Do You Know Your Contractor?
Your vendors are the key to the sucess of your project. To ensure the maximum chance of suceeding you must know who you are dealing with.
First find out how the vendor was asked to bid on the project – are they connected to anyone in your company or did they resspond to a public advertisement for bids? Next do background checks to find out who they really are. Include public records such as Kroll’s, Hoover’s or Dunn and Bradstreet – keeping in mind that information reported to Dunn and Bradstreet is “self-reported” and should therefore be weighted accordingly. Find out a vendor’s financial stability, you want to ensure that a vendor will be able to see a project through to fruition.
Many vendors, especially construction companies, go through name changes frequently or change of ownership. When doing due diligence make sure that you are also obtaining information on key executives, as well as on the company. Red flags would be excessive credit, past or pending litigation, company that have been in existence for only a short period of time, and history of bankruptcy among owners.
Check references: ask prior clients what their level of satisfaction was and if they have done business with your company before, verify the work that they had done met with the expectations of the company. Keep in mind that when asking a client for references they will provide references for those who have had a positive experience with them.
Know your contractor! Do you know the following:
- How long have they been in business?
- How many other jobs are they currently involved in?
- Do references believe that they can provide a quality service or material?
- Have they worked with you before?
- Were they successful in the work they did for you?
- What does Dunn and Bradstreet, Hoover’s, or Kroll say?
- Are they subject to any pending litigation?
- When was the last time they were asked to bid for your services? How did their prices vary after the last bid?
- Are they related to anyone in your company!?