THE FINFORENSIC GROUP
A Financial Investigation Company
              


                      FINFORENSIC:  The Fact Finders & Fraud Fighters in Government Procurement


I.  What is a Prequalified/Preferred Contractor?  (COMING IN SPRING 2018!)       

  • In order to be a Prequalified/Preferred Contractor, a Contractor and any of its subcontractors used during the past two  years must meet certain legal and regulatory requirements as well as a certain level of performance for public bidding.  This includes having an effective Compliance Program that has been evaluated as part of the "Initial Compliance Evaluation" conducted by our firm or upon our firm's re-evaluation after the Initial Compliance Evaluation.  These contractors who have been thouroughly vetted and have met our rigorous high professonal standards and minimum criteria (see below) will be awarded "Prequalified/Preferred Contractor" status with our firm as well as being issued a Certificate of Compliance and Performance.

  • A Certificate of Compliance and Performance is issued to Tier I and Tier II level Contractors (see below) for recognition of achieving  a high CPR Rating which exemplifies professionalism, ethics and integrity as well as transparency and distinguishing themselves among other contractors.

II.   What is an Initial Compliance Evaluation?

  • An Initial Compliance Evaluation (ICE) is a thorough examination of the government contractor's books and records as well as a review of information on file with various government agencies to ensure its accuracy for public bidding purposes and compliance with applicable laws and regulations relating to public bidding in the State of New Jersey. ICE also includes an evaluation of the effectiveness of the Contractor's Compliance Program. 

  • As part of ICE, we also evaluate the Contractor's performance record on public projects over the prior two years based on key factors, including but not limited to, job completion, accidents, work related injuries, contractor default, wage violations or other similar violations or performance issues.

  • A grading/point system is utilized to rate the Compliance and Performance criteria and a Compliance, Performance & R isk Assessment Rating (CPR) is then determined.

III.  What is a CPR Rating?

  • The CPR Rating is a thorough and comprehensive rating system serving government contractors, surety companies and government agencies in the State of New Jersey.  The primary focus is evaluation of a contractor and any of its subcontractor's "compliance" to laws and regulations and other key factors relating to the government procurement process as well as the "performance" by a contractor and its subcontractor's on public projects.

  • The purpose of the CPR Rating is to better assure government agencies and surety companies that, as of the date of a public bid, Contractors and their associated subcontractors under consideration for award of a public works project possess the qualifications necessary to successfully complete public projects on time and in compliance with bid specifications and contract requirements in accordance with applicable laws and regulations with very limited risks as to safety, work related injuries or accidents.

  • The probability of a contractor's timely completion of projects and associated risks is determined through historical evaluation of prior performance, identifying  any terminations of prior projects, contractor default, wage violations, other labor law violations or any other litigation related to the Contractor and/or its projects. These factors may also reveal the Contractor's tendency or its falure to adhere to various laws, illustrating the contractor's ethics, integrity, trustworthiness, professionalism and reliability.

  • The assessment may also consider current public projects of the Contractor that may negatively impact the timlieness and performance of the Contractor on additional public projects that may be awarded to the Contractor during the same time period of current projects.

  • The "Risk Assessment" is represented in a (2) letter rating designation (Compliance + Performance) ranging from A to D.  The first letter applies to the Compliance rating and the second letter represents the Performance rating. The combination of these ratings  (Ex:"AA", "AB", "AC", "BA, "BB", "BC", etc.) result in the assignment of the Contractor  the appropriate Tier and Risk Category.   

  • NOTE: The subcontractors used by a contractor are incorporated in the Performance part of the CPR Rating calculation. It should also be noted there is an inherent and incremental increase in risk for the number of subcontractors a contractor utilizes in connection with a public bid which may furher possibly negatively impact a Contractor's CPR Rating. Hence, "KYS" - KNOW YOUR SUBCONTRACTORS!

  • The Contractor's compliance and performance are periodically reviewed and certain "Delta Factors" may result in changes to the Contractor's CPR Rating.


