In these challenging times it is imperative for a contractor to identify the risks in tendering for a project. If a project has a higher risk profile, then the contractor should apportion higher costs to this project in order to mitigate the risk.

In order to establish the risk profile, the following items need to be considered:

The client

• Have you experienced delayed payments or non-payment from this client before?
• If this is a new client, use your network to find out as much as you can about the client.
• If there are any questions around the financing of the project or the client’s ability to pay for work completed, ask the client to provide a credit bureau score.
• Are they willing to provide a payment guarantee in order to facilitate your waiver of builder’s lien?

The professional team

• Have you worked with the professionals before?
• If so, rate their performance on the following criteria: Ethics, impartiality, information flow, dispute resolution.
• Any new professional, ask your colleagues in the industry about their ability to deliver in all aspects? The above criteria should be used.
• Rate the quality of tender documents – this will give you a fair idea on the abilities of the professional team.

The project

• The geographic location of the site.
• The surrounding communities.
• Has the client employed a social facilitator and community liaison officer?
• Access to the site.
• The resources required to build the project.
• Local community participation in the site.
• Has an audit of the local skills been completed before the call for bids?
• Has the client engaged with the surrounding communities on the benefit of the project to the community?

Company resources

• The availability of your company resources for the project without having to purchase or hire additional resources.
• Staffing requirements.
• Financial resources that will be required during the project.
• Specialist subcontractors that will be required on the project and the number of these subcontractors that are willing to price their section of the works.
• Any imported materials?

Once you have gone through the above it will give you a very good idea on the viability of your company on submitting a bid on the project. Always remember the reason you are in business is to earn a profit and return on your capital employed.

Ross Stembridge | Building Services Manager