Is It OK To Reduce The Bid Price To Win A Contract?
A reader writes: “My custodial contractor offered to ‘back into my budget’ Does that make sense?”
I am sure there are those who will disagree with my suggestions and I encourage them to come forward with any ideas that might work. I will make a few points that hopefully with help readers with a decision like this.
- Do you have a budgeted amount set aside for custodial operations? If so, then how did you arrive at that number? If you used a published (or your own) time standard then you have calculated all the tasks involved and how often (frequency) you think they need to be done to arrive at the total annual DLH (Direct Labor Hours) necessary to maintain the building/area to satisfy your tenants. Of course, you will need to calculate the total cost based on wage/benefit rates, supervision, supplies, equipment, overhead and other factors. Your response was that you were given a budgeted amount with no explanation.
- Do you have clear specifications that the contractor can use to generate a dollar amount based on the factors I just listed? If not, I suggest you work with them to spec out what you consider to be your expectations of outcomes and then work towards the tasks and frequencies that will satisfy those requirements.
- Do you trust the contractor to act in everyone’s best interest? If so, then you can empower him/her to “back into” your budget while taking into account your priorities. For instance, the front entrance, restrooms and other high profile areas should be maintained first. As the priority list declines, you will have to decide how often items such as stripping/recoating, burnishing, carpet cleaning can be performed while staying in your budget. Once all the funds have been expended, go back over it with a red pencil and adjust/tweak accordingly.
Be cautious in dealing with a contractor who quotes a price and immediately drops it to meet your number. In most cases, a change in price should mean a change in service.
Your comments and feedback are always appreciated. I hope to hear from you soon. Until then, keep it clean…
Mickey Crowe has been involved in the industry for over 35 years. He is a trainer, speaker and consultant. You can reach Mickey at 678-314-2171 or CTCG50@comcast.net.