Win School Contracts

Schools can be lucrative accounts for building service contractors, particularly when the a is for an entire public school district or a large university. Winning those big-ticket jobs is difficult, though, thanks to fierce competition and resistance to outsourcing by the schools themselves.

Although it is typically less expensive for schools to switch from in-house to contract cleaning, many aren’t quick to jump on the bandwagon. A BSC may need to educate the educators in order to convince them to take the leap.

“The politics involved are mind-boggling,” says Chris Arlen, president of Service Performance, an industry consultant in Bainbridge Island, Wash. “It’s not like a business where you go to a limited number of decision makers. There are so many stakeholders and it becomes very emotional, and rightly so because that’s what community is about.”

Despite deeply rooted fears about things such as wages and security, educational facilities are slowly warming up to outsourcing. The trend is accelerating in some parts of the country faster than others. For instance, in Michigan, 18 percent of districts outsource cleaning, up 20 percent from last year, according to studies by the Mackinac Center for Public Policy. Contract cleaning is catching on in areas of the country where school budgets are shrinking and school boards are forced to find savings elsewhere.

“Five years ago we had no school contracts,” says Dennis O’Brien, CEO of Cleaning Services Group in Danvers, Mass. “Today we have about 30 and we’re seeing the momentum pick up.”

Politics is personal

Loyalty is strong among school personnel, who often spend an entire career with the same district or university. Schools are also insular, with staff, students and parents functioning as a tight-knit community. It’s no surprise then that schools with in-house cleaning crews aren’t quick to cut them loose.

“The school district is a democratic place and they say, ‘It’s not fair. Joe has worked here 20 years,’” Arlen says. “It’s an emotional connection. The principal may even have gone to the school when that custodian was working there.”

Handing jobs over to an outsider is met with resistance. Community members not only fear losing a member of the “family,” they also worry that wages will be negatively affected, which will lead to high turnover.

School custodians are typically paid well either because they belong to a union or their state enforces a prevailing wage law that keeps salaries high. Good wages mean many school janitors stay in one place their entire career. Community members are not always happy to see high-paying jobs outsourced to a company that pays less and offers no benefits for the same work.

When a BSC is hired into a school represented by a union, that contractor often becomes a signatory to the collective bargaining agreement, keeping the current personnel and their pay and benefits in tact until the agreement expires. Many BSCs avoid such an agreement because it keeps a job from being cost effective. Others agree to it only to win the account, knowing that when the expiration date passes, the job can become profitable.

In non-union facilities, the BSC is free to set its own wages and benefits. To create efficiencies, contractors typically pay lower-than-union wages and offer few or no benefits, which may explain why the contract cleaning industry is known for high turnover rates.

“In our world, we don’t have the luxury of big benefit programs,” says Dick Dotts, president of DMS Facility Services in Los Angeles. “There’s a direct relationship between wage and benefit levels and turnover. I can bid at a higher wage in an effort to reduce turnover but then that doesn’t make me the lowest-priced contractor.”

BSCs with higher-than-average turnover rates are a red flag for the school community.

“It is critical that individuals who interact with children be good role models and not pose potential harm to students, staff or property,” states the Great Lakes Center for Education Research and Practice’s report, “A Guide to Contracting Out School Support Services: Good for the School? Good For the Community?”

The concern from community members is that BSCs who suffer from high turnover simply hire “bodies” to fill vacancies. Some of these applicants may have criminal backgrounds or drug problems and not be considered suitable to work around children. These fears are doubled when the potential contractor is part of a regional or national chain.

“The safety of the students is always first because the school district is a highly visible part of the community,” Arlen says. “A school district may save a million bucks but if that outsource provider has a temporary worker on site with a felony conviction, then cost is not that important.”

Dollars and sense

Safety may trump savings, but money remains the driving force behind outsourcing. The school community may have a dozen reasons it wants to keep its in-house cleaning crew, but none of them matter if they have trouble meeting the budget restraints. At both the elementary and secondary levels, school budgets are stretched thin and the rising costs of healthcare and utilities along with under-funded government mandates are making matters worse.

Schools across the country are combing their budgets line by line looking for savings; anything unrelated to education is the first to go.

“Virtually 100 percent of them start this process with cost as the driving factor,” Dotts says. “Because it’s a financial crisis, nobody can argue with it. If they have to prioritize, the populous of the school is more concerned about the quality of education than with how the school gets cleaned.”

Cost savings are easy for school boards to measure. Many still need education, however, on the other, less tangible benefits of outsourcing, such as improved quality and fewer headaches.

“The conversation that BSCs have to have is, ‘Yes, there are great opportunities for cost savings, but you will also get equal or better quality of service,’” Arlen says.

Schools may think their low turnover rates are positive, but keeping the same janitor for 20 years can cause stagnation. Often, in-house cleaning crews are using outdated practices and products; few are members of industry associations.

