes.

Most co-operative frameworks restrict committee members from holding contracts with the society, and several treat it as a disqualification. Even where a related-party contract is permitted, it needs disclosure and general body approval — not quiet approval among colleagues.

Approval and the general body

Within the committee's limit, a committee resolution suffices — recorded with the comparative statement and the reasoning.

Above it, the general body approves. For major works, put the scope, the comparative statement and the recommendation in the notice so members can consider it before the meeting rather than being asked to approve a number on the day.

Where a special levy funds the work, the levy and the contract award are separate resolutions. Members are entitled to approve the work and still debate how it is funded.

After award

• Issue a written work order referencing the scope, the price and the terms
• Take performance security where the value justifies it
• Verify the contractor's insurance and labour compliance before work starts
• Appoint a named committee member or consultant to supervise
• Release payment against milestones and verified completion, never as a lump advance
• Retain a defect-liability amount until the warranty period passes
• Record the completion certificate against the asset

The retention amount is the one societies give away most easily and regret most often.

How this works on Plinth

A requirement is raised with its scope of work, and quotations are collected against that same scope so the comparison is like for like rather than three differently-assumed jobs.

Quotes sit side by side with their line items, exclusions and deviations, and the committee's decision is recorded with its reasoning — including where a higher quote was chosen and why. Conflict declarations and recusals are captured against the decision rather than in someone's recollection.

Because procurement, the vendor ledger and the asset register share the same records, an awarded contract carries through to the bills raised under it and the asset it relates to. Every step writes to the society's append-only audit log, so the AGM question about how a contractor was chosen has a documented answer.

Frequently asked questions

How many quotations should a housing society take? Three is the convention for anything material, above a threshold set in your procurement policy. Below it, the process should be proportionate.

Must a society accept the lowest quote? No. It must be able to explain why it did not — better warranty, verified track record, fewer exclusions. Record the reasoning.

Can a committee member's company bid for society work? Most frameworks restrict this, and some treat it as a disqualification. At minimum it requires disclosure, recusal and general body approval.

Who approves a major repair contract? The general body, above the committee's limit, with the scope and comparative statement circulated in advance.

Should we pay an advance to a contractor? Avoid large advances. Pay against verified milestones and hold a retention until the defect-liability period ends.

What records should we keep? Scope of work, all quotations including losing ones, the comparative statement, conflict declarations, the resolution, the work order, and the completion certificate.

Step-by-step guides

• Admin: Create and Publish a Service Request (RFQ)
• Admin: Review Quotes, Shortlist, Poll, and Award
• Admin: Contracts, Signing, and Payments
• Resident: Follow Society Procurement
• Vendor: Register, Browse RFQs, and Submit Quotes

Related: vendor bills and payment ledger · society asset maintenance schedule · housing society accounting