Qualifying Small Contractors – How Much Due Diligence?

Hiring small contractors

Qualifying Small Contractors – How Much Due Diligence?

There is the ever-challenging issue of the best methods to qualify the small contractors and the mom and pops or one-man entity contractors. Many hiring contractors may choose to exempt or relieve these small contractors from internal qualification processes or third party systems. Big or small, all contractors can all impose risk on the hiring organization. The level of risk the contractor could cause or be exposed to is more important than the size of the contractor.

Basic due diligence requires that all contractors be assessed to determine the level of risk for the type of work performed and the control measures that will be implemented. Even small, low-risk contractors require basic due diligence be carried out. The issue arises though – how much due diligence is required? What information is necessary to evaluate the small contractor? What documentation is needed? What types of acceptances can be made, if any?

The key is to have a clear and standardized process in place. Here are some tips for managing small contractors:

Tips for the Hiring Contractors

  • Ensure you have an effective contractor management process
  • Collect the high-value data and certifications before the contractor starts work
  • Identify risk levels and complete a risk assessment. Address gaps where required
  • Ensure scope of work is clearly defined
  • Ensure there is a sufficient flow of information
  • Be transparent about requirements and evaluations
  • Provide feedback on requirements and deficiencies

Tips for the Small Contractors

  • Understand the hiring contractors’ requirements
  • Complete the data and certificate requirements or data submission
  • Define an appropriate safety plan to address the work and possible risks perceived
  • Engage in open communication
  • Ask questions
  • Participate in training opportunities

From entry-level due diligence to enterprise-level configurable contractor management functionality, CQN has scalable, fit-for-purpose solutions for all purchasing organizations. Contact us today!

Ronnie Tallman