The scoring system used by MyRiskControl is licensed from Druml Group, Inc., a firm with over fifteen years of experience measuring risk within construction companies. The patent pending Druml GRoup Risk Analysis System provides a standardized means for assessing and analyzing profitability risk in a business enterprise. MyRiskControl uses the DGR ("digger") System as part of its comprehensive approach for deploying Enterprise Risk Management (ERM) within companies. The DGR score ranges from 300 to 800 having a mean of 725. Viable construction enterprises usually score no less than 500. To simplify identification of risk present within a construction company, the DGR system uses the following color-coded ratings:
Red DGR rating - DGR score 300 to 524: Contractors in this range can expect to receive resistance from banks and sureties to extend credit. The companies may find it difficult to fund ongoing work and meet debt obligations. A complete restructuring may be in order and outside assistance is almost assuredly required to control risk.
Blue DGR rating - DGR score 525 to 674: Contractors in this range can expect to find it difficult, but not impossible, to convince banks and sureties to extend credit. Companies may encounter pressure to prepare business plans, produce routine financial information, establish a WIP process and institute job cost controls. Meeting these requirements may seem burdensome, however management must embrace these improvement measures to decrease risk and maximize profitability. The contractor will be expected to reduce reliance on a line of credit over time. Credit from vendors and suppliers will be limited and potentially cut off due to late payments.
Silver DGR rating - DGR score 625 to 774: Contractors in this range can expect to produce more accurate financial information and prevent Work in Progress reports from exhibiting profit fade. In general, banks and sureties will welcome business with such companies but expect performance results to align with their expectations. Sales volume will likely be on the rise and the contractor will be expected to maintain controls in place as revenue increases. Performance of projects will be more closely scrutinized by those granting credit, particularly sureties. Vendor, supplier and subcontractor relationships will be healthy and well maintained.
Gold DGR rating - DGR score 775 to 800: Contractors in this range will be sought after by banks and sureties. They typically will be flush with cash, perform a large amount of volume, and have well-established controls. Jobs incurring a loss will be infrequent and generally unexpected. Banks and sureties will negotiate on rates and terms, possibly waiving personal guarantees. The companies will exhibit consistent profitability on jobs and obtain the most attractive discounts from vendors and suppliers. Subcontractors will seek to do business with the entity. Profitability will remain strong if the contractor does not deviate from specialties or resident geography.
