Assessment of the Risk of the Project's Contractor Bankruptcy Using the Partial Least Squares Approach

The project owner or authorized entity (e.g. project manager) is at some point before the decision problem of the delegation execution professional specialist. Typically, on the services market, operates a number of contractors capable of carrying out the intended tasks, and each of them can provide different bid. Regardless of decision-maker's structure of the contracting preferences and number of evaluation criteria, it is necessary to verify whether the selected contractor is actually capable of completing contracted tasks. Very cheap offer may e.g. one be submitted by the bidder threatened with bankruptcy, fighting for survival. Described in this paper, method for assessing the reliability of contractors based on Partial Least Squares approach is fast and effective method to classify them in terms of risk of bankruptcy. Proposed operating model has been validated on publicly available financial data of construction companies listed on the Polish Stock Exchange.