How to bid janitorial contracts: production rates, labor math and margin

Your price is only as good as the numbers from the walkthrough. Before you open a spreadsheet, make sure you have:

• Cleanable square footage. Not the gross building area from the listing, but the space you actually clean. Exclude mechanical rooms, unused floors and areas the buyer cleans themselves.
• Floor mix: carpet, resilient tile, sealed concrete, stone. Hard floors take more time per square foot than carpet that only needs vacuuming.
• Restroom count and fixtures. Restrooms are often the most labor-intensive space per square foot in the building.
• Density: number of workstations, offices, trash points and break rooms. A dense office takes longer than an open one of the same size.
• Frequency per area. Some areas are cleaned nightly, others weekly. A single "5x per week" rarely applies to every room.
• Access window: how many hours your crew has per visit, which drives crew size.
• Periodic work: carpet extraction, strip and wax, window cleaning, high dusting. These are usually priced separately.
• Supplies responsibility: who provides paper goods, soap and liners. This changes your price materially.

A production rate is the number of square feet one worker cleans in one hour for a given scope. It is the single most important number in a janitorial bid. The ranges below are general industry ranges for routine nightly cleaning. Your real rates depend on your equipment, training, the scope and the condition of the building, so treat them as a starting point and replace them with your own measured rates as soon as you have them.

Two practical points about production rates:

• Blend by area. A building with 24,000 square feet of offices and 6,000 square feet of restrooms and break rooms should be estimated in two parts, each with its own rate, not with one average.
• Measure your own. Time your crews on a few buildings you already clean, per area type. After a month you will have production rates that reflect your people and your equipment, which is what your bid should use.

Once you have a production rate, labor hours per visit is simple division: square feet divided by square feet per hour. Visits per month convert a weekly frequency into a monthly one: visits per week times 52 weeks divided by 12 months. For five visits a week that is about 21.67 visits a month, for three visits about 13.

Crew size comes from the access window. If a building needs 8.6 labor hours per visit and the buyer allows four hours after close, you need at least two cleaners working a little over four hours each, or three cleaners working just under three hours each. The choice depends on your staffing:

• Fewer cleaners on longer shifts reduces travel and supervision overhead per hour worked.
• More cleaners on shorter shifts fits tight access windows and part-time staff availability.
• Always check that the crew plan fits inside the access window with time for setup, trash runs and lockup.

Labor hours, not crew size, drive the price. Crew size is how you deliver those hours.

The hourly wage you pay is not your labor cost. Every hour of wages carries mandatory and voluntary costs on top, usually called labor burden:

• Employer payroll taxes. FICA (Social Security and Medicare) is 7.65 percent of wages, plus federal and state unemployment taxes.
• Workers' compensation insurance, which varies a lot by state and job classification.
• General liability insurance allocated to labor, where your policy is priced on payroll.
• Paid time off, holidays and any benefits you offer.
• Training time, uniforms and background checks for secure sites.

For many janitorial companies these items add roughly 18 to 30 percent on top of wages. Calculate your own burden from last year's payroll records rather than borrowing someone else's percentage, because workers' compensation rates alone can move the number by several points.

Also check the wage itself against your local market and any contract requirements. Public-sector contracts frequently set minimum wage and benefit levels, for example federal contracts covered by Service Contract Act wage determinations. If a solicitation includes a wage determination, your bid must be built on those rates.

After labor, three layers remain: supplies, overhead and profit.

Supplies and consumables cover chemicals, liners, microfiber, pads and small tools. Many companies estimate them as a percentage of labor cost, often in the mid single digits, or per square foot per month. Paper goods, hand soap and trash liners are a separate question: if the buyer expects you to provide them, estimate them from usage and headcount and show them as a separate line, because they vary with occupancy.

Overhead covers what keeps the company running but does not appear on one building: supervisors and inspections, vehicles and fuel, office staff, software, equipment depreciation, insurance not tied to payroll, and your own salary as the owner. Express it as a percentage of direct costs based on your actual books.

Margin is the profit left after all costs. Be careful with the math, because margin and markup are not the same thing:

If your plan says you need a 15 percent margin and you add 15 percent to cost, you end up with about 13 percent. Decide which one you mean and use the matching formula every time.

Here is a complete example. The assumptions are stated so you can replace each one with your own numbers. They are illustrative inputs for the method, not a price recommendation for any market.

Assumptions:

• Facility: suburban office, 30,000 cleanable square feet, mostly carpet with tiled break rooms and restrooms.
• Frequency: five nights per week, routine nightly scope, periodic floor care priced separately.
• Production rate: 3,500 square feet per labor hour, a blended rate for this building.
• Wage: 16.00 USD per hour.
• Labor burden: 25 percent of wages.
• Supplies: 6 percent of labor cost, paper goods provided by the buyer.
• Overhead: 15 percent of labor plus supplies.
• Target margin: 15 percent of price.

Now check the result from three angles:

• Price per square foot per month: 5,347 divided by 30,000 is about 0.18 USD.
• Price per visit: 5,347 divided by 21.67 is about 247 USD.
• Revenue per labor hour: 5,347 divided by 186.4 is about 28.69 USD.

Crew plan: with a four-hour access window after close, two cleaners working about 4.3 hours each cover the 8.6 hours per visit.

If the same building wanted three visits per week instead of five, visits per month drop to about 13, monthly labor hours to 111.8, and the same method gives a monthly price of about 3,207 USD. The price per visit stays about the same, because this method scales overhead with labor. In real life supervision, travel and admin do not shrink in proportion to visits, which is a good reason to review your overhead percentage for low-frequency accounts.

Before you send the number, look at it the way the buyer will:

• Compare the price per square foot with your own won and lost bids for the same facility type and frequency. A bid far off your own history deserves a second look at the inputs.
• Check revenue per labor hour. If it barely covers your loaded wage plus supplies, overhead or margin is missing somewhere.
• Re-read the scope. Anything the buyer asked for that is not in your labor hours will come out of your margin every month.
• Separate periodic work. Strip and wax, carpet extraction and window cleaning should be priced per occurrence or as a monthly line, never hidden in nightly hours.
• Price extras. Include hourly or per-job rates for additional work so change requests do not turn into unpaid labor. State them in the proposal.

If you are consistently the highest bidder on one facility type, check your production rate for it first. If you are consistently the lowest, check it even harder: winning every bid at a loss is worse than losing some.

• Using gross building area instead of cleanable square feet.
• Applying one production rate to the whole building, including restrooms and break rooms.
• Pricing from wages without burden, which hides a quarter or more of real labor cost.
• Mixing up margin and markup.
• Forgetting supervision time and inspection visits in overhead.
• Promising a scope in the proposal that is not reflected in the labor hours.
• Ignoring price escalation. A multi-year contract without an adjustment clause loses margin every time wages rise. Our guide to the commercial cleaning agreement covers escalation terms.

The number is only part of the bid. Commercial and public buyers compare bids that are easy to read and easy to trust. Put the price into a proposal with the scope, schedule, staffing and terms laid out clearly, and deliver it quickly after the walkthrough.

• Our commercial cleaning proposal template guide shows what each section should contain.
• For public-sector solicitations, follow the required pricing forms exactly. See government cleaning contracts and our guide on how to win government cleaning contracts.
• If you are still building your pipeline, start with how to get commercial cleaning contracts and the bid on cleaning contracts page.

Keep a bid log with facility type, square footage, frequency, your price per square foot and the outcome. After a few months it becomes the best pricing tool you own.