Government cleaning contracts pay anywhere from roughly $30,000 a year for a small single-office agreement to several million dollars annually for large multi-site work. A recent federal janitorial award for a single building obligated about $95,000, while a multi-location custodial contract in Detroit carried a monthly price of over $312,000, or roughly $3.7 million per year.1USAspending.gov. Contract to Garcias Janitorial What lands in the business owner’s pocket is a much smaller number. The gross award has to cover labor, fringe benefits, supplies, equipment, insurance, and overhead before anything counts as profit, and a well-run cleaning company typically nets 10% to 15% of the contract value once those costs are paid.
What Drives the Gross Contract Value
Square footage combined with cleaning frequency is the biggest single factor. A 10,000-square-foot administrative office needing nightly vacuuming and trash removal pays far less than a 100,000-square-foot warehouse-and-office complex requiring three daily cleaning shifts. Adding floor stripping and waxing, multi-story window washing, or quarterly deep cleans pushes the annual price higher because each task adds labor hours, equipment, and consumable supplies.
Technical complexity matters as much as size. A 5,000-square-foot high-containment medical laboratory can outprice a standard office twice its size because the cleaning chemicals, protective equipment, and disposal protocols cost more per square foot. Judicial buildings and research centers requiring security clearances add another layer of cost, since background investigations, compliance monitoring, and a smaller eligible labor pool all get priced into the bid.
How the Evaluation Method Shapes the Price
Under Lowest Price Technically Acceptable evaluation, the agency sets minimum standards and picks the cheapest proposal that meets them. Once your bid clears the technical bar, price is everything, and tradeoffs between quality and cost are not permitted.2Acquisition.GOV. FAR 15.101-2 Lowest Price Technically Acceptable Source Selection Process This method is common for straightforward janitorial work and tends to push contract values down because bidders compete almost entirely on price.
Best Value Tradeoff is the alternative. The agency weighs technical quality, past performance, and staffing plans against price, and a contractor with a stronger track record or a more detailed quality-control plan can win without being the cheapest. Cleaning companies with specialized capabilities tend to earn higher contract values under this method because agencies are willing to pay more for reduced risk.
The Wage Floor Set by Federal Law
Every federal cleaning contract worth more than $2,500 falls under the Service Contract Act, which requires the Department of Labor to publish location-specific wage determinations for each class of worker on the project.3Office of the Law Revision Counsel. 41 USC 6703 – Required Contract Terms A janitor cleaning a federal courthouse in Manhattan has a different mandated hourly rate than one cleaning a post office in rural Alabama, and contractors cannot pay less than the published rate.
On top of base wages, the law requires fringe benefits covering health care, retirement contributions, vacation, sick leave, and similar items. For 2025–2026, the prevailing health and welfare fringe benefit rate is $5.55 per hour per employee.4SAM.gov. All Agency Memorandums A janitor whose wage determination sets a $17.00 hourly rate therefore costs the contractor at least $22.55 per hour before payroll taxes, workers’ compensation insurance, or overhead.
Labor typically accounts for 65% to 80% of a cleaning contract’s total value, so these federal floors effectively set the minimum a contract can pay. Executive Order 14026, which had imposed a higher federal contractor minimum wage on top of the wage determinations, was revoked in March 2025 and is no longer enforced.5U.S. Department of Labor. Executive Order 13658, Establishing a Minimum Wage for Contractors The wage floor now defaults to whatever the Service Contract Act wage determination specifies for the locality and job classification. In many metropolitan areas those rates already exceed the older executive order minimums, so the practical impact varies by location.
What Eats the Rest of the Contract
Federal agencies typically require contractors working on government installations to carry bodily injury liability insurance of at least $500,000 per occurrence.6Acquisition.GOV. FAR 28.307-2 – Liability Annual premiums for a small cleaning business with five to ten employees generally run between $500 and $2,600, depending on state and claims history. Workers’ compensation insurance adds another layer, with rates for custodial employees varying significantly by state.
Cleaning supplies typically consume 6% to 11% of the contract value when you combine expendable and consumable products. Then there’s equipment depreciation, vehicle costs, uniforms, management salaries, and accounting or payroll services. After all of that, a well-run cleaning company typically targets a net profit margin of 10% to 15% of the gross contract value. On a $200,000 annual contract, that works out to $20,000 to $30,000 in actual profit, with the rest consumed by labor, supplies, insurance, and overhead.
How Set-Asides Change What You Can Charge
The federal government reserves a significant share of contract dollars for small businesses, and janitorial services are one of the categories where set-asides are common. Programs like the 8(a) Business Development Program allow certified firms to compete for sole-source and set-aside contracts that are off-limits to large national corporations.7U.S. Small Business Administration. 8(a) Business Development Program Women-Owned Small Business, Service-Disabled Veteran-Owned, and HUBZone designations offer similar restricted competition pools.
Fewer bidders means less downward pressure on price. A cleaning company competing against three other set-aside-eligible firms will often secure a better margin than one bidding against twenty companies in unrestricted competition. For janitorial services, the SBA classifies businesses under NAICS code 561720, and the small business size standard is $22 million in average annual receipts. Firms under that threshold can pursue set-aside opportunities that effectively raise what the contract pays relative to open-market bids.
Contract Length and Payment Timing
Under the Federal Acquisition Regulation, service contracts can run up to five years when you combine the base period and option years.8Acquisition.GOV. FAR 17.204 – Contracts Department of Defense contracts can stretch further, with ordering periods reaching ten years when the agency head approves an exception.9Defense Acquisition Regulations System. DFARS 217.2 – Options That length gives revenue predictability that is rare in private-sector cleaning work.
State and local governments operate under their own procurement rules. Some municipalities bundle multiple buildings into a single contract worth hundreds of thousands of dollars; others break work into small purchase orders under $10,000. Local contracts rarely carry Service Contract Act wage floors, so labor costs may be lower, but the bidding environment is often more competitive. Less paperwork, thinner margins, shorter terms.
Payment reliability is one of the biggest advantages of federal work. Under the Prompt Payment Act, federal agencies must pay a proper invoice within 30 days of receipt unless the contract specifies a different date.10Office of the Law Revision Counsel. 31 USC 3903 – Regulations Small business prime contractors get an accelerated payment goal of 15 days. If the agency misses the deadline, it owes interest at a rate set every six months, currently 4.125% for the first half of 2026.11Bureau of the Fiscal Service. Prompt Payment
Most janitorial contracts pay monthly based on invoices submitted after the work is performed. Cash flow is predictable once the cycle is established, but new contractors should plan for a 45- to 60-day gap between starting work and receiving the first payment. That initial gap is where undercapitalized businesses run into trouble. You need enough cash on hand to cover at least two months of payroll and supplies before the first check arrives.
Estimating What a Specific Contract Will Pay
The best way to estimate what a specific contract will pay is to look at what the agency paid last time. The Federal Procurement Data System archives detailed records of past federal contract awards, including dollar amounts obligated, contract durations, and the names of winning vendors.12Federal Procurement Data System. Welcome to Federal Procurement Data System – Next Generation Searching by NAICS code 561720 filters results to janitorial services. The data goes back decades, so you can track how a particular building’s cleaning budget has changed over time.
USAspending.gov offers a more user-friendly interface for the same underlying data and lets you filter by agency, location, and service type.13USAspending.gov. USAspending.gov SAM.gov also publishes active solicitations along with incumbent contract details, which sometimes include the current monthly price being paid.14SAM.gov. Contract Data Spending an afternoon pulling comparable awards before you price a proposal is the difference between a bid that wins profitably and one that either loses or wins at a loss.