Managing Risk Due to the Potential Collapse or Liquidation of Suppliers Such as Carillion

Time: 16:15 - 16:35

Date: 09/10/2018

The collapse of Carillion earlier this year has had a devesting effect on the both clients and suppliers. Large public-sector contracts were still being awarded to Carillion even in December last year. It is estimated that on the day of the company going into liquidation Carilion was the main contractor on 57 projects valued at £5.7bn. Carillion’s supply chain comprised of 30,000 and they owed them £1.2bn in overdue payments.
Aims and objectives: The presentation content demonstrates how and why it went so wrong with Carillion but more importantly why clients kept on appointing them to very large projects and why the supply chain continued to work with Carillion even though the market knew there was financial problems with the business.
The second part to the presentation looks at how clients and supply chains members, especially SMEs, could collaboratively work together to avoid the risk of appointing and working with contractors that are likely to enter liquidation.
The presentation suggests ways to review the market and suggests ways to “deep dive” into contractor’s financial records prior to appointment. If a client is likely to appoint a contractor that maybe at risk of financial failure then suggestions are made on how to ensure contracts are “water tight” and compliant prior to signing, The presentation then moves onto ways to reduce risk even if clients and supplying chain are in long-term partnership contracts.
Finally, the presentation looks at what options the supply chain has with working collaboratively with large multi-national contractors to gain their trust and to ensue each other’s business understand their objectives and align them together.


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