At Penta Services, we truly like the seasonal approach or some variant of a seasonal approach. In this blog we will discuss the pros and cons of various billing models. In our opinion, any form of a per occurrence structure will have similar pros and cons.
Pros To Seasonal Agreements
- budget friendly over multiple years – allows facility owners and managers to put a hard number on their snow and ice management program
- allows the contractor to use their professional judgement as to when services are rendered
- reduces the over application of ice melt products
- allows the contractor to properly equip and staff for the work they are providing knowing they have their budget covered
Cons to Seasonal Agreements
- We have heard concerns from customers that if they are paying a flat amount, that service levels will fall since there is no incentive to provide additional applications – trust must be built quickly
- Customers can feel like they paid for nothing on winter season with light precipitation
- To play out in both party’s favor, we see 3-5 year time horizons as the norm
Pros to billing per service
- For the customer, nothing is due until services are rendered meaning on light snow years, bills could be extremely low
Cons to billing per service
- On heavy snowfall and ice years, snow removal costs can blow budgets for facility owners and managers
- There is an incentive to alter the level of service as a year progresses and costs climb – this increases liability exposure to the property owner.
- Contractors have an incentive to apply applications or perform services that could be deemed questionable
- Additional applications build up on sidewalks, parking lots, and landscaped areas which increases the cleaning and repair costs for building owners.
Our customers don’t count salt applications or how many inches of snow we plowed to determine the success of our snow operation. Success is determined by the finished product and how efficiently their lot was made safe after a snow or ice event.
To learn more about our services, we encourage you to check out our capabilities.