Retuning A Cleaning Contract
My simple definition of “retuning a custodial contract” is to take a snapshot of where you are compared to where you should be and then take appropriate action to remedy the situation. What has changed since the last time your reviewed this contract? Has there been a change in total square footage up or down? What about floor surface or frequency of cleaning? If so, was that captured in a modification to reflect the difference in the real costs associated with this change?
I usually recommend that a modification be triggered if there is a 2 percent to 5 percent change based on the size of the contract and the impact it has on total labor and benefits. Of course, if there is a major change in the specifications or requirements such as number of days’ service is provided or tasks performed or supplies/equipment needed it should be reflected in a modification.
The key point is always to know what it is costing in labor and benefits to successfully operate this contract. Some cities and states are implementing “living wages” which are a wonderful concept as long as everyone knows it will have an impact on the bottom line so budget accordingly. Remember that in most cases expendable supplies can run 1 percent to 2 percent, with consumable supplies varying based on usage up to 8 percent. Equipment and tools can vary again due to size of contract, requirements and productivity goals. The primary cost in any custodial service contract will continue to be labor and benefits, which can run as high as 80 percent in some cases. Please understand that although there may be ideas of total costs for these items, it is dictated by the specifications, type building, traffic and other factors such as local wages and benefits that are going to vary case by case.
Once you know your current numbers you can make adjustments to protect your margins and provide the level of service specified in the contract. Your comments and questions are important. 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.