IV.  What are Delta Factors?

  • Delta is the fourth letter in the Greek alphabet (i.e. uppercase letter "Δ"). Delta's most common meaning is that of difference or change in something. The shape of the uppercase Delta is in the form of a triangle. Like a triangle, a Delta also has three sides each representing the three parties to a public bid: government agency (obligee or owner), public contractor (principal or obligor) and surety company (guarantor). Similarly, there are three components to the CPR Rating: Compliance, P erformance & R isk Assessment (CPR).
  • Contractors/subcontractors are rated on a list of broad factors including critical factors regarding key areas of Compliance and Performance which substantially make up a contractors risk assessment. "Delta Factors" are changes in risk assessment factors that result in a change to the Contractor's CPR Rating.

  • A change in the CPR Rating could potentially result in an  increase or decrease in insurance costs and other expenses involving credit and may either negatively or positively impact a contractor from being awarded a public bid, as well as impact its ability to obtain surety bonds required for a public bid.


V.  How is the CPR Rating calculated?

A grading system is used to determine the Compliance portion and a point system is used to determine the Performance portion of the rating. The points of each performance factor are weighted based on the relevance and gravity of a given factor. The combination of the two ratings result in the CPR Rating.

  • Compliance:  Rates the contractor's Compliance Program as A, B, C or D. The determination of an "Effective Compliance Program" is made by evaluating the seven essential elements required for an effective compliance program, which are:  Code of Conduct/Policies and Procedures, Compliance Officer, Education and Training, Monitoring and Auditing, Reporting and Investigating Enforcement and Discipline, Response and Prevention.  In addition, other key factors as listed below are also evaluated. Based on the evaluation and combination of each factor, the Compliance Rating is derived.

  • Performance: Rates the contractor's Performance as A, B, C or D based on the overall points scored on performance factors using a weighting based on the relevance and gravity of a given factor. The factors that pose potential risk to a government agency and surety company and other parties including, but not limited to, are: delays in job completions, prevailing wage or other labor violations, evidence of possible violations involving Certified Payrolls, other violations of law including, among other things, violations of the False Claims Act (FCA), 31 U.S.C. §§ 3729-3733 and New Jersey False Claims Act (NJFCA), N.J.S.A. 2A:32C-1-18, other civil & criminal litigation, legal action by law enforcement or regulatory authorities, work related injuries/accidents, bond claims, being declared in default by a government agency and termination of contracts due to violations of the Prevaling Wage Act. Feedback from goverment agencies as to a contractor's performance are also taken into consideration. 
    • In the event a contractor utilizes one or more subcontractors, the subcontractors are included in the contractor's Peformance rating and the letter designation will be in lowercase to denote and signify that a contractor uses one or more subcontractors.
    • Using a proprietary algorithm we assign a letter grade of A, B, C or D by thoroughly examining and evaluating a Contractor's and any of its Subcontractor's performance on various projects over the past two years using (10) ten performance factors that measure and reflect a Contractor's ability and capacity to successfully complete public projects with the utmost professionalism, integrity and ethics ("PIE") including. but not limited to:
      • ​Percentage of public projects completed without delays
      • Certified Payroll Assessment and red flag indicators
      • Accidents/Work Related Injuries etc...

  • Risk Assessmen t: The overall "Risk Assessment" is computed and represented by a (2) letter designation (Compliance + Performance) and a contractor is then assigned into the appropriate Contractor Tier Level and Risk Category, provided they all meet the requirements listed below.

VI.  Contractor Tier Levels & Risk Categories

     The combinationof the Compliance and Performance Rating plus the existence of key compliance factors categorizes the Contractor into the
     following tier levels:

