Federal janitorial contracts can look straightforward: clean the building, submit the invoice, repeat. The pricing gets dangerous when you treat every building like the same job.
Two facilities with identical square footage can require very different labor hours. Restrooms, security procedures, floor types, operating hours, and cleaning frequencies all change the cost.
The goal is not to discover a magic government rate. It is to build a price you can explain, support, and actually perform at.
As the prime contractor, that applies whether your own employees do the cleaning or subcontractors perform some of the work. A subcontractor’s quote is an input to your estimate—not a substitute for understanding what you owe the government.
Start with the cleaning requirements
Before you calculate a price, turn the performance work statement into a workload model. List each required task, where it happens, and how often it must be completed.
At minimum, capture:
- Cleanable area by floor type, rather than total building size alone.
- Restroom fixtures and required service frequency.
- Trash collection points and disposal responsibilities.
- Daily, weekly, monthly, and annual tasks.
- Occupied hours and permitted cleaning windows.
- Required inspections, reporting, and supervision.
- Supplies and equipment furnished by the government versus the contractor.
Separate routine cleaning from periodic work such as carpet extraction or floor refinishing. Those tasks need labor and equipment even when they occur only a few times per year.
If the documents conflict, use the solicitation’s question process. Do not silently choose the interpretation that produces the lowest price.
Build labor hours from the actual work
Labor will usually drive much of your janitorial price. Start with task-level productivity assumptions grounded in your own operations, reliable estimating resources, or a supervisor’s documented assessment.
Suppose your workload estimate requires 24 productive cleaning hours each weekday. That does not automatically mean three employees working eight paid hours will cover everything.
You still need to account for access procedures, moving equipment, stocking carts, required meetings, and other paid time that does not directly produce cleaning output. You also need coverage when someone is absent.
Build the schedule first:
- How many workers must be present during each cleaning window?
- Who opens, closes, and checks the work?
- Who covers leave and unexpected absences?
- Can periodic tasks fit into normal staffing, or do they require additional hours?
A staffing plan that works only when nobody gets sick is not a staffing plan. It is an unpriced risk.
Use the applicable labor requirements
Do not price federal service work using only local advertised hourly wages. Review the solicitation’s labor clauses and any applicable wage determination.
Many federal janitorial contracts are subject to Service Contract Labor Standards. Depending on the requirements incorporated into the solicitation, covered workers may be entitled to specified minimum wages and fringe benefits, including applicable vacation and holiday benefits.
A predecessor collective bargaining agreement can also affect wage and benefit obligations in covered successor-contract situations. Do not assume a general area wage determination answers every question.
For each labor category, identify:
- The applicable minimum wage and your planned recruiting wage.
- Required health and welfare benefits and how you will satisfy them.
- Vacation, holiday, and other applicable paid-leave costs.
- Employer payroll taxes, unemployment costs, and workers’ compensation.
- Any additional obligations created by incorporated clauses or applicable law.
Avoid double counting benefits, but do not leave them out. If you are uncertain about coverage or treatment, get qualified payroll or labor-compliance guidance before submitting your bid.
Calculate a loaded labor cost
Your loaded labor cost is more than the employee’s hourly pay. It includes the employer costs required to put that person on the job.
For illustration, assume your estimating model produces a loaded cost of $25 per paid hour and requires 130 paid hours each week. That produces $3,250 in weekly labor cost.
Those numbers are hypothetical, not recommended federal cleaning rates. Your actual inputs must come from the solicitation, your staffing plan, and your business costs.
Annualize carefully. Check the performance calendar, federal holidays, required holiday service, and periodic tasks. The building may close on a holiday while benefit obligations still create costs.
Also distinguish between a working supervisor who cleans and a manager who visits several accounts. Allocate their time realistically rather than charging both as full-time onsite staff without a reason.
Price your delivery model as the prime
When you self-perform
If your employees perform the work, build the price around your actual ability to recruit, train, schedule, and retain that workforce. The wage determination establishes applicable minimums; it does not guarantee that workers will accept the job at those rates.
Include your own contract-management effort, too. If you will handle inspections, scheduling, payroll coordination, or customer issues, assign a realistic cost to that time. If you also plan to clean, include those productive hours without assuming you can clean and manage the contract during the same hours. Your involvement is not free capacity.
When you use subcontractors
Give prospective subcontractors the relevant scope, cleaning schedule, labor requirements, and applicable wage determination before requesting a firm quote. Ask them to identify staffing assumptions, included supplies, periodic services, exclusions, and the wage and benefit basis supporting their price. A lump-sum quote with no explanation can hide a scope gap or an unfunded labor obligation.
Compare subcontractor quotes on the same basis:
- Which tasks and facilities does each quote cover?
- Who provides equipment, consumables, supervision, and absence coverage?
- Does the quote account for applicable wages and fringe benefits?
- Who handles startup, access requirements, inspections, and corrective work?
- How are base and option periods priced, and what changes can trigger an adjustment under the subcontract?
Flow down required clauses and applicable wage determinations, and establish a practical process for checking compliance. Under applicable Service Contract Labor Standards requirements, the prime has responsibility for subcontractor compliance. Do not treat subcontracting as a way to move labor obligations out of sight.
Your prime price must cover the subcontractor’s work plus your own remaining costs: contract administration, quality control, coordination, insurance, and any work you retain. Do not add a second full cleaning crew to costs already covered by the subcontract, but do not assume the subcontractor’s supervisor replaces all prime oversight either.
Check any applicable limitations on subcontracting and other self-performance requirements before committing to the delivery model, especially on set-aside work. A profitable spreadsheet does not fix an impermissible subcontracting arrangement.
Finally, work through cash timing. Your obligations to employees and subcontractors must fit the applicable payment requirements and your available working capital—not an assumption that the government will always pay before you need to pay anyone else.