“A lot of times these schools are accepting sub-par standards,” O’Brien says. “We’re able to do things that they’ve never thought of and they can’t do with their current crew. They could probably do it if they got a whole new crew and educated them, but do they want to put their time into managing cleaning or do they want to let professionals do it for them?”

Unlike in-house cleaning departments, BSCs have to stay competitive and as a result offer the latest equipment and procedures, making them more efficient and cost effective. One area that’s particularly important to schools is green cleaning, especially as more states implement environmentally friendly initiatives (see Additional Info, pg. 21). BSCs current on green trends know which chemicals, equipment and practices to use.

“It’s one way a sophisticated contractor could help a less sophisticated school district,” Dotts says. “It’s also a good move politically.”

For example, the school board officials would be seen as hiring a contractor because they want to implement environmentally preferable cleaning programs and not because they’d rather save money by paying lower wages for the janitors.

Another benefit of outsourcing is it allows school administrators to concentrate on their primary mission of educating children. They can hand over supervision of the cleaning crew, as well as management of their payroll and benefits, to a BSC. Eliminating paperwork lifts a big burden from administration, another benefit not necessarily reflected on the bottom line.

Many school cleaning departments don’t have specifications for their work. When it comes time to draft a Request for Proposal, administrators don’t know what is cleaned or how often. They also don’t realize the many non-cleaning tasks school janitors perform.

BSCs can prove their value — and shed light on the faults of the current operation — by creating a thorough spec sheet for the school. This list clearly iterates the work the BSC will do and helps the school see how much money can be saved.

BSCs should also use the bidding process to address typical reservations about outsourcing. If turnover is low, tell the school and let them know why (paying more than the competition, for example). If security measures are as strict as the school’s, offer to conduct background checks or drug tests on employees. If the school is worried about a specific issue, address it as part of the contract.

“In theory, everything that the school district does can be required of the contractor,” Dotts says.

Breaking through

Winning school contracts isn’t as easy as submitting a bid. When switching from in-house to outsourced cleaning, a school looks for more than just the lowest price.

“It’s a Catch-22. BSCs that want to do school districts have to already be doing a school district,” Arlen says. “They don’t want to hand their baby to someone who’s trying it for the first time.”

If building service contractors don’t already have a school district or university on their resume, there are ways to break into this growing market. For example, a BSC can hire a facilities director who is retiring from a large school district to beef up the contractor’s school expertise. Or, start with private schools, which typically have less red tape than their public counterparts.

Another effective method is to slowly integrate the contractor into the school over time, which can help when the public is against outsourcing. Since staffing is typically the biggest obstacle, address it by finding solutions that allow the current janitorial staff to stay on board.

At Service Management Group (SMG) in Shelton, Conn., the company hired the school janitor to ease the school’s concerns about firing a loyal employee.

“We signed a three-year contract and as long as that employee lives up to our standards, they have their job for three more years,” says Michelle Michaud, account executive for SMG. “If a client is very happy with an employee, we are going to do our best to retain that person. They are happy with them for a reason.”

The employee did have to take a pay cut to work for the contract cleaning company. If school janitors are unwilling to accept BSCs’ wages, the school may be willing to pay their long-time employees to serve as day porters, who handle emergencies during school hours, and then hire BSCs to clean after hours. Or, ask the school to implement a pilot program at a single building, perhaps a newly built facility that doesn’t yet have a cleaning crew assigned to it.

“Then you can ratchet up your involvement as attrition occurs on their side,” Dotts says. “That’s typically the smoothest transition because you’re not displacing anyone.”

A final option to curry favor with a school is contract management. In this scenario, the school retains its custodial crew but managing those janitors falls to a BSC. The contractor can reshuffle staff, introduce new cleaning methods, offer training, or do anything that creates efficiencies (except cut pay and benefits). Typically, the BSC has a contracted amount of time to find enough savings to cover their management fee.

After a number of years, the school can use the improvements as leverage in its union negotiations. If the union isn’t willing to compromise on wages, then the school can point to improvements made by an outside firm and say that the BSC knows the job and can step in full-time if needed.

“If they are smart, the BSC has gotten involved in the politics — the committees, the fundraisers, and they’ve met and know the school board,” Arlen says “They become part of the community so they are in a better position to make a proposal.”

Becky Mollenkamp is a freelance writer based in Des Moines, Iowa. She is a frequent contributor to Contracting Profits.

CleanLink: Additional Info CleanTips Smart Podcasts For The Commercial Cleaning Industry Outsourcing is one growing trend in schools, green cleaning is another. Listen to Mark Bishop, deputy director for the Healthy Schools Campaign, discuss the benefits to implementing a green program in the podcast, Green Cleaning In Schools.