  • Tier I: Prequalified/Preferred PLUS Contractor - VERY LOW RISK  (***FIN-VERIFIED*** )
  • Contractor has met or exceeded our rigorous high professional standards and has a superior Perfomance Rating where both the Compliance and Performance ratings resulted in an A grading (Ex: "AA" or "Aa"). The Contractor is assigned to this Tier Level when the following criteria are met:
    • Effective Compliance Program as defined above
    • Safety Management/Training Program 
    • OSHA 30-Hour Construction Training Certificate by at least one Supervisor, Foreman, Manager or other high level representative/owner
    • OSHA 10-Hour Construction Training Certificate by at least two other employees
    • E-Verify on all employees subject to Prevailing Wage Act (PWA)
    • InstantCard - Credential Verification Service (CVS) for all employees subject to Prevailing Wage Act
    • TSheets.com - cloud base time clock installed at government site locations where all employees subject to Prevailing Wage must electronically sign in and out with "TSheets Kiosk" via a Tablet or IPAD with FINFORENSIC serving as joint administrator with a designated government official and an assigned contractor representative. The government agency and FINFORENSIC through TSheets.com will collect, process and retain biometric information as verification and identification of employees for security purposes and will also simultaneously help combat and deter payroll fraud
    • Cyber Security Program
    • "A" Performance Rating including any subcontractors
    • Certificate of Compliance & Performance issued to a Tier I level Contractor or Subcontractor by the Public Contractors Association of New Jersey
  • Tier II: Prequalified/Preferred Contractor LOW RISK   (***FIN-VERIFIED***)
  • Contractor has met our rigorous high professional standards and has a very high Performance Rating where the Compliance and Performance ratings are a combination A & B or both B (Ex: "AB", "BA", "BB" or "Ab", "Ba", "Bb").  The Contractor is assigned to this Tier Level when the following criteria are met:
    • ​Effective Compliance Program  as defined above
    • Safety Management/Training Program
    • OSHA 30-Hour Construction Training Certificate by at least one Supervisor, Foreman, Manager or other high level representative/owner
    • OSHA 10-Hour Construction Training Certificate by one other employee
    • E-Verify on all employees subject to Prevailing Wage Act
    • InstantCard - Credential Verification Service (CVS) for all employees subject to Prevailing Wage Act (PWA)
    • TSheets.com - cloud base time clock installed at government site locations where all employees subject to Prevailing Wage must electronically sign in and out with "TSheets Kiosk" via a Tablet or IPAD with FINFORENSIC serving as joint administrator with a designated government official and an assigned contractor representative. The government agency and FINFORENSIC through TSheets.com will collect, process and retain biometric information as verification and identification of employees for security purposes and will also simultaneously help combat and deter payroll fraud
    • "B" Performance Rating including any subcontractors or an "A" Performance Rating with a "B" Compliance Rating
    • Certificate of Compliance & Performance issued to a Tier II Contractor or Subcontractor by the Public Contractors Association of New Jersey
  • Tier III: Prequalified Contractor - MEDIUM to HIGH RISK
  • Contractor may have met some of our requirements and rigorous high professional standards in one of the two Risk Assessment criteria (Compliance or Performance) but does not have a very high rating in both criteria. In this Tier Level, the Compliance and Performance Ratings are the following combinations of A, B & C (Ex.: "AC", "BC", "CC", "CA, "CB" or "Ac", "Bc", "Cc", "Ca", "Cb,").  The Contractor is assigned to this Tier Level when the following criteria are met:
    • Effective Compliance Program or in the process of developing and implementing one which Contractor agrees to fully implement within a time frame of 6-9 months with FINFORENSIC retained as a Consultant during the development phase to assist in building an effective compliance program and monitor the development at various stages to ensure timely completion or otherwise, be downgraded to a Tier IV level Contractor or
    • a Contractor may select another firm to assist in developing a Compliance Program which Contractor agrees to fully implement within a time frame of 6 months subject to FINFORENSIC and its affiliates to periodically evaluate and reassess the Compliance Program implemented as to its effectiveness and modify where necessary with the first audit to be conducted within 3 months after implemention or otherwise, be downgraded to a Tier IV level Contractor
    • Safety Management/Training Program
    • OSHA 30-Hour or OSHA 10-Hour Construction Training Certificate by at least one employee
    • E-Verify on all employees subject to Prevailing Wage Act
    • TSheets.com - cloud base time clock installed at government site locations where all employees subject to Prevailing Wage must electronically sign in and out with "TSheets Kiosk" via a Tablet or IPAD with FINFORENSIC serving as joint administrator with a designated government official and an assigned contractor representative. The government agency and FINFORENSIC through TSheets.com will collect, process and retain biometric information as verification and identification of employees for security purposes and will also simultaneously help combat and deter payroll fraud
    • "C" Performance Rating including any subcontractors or a higher Performance Rating but with "C" Compliance Rating
    • Certificate of Compliance and Performance is not issued for Tier III level Contractors
  • Tier IV: Emerging Contractor HIGH RISK 
  • Contractor does not meet our requirements nor our high professional standards resulting in a D rating in either the Compliance or Performance Rating which is represented in combinations of A, B, C & D (Ex: "AD", "BD", "CD", "DD", "DA", "DB", "DC").  The Contractor is assigned to this Tier Level when the following criteria are met:
    • Contractor is in the process of improving, maintaining and implementing minimum pre-qualification requirements with guidance and professional service from our firm or similar firm to be completed within 3-6 months and its rating may be upgraded provided it meets certain minimum criteria
    • Contractor Is committed to remediate issues and improve policies, programs, procedures and/or performance where needed with proper oversight by our firm 
    • "D" Performance Rating or higher Performance Rating but with a "D" Compliance Rating
    • Certificate of Compliance and Performance not issued for Tier IV level Contractors
    • NOTE: Subcontractors are not included in the Performance rating of an Emerging Contractor, therefore, an UPPERCASE lettering will always appear in the Performance rating of a contractor 
  • Tier V: Unverified Contractor - NOT RATED  VERY HIGH RISK
  • Contractor has declined or not yet come forward to be rated.
  • Contractor has obtained a Public Works Contractor Registration Certificate from the New Jersey Department of Labor and Workforce Development to either bid on or obtain public work but has not had an "Initial Compliance Evaluation" performed and other testing conducted by our firm as part of our thorough evaluation and vetting procees to compute an overall "Risk Assessment" and be issued a two letter designation rating in Compliance and Performance and subsequently be assigned into an appropriate Tier level and Risk Category. (Required Information not available - Ex: NR - "NOT RATED")

