The US Marketplace for Cleaning Government Buildings

The US market for cleaning government buildings begins with estimating the size of the market however no one knows exactly how many buildings the government owns or controls.  The US Federal government has more than 500,000 buildings totaling approximately 3.1 billion square feet of space, housing 479 separate federal agencies.

Federal buildings are just the beginning, there are 50 state governments who each own thousands of buildings. State and federal buildings are supplemented with leased space so cleanable space is much more than what is simply owned. There are 3,144 county governments and 19,429 municipalities each with buildings that require cleaning. The total amount of property that needs to be cleaned is truly amazing and there are many contractors who won’t approach this sector at all

I cannot estimate how many people reading this may still have a phone book but there are pages of government agencies in every phone book, listed in its own separate section. A small phone book will still have 10 to 12 pages of government listings. So if you consider the sheer size of federal, state, county and municipal buildings together, the largest buyer of cleaning is the government at one level or another.

If you do business with government at any level, you are now B2G, in addition to B2B or in the residential side B2C. Marketing is different in all three sectors. Mass marketing is effective for the residential sector to consumers (B2C), direct marketing for the commercial sector to businesses (B2B) but the government sector (B2G) is a different animal completely.

An Introduction to Government Contracting for Cleaning and Maintenance Companies

The Government Procurement Process

Unlike the private sector, bidding opportunities for cleaning and maintenance most of the time are public. Federal, state, county and municipal contracts are solicited to the public advertised as Request for Proposals (RFP), Invitation to Bid (ITB) or Request for Quotations (RFQ) and Request for Sealed Bids so the public has knowledge of each opportunity.

The entire process is public so the companies bidding as well as the results are public. The idea is that since it is tax money from citizens to fund the work then the public has a right to know what is purchased and the prices. 

Because of the scope and volume of government purchases, plowing through thousands of solicitations can be daunting but there are services that are available that do the hunting for you. Once you understand that the largest buyer of everything (including cleaning) is government, you begin to see the daunting task of looking for just the right cleaning opportunity.

Some opportunities will be too big and others too small. Some examples would be the US National Park Service’s Ranger Towers located in National Forests as too small or an entire US Military Base may be way too large. Beginning with the right size opportunity in the right location is critical. Because your past performance on government work is so important, you can’t afford taking a chance and winning a contract you can’t perform.

Proposal preparation can be highly detailed but once a contractor has gone through a few proposals, the proposals become easier because the basic pieces have already been drafted previously. Doing the first one can be a challenge so starting a small is a good idea.

Assembling a proposal library that grows with each opportunity is one of the advantages of targeting government contracts. Some smaller contracts usually with county or municipal governments are very simple and are not much more than a fill in the blank form.

Fixed Term Contracts

This is another common feature of government contracting, fixed term contracts. Contracts will run on an annual basis with an option for additional years, usually 3 to 5 years.

This feature of government contracting can be both good and bad in that even if you have provided outstanding service, after the annual options are exercised, you can lose it based on price when it is rebid. Your bid price is public and everyone knows what your price is.

The good news is that if you perform up to terms of the contract, counting on an uninterrupted 5 year job gives you some operational and financial stability. Government contracts are considered highly valuable because of the fixed term and assurance of payment.

As long as the terms of the contract are met, you have zero chance of losing them. The stability of these contracts are unequaled in the private sector.

Set Aside Opportunities

Approximately 23% of Federal contracts are set aside for small business. State, county and municipal procurement programs also have set aside targets for small and minority businesses. The Federal guidelines are mirrored in state and other government entities. There are numerous targeted procurement programs for a host of small or mandated disadvantaged groups.

Women, minorities, veterans and small businesses are the broad categories but then there are further breakdowns beyond these. As with all things government, something as simple as defining “small business” is not as clearly defined as you may think. The US Small Business Administration’s (SBA) Office of Advocacy declares that 99.7% of all US companies can be classified as “small”. However the 45 page guide to Government size thresholds by industry, currently lists Janitorial companies doing less than $16.5 million dollars in annual revenue as “small” but the threshold for Carpet and Upholstery Cleaning services is $5 million. Most of us in the industry would not consider these small businesses however the government does so here is an opportunity.

There are certifications for each category that have to be applied for, approved, documented and then presented. The certification process for each of these categories is not particularly difficult but can be confusing for the company owner new to government contracting beginning with the alphabet soup of government abbreviations.

Certifications can be combined if the company meets more than one criteria so it’s possible to be certified as a small business (8(a) designation) and minority owned (MBE) or veteran owned (VOSB) and located in a historically underutilized business zone (HUB Zone). Each certification will have its own specific set aside opportunities.

There is a learning curve with government contracting but understanding the differences from the private sector is a good place to start. Government contracting can be lucrative but with the instability of the private sector economy it can also be an oasis of stability for US cleaning companies.

Ed Selkow