4 Rules to a Janitorial Service Price

4 Rules to a Janitorial Service Price

If you are looking for janitorial service prices, there are four rules required to produce an accurate bid. If your bids are inaccurate, you will likely experience service problems in the future.
To avoid post-purchase regret, here are the four rules to help you get it right:

Rule 1: Know and provide bidders your actual cleanable square feet

Providing a guesstimate of your building’s square footage is equivalent to “garbage in garbage out”. If you guess too high, you will pay too much. If you guess too low, you will be dissatisfied with your service. Janitorial pricing is based on your square footage. To get an accurate price, you need to account for any non-cleaning space and vacant space. Subtract those from your square footage.  If you anticipate vacant space being occupied soon, then ask for a vacancy credit. Most commercial cleaning companies will provide a vacancy credit for approximately 85% of the bid price.

Rule 2: Learn production rates

The best way to discern if your janitorial pricing is too high or too low is to understand production rates. You might say, “the comparative bids will tell me that.” Well, not necessarily. If the competition is high, it is possible that everyone bidding could go below a price that is both technologically and practically impossible to achieve from a production rate standpoint. I have personally seen that happen before. Consequently, the awarded contract only lasted a year (it was a 3-year contract) and then they went out to bid again. A production rate is the square feet cleaned per hour. You can derive it by the formula:

Square feet cleaned / total hours = Production Rate

A general rule is, the smaller the building the ower the production rate, and vice versa for larger buildings. Production rates are influenced by building design, density of building occupants, the cleaner’s mood and health, surface type, cleaning technology, and the cleaning process. The whole reason you outsource your service is for the expertise in how to improve the production rate given the multiple variables. Production rates drive the price because they produce the labor hours required. For example, say you have 3,300 square feet of cleaning space. A facility of that size with full scope of cleaning can be cleaned around 3,300 square feet per hour. The facility will require 1 labor hour to be cleaned.

Square feet / Production = Labor hours  = 3,300/3,300 = 1 hour  

ISSA: The Worldwide Cleaning Industry Association provides a list of production rates in its Cleaning Times 540. Use it as base, but know professional janitorial service companies often exceed those rates.

Rule 3: Hold mandatory site visits

Because there are so many factors that affect a production rate (making the cleaning faster or slower), you must include a site visit to achieve the most accurate price. For example, on paper you may say “quarterly strip and refinish.” That is fine unless the previous contractors has been applying finish without stripping (often resulting in a yellowing of the finish), then the multiple layers will take longer to remove.   A site visit will help your bidders assess the density of building occupants, the condition of the building surfaces and any external factors like transitions from manufacturing to office or outside to office. This will help the bidder know how dirt is transferred through your facility and how the dirt will impact the daily and periodic cleaning, and therefore, the janitorial service price.

Rule 4: Have bidders break down the bid for periodic work

Some janitorial service companies will bid the reality versus the specifications. For example, you might have monthly strip and refinish on all VCT floors. The reality is, the floors can maintain the same level of appearance on a six times per year schedule. To lower cost, the commercial cleaning company will bid the reality at six times per year versus twelve. They know that these costs are absorbed in the overall price. You, in turn, are not getting what you asked for, and it is unfair to those contractors who have honestly tried to meet your need by following your specifications.  Have each contractor breakdown their periodic work into separate bids by providing:
  • Monthly hours for the periodic service
  • Actual frequency used in the bid
  • Monthly dollar cost to provide the periodic service
With these three bullets of information, you can accurately compare competing bids “apples to apples.” You may not be able to ensure the dishonest janitorial service companies honest, but as a bonus, you will increase your likelihood of awarding the contract to an honest cleaning company.
Following these four simple rules will go a long way to ensure your janitorial service price is accurate. An accurate price is one that reflects your scope of work. When price accurately reflects the scope of work, expectations will be met leading to greater customer satisfaction for the services rendered.

 

Marc Collings

Senior VP of Sales and Marketing at Varsity Facility Services
Marc Collings is Varsity's Vice President of Marketing for Varsity Facility Services. Marc oversees the company's growth, branding, positioning, customer support and analytics. In this role, he has positioned the company as a customer solutions leader for lowering cost and improving quality. He also led the company-wide rebranding and strategically positioned the company as a sustainability leader, serving on a committee for the EPA, obtaining the Ashkin Group award for sustainable leadership, leading Varsity's CIMS Green Building certification with honors, and developing Varsity's S.H.A.P.E. sustainability strategy, which improves service results along five dimensions: Safety, Health, Asset Preservation, Productivity and the Environment.

In 2011, Marc's team won the large company category, "Best in the Industry" marketing materials from the Building Service Contractor Association International (BSCAI). Marc also directs Varsity's proposal writing, sales process and tools development, marketing campaigns, corporate website SEO performance and customer support center.

Marc has spent his career developing strategic capabilities that enhance value to customers and the company. A Lean Sigma Green belt himself, he developed the company's Lean Sigma offering, providing an innovative solution to customers' need to lower cost while raising quality. He led the development of JanOPS, an industry-leading janitorial operating system, which brings standardization and service consistency to large campus and geographically disperse national accounts.

Prior to this position, Marc was responsible for strategic management at Varsity. He has initiated or directed multiple strategic technology initiatives, ranging from a corporate website, a corporate intranet, a web/smartphone based quality control system, a learning management system, a corporate content manager and knowledge wiki, salesforce.com deployment and customization, and an Android app which facilitates the GROW sales process he has developed.

Marc is the author of several leadership and management training manuals, field guides, marketing collateral and case studies. He speaks Portuguese and Spanish and holds a bachelor degree in English/Technical Writing and a Masters of Business Administration in Finance from Idaho State University. Marc enjoys mountain biking, skiing, fishing and golf. He is happily married, and he and his wife Victoria enjoy raising and spending time with their four children.

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