VII.  What are the prerequisites for a contractor or subcontractor to obtain a Prequalified/Preferred Contractor status with our firm in the State of New Jersey and receive a Certificate of Compliance and Peformance?

  • An "Initial Compliance Evaluation" must also be conducted by our firm for both the contractors and their respective subcontractors utilized during the last two (2) preceding years.

  • A Contractor and Subcontractor(s) must have 2 years experience engaging in actual public bidding or performing public work in the State of New Jersey.

  • A Contractor or Subcontractor must be certain minimum criteria as either Tier I or Tier II level Contractor

  • A Contractor must be a member of the Public Contractors Association of New Jersey pcaofnj.com (COMING IN SPRING 2018).


VIII.  What are the specific requirements for a contractor or subcontractor to obtain a Prequalified/Preferred Contractor status including the minimum criteria required for either a "Tier I" or "Tier II" level contractor or subcontractor with our firm in the State of New Jersey?

  • No penalties issued or other legal action taken during the last two (2) preceeding years by the New Jersey Department of Labor and Workforce Development, U.S. Department of Labor or federal and state law enforcement authorities and regulators including, but not limited to, the U.S. Attorneys Office, Department of Justice (DOJ) or the NJ Attorney General's Office for violations of prevailing wage, OSHA violations and other similar labor law violations and related violations of law and regulations relating to public work by a contractor or its subcontractors. This requirement shall be independently verified by our firm.

  • No claims made against the contractor's bond or surety company during the last two (2) preceeding years via certification from the surety company of the public contractor.

  • The contractor has not defaulted on any public contract during the last two (2) preceeding years nor has been terminated from any public contract via a certification from the contractor's surety company during the last two preceding years.

  • The contractor or any of its subcontractors have not had any work related injuries or accidents in connection with any public work projects during the last two (2) preceeding years in the state of New Jersey via certifcation from the workers compensation and property/liability insurance carriers.

