Introduction to Contractor Management

ELEMENT OVERVIEW

Implementing practices to ensure that contract workers can perform their jobs safely, and that contracted services do not add to or increase facility operational risks, is one of nine elements in the RBPS pillar of managing risk. This chapter addresses the responsibilities of the contracting company and the contract employer in implementing a contractor management program. Section 13.2 describes the key principles and essential features of a management system for this element. Section 13.3 lists work activities that support these essential features, and presents a range of approaches that might be appropriate for each work activity, depending on perceived risk, resources, and organizational culture. Sections 13.4 through 13.6 include (1) ideas for improving the effectiveness of management systems and specific programs that support this element, (2) metrics that could be used to monitor this element, and (3) issues that may be appropriate for management review.

What Is It?

Industry often relies upon contractors for very specialized skills and, sometimes, to accomplish particularly hazardous tasks – often during periods of intense activity, such as maintenance turnarounds. Such
considerations, coupled with the potential lack of familiarity that contractor personnel may have with facility hazards and operations, pose unique challenges for the safe utilization of contract services. Contractor management is a system of controls to ensure that contracted services support both safe facility operations and the company’s process safety and personal safety performance goals. This element addresses the selection, acquisition, use, and monitoring of such contracted services. Contractor management does not address the procurement of goods and supplies or offsite equipment fabrication functions that are covered by the asset integrity quality assurance function. While the most significant contractor safety challenges typically involve workers located closest to process hazards or involved in high-risk occupations, such as construction work, the safety needs of contractors providing simpler and more routine tasks, such as janitorial or groundskeeping services, must also be addressed in the contractor management program.

Why Is It Important?

Companies are increasingly leveraging internal resources by contracting for a diverse range of services, including design and construction, maintenance, inspection and testing, and staff augmentation. In doing so, a company can achieve goals such as (1) accessing specialized expertise that is not continuously or routinely required, (2) supplementing limited company resources during periods of unusual demand, and (3) providing staffing increases without the overhead costs of direct-hire employees. However, using contractors involves an outside organization that is within the company’s risk control
activities. The use of contractors can place personnel who are unfamiliar with the facility’s hazards and protective systems into locations where they could be affected by process hazards. Conversely, as a result of their work activities, the contractors may expose facility personnel to new hazards, such as unique chemicals hazards or x-ray sources. Also, their activities onsite may unintentionally defeat or bypass facility safety controls. Thus, companies must recognize and address new challenges associated with using contractors. For example, training and oversight requirements will be different from those for direct-hire employees. Thus, companies need to carefully select contractors and apply prudent controls to manage their services (Ref. 13.1). Only by working together can companies and contractors provide a safe workplace that protects the workforce, the community, and the environment, as well as the welfare and interests of the company (Ref. 13.1).

Where/When Is It Done?

Contractor management begins well before the issuance of any service contract. Systems must be established for qualifying candidate firms based upon not only their technical capabilities, but also their safety programs and safety records. Orientation and training of contractor personnel must be accomplished before they begin work. Responsibilities for this training must be defined, with some training often provided by the contract employer and some by the contracting company. The boundaries of authority and responsibilities must be clearly set for any contractor that works at the facility. Periodic monitoring of contractor safety performance and auditing of contractor management systems is required. At the end of each contract period, retrospective evaluation of a contractor’s safety performance should help determine whether the particular contractor is retained or considered for future work.

Who Does It?

While some responsibilities for implementing the contractor management element are assigned to contractor personnel, many tasks are assigned to company staff at either the facility or corporate level. specific delegation of responsibilities between contractor, corporate, and facility personnel needs to be resolved prior to the start of a contractor-company relationship. Company groups having delegated roles and responsibilities could include operations, maintenance craft groups, facility or corporate safety, and perhaps the process safety group. The contractor management program is often managed by the procurement function, so purchasing personnel should be involved when appropriate.

What Is the Anticipated Work Product?

The anticipated work products for the contractor management element include:

  • The creation of a list of pre-qualified candidate contract firms.
  • The selection of specific contractors with strong safety programs and good safety records.
  • The preparation of contract employers and their employees to safely provide their services based upon an understanding of relevant risks, facility safety controls and procedures, and their personal safety responsibilities.
  • The safe delivery of the contracted services, with improved quality and productivity.
  • Appropriate documentation of the contractor screening and selection process, the contractor’s safety performance during the performance of its services, and any other issues relevant to the evaluation of the contractor for potential selection for future services.

Outputs of the contractor management element can also be used to facilitate the performance of other elements. For example, contract workers must be trained to properly implement safe work practices, and contract workers should be effectively integrated into the workforce involvement program. 

How Is It Done?

The scope of contracted services can encompass a broad spectrum, ranging from contracting with an individual to provide a very specialized service to contracting with a large firm (perhaps with many subcontractors) who will provide hundreds of workers with diverse skills for a major construction project or maintenance turnaround. A contract firm could be onsite for only a few hours, never to return, or could have a continuing presence at a facility for decades. Some contractors will be directly exposed to the process and its hazards, while in other situations, such as new project construction adjacent to an operating unit, effective controls will be required to isolate the contractors from process hazards. Finally, some contract service companies have a very stable workforce, while others have a high rate of turnover. The contractor management element must be well defined and flexible enough to handle this gamut of potential circumstances. The responsibilities and procedures for implementing these activities should be documented in a written program description with specific criteria for screening and selecting contract service providers.