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If you were religious, and could ask God one question, it might be, “Please explain the bid process to me.”
Last month, Mary brought you a request for proposal (RFP) for 600,000 square feet.
You did the walk-through and are bidding against several companies. Mary is still working on the bid, but to keep her on track with day-to-day sales, you have taken over as the primary contact for your office.
Where do you even start? It is decided that the job will be done over 13 weekends, doing close to 45,000 square feet a week. The decision is made by you and Mary to bid one sample week and then multiply it by 13 to give you a total bid for the entire project.
This is called “flex pricing” because most of us will view and price this work from three different angles or methods.
You will have three ways, or price thoughts, of pricing and bidding this job. These three ways will be used to complete a final price.
2. Industry standard
3. Time and motion
We will price 45,000 square feet of carpet per weekend, and then multiple it by 13 for a final price. The carpet is 6,6 nylon, loop pile, neutral color, light soil, no chair mats, no lunch room, three separate floors, six years old and in good condition and appearance. We will be edge vacuuming, pile lifting, pre-conditioning, agitating with a dual-cylindrical brush, followed by portable extraction.
Breaking it down
As mentioned, we will use three different price thoughts to finally get to our final price to submit. Let’s analyze each method.
You might call this a “gut feeling” approach. This method uses little — if any — math. It is “your” estimation of how long you think the job will take just by walking through the building. You say to yourself, “I think this job will take…” and you come up with a “gut feeling” estimate.
For this project, your experience says each 15,000 square foot floor will take three technicians four hours, equaling 12 hours per floor. Travel time is six hours. With three floors to clean and with travel, your total hours would be 42. At $70 per hour, you are at $2,940.
This is the market square foot price in your area for commercial carpet cleaning.
You simply determine the price by multiplying 45,000 square feet times .09 cents per square foot and you are at $4,050.
Time and motion
For this method, you take each step of the cleaning and assign how long each step will take or how many square feet you can cover per hourwith each step. This method requires a few more details than the previous two methods.
A. Travel to job (three people) ½ hour/each = 1.5 hours
B. Get into building and set up ½ hour/each = 1.5 hours
C. Vacuum 10,000 sq. ft/hr (45,000) = 4.5 hours
D. Spray and pile lift 2,500 sq. ft./hr (45,000) = 18 hours
E. Portable extraction 1,000 sq. ft./hr (45,000) = 45 hours
F. Pack-up and drive time back to office, 1 hour each = 3 hours
Total time: 73.5 hours
Total time and motion method, 73.5 hours x $70: $5,145
Method price comparison
You now have three bid numbers to consider, and they are:
- Experience: $2940
- Standard: $4050
- Time and motion: $5145
Some things need to be said. The carpet cleaning industry is one of the only groups that prices by the square foot and not by time and materials. You must determine your hourly rate for your business. For these scenarios, the hourly rate was $70.
Both you and Mary decide that leaning towards the experience method can be trusted. So Mary’s price for this job will be $2,940 per weekend, with 13 weekends, bringing the entire 600,000 square foot bid in at $38,220.
The price per square foot then is .0637 cents.
Fred Geyen is president of the Geyen Group (www.GeyenGroup.com). His background includes commercial product sales and program development for residential, commercial and disaster restoration with ServiceMaster. He has a Leadership in Energy and Environmental Design Accredited Professional (LEED-AP) designation and is on the board of directors with the LMCCA. Geyen can be contacted at (612) 799-5111.