Restructuring School Bid

Discussion in 'Lawn Mowing' started by LwnmwrMan22, Jan 7, 2008.

  1. LwnmwrMan22

    LwnmwrMan22 LawnSite Platinum Member
    Posts: 4,372

    I have a school district that I'm under contract for this year (2008). However, I'm looking to renew it for another 2 years (2009, 2010).

    Here's 2 issues.

    1, they've already renewed the contract 2 times since 2002, and the billing manager says they may not be able to renew it without bidding it out again.

    2, the senior high is going under fairly major renovations as far as the sports fields are concerned.

    My current contract is $6,000 / month for 6 months, with an additional $400 / month for 6 months to cover gas with having to mow fields that are in season 3 times / week. For example, we mow the varsity baseball field 3 times / week in the spring, football 3 times / week in the fall, for a total of $38,400 for the season.

    Now the renovations are going to take away about 20% of the work for the season.

    In order to get the contract renewed, would you offer a price break on this year's services?? Or would you try to lock in a price for the next 3 years, keeping the price the same and using the lack of work for this year, as your price increase the next 2 years??

    If you just took the straight price lock across the board, that would mean a 10% increase in pricing for the 2009, 2010 seasons.

    If you discounted this year, and then did a price lock, that would be more along the 2-3% yearly increase.

    The price was increased about 9% two years ago.

    It takes about 800 man hours / year to maintain the property.

    I know it's a low per man hour price, so please don't comment on that. I get much more for that on my smaller commercial / residential properties. It's what large acreage goes for in this area.

    Anyways... what are your thoughts?? Just thought I'd see who has the pencil sharp in January.
     
  2. meets1

    meets1 LawnSite Gold Member
    Posts: 3,787

    Just a quick thought - I would discount this year being you have a good relationship already with the school and hopefully your workmanship also goes along way in there decision. So discount this year, make up in the previous years and your locked in thru 2010. The school may like the fact that your 'thinking' of them in regards to less mow time vs money spent by the school showing good pr work on your part while maintaining or adding value in the years to come.

    If you go up now, say they do re-bid this and your smoked on the bid or they consider another bid cuz just maybe someone on the board was rubbed the wrong way by you increasing the price while they decreased the area to be mowed?? Then where are ya?
     
  3. LwnmwrMan22

    LwnmwrMan22 LawnSite Platinum Member
    Posts: 4,372

    So...what you're saying is.. something along these lines.....

    This year, the work that's going to be taken away due to new construction, is going to be about 20% of the total contract, MAYBE 25%.

    Lock them in at the same rate for the next two years, but instead of discounting the full 20%, discount this year 15%, that means a 2.5% increase for the next 2 years, while making it look like I'm holding the line on the pricing??????????

    2 of the 7 board members have told me as far as they're concerned, I have a lifetime contract.
     
  4. AintNoFun

    AintNoFun LawnSite Bronze Member
    Posts: 1,807

    i know in nj there is a limit on how many years they can renew it with rebidding i *think* its 3 or 5, not to sure but i know its out there...
     
  5. LwnmwrMan22

    LwnmwrMan22 LawnSite Platinum Member
    Posts: 4,372

    After talking with the Business Manager for the school, I was able to figure out how much turf area was going to be torn out, and a cost equal to turf lost.

    I then gave them a deduction of 80% of that number, and said that if they'll renew for 2009 and 2010, that I'll hold the price the same as we were charging last year.

    The amount that I kept from the deduction will equal out to about a 4% pay increase for the other two years.

    I got the approval.

    I then found out that the areas of turf they're removing, that they're replacing with artificial turf. So now next year, once the construction is done, I'll be back to the original pay, but still without these other fields to maintain. They're also adding 4-5 more baseball / softball fields, which I'll be expected to maintain as well.

    So it all turned out for the better.

    Can't wait to get the new Kubota M6040 to pull the 15' tri-deck now.

    As for rebidding, they said as long as it stays under $50,000, they're not legally obligated to get new bids.

    Each of the board members said we did and absolutely wonderful job, and that there were no reasons to rebid.
     
  6. meets1

    meets1 LawnSite Gold Member
    Posts: 3,787

    Lucky man!
     

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