The RFP process for contracting association management has gained popularity among some association leaders. Advocates cite it as simple due diligence — something a responsible board does every few years. And yes, board members have a fiduciary duty to be fiscally responsible. But a policy of periodic RFPs can produce consequences no one on the board actually wants.
If association management were a commodity, an RFP might make sense when considering a change. But AMCs vary widely in how they operate, and associations don’t all have the same needs. A process built for comparing like-for-like bids doesn’t work well when the “product” is a relationship built on judgment, institutional knowledge, and day-to-day problem-solving.
The scope-of-work problem
Every management contract includes a scope of work — a list of the tasks the AMC agrees to perform. It’s very common for associations to leave needs out of the RFP, because most board members don’t actually know the full depth of what management does for them. The scope, as written, is typically understated.
That understatement sets off a chain reaction. When an AMC responds to an RFP, it has to price the bid based on what’s written — not what the work actually requires. Bid on the real scope instead of the stated one, and the price comes in too high to be competitive. Current management faces the opposite trap: they know exactly what the work takes, so if they bid honestly, they’ll look expensive next to competitors bidding on a scope that understates the job. This is one reason a current AMC will often walk away the moment it learns an RFP has been issued or is coming.
And the story doesn’t end once a new AMC wins the bid. Whoever comes in on the understated scope now faces the same gap the outgoing AMC saw all along — either absorb the extra work at a loss, or push back on the association almost immediately after signing. Either way, the board is right back where it started, just with a new management company and a fresh round of friction.
A red flag worth knowing
If an RFP invites current management to bid, that’s worth pausing on. If there were real performance issues, current management typically wouldn’t be invited at all — the point of the RFP would be to replace them. An invitation to rebid usually signals something else: the board is shopping for a lower price. Every prospective AMC reading that RFP receives the same message — no matter how well you perform, this association will put you up for rebid every few years. It also suggests that whoever wins the contract will be regularly asked to take on work outside the agreed scope without additional compensation. Knowing this, many well-run AMCs simply decline to bid at all.
When the RFP threat becomes a management tool
Some associations use the threat of an RFP to pressure their AMC into absorbing out-of-scope work for free. In some organizations, this becomes part of the culture — the assumption that management’s job is to make the organization successful regardless of scope or cost limits. That puts the AMC in an impossible position: keep the client and lose money, or hold the line and risk the relationship. Because AMCs operate on thin margins to begin with, losing money isn’t a sustainable long-term choice.
Three parties, three losers
An AMC management change involves three parties — the association, the outgoing AMC, and the incoming AMC — and all three end up worse off.
The association loses because:
- It’s now living with the results of a scope of work that was likely unrealistic, unsustainable, and inaccurate from the start.
- It has to absorb the cost and disruption of a management transition.
- Many strong AMCs won’t even bid on an RFP with a clearly understated scope, which narrows the field to those willing to gamble on it.
The current AMC loses because:
- It loses the investment built up over years with that client.
- It may have to let team members go, despite strong performance, simply because the income no longer supports them.
- It absorbs the added workload of an unwanted transition.
The new AMC loses because:
- It wins the contract, then discovers the scope was understated all along.
- It’s set up for friction with a new client almost immediately.
- It risks sustaining real losses trying to keep pace with client demands that were never priced in.
There is a better way
- If your association is having performance issues with your AMC, talk with them directly and give them a real chance to fix the problem.
- Don’t send out an RFP just because you’re hoping to pay less. If the RFP underestimates your actual needs — and it likely will — the price will simply climb back up once the real scope becomes clear.
- If you believe you’re being overcharged, or genuinely need to reduce costs, talk with current management first. You may be paying for services you no longer need, and that’s a conversation, not a bidding war.
To be clear, there are times when an association genuinely needs a change in management. But the RFP process is rarely the process that gets you there in good shape.
If you do decide it’s time for new management:
- Research other AMCs serving associations similar to yours in specialty or type.
- Reach out to promising candidates and set up a call with the president or whoever handles prospective clients.
- Come prepared with the questions that matter most to your association.
- If both sides sense a potential fit, let the AMC guide you through their own discovery process. A good AMC’s goal in that conversation is to reach a realistic understanding of what your association actually needs — not just to win the bid.
- If you end up comparing multiple proposals, don’t evaluate on price alone. Consider how the AMC is structured, how genuinely responsive they are to your association’s specific needs, and the overall fit.
An RFP can be exactly the right tool for choosing a conference venue or a firm to prepare your 990. It’s rarely the right tool for choosing who manages your association.
