Nobody Bid the Construction Defect Repair
How to make a construction defect settlement fix more of your building
Your association spent two or three years on a construction defect claim. Experts opened walls, cut test holes in the roof, and water-tested the windows. The case settled. Now there's a check in the bank and a board that has to turn it into a repaired building.
In Colorado, what happens next is almost always the same. The repair goes to the construction company that did the intrusive testing. No bid-ready scope. No competing proposals. Just a contract.
I understand why. That firm has been inside the walls. It knows the building. Its repair estimate is already in the case file. Continuity feels safe, and after years of litigation everyone wants to be done.
But a settlement is a fixed amount of money. Once it's in the bank, the only question that matters is how much building it buys. And a repair nobody competed for is the most expensive way to spend a fixed amount of money.
Why a sole-source repair costs more
This isn't about anyone doing anything wrong. It's about how the number was built.
The testing contractor's estimate was prepared to support a claim. Its job was to capture the full cost of the defects, conservatively, so the association didn't settle short. That's exactly what you want during the case. It isn't what you want as a construction price.
And when a contractor knows it's the only firm being asked, the price reflects that. Nobody has to sharpen a pencil.
When DHA has taken defect repairs to competitive bid, the association's savings compared with the direct-award price for the same work have run as high as 50%. That isn't money the board pockets. It's work that gets done.
What the difference looks like
Here's an illustration (not a client). An association has $1.8 million in net settlement proceeds and a repair scope covering roofing, windows, and balcony waterproofing.
Direct-award price for the full scope: $2.4 million. The board can fund about three quarters of it. Something gets left behind, usually the defects that aren't leaking yet.
Competitive bid 30% below that: $1.68 million. The full scope gets built, with $120,000 left as contingency.
Competitive bid 50% below that: $1.2 million. The full scope gets built, with $600,000 left for the next priority on the list.
Same building. Same defects. Same settlement. The only difference is whether anyone competed for the work.
One more reason this matters now. Colorado's HB25-1272, effective August 2025, requires an association's net defect recovery to go toward repairing the defects and adds disclosure requirements to owners (DRE summary). I'm not an attorney, and your association's counsel is the right person to explain what it means for you. What I can tell you is that it turns every dollar of premium into a dollar that never reaches the building.
How we do it: four steps
A professional writes the scope of work. Not the testing report reformatted, but a bid-ready scope: quantities, specifications, access, sequencing, and acceptance criteria, so every contractor prices the same job.
We build a priority matrix with the defect attorney team. The attorneys know which defects the recovery was built on and what the experts found. Together we rank the work: active water intrusion and life safety first, then defects causing progressive damage, then the rest. The attorney is a partner in this step.
We build the scope from that matrix and the defect rough order of magnitude. Base scope for the top tiers, add-alternates for the rest. When bids come in, the board can match the work to the money instead of guessing.
Qualified contractors bid it, and we level the bids. The testing contractor is welcome to bid, and often should, since it knows the building. It just has to win.
From there the job runs like any capital project: pay only for verified work, keep oversight on site, and finish with a closeout file that proves the defects were fixed.
A word on timing, and on the attorneys
Defect attorneys have a hard job, and they have good reasons to keep the testing contractor close while a case is live. Its estimate may be part of the damages evidence, and changing course before the expert report is final or the settlement is signed could hurt the case.
So ask your attorney one question early: "When can we take the repair scope to bid without affecting the claim?" Usually the answer is after settlement. That's the moment the board's job changes from winning the case to buying the repair.
The attorney's job is the case. The testing firm's job was the investigation. Buying the repair at market is a different job, and on most defect projects nobody is assigned to it.
That's the gap. Assign it.
The bottom line
Competitive bidding of defect repairs is still unusual in Colorado. It shouldn't be. Every other capital project an association takes on gets a scope and competitive bids. The one funded by a hard-won settlement deserves at least the same discipline.
If your association is settling a defect claim, or just did, comment "DEFECT" or send me a DM and I'll send you our Defect Repair Bid Package Checklist: priority matrix template, scope-from-ROM steps, bid leveling, and the closeout file.
Next issue: The Reserve Study Said $400,000. The Bids Came In at $700,000. Why the paper number and the buildable number never match, and what to do before you set your 2027 contribution.
Sean Davis, PMP | Civil Engineer | Current HOA Board Member (12 years) | DHA Construction Management | Broomfield, CO
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