How best can high-cost projects be executed by Residential Communities (RWAs) ?

Many RWAs build up on their infrastructure with high-cost enhancements such as installing a centralised Reverse Osmosis (RO) system for providing drinking water to their apartments.  Sometimes,  essential maintenance  activity such as repainting of building exteriors or major repairs to the buildings can also involve high costs.  Such projects obviously need to be executed very judiciously and this can be challenging to volunteer members who may not have sufficient expertise or time to devote to their execution. The risk of  such projects ending up poorly implemented or with complaints and even suspicion of irregularities is hence extremely high.

Is there an optimal way to execute such projects? Yes, this is very much possible. The foundation can be set by adopting the proven principles that execution must be transparent, ethical, and inclusive. Keeping that as the focus, we lay down the steps that are in keeping with proven practices.  These steps may seem a little elaborate and difficult to execute especially by smaller communities and for smaller, standard projects, but serves as a good background for simpler, efficient models.

Stage 1

Acceptance of Necessity (AoN).   The process starts with the projecting of a perceived or felt need by some members. While some of these can be addressed by applying standard solutions, some solutions may require a feasibility study. Either way,  various options, each with their cost-benefit-risk analysis  can be explored.  For example, different RO technologies may provide different qualities and may incur differing capital investments  (capex) and corresponding operating costs (opex). This could lead to differing  break-even periods and if a technology is close to being phased out, it could mean a risk of no-maintenance support by the supplier before the elapse of it’s expected life.

To obtain clarity and avoid such risks, it may hence be wise to use an independent consultant in conjunction with a volunteer member who will provide inputs on the requirements of the members of the community.  A report providing findings of the  alternatives and cost-benefit-risk analysis can then be shared publicly with the full community for a few weeks to allow them to understand it, pose queries, point out any missing angles and suggest improvements. A consensus building activity ( please see our article here: https://www.cocreed.in/post/how-consensus-building-can-help-residential-communities-take-better-decisions )  could be of great help to ensure that most of the community actively agree, while the balance find no serious objection.

The decision to go ahead with a tentative budget can then be taken by the general body in a meeting by putting it to vote. The resolution taken can be published on the community digital notice board or website as a record and for the benefit of those members who were not available at the meeting.

Stage 2

Defining technical specifications /scope.   The option that was selected in the stage above, then needs to be described in full detail to enable suppliers to respond. Drawing these up will need some inputs such as current water quality, daily consumption data, space availability and layout etc. A  qualified water systems consultant or engineer should be employed for then drawing up the output quality and quantum desired, aspects of reliability, testing methods, maintenance and warranty etc. Care must be taken that the specifications are not such that it limits the competition to one vendor, because such a situation can lead to excessive expenditure. The draft specifications along with a list of possible vendors can be published on the community digital notice board for a week to invite queries/observations/suggestions before finalising them.  

Stage 3

Request for Proposals (RFP):   This document should be addressed to multiple vendors (who are considered reliable and established) with an invite to any others in the public domain and should contain the technical specifications we arrived at in the earlier stage, eligibility criteria, evaluation methodology, timelines and payment terms among other details. Detailed formats for RFPs are available online, but the employment of an independent consultant, again is advisable. A copy of the RFP should be published in the community website and local vendor directories/ industry forums indicating an intention to let in more open competition.

RFPs must ask for two bids in separate sealed envelopes – one where the vendor provides the technical specifications of his product, including details of any service support that will be provided, in a technical bid and the other where he quotes his price in a commercial bid.  

Stage 4

Evaluation of  Technical Bids. Once responses are received, a technical committee which could comprise of some volunteer members and a qualified consultant, evaluates them. After disqualifying those which do not meet the specifications listed in the RFP, an evaluation matrix can be drawn up. A document stating the reasons for disqualification of a vendor, if any,  and providing an interpretation of the evaluation matrix can then be shared with the community.  It is possible that at this stage, additional features or  costs or benefits of different products may come to light. If these are considered important and desirable, it may be worthwile to halt and repeat stages 2 and 3 with the amended specifications.

