BSCs Could Lose Their Government Contracts

The federal government currently spends about $1 billion on janitorial services that are provided by nearly 2,500 building service contractors. But that will be changing in the coming years as the General Services Administration (GSA) moves forward with its Federal Strategic Sourcing Initiative (FSSI) for Building Maintenance and Operations (BMO).

The scope of the BMO covers the most commonly used services required for complete operation and maintenance of federal buildings, including contract cleaning. To qualify, BSCs will be required to supply both janitorial and landscaping/grounds maintenance services. GSA has created regional service areas by dividing the country into six zones. BSCs must be able to service an entire zone.

The goal of this particular FSSI is for the government to receive uniform cleaning services at all of its facilities in a particular zone at a uniform price. Such standardized service will reduce costs and ultimately save money for taxpayers. But there will be losers — namely the local small businesses currently servicing government contracts that are unable to expand their reach to other states in the zone.

According to a survey by Bornstein and Song CPAs and Consultants, of all respondents currently providing BMO services, only 39 percent can fully service Zone 1. Another 20 percent were unsure if they could.

Based on these survey results, the field of applicants is already being narrowed. If this initiative follows suit of other FSSI programs, the number of participants will be reduced even further. For example, under FSSI JanSan, the number of distributors allowed was capped at 18. Don’t be surprised if a significant number of BSCs lose customers and are forced to look elsewhere for revenue.

Final solicitation for Zone 1 has already closed, but rollout for Phase 2, covering Zones 2 through 6 is underway. For BSCs with government clients, FSSI BMO has the potential to remove you from the playing field. But first, determine if you want to continue serving this market (Be warned: your current pricing may be significantly reduced if chosen). Then, either start investigating what it will take to submit a proposal or start diversifying into other markets.

Learn more about FSSI BMO here: