Understanding the Risk Evaluation Score

The risk evaluation score is generated in TradeTapp as part of the financial calculations. After financial input is completed, you will see the score under the company's name in their profile and in the Risk Evaluation column in the Invitations dashboard.

Note: For North American customers who are inviting international vendors, there is no benchmarking available international vendors outside of North America so no risk evaluation score can be calculated. These vendors will be labeled "No Financials".



In this article, you'll find: 

• What is the risk evaluation score based on?
• How is the risk evaluation score calculated?
• Example Risk Evaluation Score Calculation
   

What is the risk evaluation score based on?

The risk evaluation score is based on the vendor's current Reported Total Backlog compared to the recommended Aggregate Total Capacity and the financial benchmarking percentile. 

These values are found in the Summary tab of a vendor's profile in the Benchmarking Results and Key Metrics sections.

• Reported Total Backlog: Provided by the vendor in their questionnaire.
• Aggregate Total Capacity: See How are Single Project Capacity and Aggregate Total Capacity calculated in TradeTapp? (General contractors)
• Benchmarking Results: See Where do the benchmarking results come from?

Note: If any of these inputs are unavailable, the score cannot be calculated and the No Financials label will appear instead. This can occur if the vendor is outside North America or has an invalid Tax ID. Learn more about when the risk evaluation score can't be calculated.
 

How is the risk evaluation score calculated?

If the Reported Total Backlog does not exceed the Aggregate Total Capacity:

• High Risk: 29% or lower benchmarking percentile
• Moderate Risk: 30%-50% benchmarking percentile
• Low Risk: 51% or higher benchmarking percentile

If the Reported Total Backlog is greater than the Aggregate Total Capacity:

• Severe Risk: 29% or lower benchmarking percentile
• High Risk: 30%-49% benchmarking percentile
• Moderate Risk: 50%-69% or higher benchmarking percentile
• Low Risk: 70% or higher benchmarking percentile

If the Reported Total Backlog is 2x (or more) greater than the Aggregate Total Capacity:

• Severe Risk: 49% or lower benchmarking percentile
• High Risk: 50% or higher benchmarking percentile

When can a score not be calculated? 

• Unsupported country or region — Benchmarking is currently only supported for vendors based in the United States or Canada. Vendors in other countries will always show the No Financials icon.
• Invalid or missing Tax ID — The vendor's Tax ID must be a valid US Federal Employer Identification Number (FEIN) or Canadian Business Number (BN). If the Tax ID type is missing or doesn't match a supported format, benchmarking cannot run.
• Incomplete financial submission — The vendor has not yet submitted financials, or the submitted financials are incomplete.

Example Risk Evaluation Score Calculation

For example, for the vendor in the screenshots show on this page: 

• Reported Total Backlog is $33,864,551
• Aggregate Total Capacity is $289,363,945

The Reported Total Backlog does not exceed the Aggregate Total Capacity. Thee benchmarking percentile is 53% so using the guidance above, the vendor receives a Low Risk score.

Want to learn more about risk assessment in TradeTapp? Download the TradeTapp Risk Assessment Overview.