  • Must provide copy of the most recent Review or Audit Financial Statements from the Contractor's Certified Public Accountant (CPA) to evaluate financials and verify certain information including, but not limited, disclosure of any subcontractor liabilities and other key footnote disclosures of a contractor.

  • Has implemented a Compliance Program (CP) designed for public bidding in the State of New Jersey covering the seven (7) essential elements of a Compliance Program including:
    • Code of Conduct/Policies and Procedures
    • Compliance Officer
    • Education and Training
    • Monitoring and Auditing
    • Reporting and Investigating
    • Enforcement and Discipline
    • Response and Prevention

  • The CPR Rating (Both Compliance & Performance) must be at a certain grade level and meet other requirements. Otherwise, a contractor's CPR Rating may be downgraded to the next lowest Tier level due to failure to meet certain grade levels and other requirements (See various Tier levels, Ratings and Risk Categories above).


  • WARNING: A contractor must certify to the above which shall also be independently verified to obtain Prequalified/Preferred Contractor status with our firm and subsequently placed on our list of Prequalified/Preferred Contractors as well as receiving a CPR RATING from FINFORENSIC which shall be made available to the government agencies and surety companies.


IX. 
What other requirements must be met by a public contractor to continue to maintain a Prequalified/Preferred Contractor status with our firm?

  • A contractor must also have an "Independent Compliance Examination" periodically performed every (2) two years after an "Initial Compliance Evaluation" is conducted by our affiliated firm.  Our affiliated firm Regulatory Compliance Intelligence, LLC www.regulatorycomplianceintel.com provides various professional services including fraud examinations, audits and investigations and other due diligence in order to maintain its status as a Prequalified/Preferred Contractor in the State of New Jersey.

  • A compliance program implemented soley by a contractor or with the assistance of another firm must be evaluated 3 months after being implemented to determine its effectiveness.


X.  What are the benefits to a contractor or subcontractor of obtaining and maintaining a Prequalified/Preferred Contractor status with our firm?

  • Provide contractors with a means of enhancing their qualifications and reputation by receiving recognition for high standards of compliance and performance.

  • A contractor has met our rigourous high professional standards of compliance as to various laws and applicable regulations pertaining to government contractors and subcontractors in the public bidding arena in the State of New Jersey.

  • A contractor will receive a "Certificate of Compliance & Performance" upon having an "Initial Compliance Evaluation" conducted our affiliate Regulatory Compliance Intelligence, LLC which provides professional services including, but not limited to, Compliance Examinations and Audits, Pre-Bid Audits, Compliance Consulting as well as serving as a 3rd Party Chief Compliance Officer for a Contractor/Subcontractor upon request and other due diligence and related services.

  • A contractor may include its "Certificate of Compliance & Performance" in any public bid to reflect its professional credentials, integrity, ethics, transparency and more importantly, to demonstrate to goverment agencies, surety companies and the general public of its organization's strong commitment to honest and responsible conduct to adhere to various laws and applicalbe regulations required by public contractors conducting business in the State of New Jersey.

  • A contractor's commitment to an effective compliance program as well as training and safety is an indicator of the quality and commitment of current leadership and its ability to attract and maintain quality workers, its ability to complete a project as well as its ability to obtain surety bonding.

  • A contractor avoids or mitigates its risk(s) associated with another contractor or governing body seeking to challenge/protest their public bid.

  • A contractor is viewed more positively and favorably in the eyes of governing bodies which may play a significant role in being deemed a more "responsible" and "responsive" bidder, better position itself in the evaluation process of a bid and ultimately the prospects of being formally awarded a public bid.

  • A prequalified/preferred contractor status further strengthens and enhances the depiction of the contractor's professionalism and competency which directly or indirectly relates to a contractor being deemed  a "responsible" and "responsive" bidder".

  • A contractor may reduce its bond commissions as surety companies begin to prefer or may require that a contractor to obtain and maintain prequalified/preferred contractor status with our firm to further mitigate its own risk.

