National Sweeping Services:
The Target Stores Experience
by Ranger Kidwell-Ross
In 2003, the big news in the sweeping industry was management companies that represented national retailers in their purchase of sweeping services. The most controversial of these was National Landscaping Services (NLS), which represented Target stores. NLS went out of business, leaving a host of sweeping contractors unpaid.
Our investigation uncovered other players in this market that appear to be conducting business less than optimally, as well. Especially for smaller sweeping contractors, a seemingly lucrative contract with a national vendor can turn into a nightmare of paperwork, payment delays, contract squeezing and cancellation with little notice.
Here is a synopsis of the trouble Target Stores found itself in because of use of NLS. To the credit of Target management, to our knowledge all sweeping contractors were eventually reimbursed for at leaset the majority of the money owed for what turned out to be a fiasco for all concerned.
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At the Sweeper Roundtable at the National Pavement Expo in 2003, there was a buzz among sweeping contractors. Word was that Target stores were going to start going through a national sweeping management company. National Landscaping Services, based in Florida, was the bottleneck through which all future Target sweeping contracts would be filtered.
Some who currently swept Target stores in their area said it appeared they would be keeping the contracts, though perhaps at lower rates. Others complained the work was being sent elsewhere without them even having a chance to bid. From the position of hindsight, it appears those who lost the Target contracts may actually have been the winners in the long-term.
Here's what we learned by talking to several of the contractors involved: Sweeping through NLS started in May. Uniformly, it sounds like NLS initially offered ridiculously low sweeping rates across the board. The company's representatives also seemed to have little knowledge about snow belt concerns such as Spring cleanup. After some amount of negotiations, contractors signed contracts and work commenced. In some areas, there was ongoing contact with a quality control person who was supposedly checking up for NLS.
One aspect no contractors liked was that NLS told them it took 60 days to "get into the payment loop." Still, that wasn't a real problem, since after that payments would be steady each month and the extra business was good to have. At least one contractor added an additional sweeper and operator to his fleet in order to handle the new, several location, 7-days-a-week business. Plus, he signed on for landscaping services another 2-3 days a week. A number of other sweeping contractors around the country, both naPSa members and not, also had similar contracts with NLS.
Contractors substantiated their receivables by faxing an invoice to NLS on a weekly basis. No one had expectations of payment prior to the first of July because all had been told it would take 60 days. Because of the reputation of the national Target chain no one had an inkling they were about to be stiffed for a substantial amount of work. After accepting contractor invoices throughout May and June Ð and apparently getting money from Target through that same time period Ð NLS appears to have taken a powder before paying anyone.
In late June or early July some contractors notified Target with payment concerns based on not being able to contact NLS. Target apparently sent an attorney to check the NLS office in Florida and found the building cleaned out. Not just sweeping contractors were affected: One former NLS employee a member talked to said he had quit because he hadn't been paid from February, when he'd started with them, up until June!
More recently, Target contractors received notice that other companies have taken the place of NLS. These include, among perhaps other, one called Dentco (website: www.TheOutsideGuys.com), and another called U.S. Maintenance (website: www.usmaintenance.com). The former Target contractors were also given a fax number to which they could send previous invoices, as well as a mailing address. No one appears to have an actual phone number to call about the situation, though, other than to Target's national headquarters.
Target's initial position appeared to be that they'd paid NLS in good faith and so had no further obligation. Later on, the company changed that position, held a conference call with the sweeping contractors who'd swept Target stores for NLS, and arranged a payment schedule with them. As far as we could find out, all such contractors eventually received at least a satisfactory partial payment for the work they'd done.
During the intervening timeframe, however, there was definitely an uproar and a service lapse at some Target locations. One contractor said that Dentco had taken over the service contract for NLS and had left all the Target accounts with them.
Another said their Target accounts had been transferred to another local contractor without him having an opportunity to bid or even with timely prior notice for them to quit sweeping. From that, one has to wonder about what Dentco's business practices will prove to be. I left two messages with Dentco and no one from there called back prior to this article being written.
Time will tell, but it sounds like enough to point one in the direction of having contracts in this or related situations reviewed by an attorney prior to signing. That's typically a good practice in any event.
That's not to say you should 'just say no' to servicing contracts from the large outsource providers. As I said initially, for a variety of reasons it appears these types of arrangements will become more and more a part of the sweeping industry. However, be sure to conduct a high level of due diligence, and keep in mind that if you accept work at below your true cost of service then there's no amount of volume that will turn it into a money-making situation.
If you have current information to share on this general topic, or concerning any of the players in the national vendor industry, please let us know. Our strength of numbers and ability to share information via the WorldSweeper.com website provide us with some great advantages!
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