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Saturday, November 29, 2014

Question

I am just getting started in the cleaning business. I'm on the cusp of securing my first substantial cleaning contract. The property manager has all but assured me I will get the contract if my bid is reasonable. She is expecting my bid in the next ten days. She has also made it known in no uncertain terms that the adjacent building, which is currently unoccupied, and under construction, will need to be maintained also... and that contract is all but mine, too. I do not want to risk overbidding. However, I, by no means want to underbid either. The cleanable space for the occupied bldg. is 14,770 sq. ft. [Detailed description] There are 1,200 sq. ft. of stairwells (unfinished concrete). We will be cleaning a total of 4,900 sq. ft. of glass (this is interior glass only. Includes both sides of the glass, this is done bi-weekly) The frequency rate is 5 days a week, doing basic office cleaning... dusting, wiping down all horizontal surfaces, sweeping, emptying trash cans, replacing liners, etc... I envision a two person work crew covering 2,500 sq. ft. per hour. We use the Pro-team backpack vacuum, mops and buckets... no auto scrubbers. On Fridays, there're a few extra tasks... spot clean carpet, wet mop all concrete floors, disinfect and wash all restroom walls and wet mop tile floors, wet mop stairwells, clean air vents, light fixtures, chandeliers in conf. rooms and dust all woodwork (3 person work crew on Fridays). I would earnestly appreciate if you could help me get a firm grasp of the bidding process... and what the amount per sq. ft. and or monthly rate should be for this contract. Again, I am flummoxed, and very fearful of risking potential projects by overpricing this one. (metro Detroit area)


Answer

I can offer no guarantee that what I give you will work in that market because bidders have been known to underbid thinking that they are really high. And the other way around. You could be up against who knows who.
Let's start with some basic figuring. The 2 person crew will be covering 2500 sq. ft. per hour and need 6 hours (12 man-hours) to do the work each time they are there. On Friday, the third man will add 6 hours to your payroll, so you have a total of 66 man-hours each week. At $10 per hour, your labor cost without payroll add-ons such as social security and worker's comp. will be $660. Add 20% for the labor burden and you have another $132, bringing labor to $792 per week. That is $41,184 annually or $3432 per month. Labor only. No profit or supplies or take home for you.
If you use a multiplier such as 2.5 times your labor to arrive at a price that covers the "rest" you arrive at $102,960 annually or $8580 per month. Divide the cost by the sq. ft. and you see an annual sq. ft. charge of $6.97 and a monthly of $.58/ sq. ft.
I cannot say for certain if this is high or low for this facility and the work you are expecting to do. It may not be, but some work seems unnecessary. For example, does the interior glass become so readily soiled as to require a bi-weekly cleaning, both sides? What makes the stairwells need a weekly wet mopping? Are the rest room walls constructed so they can be disinfected and washed each week?
Is that needed? How often, really?
Two simple observations.
1) Your projected production rate (1250 sq. ft. per man-hour) seems too low for an office building.
2) Your "project" work seems more frequent than should be necessary.

If you can produce at a 3000 sq. ft. per man-hour rate, you could drop the cost of labor substantially. If your overhead allows for a lower multiplier (2 instead of 2.5), you can lower the price. If the project tasks can be done on a lesser frequency, you will be able to charge less.
If you pay less per hour, your costs reduce.

The big question is, do you have that flexibility and can you make those changes?

Lynn E. Krafft, ICAN/ATEX Editor
lekrafft@juno.com