Contractor Management - The Macro View

Contractor Safety Management

Contractor Management - The Macro View

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Four Key Success Factors

As a global trend, more organizations in nearly all sectors of the economy are outsourcing more work. Currently, contractors fill one in every five jobs in the United States. Contractors are projected to make up half the workforce within the next decade. This trend is common across industrialized and emerging countries around the world.

No matter the industry, a key factor is workplace health and safety. The following is an introduction to the main elements of contractor management with an occupational health and safety focus.

Contractor management is a business process implemented by purchasing organizations to maximize efficiency and reduce sources of loss with their contracted services. This article will focus on common systems and activities in high-risk workplaces.

High-risk workplaces are physical locations and work activities that expose workers to significant or unusual hazards. Examples include:

• operating machinery,
• work on or near high-pressure or high-temperature process equipment,
• electrical systems,
• chemical and biological hazards,
• work above grade,
• fire and explosion hazards,
• work in confined spaces and in excavations.

Contractor Management Core Elements

Broadly, there are four major elements of a contractor management system: Assessment, Mobilization, Monitoring, and Review. Within each category, there are many subactivities that a purchaser may implement. Not all sub-activities fit in every contracting situation.

Contractor Assessment: Know What You're Buying

Keep contractor safety in mind when you take measures to ensure your worksites' safety. Although contractors are externally hired professionals, your company's health and safety policies apply to them when they are on your worksites. 

Therefore, assessing your contractors is an important task and one of the crucial aspects of proactive health and safety management. By doing your due diligence, you can ensure the safety of your employees, contractors, and the public.

Health and safety assessment examines contractor capability, management systems, and previous performance against a purchaser's internal criteria. A well-rounded approach to contractor assessment includes both leading and lagging indicators.

Generally, leading indicators are sourced from the contractor's health and safety programs and other management systems. Lagging indicators are incident-driven and attempt to quantify safety performance based on injury experience or other losses that result from workplace incidents. 

Why Contractor Assessment is Important

One of the critical reasons for conducting a safety assessment for contractors is that they aren't on your payroll. Still, they manage exposed workers on your worksites.

When contractors are active on your sites, they are responsible for implementing the health and safety standards for all their workers and any subcontractors under their direction.

Since contractors often work on multiple projects simultaneously and travel from one site to another, keeping track of their activities can be difficult. However, suppose there is a serious injury or other event on your project. In that case, there is elevated risk if inadequate contractor controls contributed to the incident.

Best Practices for Contractor Safety Assessment

A contractor safety assessment is based on the idea that all workers are as valuable as your employees. This philosophy is embedded in the legal framework governing workplace safety. Here are steps you can take to ensure contractor safety.

Before hiring a contractor, your primary focus will be performing essential due diligence. This starts with checking the contractor's performance on previous projects. Ask for safety data like workers' compensation claims experience and any actions taken by safety regulators.

Verify your contractor is adequately insured for general liability, workers' compensation, and any specialty coverages required for the specific scope of work. Request a copy of a previous project safety plan similar to your scope of work. Reviewing this document will give you insight into how the contractor will manage risk on your sites. Once work is awarded, require that a project safety plan be created and distributed to the impacted stakeholders.

Managed Mobilization: Leverage Your Pre-Award Efforts

Mobilization is the series of actions required to bring a contractor's people, equipment, and materials to the worksite and prepare them for project execution. Many activities add value to this critical piece of the contractor management process. Here are two of the most vital:

Records Collection

Relevant licenses, permits, or any accreditation required for the work are obtained at or before contractor mobilization. The purpose of obtaining these documents is to determine competency and verify compliance with the regulatory requirements.

Task and Risk Assessment

Once hired, the contractor assesses the known risks and those likely to be created by their work. The assessment is typically documented. Health and safety legislation describes risk assessment requirements in many jurisdictions.

The benefit of a project-specific risk assessment is a knowledgeable contractor who understands the hazards and is well-equipped to manage them. Creating and communicating a project-specific risk assessment is a contractor management best practice. Updating for changing conditions and other variables is also critical.

Training and Orientation

No matter the contractor's assessed capability and previous performance, it is critical to brief onsite management and workers about the health and safety systems implemented on your worksites. Therefore, an orientation to the worksite and the safety standards in force is a valuable and necessary due diligence activity.

Contractor Monitoring: Maintaining Safe Worksites

Active monitoring controls the worksite and demonstrates ongoing due diligence. Frequent checks help ensure that the contractor complies with purchaser standards and that hazards are identified and managed. Monitoring is typically done with both formal and informal processes.

Formal processes include documented worksite inspections, records checks like equipment certifications, and focused observations of high-risk tasks. Informal processes are typically job site walkarounds with a worker health and safety focus.

Other valuable inputs to workplace monitoring are hazardous condition reports and investigations of near-miss events. Both present learning opportunities that proactive clients and prime contractors use to improve the workplace.

Post-Project Reviews: Maximize Lessons Learned and Strengthen Your Organization

The post-project review is an excellent opportunity to assess contractor performance and record lessons learned.

One of the best ways to conduct a post-job assessment is to study the documentation created in the active phase of the contract. These records include investigations, inspections, and related reports of contractor performance.

Formal processes assessing all contractor performance aspects are standard for high-value and long-term contracts. Common review categories include cost control, schedule adherence, labor management, quality, and safety.

Conclusion

Effective contractor management requires known performance standards and management leadership in four primary areas: assessment, managed mobilization, monitoring, and performance review. With management focus and measurable goals, each activity can vastly improve contractor management systems and performance.