Enhancing Safety Through Contractor Prequalification

At most companies’ facilities,  you have to stop to identify yourself and explain why you’re there. The reasoning is clear: the company wants to make sure that the only people who enter are those who belong there.

It pays to take a similar approach with the contractors who will work on your organization’s projects. Only those who meet your organization’s standards for safety should be allowed to set foot on your worksites. By using a contractor prequalification program to control access to your projects, you protect your organization’s public reputation and help keep insurance costs under control.

Do you need a prequalification program?

Your company maintains high standards for every aspect of its operations, and that includes safety. You take compliance with safety regulations seriously, so that your employees will not be exposed to unnecessary risks.

What about the many outside companies that perform work on your sites? A large construction project might involve workers from dozens of contractors performing potentially dangerous tasks every day. If one of those contractors’ employees is injured, you might face legal liability or see higher insurance rates. In addition, an action taken by a contractor’s employee could put your employees at risk.

In essence, a prequalification program is a formal, comprehensive way to weed out contractors who fail to meet your standards and sends a strong message that you take safety seriously.

Prequalification provides assurance

A contractor who wants your business will tell you its supervisors and workers value safety, and that they will only follow safe jobsite practices. They may also claim they’ll meet all your deadlines and never request a change order.

With a prequalification program, you don’t have to depend upon empty promises, because you can verify they follow recognized safety standards. Examining a wide variety of characteristics allows you to determine whether or not their employees belong on your jobsite.

Safety directors with strong prequalification programs will tell stories of aggressive contractors who show up at pre-bid meetings, eager to capture the project. Once they learn that the company has a safety prequalification program or hear about the standards they’ll be expected to meet, they quietly disappear, because they know they won’t make the cut.

Besides raw data, a prequalification process demands a certain level of sophistication and seriousness on the contractor’s part. If a friendly mom-and-pop contractor doesn’t understand today’s safety requirements, they can endanger everyone on your site. You’ll also be able to educate smaller, less-sophisticated contractors who might have avoided OSHA scrutiny because of their size, helping them understand what they should be doing to ensure employee safety and comply with the law. You can show them how improved safety practices can make them more profitable by driving down their insurance rates. In a way, you become a “safety coach” who helps them meet your standards.

Raising the bar for safety on your projects can actually improve safety throughout the community. As contractors change their work practices to meet your standards, they’ll bring those same practices to other jobsites and owners. That also benefits the contractors, because your standards may be seen as a credential in the marketplace. Other owners will know that if a contractor works with you, they can hire them with greater confidence. Naming your organization as a client can enhance the contractor’s profile.

Which factors should you examine?

Prequalification programs are designed to ensure that every contractor company has a rock-solid safety culture. You can start by verifying that each contractor has a written safety plan that goes beyond OSHA minimums to meet your higher standards.

Because simply having a plan and living up to it are two different things, you’ll want to look more deeply. Does the plan provide comprehensive guidance? How does the contractor handle safety training? What is the company’s actual rate of recordable incidents? What types of injuries have workers suffered? How many required simple first aid compared to how many had to be rushed to the emergency room? Is there a pattern that suggests an underlying problem? Those and other factors provide useful insight into how the contractor does business.

If a contractor wonders why you’re concerned about what happened on other jobsites, explain that it’s an indication of their safety culture, and how important safety is to their employees. If their workers are not encouraged to use safe practices elsewhere, they’re less likely to change their behavior for you.

Your prequalification program should encompass the factors you need to make a reasonable decision as to whether a contractor shares your organization’s commitment to safety, such as:

  • Commitment from the top. If the company’s owners or top managers don’t believe safety is critical, lower-level workers will be less likely to take it seriously. You can request a signed statement from the highest-level manager that explains the organization’s commitment to and support for workplace safety.
  • The right numbers. Programs typically review a contractor’s OSHA 300 logs to examine recordable incidents going back three years, and how that translates into incident rates and their EMR (experience modification ratio). EMR data can serve as a starting point. For example, if the contractor has a high recordable incident rate, it may warrant further investigation to determine the cause.
  • Pay particular attention to fatalities, but be sure that a fatality was work-related. For example, the fatality may have been an auto accident as a worker was leaving the jobsite for lunch, or it may have been a heart attack that had no reflection on the company’s safety practices.
  • Source of workers. Does the contractor use a staff that has been through its training program, or does it assemble workers for each program? I’ve worked with one owner that doesn’t want to work with contractors that depend on the union hall. Their reasoning is that, no matter how qualified a union member may be, he or she may not have been ingrained in that contractor’s safety training and safety culture.
  • In-force insurance. Periodically check contractors’ insurance policies for general liability, auto and workers compensation. If a policy expires or is cancelled, a contractor working on your site might be creating an unexpected liability for you.
  • Financial health. While the connection between safety and finances may not seem obvious, a contractor in financial trouble is more likely to cut corners. A financially troubled firm may go belly-up during the middle of a project, leaving you in a difficult situation.
  • Industry experience. Some industries have unique safety requirements. A contractor working on an addition or renovation at a hospital must be familiar with life safety standards, while a contractor on an airport project must understand FAA rules governing ground operations. Do you want contractors who already have such knowledge, or are you willing to take on the added work and time involved in educating them?
  • Training scope. If the work the contractor will perform requires familiarity with a particular area of safety, the prequalification program should address it. For example, if the contractor will be working in confined spaces, does the company have experience and know how to work safely in that environment?
  • Accident investigation. A closer look at past accidents may identify patterns. You should be able to determine whether corrective actions were taken to prevent reoccurrences.
  • Disciplinary policies. Contractors’ policies should detail clear steps and progressive procedures for safety offenses, including responses to those who commit multiple offenses. A drug and alcohol policy should be in place, and you should be able to find evidence that it is being enforced.
  • Checking paperwork. Cross-referencing the addresses on OSHA logs with those on W-9s can reveal if a contractor with multiple divisions or locations is submitting data from a different division or office to sneak through the prequalification process.

What about national safety registries?

There are web-based nationwide registries that provide contractor prequalification services, and they may appear to provide an affordable alternative to developing an owner’s own contractor prequalification program.

However, large-scale databases are far less likely to offer deeper insights than an approach that’s more personalized to your needs and your jobsites. A registry might address or neglect issues that are important or unique to your site and industry. In addition, relying solely on a database may mean missing out on smaller, high-quality local or regional contractors that are unwilling to pay the fees to be included in the registry.

Managing your program

Make sure that the individual responsible for operating your prequalification program is knowledgeable about safety practices. Some organizations delegate the responsibility to administrative assistants who can collect and review information, but who lack the firsthand experience to spot problem areas or recognize obvious attempts to deceive.

Remember also that a prequalification program is not the single solution to all of an organization’s safety needs. It’s one step that ensures that prospective contractors meet your minimum requirements, and it should be part of a comprehensive Contractor Safety Management Process. Once the contractor starts working on your site, it’s up to your safety team to continuously verify that the contractors work in accordance with your standards.

While a prequalification program this thorough may seem complex at first, it quickly becomes a familiar, regular practice for your company. It will also increase awareness of the importance of safety at your site and should lead to a reduction in incidents. All the workers on your site will be safer, and your insurance premiums should stay as low as possible.

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