Here’s a number that should focus any committee’s attention: the large majority of a building’s spending goes to contractors — cleaners, gardeners, plumbers, electricians, lift and fire technicians, and the trades who turn up for major works. Which means contractor management is, more than almost anything else, where a building’s money is either well spent or quietly wasted. After thirty years managing Sydney buildings, here’s how good buildings get good trades at fair prices — and how the poorly run ones overpay without ever realising.
Why This Is Where the Money Is
Your building manager’s fee is visible and gets scrutinised. The contractor spend it oversees is far larger and gets scrutinised far less — which is exactly backwards. A building that manages contractors well can save many times the building manager’s fee in better pricing and accountability; a building that doesn’t overpays across dozens of invoices a year, in amounts small enough that no single one raises a flag. Contractor management is the highest-leverage cost control a building has.
Get Genuinely Competitive Quotes
The single most important discipline is competitive quoting: for significant work, obtaining multiple quotes against the same defined scope, and comparing them properly. This does two things — it keeps prices honest, because contractors who know they’re competing sharpen their pencils, and it surfaces the differences between what each is actually offering. A building that always uses the same contractor without testing the market has no idea whether it’s paying a fair price, and contractors know it.
The catch is that quotes must be against the same specification. Three quotes for three different versions of the job tell you nothing. Defining the scope clearly first is what makes the comparison meaningful.
The Commission Question
Here’s the one that costs buildings the most quietly: some building managers retain commissions or rebates from the contractors they engage. When that happens, the incentive shifts — the manager benefits from choosing contractors who pay them, not necessarily the ones who serve the building best. It’s one of the clearest reasons to ask, directly, whether your building manager retains any contractor commissions, and to insist that any rebates flow back to the owners corporation. A transparent building manager passes the full benefit of their buying power to the building, not into their own margin.
Build Relationships, But Keep Them Honest
There’s real value in long-term relationships with good contractors who know the building — they respond faster, understand the plant, and cut fewer corners. The art is holding those relationships and competitive tension at the same time: valuing reliability without letting a comfortable contractor stop being sharp on price. Periodically testing the market, even for trusted contractors, keeps everyone honest and confirms you’re still getting value from loyalty rather than just paying for it.
Check the Basics — Every Time
Good contractor management also means confirming the fundamentals before work starts: proper licensing for the trade, current insurance, and references or a track record for work of similar type and scale. On anything involving safety — electrical, heights, fire, plant — this isn’t bureaucracy; it’s the difference between a controlled job and a liability. Unlicensed, uninsured or out-of-their-depth contractors are a false economy that shows up later as failed work or a claim.
Audit the Invoices
The quiet leak in most buildings is invoices paid without scrutiny — progress claims approved without confirming the work behind them, variations waved through without justification, recurring charges that creep up unremarked. Someone checking that invoices match the work done, and questioning what doesn’t, recovers more money over a year than almost any other single practice. Contractors price sharper for buildings they know are paying attention.
Where a Building Manager Fits In
This is the heart of what a good building manager does for a building’s finances. We obtain and compare competitive quotes, engage licensed and insured contractors, supervise their work and hold it to standard, audit invoices against what was actually done, and — critically — pass the full benefit of that buying power back to the building rather than retaining commissions. Because Building Management Australia is independent of any strata management firm, our only interest is your building getting fair prices and good work. The owners corporation approves the spending and the strata manager processes it; the building manager makes sure the money buys what it should. Over a year, in a building of any size, that discipline is worth far more than it costs.
Frequently Asked Questions
How do we know if we’re paying fair prices for contractors?
By testing the market — obtaining competitive quotes against the same scope for significant work, and periodically re-testing even trusted contractors. A building that always uses the same trade without comparison has no way of knowing whether its prices are fair. Transparent, competitive quoting is how you find out.
What are contractor commissions and why do they matter?
Some building managers retain commissions or rebates from the contractors they engage, which creates an incentive to choose contractors who pay them rather than those who best serve the building. Ask your building manager directly whether they retain any contractor commissions, and insist that rebates flow back to the owners corporation. It’s one of the quietest ways buildings overpay.
Is it bad to use the same contractors for years?
Not necessarily — long-term relationships with good contractors who know the building have real value in responsiveness and quality. The key is keeping them honest by periodically testing the market, so loyalty is earning you good service rather than simply costing you competitive pricing. Reliability and value aren’t mutually exclusive if the relationship is managed.
What’s the most overlooked way buildings overpay?
Invoices paid without scrutiny — progress claims approved without confirming the work, variations waved through, recurring charges creeping up. Someone actually checking invoices against work done, and questioning what doesn’t add up, recovers more over a year than most committees expect. Contractors price sharper for buildings that pay attention.
Want Contractor Spend That’s Actually Controlled?
Building Management Australia is an independent Sydney building management firm — not a strata agent. Obtaining competitive quotes, engaging licensed and insured contractors, supervising the work, auditing invoices, and passing the full benefit of our buying power back to your building — with no retained commissions — is core to how we work. If you suspect your building’s contractor spend isn’t being properly controlled, request a proposal at bmaus.com.au or email Andrew directly at [email protected].
About the Author
Andrew Veron is the founder of Building Management Australia (BMA), an independent Sydney building management firm established in 1995. BMA is a building management company — not a strata agent — providing on-site and visiting building management, facilities management, concierge, cleaning and valet services to residential, commercial and mixed-use properties. Over the past 30 years, Andrew and the BMA team have managed buildings across the Eastern Suburbs, North Sydney, Inner Sydney, Parramatta and the Sydney CBD, with assets currently valued in excess of $3 billion under management. Because BMA is independent of any strata management firm, committees receive unbiased advice and transparent contractor relationships. Reach Andrew at [email protected] or bmaus.com.au.