Discussing Contracts and Bids in Executive Session
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We recently received a question regarding the ability of condominium boards to legally convene in executive session pursuant to § 55-79.75 of the Virginia Code. Specifically, the question asked whether § 55-79.75’s provision stating that boards may convene in executive session to “discuss and consider contracts” grants boards the authority to discuss and consider bids.
Answer:
The discussion and consideration of bids for contracts relating to the provision of goods and/or services to a Virginia condominium is an important exception to the general requirement that condominium boards meet in the open. The bid process is an integral part of the contracting process. An association's ability to competitively bid out work is largely dependent on its ability to obtain bids from reputable contractors.
Discussing bids in an open session of the board risks contaminating this process and destroying the association's ability to get competitive contracts from licensed, reputable contractors. Many quality contractors would be reluctant to engage in the competitive bid process if they thought that their competitors would have access to their bids. In the case of competitive bidding, information is power. A condominium board in Virginia is acting responsibly and within its rights to discuss and consider contract bids in closed (executive) session. In fact, there is a strong legal argument that the board would violate its fiduciary duty if it were to discuss such bids in open session.
