The Cost of Tendering

Let me ask you something.

When your organisation last went to tender for cleaning or facilities services, what was the deciding factor?

If the answer is price (and in most cases, it is) then I want to walk you through what that price actually contains. Because I have spent three decades on both sides of this equation. I have priced contracts. I have delivered them. And I can tell you, with complete transparency, that FM Services Group does not submit the lowest tender. We never have.

That decision has cost us work. Contracts we were better placed to deliver, gone to a competitor whose number was smaller. I have sat with that reality more times than I can count.

But I have never been able to reconcile what would have to be removed from our pricing to compete at the bottom of that market. So we don’t.

Here is what a realistic cleaning contract price contains: labour costs that reflect actual living wages, employer PRSI, holiday pay, sick pay. Supervision. Training. Equipment that is fit for purpose and replaced when it fails. Management overhead. A margin that allows a business to absorb the unexpected without passing it directly onto the people doing the work.

Here is what a below-market tender price contains: most of those things, in reduced or removed form.

The supervision hours get cut first. Then the training budget. Then the equipment replacement cycle gets stretched. Staff are asked to cover more in the same time. Supervisors carry larger teams with less support. The margin for absorbing the unexpected disappears — so when something goes wrong, it lands directly on the people at the front line.

To be fair to our industry peers, this is not always a failure of character by the companies submitting those tenders. It is often the entirely rational response to a procurement system that signals, loudly and repeatedly, that price is what matters most. The system creates the race. Then acts surprised at where people finish.

But what that system doesn’t reconcile is that this cost doesn’t disappear when it leaves the contract price. It gets transferred, usually To workers absorbing pressure without support. The expectation that personal endurance of those at the frontline will quietly compensate for structural underfunding. To public systems that carry the downstream costs of poorly maintained environments. To families where someone comes home depleted and has nothing left.

You didn’t pay for those costs. But be under no illusion - they were paid.

The lowest tender is rarely the cheapest option.

It is simply the option that moves the costs somewhere harder to see. We’ve already established in this series, is exactly what invisible labour does best.

I run a business. I understand margins and I understand pressure. What I have learned, at real commercial cost, is that procurement frameworks which evaluate cleaning contracts on price alone are not saving money. They are redistributing it. Onto the people least positioned to absorb it.

The question worth asking, the next time a tender lands on your desk, is not what is the cheapest way to get this done?

Consider asking: who is paying the difference?

This is the third in a series on invisible labour, the work that holds systems together and never makes it onto boardroom agendas. Read the series from the beginning: The Work That Holds Everything Together (That Nobody Counts) and Temporal Invisibility: The Better the Work, the Less Anyone Knows It Happened.