Tender Review Due Diligence
Tender Review Due Diligence
To complete a financial health review, we will need Tenderers to submit documentation/statements that
allow us to assess:
Credit rating
Beneficial ownership and related corporate entities
GST status
Profitability
Revenue
Cash flow
Liquidity
Borrowings
Including any associated trajectories or forecasts and key financial ratios
A financial due diligence assessment report should show:
Contract value as a percentage of the Tenderer’s annual revenue
Former directors (or current staff) that have been disqualified.
Winding up orders against the Tenderer (or a related entity) or notice that it is under external
administration.
Insurances
Defect liabilities currently affecting the Tenderer.
Legal
Most legal issues that may relate to delivery of the Project will be covered under the Contract, however a
review of prior/current actions is pertinent. To complete a basic assessment we would, at a minimum,
need Tenderers to submit documentation and carry out our own investigations, that allow us to assess:
Relevant judgments or legal action involving the Tenderer.
Relevant regulatory findings
Evidence of compliance to modern slavery practices - we have a responsibility to take reasonable
steps to ensure our purchasing decisions do not inadvertently support illegal or unethical business
practices.
Any Evidence of underpayment of staff and subcontractors, unreasonable rates and false claims
about the use and support of small or local businesses, Indigenous or disability workforce
suppliers.
Subcontracting
The project will require the Tenderer to rely heavily on subcontracting – which is a large potential risk.
Among other things, it’s important for us to identify the key subcontractors and carry out further due
diligence checks. Alternatively, a subcontracting agreement could be used to circumvent the due
diligence process.
To enable further checks, Tenderer should be asked to supply information about subcontractors they
intend to engage, including:
o Details about each subcontracting entity, including key personnel, history and
capabilities.
o Evidence of compliance with licensing requirements
o Proof of public liability insurance and workers compensation insurance
o Details concerning how subcontractors would be appointed and monitored.
o Evidence that the tenderer has systems and contractual arrangements in place to
monitor subcontractors.
If the tenderer and subcontractor are related entities, or the subcontractor is related to a director or
senior executive of the tenderer, this will increase related party risks such as non-disclosure,
misstatements and possibly fraud.