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Bidding

Bidding as a Cost Per Gross Leaseable Area

Contractor Says the Best Way to Bid Parking Area Sweeping is by 'GLA' and 'CAM'

This article has been derived from information posted on December 15, 2005, at the WorldSweeper.com Discussion Forum under Parking Area Sweeping (Bidding). Since the author was logged in as a guest, there was no way to determine who wrote it. Attempts to contact him/her via a request at the post were unsuccessful.

Bidding sweeping jobs is one of the toughest, most time-consuming aspects of the parking lot sweeping business. For that reason, there are a number of techniques people use to determine their bid pricing. The mystery contractor who provided the initial information that led to this article, who we'll call 'Mr. Smith,' says that he's hit upon a method that reduces bid research time and has developed for him a successful sweeping company.

"I bid," said Smith, "not by sweeps per month or by night, but by using a formulation based upon the gross leaseable area of the center. Here's an example:

"Say the shopping center has 175,000 square feet of gross leaseable area. The shopping center owner probably operates the center on a budget using the term known as 'CAM,' or Common Area Maintenance. This is usually an addendum to the basic rent charged to the individual tenants of a shopping center.

The typical CAM rate can be any amount and, out of it, all repairs, maintenance, lighting, etc. must be paid for by the manager of the shopping center. Over time, I have determined what my charges are for sweeping and all associated expenses such as insurance, labor, fuel, maintenance of equipment, office expenses, etc. Specifically, in my area I have found that my operation requires a charge of .23 cents per square foot.

"In other words, I can sweep and maintain a center for .23 x 175,000 sq. ft. per year, or a total of $40,250.00 per year payable in monthly payments of $3,354.17. That's for cleaning the center every night, 7 days a week.

"When dealing with a new client, all I need determine is the new property's Gross Leaseable Area, or GLA, and then multiply by my CAM factor rate. That completes my bid process. All my charges remain equivalent from company to company and center to center. I have, on some occasions, had to alter this method somewhat to allow for unusual parking area configurations, or for property that has garden areas to maintain or other unusual features.

"However, the benefit I have gained from using this method is that it's not only quick and very easy to bid, but I 'talk the talk' of the shopping center owner or manager. Because it's a concept they find easy to understand, managers can quickly determine exactly how what I'm doing fits into his budget. In turn, it's easier for him to sell my rate to his tenants. I'm just passing on a trick that has worked for me for over twenty-five years."

To gain more background on this concept, we contacted several experienced sweeping contractors to get their take on it. Because this involves pricing, we are not using the names and companies of those we talked to. However, here's what our initial investigation discovered:

A Virginia-based contractor offered the following: "Since you called and gave me the topic ahead of time, I checked the stats on one of our long-time customer centers to see what the multiple was for that center. As I say, we've swept them for a number of years and have what I would call a normal profit level with them.

"What I found is that we're sweeping for just 8 cents per leaseable square foot at that center. I'm interested to check out the topic and my stats some more, in order to see what kind of uniformity we might have in that regard.

"I also wonder, how would one develop the multiple for sweeping some other number of nights per week? I assume there would be a higher cost per GLA for fewer days."

Another contractor we contacted wondered what the differences are in different areas or even in the same area in terms of the average amount of parking area required per square foot of office space. The GLA equation would tend to change as that variable changed, as well. "Even in our surrounding area," he said, "the amount of parking allotted to different commercial centers varies quite a bit. I'd be concerned with what that factor is, and how it would affect my profitability."

Yet another contractor was also skeptical this system would work except, perhaps, in very standard situations. "I find it extremely important to view each lot we bid on," she told me, "to determine how many trees there are, the types of parking bumper stops, whether there is a chain-link or other fence, what the back of the center looks like and more. I would be uncomfortable bidding via this process given there are so many variables to work through."

We invite your comments on this topic, and plan to do a follow-up on it that will eventually be posted with this article. If you'd like to participate, please do the following:

  • Evaluate two or more of your 7-day-a-week accounts, and determine what you are charging for each in terms of a dollar amount per GLA.
  • Let us know the dollar amount and GLA for each of the accounts, as well as the state you're operating in.

All more specific information will be kept confidential.

To submit your information, use the contact form found throughout the WorldSweeper.com website.

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