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A Case Study for

Bentall Kennedy, Toronto2014 Janitorial Contract Request for Proposal [RFP]

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Table of Contents

Executive Summary...........................................................................................................3

Introduction........................................................................................................................4

Janitorial Industry Trends...................................................................................................5

DCS Project Research.......................................................................................................6

Request for Qualification Process......................................................................................7

RFP Preparation................................................................................................................8

Scope of Work in Cleaning Specifications.........................................................................9

Environmental Considerations.........................................................................................10

Daytime Cleaning.............................................................................................................11

Janitorial Market Financial Considerations......................................................................12

Contractor Submissions and Award Process...................................................................12

Contract Implementation..................................................................................................14

Future Support Services..................................................................................................15

Conclusions.....................................................................................................................15


Executive Summary

In early 2014 a team of Bentall Kennedy General Managers in the greater Toronto area, under the guidance of their Vice Presidents, engaged a national janitorial consulting company, DCS Global to project manage a group janitorial request for proposal process. Overall there were 24 office buildings in this project.High-level objectives were set by Bentall Kennedy leadership in the several key areas and the following results were achieved:

1. Several Forever Green environmental pillars were enhanced including: Cleaning chemicals were reduced significantly through the introduction of the Lotus

Pro system. Daytime cleaning was introduced to some buildings which will reduce energy

consumption by 4 – 8 % of current kilowatt hour consumption. Recycling programs were fine-tuned delivering less downstream waste.

2. A janitorial management key performance indicator [KPI] contractor reporting structure was put into place. This quarterly report will reduce Bentall Kennedy’s management time and reduce the risk to the landlord.

3. Contractors were challenged and they delivered several innovative features to their service models in the buildings. These included sophisticated computerized quality control programs, green vacuum’s which use less energy, and customer service training tools for staff.

4. Overall cleaning cost increases as a group for the 24 buildings were held to an absolute minimum of 1.8%. Considering there have been minimum wage increases, collective-bargaining agreement increases, supply and material cost increases and inflationary pressure since these buildings were last tendered, this is a significant achievement.


Introduction:

The janitorial industry is a semi technical industry that has critical impact on commercial building operations. Cleaning services not only represent the second highest cost item for building operations and greatly affect tenant satisfaction, health and safety and the building lifecycle.

This case study will document the transition of 24 medium-sized office buildings, managed by Bentall Kennedy in Toronto, through a janitorial Request for Proposal (RFP) process. This project was designed and executed by DCS Global Enterprise Canada Inc. under the direction of three Bentall Kennedy Vice Presidents, Michelle Brown, Neil Lacheur and David Matarasso.

The specific goals of the project were:

Cost reduction and future cost predictability Increased quality of cleaning services being delivered Reduction of property management time in managing cleaning Alignment with Bentall Kennedy “ Forever Green” program Improvement in cleaning for health and safety.

This case study will demonstrate that all of these goals have been achieved.


Janitorial Industry Trends in North America

Canada is fortunate in that it often leads the North American marketplace in janitorial industry trends benefiting clients and tenants. It seems that we have a more cohesive market in Canada with a smaller population, several national janitorial companies and third-party consulting companies that are able to standardize and propagate programs. Several key trends that this RFP supports are:

Enhanced environmental cleaning utilizing the latest that LEED. BOMA BEST and Bentall Kennedy’s Forever Green program have to offer

Daytime cleaning Chemical free cleaning Enhanced contractor security requirements with Comply Works and new responsible

contractor requirements Robust computerized quality control Self managed contractor systems including quarterly key performance indicator [KPI]

scoring Financial reward and penalty systems tied to KPI scores.

All of these trends were incorporated into this janitorial RFP process resulting in a very innovative and balanced janitorial contractor procurement initiative.


DCS Project Research

After initial interviews with key Property Managers, DCS interviewed VP Michelle Brown to sharpen the project focus. Subsequent interviews were carried out with Neil Lacheur and David Matarasso.

Three items were added to the scope of work:

The contractor marketplace and who should be invited Initiation of a request for qualification [RFQ] process Volume based contract awards and pricing systems

Subsequent to those interviews, DCS began contacting major janitorial contractors and manufacturers of cleaning supplies and equipment.

Information was gathered on microfiber systems, ionized water systems, high efficiency and green equipment, computerized quality control systems, etc.

Of note, the Canadian Commercial Cleaning Association [CCCA] had established an advisory council consisting of three national manufacturers of janitorial equipment, chemicals and a paper manufacturer. This advisory Council is charged with providing generic “best practice” information and resources to the cleaning industry. They created with DCS a comprehensive section on these three topics for use in this RFP.

