How Do Snow Removal Contracts Work?

Posted: Oct 27, 2020

The Denver area is no stranger to harsh winters and heavy snow. For property managers, it’s important to have all your bases covered when it comes to winter risk management. That’s why commercial properties in the Denver area need professional snow removal services to have their back. When you’re looking for a snow removal contractor to take care of your property, it can seem a little overwhelming with all of the different offers you may receive. It’s important that you find a contractor who understands what your needs are and can meet all of your expectations.

We’ve put together this handy guide about how snow removal contracts work, and how you can make sure that you’re getting the best contract for your property:

How Snow Removal Contracts Work

When talking about snow removal contracts, it’s important to understand the difference between snow plowing and snow removal. Snow plowing is simply pushing all the snow and piling it up somewhere on the property. For properties that have a lot of space or a suitable area to keep all the plowed snow, this may be ideal as it can generally save some money. But for other properties, there may not be an appropriate place to safely store all the plowed snow, and so snow removal – when the contractor will haul the snow off of the property – may be necessary.

Before any contract can be drawn up, it’s important that the contractor visits the property to give it a thorough walk-through to develop a proper winter risk management plan. This will identify everything that the contractor needs to do when they service the property, and what equipment and how many crew members they will need.

Snow removal contracts can be broken down into four basic sections, including:

  1. Scope of Work

    This section will outline all of the services that the client and contractor agree to have performed, such as snow plowing or removal, de-icing, or sidewalk management. It’ll also mention what equipment and materials will be used to perform the work. It may also mention the size of the crew that will take care of your property. The contract will also set out the amount of snowfall, in inches, that must accumulate before the contractor heads out to your property (known as the “trigger”).

    It is important to work out a detailed scope of work so that all included services are clearly defined in writing, as well as any additional services that may be performed if authorized. A detailed “site map” is also helpful to outline exactly what work will be performed, snow piling locations, hours of operation, etc. Areas or items that will be excluded from service should also be noted so that extra work isn’t performed needlessly, which may incur extra costs for the client. An example of this could be having an outside common area cleared of snow and ice when the client doesn’t want to contractor to do so.

  2. Payment

    This section lays out the agreed-upon payment structure, payment amount, and when payments are due. It’s important to have clearly-defined pricing and payment terms for what services are included in the contract and any additional services that may be authorized. Look out for contracts that have attractive “base” pricing but have tricky wording that can lead to extra or unnecessary service calls and additional costs. We will break down the most common payment structures for snow removal contracts in the next section.

    The Better Business Bureau recommends that you “split the payments” and advises against working with any contractor who expects payment for the whole season up-front, or who only deals in cash. These may be signs of a scam.

  3. Performance

    This section will detail how the contractor will stay in contact with the client during service and when the client can expect service. The contractor should note what they define as a “snow event”, and give a detailed timeframe of when work will commence. Simply giving a vague “after the snow stops” could mean anything, even a full 24 hours later. Failing to clearly define a timeframe can leave the client open to very slow response times without being able to hold the contractor accountable.

    It’s also important to take the contractor’s size into account. For example, a contractor may have 20 clients’ properties to attend to, but only 6 crews to handle everything. This could lead to longer response times compared to a larger contractor with more crews on hand or a contractor that has a smaller number of clients.

  4. Insurance

    This section outlines all of the insurance details. It will mention that the contractor agrees to maintain commercial liability insurance throughout the contract’s duration. Snow removal contractors NEED to be insured so that the client is covered in case of an accident or incident. It is also important to find a contractor that has trained and certified staff. ASCA, SIMA, and ISO SN9001:2016 are the leading certifications for snow removal companies.

Other important information that the contract should have includes detailed “Terms & Conditions” that identify the duration of the contract (start & end dates) and the ability for changes to be made to the contract with written agreement from both parties. A “termination clause” (written notice) for both parties is also important. Without a proper termination clause, the client could still be stuck paying one contractor even if they decide to contract another company for service.

Contract Payment Models

There are several general payment models that snow removal companies offer to fit various needs and budgets:

  • Pay Per Push/Pay Per Visit

    A simple pay-as-you-go option, Pay Per Push charges for each visit to the property. For areas that do not get frequent snow, this can be an effective plan: you simply pay each time the snowplow shows up. However, for areas that get more frequent snow or larger snowfall amounts, Pay Per Push can be more expensive and more difficult to properly budget for, especially during storms or heavy snow when a snowplow may need to visit more than once per day.

  • Per Event (aka Per Snowstorm)

    This is another contract type that requires you to pay only when it snows. An “Event” refers to one snowstorm or other winter weather event. Typically Per Event contracts will cover one 24-hour period per “Event”. That means that if the snowplow needs to clear your property two or three times in one day, you’re still only paying for that one 24-hour period. On the other hand, if a snowstorm lasts two or three days, that means you will be charged for two or three separate “Events”. This can make it difficult to budget for larger snowstorms or heavy snowfall that may take days to clear.

  • Hourly (sometimes referred to as Time + Materials)

    This simple payment method can be hard to budget for if you receive regular snowfall. If there are only a few inches of snow on the ground, it may only take a crew an hour or so to plow a parking lot and be on their way. But for larger snow accumulation or storms, paying by the hour can be costly. Contractors will usually charge for any materials used as well, such as salt or de-icing products. For hourly contracts, experience matters.

  • Seasonal (aka Fixed Fee)

    A seasonal contract will cover you for the entire snow season with one flat rate. These contracts are usually set for 2-3 years, and the fixed fee makes it easy to budget for. These contracts are incredibly beneficial for clients who live in areas that regularly get snow or receive a lot of total snowfall throughout the winter. You simply pay one flat rate and you don’t have anything to worry about through the entire snow season. This works out well for the client during especially harsh winters, which can balance out with milder winters.

  • Full-Service (aka Year-Round)

    Some snow removal companies also offer services during the warmer months of the year. A Full-Service contract is sort of a Seasonal+ or Premium contract: in addition to all of the snow and ice coverage of a Seasonal contract, the Full-Service contract also provides groundskeeping and landscaping services for year-round coverage. This is a great contract for property managers that are looking for one company to handle all of their grounds management and snow removal needs with one contract and one fee.

    While we provide winter risk management and snow & ice removal services at SMS, all of our groundskeeping and landscaping services are run by our sister company, GroundMasters Landscape Services.

  • If you are looking for professional, dependable snow removal services for your Denver area commercial property, look no further than Snow Management Services. For over 25 years our winter risk assessments will make sure that your property receives the care it needs to stay clear and safe even during the roughest winters. To see what we can do for your property, give us a call at (303) 750-8867 or contact us online today.