Integrated report 2019
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Risk management in the supply chain

Our supply chain includes thousands of suppliers and contractors with whom we cooperate on a daily basis. As a general contractor, we are responsible for the actions undertaken by the suppliers and contractors, supplied materials and provided working conditions. The main non-financial risks in the supply chain concern:

  • occupational health and safety,
  • conditions of employment,
  • environmental protection.

Every new contractor undergoes a preliminary assessment based on a questionnaire. The questionnaire consists of a supplier’s declaration on compliance with applicable regulations within the scope of labour law, environmental protection, etc. All significant suppliers and subcontractors (100%) are subject to preliminary assessment (qualification). In the case of ending cooperation with a given supplier, the final assessment is conducted, including such issues as quality, timeliness, actual technical capacity, OHS, environmental aspects and issues related to human rights, including employees’ rights. The assessment is conducted by contract managers, who must indicate any irregularities or events that may constitute a threat, actions inconsistent with the principles applicable to sub-suppliers in the Budimex Group. Results of questionnaires and final assessments are gathered in the Central Database. Internal auditors have access to these data and use them to assess sub-suppliers. Auditors have also access to suppliers’ bids, based on which the contract has been signed. When analysing the offer, contract history and the final assessment’s result, they may compare the elements to which the given supplier undertook at the offer level with an actual process and effect of cooperation. Regardless of the assessment, after the end of a given contract, we send a Satisfaction Survey to the investor. Next, we analyse the assessment’s results and conclusions during annual management reviews.

Based on the preliminary qualification and final assessments, we group the subcontractors as follows:

  • recommended (top ratings),
  • qualified (positive ratings, but slightly lower than in the case of recommended suppliers),
  • rejected (low ratings, but qualification is conditional, i.e. cooperation can be started if e.g. business partner introduces corrective actions),
  • disqualified (cooperation with a given partner is impossible, e.g. due to its financial situation or previous gross breach of rules on cooperation, e.g. in the area of ethics or environmental protection, i.e. bribery attempt or causing significant environmental damage).

We strive to supplement significant agreements with key contractors, even those having greater bargaining power, with an ethics-related appendix.

Results of preliminary (questionnaires) and final assessments at sub-suppliers in 2019 and the status as of 31 December 2019 for all Contractors are as follows:

Scope of verification 2016 2017 2018 2019 cumulatively (active)
Framework agreements
Material investment agreements defined as framework agreements 16 19 30 11 164
Material investment agreements containing ethical clauses. Total number of agreements with these clauses and % of material framework agreements 11 (69%) 11 (58%) 24 (80%) 8 (73%) 134


Percentage of all agreements with ethical clauses among all framework agreements 50% 72% 73% 73% 82%

Scope of verification

Questionnaires and final assessments 2016 2017 2018 2019
Number of questionnaires 1191 1019 1163 885
 Number of conducted final assessments 4583 3068 5329 1420
 Number of irregularities identified 184 153 361 93
Number of irregularities identified
Meeting deadlines 61 45 121 31
Product quality 24 21 47 10
Technical capacity 50 41 78 23
 Compliance with price terms 11 10 31 13
OHS 26 23 49 7
Environmental protection 12 12 35 9