Thinking About Hiring the Lowest Bidder? Maybe Best Think Again

The reason these “hire the low bidder” regulations are in place looks good on paper. They say that if, for instance, five different landscape contractors all perform the same tasks and meet all the necessary requirements, then there is no reason not to hire the lowest bidder. 

However, we all know that what looks good on paper may not necessarily look good when put into service. Here is something John Ruskin, a nineteenth-century social thinker, and philanthropist said about hiring low bidders:

The common law of business balance prohibits paying a little and getting a lot – it can’t be done. If you deal with the lowest bidder, it is well to add something for the risk you run, and if you do that, you will have enough to pay for something better.”

We know many building managers understand precisely what Ruskin is saying. Many likely could say the very same thing. But we also know it is sometimes tough to ignore a low bid, especially when it comes to cleaning. 

The reason for this is many building managers view cleaning as a commodity. They believe all cleaning services are pretty much alike, so why not go with the lowest bid?

But, if there is anything we have learned because of COVID-19 is the importance of properly performed, effective cleaning. Cleaning is not a commodity. It keeps people healthy, buildings open, and businesses alive. 

So, accepting the importance of cleaning, let’s consider the following scenario.  

A building manager receives five bids for cleaning her multistory office building five days per week. On paper, the cleaning contractors provide the same or similar services, and all meet the necessary requirements. However, these were their bid charges:

•$12,500 per month

•$9,500 per month

•$9,350 per month

•$9,000 per month

•$4,850 per month.

In the past, this facility has always paid between $8,500 and $10,000 per month for cleaning, so the first bid is eliminated. That’s too high.  

But that last bid pops out. How can this contractor offer to do the same services as the other four contractors at almost half the price?   

What is possibly happening is the following:

The contractor is not paying employment taxes or only a portion of the employment taxes due. While you may not consider this your issue, these contractors tend to have staff turnover problems and do not always attract the highest caliber workers. Now it is your problem because the result is often poor-quality work.

The workers are not employees but “subcontractors.” Quite common in the professional cleaning industry, the problem with hiring sub-contractors is that the contractor you hired has little control over the people cleaning your facility. The workers may be part-time people with little or no interest in cleaning. They often purchase cleaning equipment based on low price, not quality. Legally, the contractor you hired can do nothing about this. Long-term positive outcomes tend to be remote in these situations.

Over the years, I have come to feel sorry for many of the people that join a franchise. Invariably, these are honest, hardworking people looking for ways to improve their lives for themselves and their families. But the franchise company is only interested in one thing: getting the account. Whether the people that have bought into the franchise can make a living, or a fair hourly wage cleaning your facility, is not their concern. When the workers realize they can’t, the quality of service invariably declines. When this happens, the franchise company finds new people to handle the cleaning at your facility, and the entire process is repeated over and over again, like a broken record.

So, the next time you are considering a low bid from a cleaning contractor, or for any service or product, let’s remember what Ruskin said earlier: “When you pay too little, you sometimes lose everything because the thing you bought was incapable of doing the thing it was bought to do.”