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NAICS NewsletterApril 20, 2007

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 the services of 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 buying these services over the last four fiscal years.

Top 10 Federal Agencies by % of Total Market FY05 through January 2009 for NAICS 561720

WHAT IS NAICS 561720?

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 $15.0 Million (effective July 31, 2006), which means that a company, including its affiliates, would be considered a "small business" if their average annual gross revenue does not exceed $15.0 Million for the past three years.

Total reported spending under NAICS 561720 in FY03 was over $950 Million. FY04 saw a slight decrease, to over $860 Million. Spending for FY05 and FY06 are not as widely reported as the previous fiscal years, so those values are even lower (almost $600 Million for FY05 and $360 Million for FY06). This does not necessarily mean those years saw decreased spending, rather, it indicates that many agencies have not reported all of their contract data to the FPDS yet. These numbers may increase as more departments and agencies report their contract spending.

WHO ISSUES THE CONTRACTS?

The Department of Defense (DoD) was by far the largest buyer for these services for the last four fiscal years (FY03 through FY06), with over $1.43 Billion in contract spending, comprising almost 50% of the market share for NAICS 561720. This value may include all components of the Defense Department (Army, Navy, Air Force, DLA, etc.), however, FY05 and FY06 contract dollars have not been as widely reported yet (at least as far as FPDS data).

The General Services Administration (GSA) was about half of DoD's market share, with just under $700 Million over the same period. GSA's Public Buildings Service (PBS) provides janitorial and building maintenance services for many federal offices across the country. There is another significant gap between GSA's market share, and the remaining firms in the top ten. The Department of Homeland Security (DHS), the Social Security Administration (SSA), the Department of Veterans Affairs (VA), the United States Treasury, and NASA all have at least $60 Million each in contract spending during this period.

Top 10 Federal Agencies by % of Total Market FY03 through FY06 for NAICS 561720

WHO WINS THE CONTRACTS?

According to the Central Contractor Registry (CCR), there are 6,712 companies registered under NAICS 561720 (source: active registrants, www.ccr.gov as of 04/17/2007). Of this number, 5,926 qualify as small businesses. The two charts below identify the top 10 Companies, by market share, for the period of FY03 through FY06. 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 following acquisition strategies:

  • 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 ($2,501 to $100,000)
  • Total Small Business set-aside

The Jefferson Rehabilitation Center (JRC) holds the top spot on the "any" competition list, with almost $120 Million in total contract dollars for FY03 through FY06 - over 9% of the market share. JRC is one of many organizations performing custodial services for the federal government that may have been awarded their contracts through the Javits-Wagner-O’Day (JWOD - www.jwod.gov) Program. This 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 National Institute for the Severely Handicapped (NISH - www.nish.org) and the National Industries for the Blind (NIB - www.nib.org). Note, this program is transitioning to a new name, from JWOD to AbilityOne.

The joint venture of Vinnell-Brown & Root (VBR) is the only other firm whose contract dollars for the FY03 to FY06 timeframe exceeds $100 Million. Melwood, FedCap and LT Services all have contract spending over $50 Million for that same time period. Another 29 firms are over $10 Million.

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 FY03 through FY06 - Unrestricted

The combined contract spending for contracts awarded under "restricted competition" totaled over $340 Million for FY03 through FY06. Khotol Services Corporation takes top honors on the restricted chart, with over 4.5% of the restricted contract spending, which equates to over $15 Million. Integrity Management Services Inc. (also in the 9th spot on the chart above) was not far behind with just over $14 Million. Chugach McKinley Inc. and Tri Ark Industries Inc. both held over $10 Million in combined contract dollars for FY03 through FY06. Another 15 firms had at least $5 Million.

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 FY03 through FY06 - RESTRICTED Competition

HOW ARE THESE CONTRACTS PROCURED?

A significant percentage of contracts with spending during the FY03 through FY06 timeframe under NAICS 561720 did not report their acquisition strategy. This could include contracts awarded using full and open competition, small business set-aside, or any manner of restriction. This accounted for 50% of the market share - almost $1.4 Billion in contract dollars.

Full and Open (unrestricted) competition held 29% of the market share, equating to over $800 Million. Businesses of any size and type can compete for these contracts. By comparison, contract dollar totals for this period set-aside for small businesses was only 8% and all other acquisition strategies combined was just 13%. The breakout of the combined acquisition strategies segment is described in the second pie chart below.

Acquisition Breakout under NAICS 561720 - FY03 through FY06

Over half of contract dollars (from the 'All Other Acquisition Strategies' described in the chart above) were sole sourced to 8(a) firms (this may include those sole sourced to Alaska Native Corporations). This represented over $200 Million in reported contract spending over the FY03-FY06 period. Over one-quarter of the market share was set-aside for 8(a) firms on a competitive basis. The market share for competitive HUBZone procurements was significantly smaller - over 7%, which equated to $26 Million. Unless otherwise indicated, the acquisition strategies listed below were competitive requirements.

Acquisition Breakout Other than Full and Open under NAICS 561720 - FY03 through FY06
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