Projects - Risk Management
Project Sydney NSW
Subcontractor Financial Review
Summary
- Local Council
- Accommodation and conference centre
- Value – $45m
- Review structure and financial accounts
Issues
- Local Council was funding a significant accommodation and conference centre in Sydney and requested a review of the subcontractor’s financial position and structure.
- The income of the subcontractor was affected by Covid-19.
- The subcontractor was self-insured.
- Working capital was low for a company of its size.
- 40% of creditors were over 90 days old.
Solution
- Recommend that the Council insist on minimum level of working capital as well as a guarantee from the Head Entity.
- Subcontractor to improve creditor repayments.
Outcome
- Local Council decided to appoint the subcontractor to complete the landscaping works.