A Financial Investigation Company

The Value of a Forensic Bid Audit

Why a Forensic Bid Audit

First, due to rampant public corruption and fraud, a government official may engage in unlawful conduct by prematurely releasing the bid documents and/or the technical specifications of a public bid project to a friend well before the Notice to Bidders as part of a bid advertisement who happens to also be a government contractor in return for a kickback or other thing of value.  By having possession of the technical specifications prior to the bid advertisement, it is evident a contractor has a distinct and overwhelming advantage over other contractors including substantially more time to better prepare and submit a public bid resulting in the likelihood and probability of more accurate estimated material costs and labor for a particular public project while other contractors are limited to as little as only ten (10) days to prepare and submit a public bid to a governmental agency.

So if you are wondering why a particular government contractor is landing more bids than others, public corruption just may be the reason. If a contractor is engaging in public corruption with government officials, it is likely he is also may be engaging in other unlawful activity and a forensic bid auditbwill most likely uncover the essential facts which may reveal evidence of wrong doing. This is why it is imperative a forensic bid audit be conducted by a professional forensic examiner on behalf of the 2nd and possibly even the 3rd lowest bidder for a public bid project.

Second, when a procurement bid for a public project is held on its scheduled due date, timely bids submitted by government contractors are opened by the governing agency and bids are subsequently read out loud. In many cases, a representative from the governing agency will also document the bid forms and other related documents submitted by a contractor by way of a checklist or other similar method.

However, in virtually all cases, neither the agency nor the attorney for the governing body will thoroughly examine, review and verify the content of information disclosed on various bid forms and other information submitted by a contractor as part of a public bid. After all, why should they? It is not their money but rather taxpayers' money.  At best, government authorities and/or the attorney for the governing body may just review the bid forms submitted by a contractor while failing to confirm and verify virtually all the assertions and representations made in bid forms by a contractor as part of a public bid.

Third, typically after all the bids are opened and read out loud, those contractors who were not among the three lowest bidders will simply walk out disappointed.  The 2nd or 3rd lowest bidder may stick around briefly to get a quick glance or at best conduct only a cursory review of the bid documents of the purported lowest responsible and responsive bidder. 

Shortly thereafter, the bid is formally awarded by the governing body, typically at the next board meeting. If public corruption is involved, it just may be awarded at the next board meeting whether scheduled or unscheduled which may even be the very next business day after a public bid is held without providing a reasonable opportunity for a bidder to formally or informally contest a bid. Such action by a government agency may be designed to conceal any evidence of unlawful conduct.

What is a Forensic Bid Audit? 

When THE FINFORENSIC GROUP conducts a forensic bid audit, we immediately make a site visit to the governing agency where the bid documents are physically located. WUpon arrival, we spend several hours methodically conducting a thorough audit, review and verification of the content of information disclosed in various bid forms and assertions made by the low bidder item by item and document such pertinent and relevant information as determined by our professionals.

During our forensic bid audit, a government official will typically monitor a member of our team during our audit of documents relating to a public bid which may take a several hours from beginning to end. We commence a forensic bid audit beginning with the examination of the bid documents of the low bidder and proceed to the 2nd lowest bidder and possibly the 3rd lowest bidder, where necessary, as part of our service. Although bid documents may be obtained via an Open Public Records Act request ("OPRA") depending on the type of public bid, this process may take up to seven business days or possibly longer. We believe it is imperative for contractors to jump out of gate and not rely on government representatives to provide information in a timely matter particularly when corruption may be occurring. Hence, "time is of the essence".

Critical information obtained from bid forms and other related documents or lack thereof is documented and simultaneously entered into our database. Upon conclusion, information is uploaded for our team to gain immediate access and begin the second phase of our forensic bid audit with respect to current information on file with public records held by a number of government agencies.

We then cross reference this critical information contained and disclosed in bid documents with other public records held by a number of government agencies as part of our unique fact finding strategies and extensive due diligence which encompasses a lengthy checklist of items and sub-items covering a broad area. The final phase involves the drill down of selected critical information and data, where warranted, that is submitted by a contractor in connection with a public bid and juxtaposed with recent other public bids submitted by a low bidder for further inconsistencies. Any misrepresentations, errors, omissions, irregularities, evidence of fraud and/or other material defects discovered during the process are documented and provided to our client in a formal report outlining our findings.

When a bid is contested for defects, the government agency has an obligation to comply with relative laws and regulations including, but not limited to, mandatory rejection of a bid when required and generally, may also reject the low bidder of a public bid project given the cumulative defects and/or the nature of those defects and subsequently award the bid to the second lowest bidder. Alternatively, the governing agency may also find it necessary to reject all bids and rebid the project out again which then gives a contractor a second bite at the apple.

By failing to uncover and make known any bid defects contained in the bid documents of the lowest bidder, government contractors in many cases are leaving money on the table.  Government contractors spend too much time and resources preparing for a public bid and can ill afford to just walk away. Missed opportunities could potentially lead to a valuable employee departing the company due to lack of regular work or even worse, the difference between success and failure of a company.   

We believe the benefits of conducting a professional forensic bid audit on behalf of government contractors in connection with a public bid are substantial. Click here to learn more about the  b enefits of a forensic bid audit .