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Monday, 21 September 2015 12:04

When the Bidding Process Goes Wrong - Learning from my mistakes

Written by  Robert Kravitz

San Francisco

I'm a former Building Service Contractor who worked in Northern California. At one point fairly early in my career, myself and six other BSCs bid on a cleaning contract for a major advertising firm in San Francisco. The facility was located in a historical district that had many old warehouses, which have since been converted into office space. Unlike newer buildings, these old structures were made of brick, and due to the frequent seismic shifts and shakes in the Bay Area, dust buildup in these old facilities was a common problem and had to be a consideration in the bids.

Following a walkthrough of the building, I considered the dust issue and also became aware of some other factors that could affect the cleaning of this particular facility. Believing I had all the information needed, I spent a few days preparing my bid and then hand delivered it to the facility manager. While I thought the bid was competitive, I was not all that confident that I would win the account. To my surprise, however, I was notified about a week later that my cleaning contract had been accepted and was given a 30-day start date.

Since this would be my largest customer at the time, I was extremely excited, but I had no idea that I would soon run into an avalanche of problems, all as a result of my winning bid.

Thrown For a Loop
My crew and I knew the first few nights of service would be the most trying. Because of this, six people were brought in to clean those first few nights, with the belief that after the first week of service, only three would be needed to work an eight-hour shift. Unfortunately, this did not happen. After a month of service, I had scaled the crew down to five cleaning contractors, but cutting that number any further was simply not in the cards.

We also encountered another problem in terms of the supplies and equipment needed to clean the facility. I had purchased two new vacuum cleaners just for this building, but it soon became evident that two more would be needed. I’d also underestimated the amount of cleaning solutions, liners, and other related products needed. The client paid for paper products—toilet tissue, hand towels, etc.—but I had to purchase everything else. Unfortunately, when preparing the bid, I placed too little emphasis on cleaning supplies, believing they would only be a minor expense. They weren’t.

Moreover, the facility had several restrooms as well as both hard-surface and carpeted floors, all of which had to be cleaned using interim and full restoration methods on a set schedule. So both the supply and labor costs for this facility were going through the roof. After three months of service, it was clear I had totally underbid the contract. Not only was I not making money, I was losing money and it could not continue.

Hat in hand, I approached the building manager, discussed the situation, and told her I would have to submit a new bid or stop the service in 30 days. This was regrettable because not only was this my highest-paying customer, the client was also a wellknown advertising company, so it was quite a feather in my cap. So the issue now was would the client accept a significantly higher monthly service charge?

Where Things Went Wrong
Before telling you how things turned out, let’s address why this situation happened in the first place. Most BSCs know that the bidding process is not scientific—there is no one way to bid. There are just too many variables. But why was I so far off? The following were some of the reasons:

Density: This refers to how many people are working in a facility per floor. This company had a large staff working in large but congested areas. I based my bid on the square footage of the facility, but did not take into enough consideration the high volume of people working in the space.

Building age: We knew this was an older building, and I was aware that could impact cleaning times. However, the age of the building created many additional concerns. The facility had little of the streamlined functionality found in a modern building. There were nooks and crannies to be cleaned everywhere— each one filled with workers. This added a considerable amount of time.

Cleaning times: I should have taken the time to add up the number of desks and restroom fixtures as well as the square footage of the carpeted and hard-surface areas and then turned to a guide such as ISSA’s Cleaning Times. These cleaning times tend to be fairly accurate, and it would have given me a better idea of just how much time my crew would need to clean the facility.

Mechanization: Other than purchasing new vacuum cleaners, I did not look into equipment that could reduce cleaning times. For instance, each floor had a long and wide hallway. Selecting a wide-area vacuum cleaner to clean these carpeted hallways could have reduced vacuuming time considerably.

The Supplies Factor
Along with everything else, the underestimated cost of supplies—chemicals, tools, and equipment—really threw me a curve. According to Tobi Colbert, director of business development for the National Service Alliance, a group purchasing organization for larger BSCs, while labor costs will likely be about 70 percent of the cost of cleaning for most job sites, “not paying attention to that 30 percent for cleaning products and supplies can be a big mistake.”

When it comes to managing supply costs, Colbert offers some useful tips:

• Eliminate any cleaning supplies that are rarely or never used.

• Evaluate the cleaning solutions to select those that perform most effectively and those that are most cost effective.

• Select products that have volume discounts and rebates from the manufacturer.

• Purchase products that can be used for multiple cleaning tasks.

The Outcome
Needless to say, this turned out to be an exasperating learning experience. I went from initial exuberance at winning the contract to just wanting to get out of it within a few weeks. As it turns out, because my new monthly charge was so much higher, the decision to keep me was bumped all the way up to the company’s CEO. As it turned out, I had two things going for me. One, the company was happy with the service. But the other I did not expect.

The advertising company told me they knew I had underbid the time and costs to clean its building, so in some ways, they felt responsible for what had occurred. The decision was made to continue on a trial basis at the higher monthly charge. If the service was up to par, we had the contract. Ultimately, things worked out, and I had that account for five more years, which ultimately provides this story with a happy ending.

Robert Kravitz

Robert Kravitz is a former building service contractor and now a frequent writer for the professional cleaning industry.

Last modified on Thursday, 07 April 2016 09:15

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