Three Quote Policies – A Nuanced Approach

It’s a somewhat common practice for strata councils to adopt a policy that requires three quotes for every project—big or small. On the surface, it sounds like good governance: more quotes mean better comparisons and could potentially lower your overall costs. But in practice, this kind of very rigid policy can create significant inefficiencies, strain vendor relationships, and even lead to worse outcomes for the strata.

Here are just a few of the reasons why we know this to be true:

There’s No Such Thing as a Free Quote

Every quote takes time, site visits, and labour—whether you see it on the invoice or not. Contractors build these “soft costs” into their pricing to recover the time and resources spent preparing quotes. That means a three-quotes requirement doesn’t guarantee savings—sometimes it increases overall costs without improving the quality of work.

Vendors Dislike Quoting for Sport

When trades are asked to repeatedly prepare quotes but rarely win the work, it damages relationships. Over time, good vendors may refuse to quote for a property known for “tire-kicking,” leaving the council with a smaller pool of bidders—and sometimes, the less reliable ones.

It Can Undermine Trusted Relationships

In many cases, a council already has a trusted, proven vendor. Repeatedly putting their work out to competition can be seen as a lack of confidence. Worse, when other contractors are brought in for small repairs that the incumbent had originally identified, it often causes friction—especially if the incumbent later criticizes the competitor’s work. This can confuse councils and create unnecessary tension.

Example: A mechanical contractor performing routine maintenance finds $3,000 of needed repairs. A second firm quotes $2,500 and gets the job. The incumbent loses trust, may start scrutinizing the competitor’s work, and the council is caught in the middle.

Marginal Price Differences Waste Time

If all quotes come in within “spitting distance” of each other, councils often choose the incumbent anyway. That’s not necessarily wrong—trust and service matter—but in these cases, requiring multiple quotes is an exercise in confirming what you already know. This can be worthwhile periodically, but not on every small job.

Tendering Law Is Complicated

While strata corporations aren’t always bound by formal public-sector tendering rules, the principles behind them—such as avoiding “bid shopping”—are worth noting. Inserting extra bidders to drive down a known contractor’s price can lead to legal and ethical concerns, as well as souring relationships with quality vendors. The law of tender is complex, and lay councils may not realize that some procurement behaviours carry real risks.

Decision Fatigue and Delays

Every extra quote means more back-and-forth, more council review, and more time before the work gets done. For urgent repairs, delays can make matters worse—particularly in areas like water ingress, mechanical failures, or safety issues.

One Size Doesn’t Fit All

Not all jobs merit the same procurement process. A $50,000 elevator upgrade? Absolutely—multiple bids make sense. A $300 replacement fan belt? Probably not. Applying the same three-quotes rule to both ends up costing more in administrative effort than it saves in dollars.

Impact on Management Firms

Management companies also bear the brunt of a blanket three-quotes policy. Coordinating multiple bids for every job—no matter the size—diverts staff time and resources from other important matters at the property. In effect, the time spent chasing unnecessary quotes often means other pressing work for the strata is delayed or deprioritized.

A More Nuanced Approach

Rather than a blanket “three-quotes” rule, consider adopting a tiered procurement policy:

• Small jobs (under $1,000–$5,000): Direct award to a trusted vendor, allowing the PM and a small executive of Council to review small jobs and make quick decisions.
• Medium jobs ($5,000–$20,000): Two quotes minimum if time allows, especially if the scope is straightforward.
• Large or specialized projects: Three or more quotes, with a clear evaluation process.  Often, this will involve an outside consultant.

This suggested approach balances accountability with efficiency, keeps vendors engaged, and respects both the council’s time and the trades’ effort.  The dollar amounts are also better determined by the size of your budget rather than arbitrarily- for example, on a $3,000,000 operating budget it certainly makes sense to establish higher thresholds than for a building with a $500,000 budget, ie. the question of materiality is important. This is also not intended to be an exhaustive approach and truly every quote must be considered on it’s own merits, but we know a policy outline to be helpful.

A rigid three-quotes policy can slow projects, frustrate vendors, strain management resources, and undermine established relationships. By building flexibility into your procurement approach, you’ll maintain transparency and fairness without sacrificing efficiency or goodwill.  You will also save *yourselves* time and energy, something we hear frequently from Strata Councils everywhere is a priority for them.