  • A contractor may have its security deposit held in the form of a Certificate of Deposit (CD) or other form of security reduced or even eliminated by its surety company.

  • A contractor may also reduce its insurance premiums as to both property/liability and workers compensation insurance as insurance companies also begin to prefer or may require a contractor to obtain and maintain a prequalified/preferred contractor status with our firm to further mitigate its own risk.

  • A subcontractor may obtain more regular public work from a contractor who may be required to have its own subcontractors to obtain and maintain prequalified/preferred contractor status with our firm to avoid having their bid challenged/protested on any grounds involving their own subcontractors.

  • Avoid or mitigate the risks of "collusion", "fraud" and "public corruption" between one or more contractors or subcontractors and corrupt procurement/public officials when bidding on public work projects in the State of New Jersey.

  • Avoid or reduced penalties issued by the New Jersey Department of Labor and Workforce Development and/or the U.S. Department of Labor from any labor law violations or other violations of law by the U.S. Attorney's Office or U.S. Department of Justice (DOJ).


XI.   What are the benefits of a Prequalified/Preferred Contractor to a governing body?

  • The governing body may prefer in its discretion or may even recommend a public bid be awarded to a contractor that is on our list of Prequalified/Preferred Contractors.

  • The discretion to determine a Contractor's qualifications and abilities to successfully perform a particular contract.

  • Provide a governing agency with a rational basis for determining that a Contractor is or is not responsible as other contractors, or for approving or disapproving his or her proposed principal Subcontractor(s) based on the most current information available and other relative factors.

  • Raise the standards of public bidding by both government agencies and public contractors involving the procurement process throughout the State of New Jersey while also joining the fight in combating public corruption and fraud by public contractors and/or corrupt politicians.

  • A comfort level knowing a public bid award for a public project recommended to a prequalified/preferred contractor will likely be completed in timely manner and in accordance with the bid specifications and also serve as a hedge and further mitigates the risk(s) of a contractor default and the rise of any other possible litigation of a contractor or its subcontractors.

  • Eliminate or reduce the appearance of "improprieties", "public corruption", "collusion" or "fraud" by government officials for a governing body. Perception means everything and therefore, it is wise for public figureheads and procurement officers of various agencies to sign on and help join the fight in combating  "public corruption" and "fraud".

  • Reduce legal fees incurred by the board attorney of a governing body from another contractor seeking to challenge/protest a public bid.

  • Provide reasonable assurance that procurement officials are complying with the public bidding laws and regulations in the State of New Jersey and eliminate or reduce the risks of possible "improprieties" including "fraud", "collusion" and "public corruption", therefore, spending taxpayer's money more wisely for its intended purposes.

  • Better position a governing body to receive grants or other project funding earmarked for public work projects or extend the time period to utilize same for public work projects.

  • Provides a clear message of a governing body that they are Anti-Fraud and against Public Corruption. Perception means everything.


XII.  What are the benefits to a surety company for having contractors and/or any of its subcontractors obtain and maintain a Prequalified/Preferred Contractor status with our firm as part of a bond program?

  • Significantly mitigate the surety's own risk as to the activities involving a contractor and/or any of its subcontractors as to performance, payment and other types of surety bonds.

  • May raise the bond commissions paid by contractors to obtain surety bonds depending on a Contractor's Risk Assessment, more specifically, its Tier Level, Risk Category and actual CPR Rating.

  • Potentially raise the security deposit required by the surety company as part of a "bond program" in the form of a Certificate of Deposit (CD) or other form of security which may be required including, but not limited to, business and/or personal assets depending on a Contractor's particular CPR Rating.

  • Be in the better position to increase its Earnings & Profits (E&P) and gain market share by differentiating between contractors and its subcontractors who have obtained Prequalified/Preferred Contractor status with our firm and others who have not as government agencies in their own discretion begin to prefer awarding a public bid to a bidder/contractor who maintains, among other things, a Prequalified Preferred Contractor status with our firm which more clearly exemplifies and further supports and attests to a contractor as being a "responsible" and "responsive" bidder in all material respects.