Contract Cleaning

 

Today, the cleaning industry in UAE and broadly the rest of the GCC region, is occupied by cleaning service providers,

 

 
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Contract Cleaning
 

With subcontracting cleaning services by FM companies becoming more of a practice, it is important to take into consideration the issues, challenges and possible solutions to them, finds Shanti Petiwala.

Today, the cleaning industry in UAE and broadly the rest of the GCC region, is occupied by cleaning service providers, equipment companies and soft-services facilities management (FM) departments. There are grey areas when it comes to differentiating between cleaning and FM companies. FM companies were formed as a result of the international trend for clients to appoint one company to manage all the service requirements for their buildings, complexes, offices, etc.

In the FM marketplace, subcontracting services allows them to acquire expertise in the services required without the investment cost, manpower acquisition, etc.; subcontracting is therefore a convenient solution. But, the very nature of companies offering services and those offering management are worlds apart. In Dubai itself, there are over 3,500 cleaning service companies - many of which are aiming to become FM companies.

Subcontracting practices and benefits

 John L. Harley, General Manager, Al Fajer SM Services – a leading cleaning services company in the UAE - says, “We have resisted the trend as we specialise in providing a range of services and can provide them as a package. But, when it comes to FM management, we consider the overall management criteria to be conflicting.” He goes on to say, “The FM trend is market driven; clients prefer to concentrate on their core business activities without the distraction of having to outsource required support services to a managing service. But, the question is, ‘Can you be both a Management Service and a Services Provider’?” While this conflict is ongoing, several FM companies are successfully subcontracting cleaning service companies to do the job. When asked why, Gil Flororita, Head of Properties and Facilities Management, DTZ Qatar, says “The contracting of cleaning service providers depends on the scope of work taken up by an Integrated FM company. The main requirement is that of competence and expertise level. The higher the scope requirement of cleaning, the more selective decisions are made. Hence, most FM companies opt to subcontract cleaning services.”

Jennifer Peltenburg, Director-Business Development and Marketing, Farnek Services, adds, “We believe that a solid cleaning team is capable of providing the hygiene necessary to make a building safe and secure. They protect and maintain the integrity of the building in line with the other FM services such as maintenance. If done effectively, cosmetic surfaces and back-end surfaces will maintain their look and feel for longer.”

However, Harley observes, “The current problem lies in most FM companies tending to base the provision of subcontracted services on the basis of the lowest cost obtained and not the services required. Moreover, very few FM companies discuss a project or client requirements with the service companies prior to their cost submissions to the client; or, again if they do, they take the lowest cost to acquire the business.” In other words, services providers are given a double-edge sword – 7-star services for a 2-star price. This ensures the FM companies’ margins; clients have to deal with just one company, but - are they getting the standards, quality and transparency required is a question that is left unanswered.

Parameters of contracting

So, what do both the cleaning and FM companies take into consideration when it comes to taking up a contract? Flororita informs, “When we tender for a building it is on the basis of the kind of qualification required. Most building management reports have a description of the assets. So, when we look for cleaning contractors, they are subjected to pre-qualifications based on agreed requisites, such as, tenure in the business; specific expertise; financial capacity; and most importantly, manifestation of historical performance delivery.” With Farnek handling most of its services in-house, the contracts taken up with clients are with consideration of its staff, which is well-trained (BICSc certified), and the company provides recommendations based on the materials utilised within the building/office. “If we do outsource,” says Jennifer, “We do have a list of preferred suppliers; moreover, we ensure that the levels of training are similar – else we provide additional training.”

As a service provider, Al Fajer’s parameters are a little different. Harley says, “The FM company must be ready to have direct discussions with us on the services requirements, which include staffing levels and criteria to maintain realistic quality standards. We also look at their quality standards and reputation in the market. Financial stability is also a major factor as regular payments in the services sector is quite an issue.”

Contracting practices

In cleaning subcontracting, there are two types of contracts, as Flororita informs. The first is a performance-based contract that includes daily, weekly and monthly cleaning parameters. The aim is to ensure that the KPIs are met irrespective of the number of people are required to achieve service deliverables. The second is the value-based contract where the scope of work is priced on a specific number of personnel involvement plus materials.

Harley adds that the terms of contract can vary from 1 to 5 years, which is good for the client and in the main FM companies who require a fixed cost for the tender period but risky for the subcontract service providers. He says, “We have to take into consideration the cost variations including variable inflation, staffing availability, government laws changes, etc., in the current market conditions. In fact, even a term of 3-years fixed cost can be difficult to sustain. There is also a concerning trend to include washroom consumables into a fixed cost tender, whereas they are a major variable cost.”

