What should I ask about an industrial cleaning company’s plant shutdown contracts?
Ask for each shutdown contract, its scope, how it was won, who at the plant signs off and when it ends. Then ask whether the plant can cancel or rebid, whether the contract allows a change of ownership, and how crews and equipment are scheduled when shutdowns overlap.
Shutdown work is concentrated and high-stakes, so the contracts matter. Request copies of current and recent agreements, plus the quotes and bids behind them. Read for scope, rates, payment timing, and any penalty terms for delays or damage. Ask your lawyer to read the clauses about assignment and change of control, because some customers can end a contract when the owner changes.
Then ask how the work was won. Was it tendered, awarded to an approved vendor list, or passed along by relationship? Find out when each shutdown happens, how often it repeats and who at the plant decides. Ask the seller how the plant rates the company’s performance, and look for written feedback or safety scorecards.
Finally, test capacity. When shutdowns cluster, how does the company staff and equip them? Does it hire temporary crews, and how are they vetted? Ask about unpaid invoices on past shutdowns, because plants can be slow to settle. Your accountant can show how revenue and cash arrive across the year, which matters when payment follows the work by weeks. Ask also which shutdown jobs earned the best and worst returns last time, and why, so you learn how well the company prices its own work.
Key takeaways
- Read the contract for scope, payment timing and what happens when the owner changes.
- Learn how each plant awards work and who decides.
- Ask how crews and equipment cope when shutdowns overlap.
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Sources
This answer is checked against primary sources. Links were last confirmed on the dates shown.
- 01Business Development Bank of CanadaGovernmentHow to conduct due diligence when buying a business
- 02Business Development Bank of CanadaGovernmentWhat are the steps to buying a business?
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