National Service Providers, notorious for undercutting local pricing, holding contractors to nit-picky fine print, delayed payments and more have become for many contractors the scourge of the pavement maintenance industry. But Asphalt Enterprises, entering its 25th year in business, has embraced the work NSPs can provide and works regularly with them -- under a yellow caution flag.
Owned by Scott and Sylvia Richards, the Raleigh, NC, contractor started as a striping company and eventually grew into a one-stop pavement maintenance shop that generates 40% of sales from sweeping and 60% from asphalt maintenance. Sylvia Richards says Asphalt Enterprises has grown every year despite the economic slowdown. “We haven’t grown the 20-30% we had been experiencing years back but we’re still growing,” she says, adding that 2011 was a few percentage points better than 2010, and they expect growth to continue in 2012. “It really helps that we’re in the maintenance end of the business because property managers recognize they have to do proper maintenance.”
And working with national service providers (NSPs) has been a factor in that growth. The contractor has been working with NSPs for eight years and today works with three NSPs which generate an average of 10% of Asphalt Enterprises’ sales each month. “It’s just a fill-in for us but it’s been very successful,” Richards says, adding that NSP-related sales are split 60% sweeping and 40% pavement maintenance.
Richards says that Asphalt Enterprises made a concerted effort to learn how to work with NSPs but initially they did not seek work from NSPs. “They sought us out,” she says. “The first thing we did (for NSPs) was striping or asphalt repairs, one-off jobs. We had stayed away from NSPs because we heard some horror stories and then we looked into it pretty well before getting involved. We wanted to make sure we had a positive experience with them going in and overall we really have – but the key to that is our approach to working with them.”
It Starts with the Contract
Richards says that whenever any contractor receives a request for a proposal from any national service provider – or any customer – the contractor must understand the terms of that specific project. Richards, who had experience reading contracts at a previous job, takes it upon herself to read all contracts, paying special attention to the fine print in any contract Asphalt Enterprises is considering taking on but especially NSP contracts.
“If they say you need pictures before and after the job then you’ve got to have pictures before and after – and with today’s technology that’s pretty easy,” Richards says. “If you come to them with your invoice and you don’t have the photos, or only have the ‘after’ photos, it’s going to delay your payment. But you should already know that because you should have read the terms of that particular project.”
She cites one example where a vendor wanted Asphalt Enterprises to bid on sweeping several locations and the fine print in the contract said that to get paid they were required to obtain a manager’s signature each time they performed the work at each location.
“But most parking lot sweeping is done at night so there is no manager on duty when we’re working,” she says. “That means we would have to go back to that location after each sweep to get the manager to sign off, and that means an extra trip out to that property. And it can mean standing around 30-40 minutes waiting for the manager only to find out the manager whose signature you need isn’t there that day. All that has to be taken into account when you’re considering the contract and pricing your bid because that’s a lot of time wasted and money you aren’t making.”
Asphalt Enterprises decided not to bid that particular job.