Stage 5

Opening of the commercial bids and selection of the optimal bid. Only those bids whose technical bids have cleared the earlier stage are considered. These are opened in a public meeting or with video recording. It is not necessary that the lowest bidder (called L1) is the best, since some vendors could lack the requisite expertise or attempt to grossly underbid. To avoid this situation, RFPs can include clauses for reasonableness of pricing and possible disqualification of a vendor who is unable to justify his capabilities with sufficient information.  

In case the scope needs to be refined ( some vendors may ask for additional inputs to fine tune their offers)  or  a vendor wishes to rework the payment terms or some clauses on warranty need to be added, a contract negotiation can be held with the selected vendor. This must be done by an empowered committee, accompanied by a law aware person.

Needless to say, the proceedings of the opening of bids, selection and negotiation should be recorded in writing.

Stage 6

Compilation of a Detailed Project Report (DPR). This is a compilation of all the documents of the stages with a summary providing  a single source of truth and allows all members of the community to see how decisions were made, not just what was decided.

After the DPR is shared with all members on the community website, some  valid concerns or  insights—especially those with domain knowledge may arise. If these are major or critical, the community has a chance to step back and take a re-look.  This feedback loop can also help refine contract terms, flag overlooked risks, or suggest better service-level clauses. A well-documented DPR reduces the risk of post-contract disputes by showing that due diligence was done. Lastly, and most importantly, it protects volunteer committee members from allegations at a later date, of procedural lapses or mismanagement.

Once community consent is apparent, the contract can be signed between the community representatives and the vendor, along with those of the consultant and two independent witnesses.

Stage 7

Monitoring execution. Execution of a project can be tracked through a project dashboard with tools such as Gantt charts, Weekly progress reports, site inspection logs etc. A monitoring team of volunteers and a consultant can prepare monthly reports which can be updated on the community notice board. Many contracts include a Liquidated Damages (LD) clause which imposes a penalty on the vendor for delays in supply or completion of the contracted work. But delays can occur due to reasons attributable to the vendor or the community. For example, the areas for laying out the pipelines may not be cleared by the community in time. The monitoring team therefore needs to record the reasons with fairness and share them with the community as a justification of the final penalties which may be fairly imposed.

Stage 8

Independent Audit. After  the project has been completed, it helps to conduct a financial audit ( to check invoices and payments) as well as a technical audit ( quality of installation).  This should be done by a third party auditor or a qualified member who is not involved in the execution.

Many may question the need for an audit, with views that it is too late to correct anything and may only bring up unpleasantness against those who were involved in execution and thereby lower community spirit. However, audits can reveal many areas of systemic weakness and can be used as stepping stones for improvement. The lessons learnt can be recorded and publicly shared for use by future project teams.

Summary

The figure below summarises the steps and important actions needed:

(Tip: Download this image or take a screenshot of it and share with your community for spreading awareness)

Conclusion

Execution of high cost and techology intensive projects for communities managed by volunteers who may lack the expertise and time, can be extremely challenging. Errors, inefficiencies, complaints and suspicions can be reduced by defining guiding principles,  laying down roles and responsibilities in writing and using checklists, forms and SOPs to guide volunteers.  While employment of consultants may be seen as an added and heavy cost, they can also reduce costly errors and reduce  the time, effort and stress of  volunteer members. The end goal must not be just enhancing infrastructure, but building trust. By embedding transparency, ethics and inclusivity at every stage, projects can shift from being “committee driven” to “community owned”.  Thus making full use of  collective wisdom and building community cohesiveness and well-being.

We hope you found this article useful. We thank our multiple contributors for adding insights to this article. Do send in your additional or counter angles at Contact@cocreed.in . 

Is your community looking for project consultants? Or would you like to offer your servcies as a project consultant ? Let us know at Contact@cocreed.in