Research was completed on designing the latest KPI model for these types of buildings.Additionally a Request for Qualifications [RFQ] model was written for the project.


Request for Qualification Process

A request for qualification document was produced by DCS and submitted to the following companies:

Asbury Bee Clean Building Maintenance DTZ Eurest/Compass Facility Services GDI Hallmark Housekeeping HW and Associates Impact Cleaning Services Long and Morris Wynford

Submission’s were received and graded with the following companies being eliminated from submitting proposals:

Wynford Asbury

It should be noted that some companies were allowed to bid despite their low score as they were “incumbent contractors”. Not allowing them to bid would result in “de facto” termination.


RFP Document Preparation

Certified cleaning inspections were completed by DCS on all properties to benchmark the cleaning quality, fully understand the cleaning challenges of the buildings and highlight building deficiencies to the contractor for correction prior to contractor bid tours.

Detailed interviews were completed by DCS of the property managers and building operators to complete the needs assessment for cleaning specifications and operating requirements.

Key issues that were identified during this phase were:

Poor quality of cleaning services in some buildings Virtually no quality control reporting being delivered by the contractor in

approximately two thirds of the buildings Some old and outdated equipment in use Extra services being invoiced separately that should/could be included in the base

scope of work Wide variety of compliance with environmental procedures necessary by Forever

Green, BOMA BEST and LEED requirements Inconsistent contract pricing with several contracts expired

Bentall Kennedy contractual requirements including Comply Works, Forever Green language, staff security, contractor staff training and several other customized items were written into the RFP document.

Due to the occasional industry hidden practice of illegal subcontracting and “piecework” with the payment janitorial labour a unique clause was put into the RFP on page 20 titled “responsible contractor”. This clause was very clear in stating that all daily cleaning staff must be actual employees of the contracting company and became relevant in the startup in one of the buildings in this group.

Site specifics for each building were entered into individual RFP documents and were circulated amongst the Property Management Team for approval. After editing the final RFP, it was issued to the selected bidders between May 12-15th, 2014 coinciding with the building tours.


Scope of Work and Cleaning Specifications

One of the key objectives in developing this RFP was to create a true “self managed janitorial service”.

When properly set up and operated this program provides:

Data that can be monitored and managed by Property Management on cleaning services to answer Tenant/Senior Management inquiries rather than physically follow up through inspections, emails, etc.

A more consistent level of cleaning services is delivered through KPI and quality control reporting and discipline, rather than experiencing the “roller coaster” of service.

Reduced liability to Property management as records of training and health and safety items are up-to-date.

Less “one-time” invoices for items that are required beyond stated frequencies.

As such, the service specification was created with a series of standards, definitions and cleaning activities with minimal frequencies. At the same time more specific reporting requirements of inspections, issues and overall cleaning system management was put into the contractual language. A key requirement for this new program is the quarterly joint customer review session.

This joint customer review session requires that the contractor report in detail the last three months activities including KPI scoring. They then discuss with Property Management where the cleaning program is now and a look forward for the next three months anticipated activities, plans and challenges. During the DCS startup interviews, most Property Managers entered those joint customer review session dates in their schedules right away.


Environmental Considerations:

The majority of the environmental operating details provided in programs such as LEED, BOMA BEST, and Green Seal provide little real guidelines on green cleaning. Most reputable cleaning contractors are following these guidelines with their own expanded, branded program.

This RFP detailed those requirements in a generic fashion but has also gone beyond those requirements through leadership from Bentall Executives and DCS.

Specifically, bidders have been led to incorporate innovations in green technology and operating systems to be used in the buildings.

These include:

Lotus Pro… for an overall reduction in chemical usage in cleaning Green vacuum’s which have reduced energy consumption, higher filtration levels

and lower noise levels Sophisticated computerized quality control systems and MSDS sheet electronic files

both of which provide online data, rather than reams of paper Extensive microfiber use instead of disposable cotton clothes or paper towels Periodic disinfection of restroom surfaces with steam technology rather than just

disinfectants Gel batteries for auto scrubbers that reduce off gassing and are safer


Daytime Cleaning

Several Bentall Kennedy properties are in the process or investigating the possibility of instituting daytime cleaning.

The benefits of this service model are multifaceted including:

Energy savings from reduced lighting usage Increased Tenant satisfaction Time savings for Property Managers in managing cleaning Reduction in greenhouse gas production and lighting pollution Increased building security Environmental Conservation with reduction in bird kills from lit windows in the

evening Socially responsible contracting


Janitorial Market Financial Considerations

The current janitorial market for contract pricing has been “bottoming out” for several years.Wage rates continue to rise incrementally along with the cost of supplies and equipment. The increased sophistication of operations that are required by the contractor’s clients continues to add overhead costs.

