November 6, 2020: We have updated the questionnaire to reflect the changing realities of the construction industry and will continue to do so regularly. For information on the most recent update, scroll to the bottom of this post.
As the founder of BuildingConnected, I partnered with subcontractor prequalification solution TradeTapp to help the industry better manage subcontractor risk throughout the procurement and construction process. I never thought we would need to manage risk through a pandemic, but that is the world we’re now navigating.
Now that both BuildingConnected and TradeTapp have become a part of Autodesk Construction Cloud™, we have even more resources at our disposal to help you navigate the current environment. After speaking with many internal and external leaders in safety, insurance, and risk management, our team at Autodesk has developed a supplemental questionnaire for you to use during your subcontractor qualification process.
Why Use a Supplemental Questionnaire?
Every business in the construction industry has been in some way affected by COVID-19, and your trade partners are no different.
That’s why it’s crucial to keep the lines of communication open, even if there’s some time between now and their qualification renewal. Use all the questions we’ve included in the supplemental questionnaire, some of them, or none of them—the important part is that you start a conversation with trade partners to determine how they’ve been affected.
Then, use that information to identify the mitigation steps you’ll need to take to eliminate the most risk and effectively work with trade partners in 2020.
Categories of Questions to Consider and Why
We broke the supplemental questionnaire into three categories: People & Projects, Liquidity, and Supply Chain.
1. People & Projects
This category is intended to evaluate how a trade partner’s team has been impacted by the crisis (e.g. if they’ve been forced to lay off or furlough a portion of their staff).
For instance, we’ve included questions like:
- Has your company laid off or furloughed employees as a result of COVID-19? If yes, please provide what percentage of overall staff and any detail on how you plan to build staff/craft labor resources back up when projects return.
- Is there any reason your full staff may not be able to come back to work once safe conditions have been met? If yes, please provide detail.
This category also considers the effects of project halts due to shelter-in-place orders. For your trade partners, stalled projects often mean stalled cash flow, and any project shutdowns could easily impact the state of their business.
Projects suddenly starting back up can raise a red flag, as well. Consider: if restrictions ease and 50% of a city’s halted projects all start back at the same time, how will that affect a trade partner’s ability to perform work? Will they be overwhelmed and understaffed, unable to fulfill previous commitments?
To tackle these issues, we included questions like:
- Did more than 50% of your current projects shut down as result of COVID-19? If yes, what percentage of your total revenue? Please provide any additional details about re-start scenarios that may put strain on your business.
This category evaluates a trade partner’s current financial position. Even if your trade partners are coming up for renewal, their most recent financial statements may not be available. In these situations, it’s important to ask directly about their credit and debt—especially considering the potential impact of funds received through CARES Act or the Federal Payroll Protection Plan.
To address this, we included questions like:
- Did your company qualify and secure access to a loan via CARES Act or the Federal Payroll Protection Plan? If yes, what impact has this had for your financial position?
- Of your current account receivables, are any aged over 120 days? If yes, please provide any details about current status of the project including Owner/Developer and GC involved.
3. Supply Chain
Based on a trade partner’s favored suppliers and needed materials, their supply chain may have been affected in different ways by the current crisis.
To learn more about how they’ve been impacted, we included questions like:
- Do you anticipate any large cost escalation risks in your supply chain? If yes, provide detail of the steps you are taking to protect against their impact.
- Are you expecting any significant delays on material shipments? If yes, please provide details.
November 6, 2020
- We now recommend that subcontractors that do not greatly surpass qualification criteria be qualified again in six months’ time.
- The“Supply Chain” section of the questionnaire has been updated. By now, all trade partners should understand variances in their supply chain and have plans in place to address them.
- We’ve split the“People & Projects” section into two sections and added questions to each of them:
- – “People” is now focused on health and safety training and productivity.
- – “Projects” has shifted from asking about the most recent shutdown, instead asking what plans are in place if a future shutdown occurs.
- We’ve added questions to the “Liquidity” section:
- – With cash flow issues already starting to pop up, we recommend directly asking how much runway a trade partner believes they have.
- – With payment delays causing bigger issues, we are also looking into how each trade partner is dealing with disruptions in their cash flow.
Download the Supplementary Questionnaire
If you’re a TradeTapp customer and you’d like us to add this questionnaire directly to your account, please click here to answer two quick questions. Your account manager will follow up after you complete them. As always, there is no charge for this.
My team and I are always looking to better support our customers. If you have ideas about better managing risk or anything else, feel free to share them. We would love to hear from you.