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:
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.
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)|
|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%|
|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|
|Compliance with price terms||11||10||31||13|