The Trade-off

"The contractors give us their numbers and we put it all together and present it to the client as one bid," says Greta Bright, director of marketing for Symbiot.

Springwood Nurseries, Evans, GA, does work for Dentco. Owner James Cartledge prices his sweeping according to what his normal rates would be.

"If I can't make any money on it then I'm not going to do it," he says. "I learned a long time ago that if you try to cut your margins too close those unexpected costs are going to sink your ship."

If an NSP can't find one of its contractors to do the job for the fee quoted to the customer, they look outside their network for new contractors.

"We don't bid the job out to other contractors unless a Dentco contractor doesn't want it," Dent says. "We offer it to our current contractor partners first to try to help them grow their business."

How NSPs find contractors

While contractors sign an agreement to comply with each NSP's specific expectations, contractors remain completely independent. The U.S. Maintenance subcontractor agreement, for example, contains a non-compete clause, expectations of compliance, equipment specifications, a requirement of $1 million in general liability insurance, and workers' compensation requirements.

Many NSPs rely on customer referrals to find sweeping contractors.

"The customer very frequently tells us who he would like us to talk with to do the job. He also often gives us lists of contractors they do not want working for them," Dent says. "If the customer has a good relationship with a contractor and wants to continue that relationship he will provide us with the information we need to contact him."

Steinhagen says that between 70% and 80% of U.S. Maintenance contractors have been referred by customers.

"It's a very high retention rate," he says. "When we sell new accounts we look to retain the vendors (contractors) the client currently is happy with who meet our requirements," Steinhagen says. "We look to maintain the current relationships."

He says those contractors typically don't want to lose business and are willing to renegotiate a fair rate so they can do business with U.S. Maintenance and continue to service the local account. It's only in instances where the customer doesn't have a preferred contractor that the NSPs begin shopping around.

Bright says Symbiot looks for contractor partners among "the top tier" of independent contractors.

"That's who we want, and we want them to stay independent," Bright says. "They shouldn't look at us as competitors. They should look at us as a way for them to stay independent and compete on a national level."

Bright says Symbiot relies on two levels of contractor "partners." A standard partnership, enabling contractors to do work for Symbiot and to be included in a referral list, costs $750 annually. A more exclusive group is "sales partners," who have the first right of refusal for any work that becomes available in their area.

"To get that first right of refusal they pay a higher fee than the partners," Bright says.

She says the cost of a sales partnership varies depending on the territory the contractor services and if the contractor wants to "own" a specific territory.

Wynen says Genesis Facility Management also relies on local contractors.

"We have moved trucks into an area to get the job done but that's not our preferred approach," he says. "We want to rely on the local contractor who knows the area and who can respond quickly and who might already be driving by the site several times a week. Plus, then it's their truck on the lot so they will want to make sure it looks good for people to see because any work a contractor does affects his reputation."

Growth opportunities for sweepers

"The opportunity for new business is the number one reason a contractor should consider aligning himself with a national service provider," Dent says. "It's not only retaining the current business they have but business potential for the future."

Bright says NSPs can actually help independent contractors get work because many local contractors can't as easily reach the decision makers, who more and more are based in another state or city.