A reader recently asked if there was data that outlined cost percentages in contracts. He wanted to compare his percentages to others in the industry. The following is a very general range that will vary for so many reasons:

  • Expendable supplies usually run 0.75-2 percent of total contract (based on size with percentage being less the larger the total contract).
  • Consumable supplies range from 5 to 9 percent based on traffic/tenant count, 5 day or 7 day facilities and, of course, size of contract same as expendables.
  • Major equipment (over $1,000) can range from 3 to 5 percent based on what is expected as to floor maintenance, windows, etc. Most are depreciated over five years which reduces annual impact.
  • Minor equipment ($250 - $1,000) can range from 2 to 6 percent, is more vacuum cleaners, low end buffers, etc. and can be depreciated over three years in most cases.
  • Tools and supplies are expensed out annually and can range from 1 to 4 percent based on contract size and requirements.
  • Overhead usually ranges from 7 to 13 percent based on complexity of support required.
  • Labor and benefits can range from 55 to 90 percent based on productivity and staffing requirements. Of course, we have to comply with DLA wage rates and benefits so productivity is very important in keeping costs down.

Please note that many people out there will disagree with my suggestions and I defer to those who have actual data. It would be great if we could share but not sure if that will happen. As to the additional costs of going green, my position is that going green does not cost in the long run when all factors are taken into account; however budget conscious customers can kill that approach if they only care about the lowest price right now. Many “certified” green products have additional fees and documentation for them to be qualified as green. I remember some distributors going green simply because they could charge more. The customer has to “get it” and support green, recyclable, environmentally friendly approaches to make it work. Savings in the damage to the environment, reduced workers comp claims, ergonomics, etc. are hard to track.

There is so much more that I simply cannot cover in these short articles. 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.


posted on 8/22/2017