Facilities & Operations
The spend you see every day but rarely challenge.
THE SPEND
Facilities spend encompasses cleaning, security, HVAC maintenance, landscaping, pest control, waste management, utilities, and building repairs. For businesses leasing commercial space, total operating costs typically run $10–$25 per square foot annually, depending on location and building class.
For a company occupying 15,000 square feet, that’s $150,000–$375,000 per year in facilities costs alone. Maintenance management can account for 40–50% of total operational budgets, yet most SMBs manage these contracts on autopilot — renewing year after year without competitive review or performance benchmarking.
RISK FACTORS WHEN UNMANAGED
• Vendor lock-in: Long-standing relationships with facilities vendors that haven’t been competitively bid in years, leading to above-market pricing.
• Reactive maintenance cycles: Over-reliance on break-fix maintenance rather than preventive programs, which costs significantly more over time.
• Unmonitored service levels: No formal KPIs or SLAs in place, making it impossible to measure whether vendors are delivering value.
• Fragmented contracts: Separate vendors for every facilities service with no consolidated view of total spend or leverage opportunity.
• Utility costs: Energy spend that hasn’t been reviewed for rate optimization, usage efficiency, or alternative supplier options.
SAVINGS OPPORTUNITIES
• Competitively bid facilities services on a 2–3 year cycle to ensure market-rate pricing and performance accountability.
• Shift from reactive to preventive maintenance, which industry research shows saves 12–18% of maintenance budgets and returns $5 for every $1 invested in avoided emergency repairs.
• Consolidate vendors where possible to simplify management and unlock volume-based pricing.
• Implement formal SLAs with measurable KPIs tied to contract performance and renewal decisions.
• Review utility contracts and energy usage to identify rate optimization and sustainability opportunities.
WHY OUTSOURCED PROCUREMENT MATTERS HERE
Facilities spend is death by a thousand cuts — dozens of vendors, hundreds of invoices, and no one looking at the total picture. A procurement partner brings structure to this chaos: consolidating the vendor base, benchmarking pricing, implementing competitive RFPs, and establishing the performance standards that keep vendors accountable.
Stillwater treats facilities procurement with the same rigor as any strategic category — because for most SMBs, it’s one of the largest indirect cost pools hiding in plain sight.