This report summarizes the results of a Campbell Institute research project to aggregate the best practices of world-class organizations in EHS around the management of contractor and supplier safety. The area of contractor safety management is especially pertinent in an increasingly global and complex world that involves work in multiple countries, non-routine work and the use of international and temporary workforces. The project looked at the major steps of the contractor life cycle:
- Prequalification
- Pre-job task and risk assessment
- Contractor training and orientation
- Monitoring of job
- Post-job evaluation
PREQUALIFICATION
10 of the 14 member organizations involved in the study use third-party prequalifying companies or are about to launch a program with one of these companies. One rationale for using external prequalifying agencies is due to the size and number of projects involving contractors, which typically are located all over the world. All of the members in the study assess contractors on their safety statistics, such as Experience Modification Rate (EMR), Total Recordable Incident Rate (TRIR), fatality rate, DART, and other OSHA recordable’s. These rates and numbers are well understood across organizations of all sizes and industries, which make them standard for data collection and evaluation. All members require contractors to submit these statistics for a given time period, typically the last three years. Some of the member organizations also look at a contractor’s TRIR as compared to an applicable NAICS code, worker compensation claims, injury logs, environmental reports and regulatory citations. For smaller subcontractors that may not be able to calculate an EMR, some will ask for other information (e.g. citation record, fatalities) in order to make an equivalent judgment of a subcontractor’s fitness for the job. Some Institute members have contingency plans in the event that a contractor’s statistics do not initially make the cut. At one company, contractors can submit a continuous improvement plan as part of its documentation that must be reviewed and approved by Management and Safety.
PRE-JOB TASK AND RISK ASSESSMENT
9 of the 14 have a method to evaluate the risk rating of the work to be performed (typically per a risk matrix) to place contractors in a predetermined risk category. For instance, one company performs an initial risk assessment based on the broad scope of work and a second assessment based on the contractor’s detailed work procedure. The company utilizes a risk matrix and assigns point values for severity, frequency, and probability to calculate the risk associated with a given project. Projects with higher risk ratings must provide additional written safety programs. A similar process at an another organization assesses contractors with a risk matrix looking at incident likelihood, severity, cost, schedule, security, and other factors. The project technical team requires contractors to describe work plans to mitigate risk.
The majority of research participants (10/14) specify that the general contractor is in charge of hiring subcontractors and managing their safety. In these situations, subcontractors are held to the same standards as general contractors, but it is the general contractor’s responsibility to apply those standards. This responsibility provides yet another reason for companies to be diligent about hiring reliable and accountable general contractors from the start.
CONTRACTOR TRAINING AND ORIENTATION
All study organizations require safety orientation and skills training of contractors in order for them to be approved for work. These orientations and training are provided on site. All organizations also require special permits or training for specific kinds of work, including (but not limited to) confined space entry, electrical work, hot work, energy control, forklifts, elevated work, etc. Specialized safety training is also provided, including HAZWOPER, hazard identification, PPE, LOTO, fall prevention, etc. At one company, these specialized area trainings are completed through a contracted online program. For another company, refresher programs in job-specific areas are held at least annually for long-term suppliers. At another company, contractor orientation is conducted via an internal online program. After completion of the online course, contractors
receive a badge that must be worn on site.
MONITORING OF JOB
Every organization in the study has periodic assessments during the contract term, which varies from daily checklists and/or safety talks to weekly walkthroughs, monthly and yearly assessments. One company performs daily inspections of contractor work to assure that it is in compliance with the Pre-Task Safety Plan submitted prior to the start of work. The company also requires contract employees to submit safety observations; a minimum of two observations per employee per month must be completed and documented. In addition to routine oversight of contractors at a petrochemical company, the monitoring process includes Performance Reviews and Field Verifications, which are major components (collectively 65%) of a contractor’s grade. The frequency of these reviews and verifications are based on the work project’s risk profile and overall contractor grade. Just over half (8/14) of the organizations included having specific courses of action in the case of contractor infractions.
POST-JOB EVALUATION
A final challenge shared by the participants in this research is the lack of an evaluation of contractors after the work has been completed. Only five participants have a post-job evaluation or specific guidelines for contractor requalification. At one company, the results of a post-work evaluation are taken into consideration when a contractor bids on future jobs. Another company has a Safety Performance Assessment of all suppliers once a year or near the end of a contract period. At another company’ post-job performance assessments take into account safety, customer service, and the quality of finished work. Another has a Safety and Operating Inspection completed for every process change, enhancement or facility improvement that is not part of routine maintenance work, which in turn serves as a post-job evaluation. In a similar fashion, the petrochemical business’s periodic Performance Reviews also capture an evaluation of contractor performance after a job has been completed.
This is an excellent study for ANY and ALL organizations who use contractors. CLICK HERE for the NSC’s Campbell Institute Research White Paper.