Bidding Office Buildings: One Size Doesn't Fit All!

Every day, it seems, we are asked to help with a bid of one kind or another. Sometimes we're provided plenty of details about the facility, other times we're simply told, "I am bidding on a 15,000 square foot office building that has 4 restrooms and a break room. How much should I charge?" That doesn't give us much information to go on, does it?

Is there a “one size fits all” when it comes to bidding office buildings?

Cleaning business owners, especially those new to the industry, often wonder why there is no “cookie cutter formula" for bidding commercial cleaning jobs. Sure, there are ‘going rates' and ‘industry averages' that you can go by and researching the market and competition in your area is going to provide you with some information on pricing, but submitting a profitable bid involves much more than that. There is no secret formula that will magically fit all instances and applications when it comes to bidding commercial buildings. Each one must be evaluated independently.

Let's illustrate why every building must be analyzed individually and why we can't simply plug numbers into a formula to come up with a price that is reflective of the job itself. We will do this by comparing 2 office buildings, each with a total of 30,000 square feet, and each cleaned 5 days per week.

Building A

Building A is a 3-story, multi-tenant office building. It has a large double entry with a large lobby, granite and terrazzo flooring, elevators and two sets of stairways. There are two restrooms, men's and women's, on each floor. Most of the tenant offices have break rooms or coffee centers.

You conclude that Building A can be cleaned by 3 cleaning technicians, each working a 3.25 hour shift, for a total of 9.75 man hours. You estimate they can clean at a rate of 3077 square feet per hour after examining the building layout.

Building B

Building B is a one-story single-tenant office building. It has a smaller entry than Building A, with a carpeted reception area. There are two large restrooms in the center of the building, one large breakroom adjacent to the restrooms, and a coffee center. There are a few enclosed offices around the perimeter of the building, with the bulk of the space filled with cubicles and large open areas.

You conclude that Building B can be cleaned by 2 cleaning technicians, each working a 3 hour shift, for a total of 6 man hours. You estimate they can clean at a rate of 5,000 square feet per hour after examining the building layout.

Comparing Apples to Oranges (something which is both the same and different simultaneously)

Even though each building is 30,000 square feet and will be cleaned 5 days per week, can you see the difference in the amount of time needed to clean each building? Building B has more open spaces, with fewer restrooms and break rooms, and no stairways or elevators to clean. Production rates are much higher in this type of building, so the employment costs alone associated with caring for the building are lower than Building A.

To conclude, the proposal price for Building A is going to be higher than the price for Building B, even though they are both 30k and are to be cleaned 5 days per week.

As you work on cleaning proposals, make note of these details so you are well-prepared to present the prospect with a realistic proposal for their building.

Keep on-gong records of your company's production rates for different types of facilities, situations, and cleaning/maintenance tasks. It is YOUR Company's production rates that will provide you with the most accurate measure of your employment costs. It is imperative that you be realistic on how fast your company can clean a particular building.

Cleaning Variables to Consider

No two jobs are ever going to be exactly the same. There are just too many variables to consider and they all will have some impact on your final price. The cleaning industry is known for its slim profit margins and in order to bid profitable, you need to ask yourself questions that will impact your final price.  

Top 10 Questions to Ask Yourself

1. What class and type of facility is it? Financial, government, medical, retail, dealership, educational, daycare, etc. What is the facilities current condition and how old is it? Does this facility require any special certifications or training?
2. How many employees, occupants, tenants, and/or public traffic can be expected at this facility?
3. How many days per week is the facility to be cleaned?
4. Are there specific hours that we are allowed to be in the building? Is this day or evening cleaning?
5. How many cleanable square feet are we responsible for?
6. What type and how many square feet of flooring are we going to be cleaning?
7. What are the cleaning specifications for this job? How many restrooms, kitchen areas, and fixtures will we be cleaning?
8. Are there weather changes that will affect our production rates later on, such as high humidity, snow, ice and salt?
9. What type of equipment will we be using at this facility? Do we have to rent any specialty equipment or purchase any special supplies?
10. What are the owners or facility manager's standards and expectations? Are they focused on price only or will we need to perform some tasks more frequently or add tasks to suffice the customer's needs.

Estimating Woes: Too Low or Too High

If you estimate too low, or underestimate your price, you run the risk of a cost overrun. You may get the job but you are going to lose money or barley break even, either case is bad news for your business. Sometimes businesses are so overwhelmed with trying to secure new business that they overlook all the variables and factors involved in submitting a competitive bid.

This results in the underestimation of the actual cost of cleaning the facility. The result is usually lower than expected profit margins at the end of the business year. Cleaning business owners that fall short of their time estimates to clean a facility and underestimate the scope of work involved will soon be out of business.

If you estimate too high, you run the risk of losing out on the bid and a new customer. If you are constantly losing out on the winning bid because you are bidding to high, you need to sit down and review what things you can change to increase production rates and/or lower your costs.

But losing a bid to the lowest bidder isn't always a bad thing. If the customer is only concerned with the “lowest price,” they are likely to always be on the look-out for a new cleaning company with the cheapest price, meaning if you did win the bid, chances are you won't be around for very long.

One last thing, do not stress out if you don't get every new customer you present a proposal to. An average ball park figure on winning a bid should be something around 20% or 1 out of 5 submissions.