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NAICS NewsletterJanuary 8, 2009

NAICS 561720

Janitorial Services

Government Contract and Procurement Analysis Report

Report Summary

This report, offered by epipeline, contains a brief analysis of the Federal government's procurement practices with regards to purchasing Janitorial Services.

You will find information on the top federal government agencies that purchase these services, as well as their procurement strategy (i.e. full and open competition, set-asides and more). Finally, there is a review of the top companies that are awarded federal government contracts for Janitorial Services.

To get a more comprehensive analysis and learn more about how epipeline can help you identify current and future bid opportunities, register for a live Demo.

This report takes an in-depth look at the 'Janitorial Services' industry, NAICS 561720. To understand the future, one must study the past. epipeline's Contract History Plus* provides you with a broad context and several perspectives that enables you to develop the best positioning and strategy for your company to more effectively compete for government contracts. The following graph illustrates one such perspective: the top Government departments/agencies buying these services over the last four fiscal years.

Top 10 Federal Agencies by % of Total Market FY04 - Q2FY08 for NAICS 561720

WHAT IS NAICS 541620?

NAICS 561720 is the primary code when projects require custodial services, to include cleaning building interiors, interiors of transportation equipment (e.g., aircraft, rail cars, ships), and/or windows. This NAICS code does not cover the following types of cleaning services: Cleaning building exteriors (except sandblasting and window cleaning) or chimneys (which are covered by NAICS 561790 - Other Services to Buildings and Dwellings) and sandblasting building exteriors (which is covered by NAICS 238990 - All Other Specialty Trade Contractors).

This NAICS was previously represented by several Standard Industrial Classification (SIC) codes. These codes covered a wide variety of topics, as listed below:

  • 4581 = Aircraft janitorial services and Janitorial services, aircraft
  • 7342 = Includes the following services:
    • Deodorant servicing of rest rooms
    • Deodorizing services
    • Rest room cleaning services
    • Washroom sanitation services
  • 7349 = Includes the following services:
    • Building cleaning services, interior
    • Building cleaning services, janitorial
    • Cleaning homes
    • Cleaning offices
    • Cleaning shopping centers
    • Custodial services
    • Housekeeping services (i.e., cleaning services)
    • Janitorial services
    • Maid services (i.e., cleaning services)
    • Office cleaning services
    • Residential cleaning services
    • Restaurant kitchen cleaning services
    • Service station cleaning and degreasing services
    • Window cleaning services

The size standard associated with NAICS 561720 is $16.5 Million (effective August 22, 2008), which means that a company, including its affiliates, would be considered a "small business" if their average annual gross receipts does not exceed $16.5 Million for the past three years. If a company has not been in business for three years, the average weekly revenue for the number of weeks the company has been in business is multiplied by 52 to determine the average annual receipts.

Total reported spending under NAICS 561720 for the period of Fiscal Year 2004 (FY04) through the second quarter (Q2) of Fiscal Year 2008 (FY08 aka Q2FY08) was over $3.12 Billion. With two quarters reported, FY08 reported spending of $262 Million for services under NAICS 561720. The chart below illustrates the reported** spending by year for FY04 through Q2FY08.

Reported Contact Spending FY04 - Q2FY08 for NAICS 561720 Source: epipeline's Contract History Plus*
** Note: it is possible that some Defense spending for the more recent fiscal years (FY05 to present) is not as widely reported as earlier years. These numbers will likely increase as more departments and agencies report their contract spending.

WHO ISSUES THE CONTRACTS?

The United States Army is the largest buyer of services under NAICS 561720, commanding over 22% of the market share for the last four fiscal years (FY04 through Q2FY08), with over $714 Million in contract spending. The United States Air Force, the General Services Administration (GSA)'s Public Buildings Service (BPS), and the United States Navy all reported contract spending for the FY04-Q2FY08 period above $1.0 Million. Many civilian agencies are located within buildings that are owned or leased by GSA PBS and therefore the contract dollars representing these services for those locations are reported by GSA PBS.

Top 10 Federal Agencies by % of Total Market FY04 - Q2FY08 for NAICS 561720 Source: epipeline's Contract History Plus*

WHO WINS THE CONTRACTS?

According to the Central Contractor Registry (CCR), there are 7,415 companies registered under NAICS 561720 (source: active registrants, www.ccr.gov as of 11/12/2008). Of this number, 6,329 qualify as small businesses, which includes the following breakout by socioeconomic categories (some companies may qualify under more than one category):

  • 579 SBA Certified 8(a) contractors;
  • 440 SBA Certified HUBZone contractors; and
  • 733 Service Disabled Veteran Owned Small Businesses (SDVOSB).

