Due Diligence

Question 1

What is due diligence?

Answer 1

Due diligence is the gathering of information to verify the credibility of something usually a company

Question 2

What limitations are there on due diligence?

Answer 2

1. Time
2. Lack of information
3. Miss information
4. Out of date sources

Question 3

How do you do due diligence on a company?

Answer 3

1. Credit checks / management accounts
2. Requesting copies of insurances
3. Accreditations (Conline etc)
4. References
5. Interviews
6. Interrogating programmes
7. Reviewing resourcing

Question 4

Give an example of when you advised the client based on due diligence you had done.

Answer 4

On my Eastbrook studios project I advised the client on the painting and decorating package. 2 of the tenders were not suitable because 1 didn’t have the resources for a scheme this size and the other had poor internal performance scores

Question 5

Why is due diligence important?

Answer 5

To make sure that the company has the necessary skills and resources to deliver

Question 6

What are the consequences of not doing due diligence on a client?

Answer 6

Could find out they don’t have suitable funding which could lead to late payments. Could find out they don’t have any construction experience.

Question 7

How does risk management relate to due diligence

Answer 7

Due diligence helps identify risks and their likelihood. Eg frequent credit checks help inform on a companies financial position. Any claims or court cases that they might be involved in.

Question 8

Give me an example of due diligence you do during construction. Verifying the qualifications and expertise of operatives

Answer 8

Credit checks. Also during Eastbrook following the court case between ISG and FK over 1.8m dispute which FK lost

Question 9

What is the difference between legal due diligence and technical due diligence?

Answer 9

Legal due diligence refers to the legal aspects eg ownership (title deeds) planning permissions, legal disputes and contracts. Technical refers to the ability or condition of something.

Question 10

Give some examples of technical due diligence you might do post contract with a subcontractor

Answer 10

1. Reviewing drawings / design info
2. Credit checks
3. Reviewing QA compliance
4. Programme and resourcing reviews