Add the costs outside payroll
Once labor is built, add the resources needed to deliver the service.
Your estimate should address:
- Cleaning chemicals, liners, paper products, and other required consumables.
- Equipment purchases, rentals, maintenance, and replacement.
- Uniforms, protective equipment, and training.
- Insurance and any specifically required bonding.
- Transportation, storage, and delivery costs.
- Quality-control administration and contract reporting.
- Recruiting, onboarding, and startup expenses.
Confirm who supplies restroom consumables. A contractor that accidentally includes government-furnished supplies may overprice. A contractor that omits contractor-furnished supplies may lose money every month.
For subcontracted work, mark which of these costs are already included in the subcontractor’s quote and which remain yours. Every responsibility needs an owner and a place in the estimate, but it should only be priced once.
Allocate company overhead separately. Bookkeeping, estimating, office expenses, and management do not disappear because they are not performed inside the federal building.
Separate profit from contingency
Profit is not the same as a cushion for estimating mistakes.
Identify specific uncertainties, such as equipment failure, higher recruiting costs, or workload ambiguity. Decide whether each risk needs clarification, an estimating allowance, or a no-bid decision.
Then add your intended profit using a consistent method. Markup and margin are different calculations. If your estimated cost is $100,000 and you add a 10% markup, your price is $110,000. Your profit margin is approximately 9.1%, not 10%.
Know which measure your spreadsheet uses. Otherwise, a small formula misunderstanding can affect every bid you submit.
Match the government’s pricing structure
Your internal estimate may be detailed, but your offer must follow the solicitation’s pricing schedule. That could mean monthly prices, separate periodic-service line items, or other units.
Map every cost to the required contract line items without omitting work or counting it twice. Follow any instructions concerning quantities and separately priced tasks.
Price option periods deliberately. Review expected cost changes and any applicable price-adjustment clauses. Do not assume every future increase will be reimbursed, and do not assume a wage-related adjustment covers all operating costs.
If you are using subcontractors, reconcile their option-period pricing and adjustment terms with your own obligations. A subcontractor’s price increase does not automatically create a right to an equivalent increase from the government.
Before submission, reconcile your pricing schedule with your staffing narrative. Promising five onsite workers while pricing three creates a problem that polished writing cannot fix.
Run a final performance test
Ask one practical question: if the government accepted this price today, could you staff and operate the contract as promised?
Check recruiting wages, payroll timing, startup cash, backup coverage, and equipment availability. For subcontracted work, confirm that the proposed team remains available, the quote covers the required performance period, and the division of responsibilities is documented.
Compare your estimate with relevant historical pricing when available, but treat that information as a reason to investigate differences—not an instruction to copy another contractor’s number.
A low price is useful only if it supports compliant performance. Build the workload, load the labor correctly, account for the whole operation, and then decide whether the opportunity fits your business.
Derek's Unconventional Wisdom: Make Your Wage Determination Visible in Your Price
Some of your competitors may not know they have to follow the applicable wage determination when paying covered workers on federal contracts. They may price the job using whatever they normally pay on commercial cleaning work, without accounting for required minimum wages and benefits. I would not assume every low bid is making that mistake. But I would not let another contractor’s unexplained number talk me into ignoring my own obligations, either.
My approach is to turn that knowledge into a competitive advantage: make the labor basis behind your price visible. Where the solicitation permits it, include a pricing narrative that spells out the exact occupation codes and categories from the applicable wage determination that you used to price your team’s covered workers. Do not stop at saying, “We comply with all labor requirements.” Explain what that means in your estimate.
Show the connection between the work and the wages
I want that narrative to connect the actual duties, the labor classifications, and the dollars. Identify the applicable wage determination by number and revision, then show the occupation title and code for each covered category you are using. Use the actual document incorporated into the solicitation, including relevant amendments—not a wage determination you happened to find for a previous bid.
For each category, explain the applicable minimum wage, your proposed pay rate, and how you accounted for required fringe benefits, vacation, and holidays. Keep wages and benefits clear enough that someone can follow the calculation. If you plan to pay above the minimum to recruit reliably, explain that distinction rather than making the minimum look like your entire staffing strategy.
The classification has to fit the duties. I am not suggesting you pick the cheapest occupation code and make the work fit afterward. If the required work does not have an appropriate listed classification, resolve the proper treatment through the applicable process rather than inventing a code or quietly borrowing an unrelated rate.
Include the subcontractor’s workers, not just your own
If I am looking at this from the prime’s perspective, a subcontractor’s low quote is not enough. I want to know which occupations and wage assumptions support it. Otherwise, I could be building my entire offer around a price that cannot support compliant performance.
Your pricing narrative should consistently explain the basis for covered workers across your proposed team, whether they are your employees or a subcontractor’s employees. That requires doing the work before submission: sharing the applicable requirements, reviewing the subcontractor’s assumptions, and resolving gaps. You cannot credibly explain a labor approach you have never checked.
Compete on a supported price, not an accusation
I would not use this section to accuse competitors of underpaying workers. You do not know how they built their bids. Show your own work instead. The point is to give the government a clear explanation of how your staffing and pricing support the required service.
Follow the proposal instructions, page limits, and restrictions on where pricing information belongs. A pricing narrative is not permission to add an unauthorized attachment or put rates in a technical volume that prohibits them. It also does not guarantee evaluation credit or overcome the solicitation’s award criteria.
The advantage is practical: you have a price you can defend and a labor plan you can carry into performance. I would rather explain why my number accounts for the required work than win with a number that depends on obligations disappearing after award.
Derek James
Derek James is the founder of GovKidMethod. By his 30th birthday, he had won 32 contracts worth over $15M for a small business across various U.S. federal agencies. Now he teaches small business owners how government contracting really works.
