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​Sealing the deal

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  • SIMA
- Posted: October 18, 2017

By Cheryl Higley

September 30 - that date is the established best practice for snow and ice management companies and their property manager clients to finalize contracts for the coming season. The earlier the contracts are awarded the better, since it gives the snow company the chance to properly plan service and allocate resources and labor.

According to this year’s State of the Industry survey, however, only 35% of respondents reported having at least 75% of their contracts finalized by September 30. What’s the holdup? Nearly 60% indicated the property/facility management procurement process isn’t allowing them to achieve the benchmark. How can the industry move the needle to bring both sides closer to the end goal?

RM Landscape President Rick Lemcke and Gallina Development Corp. Special Projects Manager Anna Marie Finnegan have worked together for 20 years. We asked them to reflect on their experiences to understand the dynamics of the property manager-snow professional relationship and what it takes to build successful partnerships.

1. Don’t slow the process.
Based in Rochester, NY, Finnegan manages more than 2 million square feet of commercial real estate. She requires all-inclusive, seasonal contracts and says she meets the industry contract award benchmark by requiring all pricing by August and having all contracts out the door by the end of September so service can start November 

Just as contractors need their property managers to help them meet that September deadline, the reverse is also true.

“Sometimes they’ll hold me up because they’re still waiting to find out what their salt will cost. Or, if we’ve had a good experience with someone and want to reward them with more work, they’ll put me off until they hear back from other prospects,” she says. “That means something on their end isn’t structured correctly.”

2. Know your limitations.
Not every snow company is equipped to service the FM/PM sector; those who don’t have the capacity and structure to manage these contracts will likely fall short.

“Sometimes contractors will bite off more than they can chew,” Finnegan says, adding she has learned the hard way. “We had a contractor who had worked for us in the past and wanted to expand. We thought they had the equipment but when it came time to plow, the equipment wasn’t available to us and they put a sub plowing for the first time ever on the site. Needless to say, it didn’t end well.”

Lemcke says site-specific equipment allocation is a key differentiator for RM Landscape and reassures his clients that their sites will be properly serviced.

“Our equipment is site specific to do that job. If there is a big event, that equipment isn’t going to get shifted somewhere else unless we get an OK that we can move after we’re caught up,” he says.

3. Build trust.
Both agree that long-term relationships established on excellent service and mutual trust is the No. 1 key to working in the snow and ice management sector.

“As you build those relationships, it makes the process a lot easier. I know who has the equipment, the manpower, etc., to do what I need based on what the contract requires,” Finnegan says, adding that she has established a roster of snow professionals she relies on, which allows her to mostly bypass the request for proposal process.

Lemcke says close to 80% of RM Landscape’s contracts are multiyear contracts servicing major retailers and Fortune 500 customers. Whenever possible, they work as the year-round exterior service provider so they have familiarity with the property and better understand the client’s needs.

“We find that 90% of our clients, including Gallina, respect our industry and realize that they are investing in the service we provide and that we are not a commodity. That matters. We have serviced one of our clients for 38 years; to be able to build a rapport like that is immeasurable,” he says. “When an FM or PM gets the reputation of being driven by quality instead of cost, it just keeps rolling for them. The more snow professionals can educate the true cost of doing business in snow and ice, the better the industry will be for everyone.”


FM/PM contract details
RM Landscape President Rick Lemcke has been in business for 45 years and as the company’s snow commander has worked extensively in negotiating contracts with property/facility managers. He offers the following warning signs for companies who consider bidding on FM/PM contracts:

Triggers: RFPs (requests for proposals) that include high service triggers should raise a red flag. That delay in service may save the FM/PM money but it puts contractors behind in storm management.

RFP Timing: RFPs that surface in October and November should be viewed cautiously. “If they’re shopping snow in October, they don’t have a clue. They’re shopping price,” Lemcke says. “We might consider a last-minute RFP if it borders one of our sites, but we would never consider a standalone situation in October or November.”

Insurance Requirements: Professional property managers know how expensive insurance is for contractors to obtain. If they’re asking for $500,000, be wary. “Some of our contracts require $6 million to $10 million. When they’re asking for that much coverage, they know what we have to invest in and what it’s going to take for us to provide service.”


State of the Industry 2017

  • 35% - Respondents who stated 75% of their new or renewing contracts for the 2016-17 season were signed by September 30.
  • 58% - Respondents who stated the No. 1 reason prohibiting them from achieving the industry benchmark was the property management procurement process.
PortfolioMix

 
Cheryl Higley is editorial director for SIMA/Snow Business. Email her at Cheryl@sima.org.

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