Tight School Budgets Benefit BSCs

Each year, more and more school districts in Michigan decide to outsource cleaning services. In the face of tightened budgets, the districts are avoiding cuts in the classroom by contracting out to janitorial, transportation and food service companies. About one third of the state’s districts hire private firms through competitive contracting, according to results of a study published in February by the Mackinac Center for Public Policy.

Michigan building service contractors are therefore experiencing a boost in business as they take on a sector dominated by in-house service providers. Facilities managers and BSCs share their perspectives as well as advice for BSCs interested in taking advantage of outsourcing trends in their areas.

A closer look
With K-12 public schools funded solely by the state, districts looking to cut spending often look first to custodial work, says Dan Koster, president of Enviro-Clean, Holland, Mich.

“Typically when they contract out, they’ll save anywhere from 30 to 50 percent of what they’re presently spending on custodial,” Koster says.

It costs schools thousands of dollars annually per custodial employee to pay for retirement, health care and benefit packages — money that some districts cannot afford to pay anymore.

Those factors constitute the biggest advantage for school districts that outsource, says Tom Zaglaniczny, president of Grosse Pointe (Mich.) Schools plant staff.

“Michigan’s in really a pretty big mess and schools are getting hit hard,” he says, and with health care costs rising significantly each year, nothing is getting cheaper. This was the third year in a row the school board took bids from BSCs, and this time, the staff was spared, but forced to take a significant cut to the custodial health care package and retirement program.

Though Grosse Pointe has managed to retain its in-house cleaning staff, a lot of surrounding districts have already made the switch — and those staffers will face a similar battle to retain their jobs with the district again next year.

“It’s getting more prominent,” Zaglaniczny says.

While facility managers are sweating, BSCs are wisely taking advantage of the current environment.

“It’s a new market for us because it’s a market that wasn’t there before,” Koster explains.

It hasn’t changed how Enviro-Clean has done business, however. While community concerns over outsourcing in schools center on personnel issues such as employees’ criminal records, high employee turnover and a workforce that doesn’t care about the school or its population as much, a BSC can quiet fears by doing a good job.

“What they find out once we’re in there is the building’s at least as clean as it was before, we were at least as responsive as their custodians were and what we’re told in the places where we are, they like it better because it’s no hassle,” Koster says. “If there’s an issue, we take care of it.”

It’s true that BSCs have a lot to prove when they take over a school contract, he continues, because public perception is that employees are not as safe or trusted and that the work quality will suffer.

“We have to follow the same hiring criteria as they do in the school systems: We drug screen everybody and do the state police and FBI fingerprint background checks and look at the past work history. So we screen the daylights out of them because, from my standpoint, if we have one problem at one school, we won’t have a chance to bid on other schools because there’s not a school board around that will hire us if we’ve had issue with another district,” Koster says.

Many people believe that BSCs don’t know how to clean a school as well.

“The biggest thing that we find, with a lot of companies out there, they don’t know how to clean schools. You can clean an office, and a school is a lot different than an office building,” Zaglaniczny says.

However, BSCs know they have big shoes to fill when they take over a contract, and should be intent on dispelling any myths that their services are not up to par.

“There’s a lot of pressure to keep it perfect,” Koster says. “We can’t afford to lose a district on quality either because that also will travel quickly.”

Both Koster and Zaglaniczny believe more school districts will outsource cleaning services in years to come. It’s a nice alternative for schools that don’t want to cut teaching positions or programs, Koster says, so it doesn’t hurt the kids’ main reason for being in school.

Valuable lessons
The situation in Michigan offers lessons for contractors across the country. BSCs interested in getting a foot in the door at a school or any other type of facility that has previously hired an in-house cleaning and maintenance staff should start small, with one building, to get some experience and work history, Koster recommends.

Be prepared to address the handling of concerns about a contractor’s ability to do the same job, for less, with added value. Facilities managers may not believe BSCs can become as familiar with buildings and their day-to-day operations throughout the seasons, or can learn how to best clean a classroom — which is decidedly different from cleaning an office, for instance.

Cleaning schools is a constant battle, from cleaning up after lunch and recesses and between classes, to dealing with emergency situations and keeping floor conditions safe during all types of weather. For the Grosse Point schools, the deciding factor was community support. Hundreds of residents showed up at a school board meeting to voice support for the staff, swaying the board decision.

Those interested in pursuing outsourcing need to be in a position of explaining processes, says Vince Elliott, president of Elliott Affiliates, a consulting firm in Hunt Valley, Md.

“If a contractor cannot explain, in great detail, how they’re going to do the job, how they’re going to deliver services, how they’re going to perform, then they’re not qualified to get that work,” he says.

Contractors are not necessarily picked based on price or even performance; they’re also picked based on the process they bring to the table. A well-documented, well-implemented program can be the ticket to winning that coveted contract, Elliot says.

Contractors are well aware of the challenges involved in winning any new contract, and the pressure to perform well at a low price has never been stronger.

“You’ve got to do it all right, because if you don’t it’ll come back to bite you,” Koster says.

Decades ago, outsourcing was all about how much money an entity could save by getting rid of an in-house workforce. That’s not as true today, says Victor Atherton, associate vice president, facilities administration, University of Miami in Miami. Now, many contracted cleaning employees are getting paid well above minimum wage and have benefits. The overriding factor these days is the management of in-house workers.

“If I have an in-house force, I’m a really busy guy,” Atherton says. “Because I’ve got people sleeping on the job, I’ve got disciplinary problems, I’ve got tardiness problems, I’ve got attendance problems, I’ve got quality problems — all these things I’ve got to deal with. In a university environment, it’s very difficult to hire and fire people. And it’s very difficult sometimes to discipline people.”

As it is now, Atherton deals with only a resident manager, saving him lots of work.

Because it may not cost that much less in some sectors to outsource and it’s a sensitive political issue, it could be difficult for BSCs to get their feet in the door. But BSCs do have those two cards — money and management — to play when bidding for a contract.