DCS has completed RFP projects in the last year of over 16 million ft.² of commercial office space not including this project. In over 70% of the awards, the “pricing pack” was very close and the client chose not to award to the low bid.

Most significantly lower prices that are received in contract bidding, when compared to current building janitorial pricing that are delivering reasonably good service, are as a result of:

Bidders undercutting labour hours with the intention of not doing all of the required work

Some form of piecework or subcontracting to avoid paying legislated benefits Contractor error

Having said that, through a gradual market labour productivity improvement cost stabilization will be maintained by the cleaning industry over the next three to five years.

This will be mostly due to: Increased staff training and reward programs Advances in cleaning supplies, tools and equipment. The “normalization” of tenant demands with widespread CCCA contractor

certification on the horizon making it more difficult for marginal and illegal operating “lowball companies” to win business.

Contractor Submissions and Award Process

Proposals were received from all invited contractors. DCS analyzed the proposals and entered the data into our risk assessment reporting tool, producing a risk assessment report for each property.

DCS conducted individual meetings with each Property Manager to ascertain their “short list” of the bidders for the properties. After these meetings all short listed companies were scheduled for a group presentation and interview with the entire Property Management and Executive Team from Bentall Kennedy. These meetings were chaired by DCS and conducted over two days, June 16 and 17th 2014.


The companies that were interviewed were: Bee-Clean Building Maintenance DTZ Eurest/Compass Facility Services Hallmark Housekeeping H & W Associates

After the interviews were completed, a debriefing was held with all Bentall Kennedy Property Management and executives. All present agreed that there were essentially four companies that stood out for potential group building awards.

A questionnaire was circulated to all present to grade the top four companies under the categories of quality control, value added services, innovation, local resources and presentation.

The companies and their scoring out of a maximum of 25 points are listed as follows:

Bee-Clean……19.3 Compass ……16.1 DTZ…………13.7 Hallmark……21.7

Further discussion amongst the group ensued as to how the contract could be awarded. After much deliberation the following contract award was made:

Hallmark Housekeeping was awarded 17 of the 24 buildings with the other buildings awarded as follows:

101 Exchange Way, Vaughan……………………. Bee Clean Building Maintenance 250 University Drive………………………………. DTZ 227 King Street South and 50 Westmount Dr.…… The Climactic Group General Mills Building……………………………. HW & Associates 1595 16th Avenue, Richmond Hill………………… Bee Clean Building Maintenance 3650 Victoria Park, Toronto………………………. Eurest/Compass 5255 Yonge Street, Toronto……………………….. Eurest/Compass


Contract Implementation

Part of the DCS scope of work was the “Contract Startup Coordination” which is a contract commissioning service. DCS carried out individual site meetings with Property Managers including cleaning inspections prior to the takeover of the new contractor.

Meetings were held with the incoming contractor highlighting the new contract requirements, ensuring the contractors were prepared to deliver all elements of service.

Supporting this process were two specific additional steps that were customized for this project.

The first was an educational forum and roundtable discussion for Property Management chaired by DCS. In this forum, information was provided highlighting what the new contract offers Property Management. Practical examples were discussed backed up by the highlighted contract language in the RFP supporting what a “self managed contractor” is required to provide. KPI language and interpretations were discussed at length including how to gather the correct data for scoring.

Additionally there were presentations on Daytime Cleaning, Cleaning for Health and Payroll Auditing.

Secondly, DCS met with each Property Manager with their cleaning contractor on-site for the first quarterly joint customer review session and KPI scoring.

Of note, during the initial startup tours of these buildings, through DCS third-party verification, one service provider was discovered to be inappropriately subcontracting labour, resulting in a change to that service provider.


Future Support Services

DCS has provided individual proposals to all Property Managers in this group of buildings for:

Cleaning for Health, surface sanitization auditing Daytime Cleaning transition support services Payroll Auditing Certified Cleaning inspections.

Conclusions

This RFP process has delivered a highly functional, innovative janitorial contract to 24 Bentall Kennedy office buildings.

All goals were achieved including:

Cost reduction and future cost predictability Increased quality of cleaning services delivered Reduction of Property Management time in managing cleaning Alignment with Bentall Kennedy “ Forever Green” program Improvement in Cleaning for Health and Health and Safety.

This process is now being repeated with Bentall Kennedy buildings in Calgary and Vancouver.


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