There are also 235 firms listed as AbilityOne non-profit agencies. The AbilityOne program (www.abilityone.org, formerly known as JWOD - Javits-Wagner-O’Day) provides employment for people who are blind or have other severe disabilities. Working with non-profit organizations, they can provide these services at a fair price. The program is overseen by The Committee for Purchase From People Who Are Blind or Severely Disabled (an independent federal agency). They receive help from the NISH (www.nish.org) and the National Industries for the Blind (NIB - www.nib.org). Some contracts are set-aside under the AbilityOne program and others may have an evaluation preference for this program.

NOTE, the CCR website states, "As of the July 30, 2008 release (4.08.2), CCR-registered vendors may elect not to display their registration in the CCR/FedReg Public Search." This could mean that there are more active contractors registered with the CCR then the resulting totals above represent.

The two charts below identify the top 10 Companies, by market share, for the period of FY04 through Q2FY08. The first chart represents the top 10 companies that were awarded their contracts under ANY type of competition, whether it was full and open, small business set-aside, sole-sourced, etc. This list primarily consists of large businesses. The second chart, however, lists the top 10 companies that won their contracts under RESTRICTED competition. Specifically, epipeline limited this to those contracts awarded under the acquisition strategies listed below. The contract dollars represented on this second chart may not include all contract dollars for the individual contractor.

  • 8(a) Competed
  • 8(a) Small Disadvantaged (SDB) set-aside
  • 8(a) sole-source
  • SDB set-aside
  • SDB, 8(a) with HUBZone
  • Combination HUBZone and 8(a)
  • HUBZone set-aside
  • HUBZone sole-source
  • Service Disabled Veteran-Owned Small Business (SDVOSB) set-aside
  • SDVOSB sole-source
  • Emerging Small Business set-aside
  • Very Small Business set-aside
  • Reserved for Small Businesses ($2501 to $100,000)
  • Total Small Business set-aside

Vinnell Brown Root holds the top spot on the unrestricted competition list and the only one cracking $100 Million, with $123 Million in contract dollars for FY04-Q2FY08 and over 6.4% of the market share. The Chimes, Melwood Job Line, FedCap Rehabilitation Services and Didlake round out the top five. The remaining firms in the top ten, along with another 41 companies all reported spending above $10 Million for the FY04 to Q2FY08 period.

PLEASE NOTE: as this is a listing by Company name, rather than PARENT company, some companies may have more than one ranking, which may not reflected in the chart below.

Top 10 NAICS 561720 Contractors by % of Total Market for FY04 - Q2FY08 - All Acquisition Strategies Source: epipeline's Contract History Plus*

The combined contract spending for contracts awarded under "restricted competition," as outlined above, totaled over $744 Million for FY04 through Q2FY08. Integrity National Corporation had the highest reported spending with over $25 Million, or 3.42% of the market share (they are also listed in the ninth spot on the previous chart). Chugach McKinley (sixth on the previous chart), Ganaayoo Services Corporation, and Integrity Management Services Inc. all reported spending above $20 Million for this period. The remaining firms in the top ten, along another 152 companies exceeded $1 Million in reported spending under NAICS 561720.

PLEASE NOTE: as this is a listing by Company name, rather than PARENT company, some companies may have more than one ranking, which may not reflected in the chart below.

Top 10 NAICS 561720 Contractors by % of Total Market for FY04 - Q2FY08 - RESTRICTED Competition Source: epipeline's Contract History Plus*

HOW ARE THESE CONTRACTS PROCURED?

Over 49% of the contract dollars spend during the FY04 through Q2FY08 timeframe were awarded using full and open competition. This represented over $1.5 Billion for NAICS 561720. Almost 20% of contracts during this period did not report their acquisition strategy. These contracts could include those awarded using full and open competition, small business set-aside, or any manner of restriction. This accounted for over $628 Million in contract dollars. Contracts sole sourced to 8(a) firms over 10% of the market share ($338 Million). Competitive 8(a) contracts was significantly less, at $190 Million.

Acquisition Breakout under NAICS 561720 - FY04 through Q2FY08 Source: epipeline's Contract History Plus*

WHERE ARE THESE CONTRACTS PERFORMED?

These contracts are being performed across the continental United States and abroad. The 50 states plus Washington, DC have reported spending of $2.42 Billion and contracts for locations outside the United States total over $706 Million.

The chart below identifies the ten states with the highest reported spending under NAICS 561720, for the period of FY04 through Q2FY08. California holds the top post, with $208 Million reported, and Texas not far behind with $193 Million. Both of these states are home to many military installations as well as regional offices for federal agencies. Their physical size also lends itself to services required for buildings under the management of GSA PBS.

The Washington, DC metropolitan area (which includes Maryland and Virginia) have a combined reported spending of over $528 Million. This area is home to the headquarters of both civilian and defense agencies, as well as military installations.

All states in the top ten reported spending over $50 Million, along with four states (Washington, Ohio, North Carolina, and Oklahoma) outside the top ten.

Contract Place of Performance under NAICS 561720 (FY04-Q2FY08)

Source: epipeline's Contract History Plus*

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