CMCA Contracting and Vendor Management 2 — Questions and Answers
Question 1: A community association's contract with a landscaping company expires next month. What is the BEST first step before the board decides whether to renew?
- Automatically renew to avoid service interruption
- Review vendor performance records and compare with competing bids (Correct answer)
- Ask the vendor to self-assess their own performance
- Renew only if no complaints were received
Correct answer: Review vendor performance records and compare with competing bids
Reviewing documented performance data and soliciting competing bids ensures the association receives the best value before committing to renewal.
Question 2: Which contract clause protects a community association if a vendor's employee is injured on the property during work?
- Liquidated damages clause
- Indemnification and hold harmless clause (Correct answer)
- Force majeure clause
- Arbitration clause
Correct answer: Indemnification and hold harmless clause
An indemnification and hold harmless clause shifts liability to the vendor for injuries or damages caused by their employees during the contract.
Question 3: When a vendor submits a change order for additional work not covered in the original contract, the manager should:
- Approve it verbally to keep the project moving
- Reject it and enforce the original scope only
- Obtain board authorization before approving any extra expenditure (Correct answer)
- Request the vendor absorb the additional cost
Correct answer: Obtain board authorization before approving any extra expenditure
Change orders that increase contract costs typically require board approval to stay within proper authorization limits and fiduciary duty.
Question 4: A pool service vendor consistently arrives late and skips treatment steps. The contract has a performance standard clause. What is the manager's BEST course of action?
- Immediately terminate the contract without notice
- Document the violations and issue a formal notice of default (Correct answer)
- Reduce the vendor's payment informally
- Warn the vendor verbally and monitor for improvement
Correct answer: Document the violations and issue a formal notice of default
Documenting deficiencies and issuing a formal default notice follows the contract's enforcement process and creates a legal record.
Question 5: Which of the following BEST describes the purpose of a contract's warranty provision for a roofing replacement project?
- It limits the vendor's total liability to the contract price
- It guarantees the vendor will finish on schedule
- It obligates the vendor to repair defects discovered after project completion (Correct answer)
- It protects the association against cost overruns
Correct answer: It obligates the vendor to repair defects discovered after project completion
A warranty provision requires the vendor to correct defective workmanship or materials discovered within the warranty period after project completion.
Question 6: An association manager is preparing an RFP for elevator maintenance. Which element is MOST important to include to enable fair bid comparison?
- The names of competing bidders
- Detailed scope of work and performance specifications (Correct answer)
- The association's preferred vendor
- A fixed price the association is willing to pay
Correct answer: Detailed scope of work and performance specifications
A detailed scope of work and performance specifications ensure all vendors bid on the same requirements, making comparisons valid and objective.
Question 7: A vendor contract contains a 'right to cure' provision. What does this mean for the association?
- The association can cure defects and charge the vendor
- The vendor must be given a specified time to correct deficiencies before termination (Correct answer)
- Either party can exit the contract within 30 days
- The association waives its right to damages if it accepts partial performance
Correct answer: The vendor must be given a specified time to correct deficiencies before termination
A right to cure provision requires the association to allow the vendor a defined remedy period to fix deficiencies before the contract can be terminated for default.
CMCA Contracting and Vendor Management 2
A community association's contract with a landscaping company expires next month.
What is the BEST first step before the board decides whether to renew?