Cleaning Services Tender for National Food Manufacturer - $55k Savings p.a.

Our member is an Australian food manufacturer with national scope, who had just set up a brand-new warehouse and wanted cleaning services. 

Although they had their own procurement team, they were focused on direct inputs for their food production, and they didn’t have the capacity or experience to run a tender on services.  The quote from their incumbent at their original warehouse was approximately $150k p.a.  Although this was a small spend in comparison to their food inputs, it was significant enough for the procurement head to be tasked with finding savings if possible.

They asked us to run a tender for them to find the best cleaning services provider for their new premises.  They requested we invite their incumbent to participate as well as our recommended range of providers.

We visited their new site, spoke with the new site manager and conducted a detailed walk around of all the areas to be cleaned, to identify their cleaning requirements.  We then invited in and accompanied each of the tender participants to visit, take measurements and confirm cleaning specifications.  Over 4 weeks we ran a three round tender to get the best pricing, and to optimise all aspects of service (agreed standards, accountant management, reporting, contract details etc.).  Weekly we met for one hour with the procurement manager, to keep them updated with the progress of the tender, and to receive any further input or changes to requirements. 

Finally, CleanCorp were the winner, showing savings of 38% over the incumbent, or almost $60,000 p.a..  Importantly, they delivered a much better service quality offering, in terms of account management, proactive quality control, specialist accreditation in cleaning to regulatory food production standards, customised reporting and commitment to continuous innovation and sustainability.

Our member paid nothing for the tender.  We negotiated a small percentage rebate with the service provider. In the end, more than 90% of the savings were passed on to the Fulcrum member, and they were able to make savings of $55,000 p.a., on a $150,000 initial quote, at no cost to them, and with only minimal time investment from their procurement manager.