Monitoring supplier finances

During the agreement period of the joint procurement contracts, Hansel will monitor specific financial and legal indicators of the suppliers and compliance with requirements laid down in the Act on the Contractor’s Obligations and Liability when Work is Contracted Out in the case of procurement projects that are included in the scope of the said Act and that Hansel has decided to monitor. The customers are informed of this on Hansel’s service website.

Hansel purchases oversight services from the market. The continuously monitored indicators are:

• Change of company name
• Change in company status
• Change of company form
• Notice of rectification regarding removal of a non-payment entry because payment has been made
• Notice of a new non-payment entry or the removal of an old entry
• Addition of a non-payment entry
• Change in prepayment register
• Loss of share capital
• Change in risk category
• Corporate reorganisation, such as a merger or acquisition

The monitoring service has functioned well, and Hansel has been able to anticipate suppliers’ financial problems and other issues. Currently, the monitoring service includes 371 companies, including all of Hansel’s Finnish contract suppliers. If the monitoring service issues an alert on deteriorated risk rating, for example, the category manager will contact the supplier to determine the reason for the change. A decision on the necessary actions will be made together.

Hansel has determined the joint procurement arrangements included in the scope of the Act on the Contractor’s Obligations and Liability when Work is Contracted Out for which Hansel will perform a review as required by law. The actual verification process is partly bought as a service from Tilaajavastuu.fi, while Hansel performs some of the checks itself. In 2018, monitoring was performed on 16 framework agreements and 256 companies, of which 72 were framework agreement suppliers and the remainder were subcontractors for these suppliers.