Measuring performance

As a service provider, Al Fajer pre-qualifies with FM companies on the basis of its internal parameters on the services the companies may require. They then submit quotations or tenders as requested by the FM companies, if successful and the works obtained, insurance policies and performance bonds of 5 per cent to 10 per cent of the contract value are given.

In the Middle East, DTZ Qatar represents and provides clients with management delivery of property and FM services. In the FM perspective, they aim to establish sound, realistic and measurable performance indicators monitored periodically. These are jointly established and agreed between by the client and DTZ. Flororita say, “Most – if not all – cleaning contracts are performance-based. The duration of the contract really doesn’t matter if the KPIs are not met. The moment a cleaning contractor falls below expectations, the contract is terminated. Performance delivery is quantified periodically.” Farnek, too, provides back-to-back KPIs with its client and service provider. This allows the company to ensure that the service offering maintains a high-level of delivery.

The imposing of KPIs to ensure standards is an industry movement. However, Harley says, “Auditing of KPIs and the percentage levels required to be met are open to misuse and unrealistic criteria levels, which are linked to payment terms. The KPI auditing in my opinion should be transparent by agreed third-party auditors to protect the interests of all parties and not carried out by the vested interest parties as currently by the FM companies and clients.”

Equipment and products

Both the clients and the FM companies require the service companies’ expertise, so unless it is something specific, the specialised equipment stated, biodegradable chemicals, eco-friendly equipment, the services companies make the decisions on equipment and chemical provisions. In some cases, as Flororita observes, “For performance-based contracts, equipments are determined by the service provider, while in value-based contracts, equipments and materials are identified by the client, which forms part of the coverage for pricing. Today, most companies are well-versed in a variety of chemicals and equipment on the basis of the cleaning services required. Eco-friendly practices are also encouraged as much as possible. Farnek prides itself on ensuring that performance meets as close to 100 per cent as possible. This means level of frequencies are maintained, the right chemicals and equipment are used, as well as the level of training from staff with customer service as key in ensuring a solid service offering.

Challenges

As the above statements confirm, the challenges in this relationship are several. But, the challenges differ from FM company to cleaning service provider. Jennifer says, “There are challenges in any service offering, and generally speaking, it is challenging when the team goes on site for the first time as traffic flows may vary depending upon the day. Therefore, it is key that the process(es) are monitored and evaluated on a daily basis in order to find that level to which is suitable and exceeds the client’s expectations.”

For service providers, the challenges are much more. Harley says, “Firstly, in many instances we are forbidden to speak to the client directly to clarify any issues in the services provided. In my opinion, a client liaison meeting with all parties at set intervals would be positive to address requirements and would provide feedback with a clearer perspective. Secondly, mobilisation times for projects are compressed with three weeks to a month being requested, whereas 8 – 12 weeks are realistically required to recruit, training and procurement process.”

Payment terms are also a huge issue, as by law, the cleaning staff is paid monthly; operation costs in accommodation, catering, transport, etc., are also monthly. Moreover there is no minimum wage for the staff. Harley says, “In some contract works, especially those involving international companies with HR policies, we request them to specifically state how much they would like to pay the staff working for them in their support services. I hope the labour market costs can be standardised across our services sector, which is a major player in Dubai’s future.”

Nevertheless, if payments on contracts are not received within the agreed credit period, the services companies have to carry the cost burden of the contract, which reduces any profit level. Payment periods can typically stretch from 90-150 days. Moreover, contract terms can also be a challenge. If a contract is terminated or a services contractor withdraws, there is difficulty in getting due payments. Harley informs that many FM companies also dictate that if they lose their contract, the services provider cannot work with any other FM company taking over the client.

Flororita, adds, “The challenge in the last ten years has been people, skill line and scarcity. Regardless of whether in-house or sub-contracted, any company engaged in such operations will clearly come across challenges on recruitment, sound training infrastructure and people retention

The trends in the industry are changing, but a snail’s pace. Today, most big clients prefer to promote their brand through the service providers in terms of uniforms and identification for staff operating on their premises. The cleaning service providers encourage this, in that it allows their staff to consider themselves part of the client’s team. However, while FM and services provisions are separate entities altogether, there is a move towards more joint ventures between the two parties to obtain a more balanced and sustainable cost basis including standards and quality of works to service the clients’ ongoing requirements.