MITIGATE HIDDEN BUSINESS RISK IMPROVING SAFETY BY PRE-SCREENING AND

QUALIFYING CONTRACTORS

PAT CUNNINGHAM Director, Safety & Audit Services WEBINAR SEP 18, 2013

The Safety Guy

‖ Who is Pat Cunningham? Masters, Occupational Health & Safety Management

Delegate to National Safety Council

Career safety professional

Not “the sales guy”

Loves sharing best practices

Wants to give you useful information that benefits your business and improves workplace safety for everyone.

WATCH FOR THESE - Signals a “Gold Nugget” of particularly useful information.

Pat Cunningham, MS Director, Safety & Auditing Services

What we will cover

‖ Let’s answer these questions:

Why are businesses relying on contractors more than ever before?

What does OSHA expect when it comes to contractors?

What types of data should you be collecting about your contractors?

What are elements of a good screening program?

Who else from your organization needs to be involved?

What are the different ways you can approach prequalification?

Why so many contractors?

‖ Key drivers that increase usage of contractors…

IF YOUR BUSINESS USES CONTRACTORS… You should be considering them in all your risk management programs and processes.

Lean-hiring practices

Reduced benefits cost

Possible tax incentives

Access to expertise that’s not available in-house

Flexible employment & staffing models

Mitigate hidden business risk

Prevent fatalities, reduce the number of injuries & other unwanted outcomes

Measure all contractors against company-defined “acceptable risk” standards

Avoid time lost due to incident investigation

Avoid cost overrides

Decrease the amount of possible citations, violations, and penalties

Decrease legal exposure

Why prequalify?

Improve safety and quality efforts

Fewer people going home injured

Influx of qualified workers

Improve project execution and operations

Support quality management and Continuous Process Improvement (CPI)

Maximize production time

Demonstrate corporate social responsibility

Protect corporate brand

Why prequalify?

‖ Contractors that are prequalified consistently outperform their peers on key safety performance indicators.

Better Safety Outcomes!

What does OSHA expect?

Date: 7/9/13

From: Pat Cunningham., Director of Safety & Auditing Services, BROWZ, LLC To: Dorothy Dougherty, Directorate of Standards & Guidance US Department of Labor – OSHA Greetings, I am looking for a ‘guideline’ document from OSHA which outlines its pre-qualification expectations/desires of business owners when hiring contractors. I did a search of the OSHA web site, and cannot find a single source document that provides business owners recommendations, or criteria for screening contractors. There is related verbiage regarding owner/contractor pre-qualification embedded in the following General Industry Standards: 119, .120, .146, .252, .272 & .1200 There may be other standard references I have missed, but I believe this illustrates how embedded the content is for anyone who desires guidance from OSHA on this topic.

‖ OSHA Standards

1. Process Safety

2. Hazardous communications

3. Permit-required Confined Spaces

4. Control of Hazardous Energy, LOTO

5. Welding, Cutting, Brazing (fire prevention)

6. Special Industries – Grain handling

7. Hazard communication

OSHA Standards & Implications

OSHA Standard #1

‖ Process Safety, 1910.119(h): “When selecting a contractor, shall obtain and

evaluate information regarding the contact employer’s safety performance and programs.”

Periodic evaluation of contractor performance

Inform contractor: fire, explosion, toxic release potentials, EAP

Maintain contract employee injury/illness log

Contractors assure that each employee is trained to perform their work safely

OSHA Standard #2

‖ Hazardous Materials, 1910.120 (b)(1)(iv): Contractors and sub-contractors: retained for work in

hazardous waste operations, shall inform them of potential fire, explosion, H&S and emergency response. The written program shall be made available to contractors and subs.

OSHA Standard #3

‖ Permit-Required Confined Spaces, 1910.146 (c)(8): • When a “Host employer” arranges to have employees of another

employer “contractor” perform CSE work:

- Inform the contractor that the workplace contains permit-required spaces

- Apprise the contractor of the elements of the hazards and the experience within the space

- Ensure necessary precautions - Coordinate entry operations when both are in space - At the conclusion of entry work – contractor debriefing

(hazards confronted or created)

OSHA Standard #4

‖ Control of Hazardous Energy, LOTO, 1910.147 (f) (2) (i): • Outside personnel (contractors):

• Whenever outside service personnel are to be engaged in activities covered by the standard, the on-site employer and outside employer shall inform each other of their respective LOTO procedures

• The on-site employer shall ensure that his/her employees understand and comply with the restrictions and prohibitions of the outside employer’s LOTO program

OSHA Standard #5

‖ Welding, Cutting, Brazing [fire prevention & protection], 1910.252 (a) (2) (xiii) (D): • Advise all contractors about flammable materials or

hazardous conditions of which they may not be aware

OSHA Standard #6

‖ Special Industries - Grain Handling, 1910.272 (i): • The employer shall inform contractors performing work at the

grain handling facility of known fire and explosion hazards related to the contractor’s work and work area. The employer shall also inform contractors of the applicable safety rules of the facility

• The employer shall explain the applicable provisions of the emergency action plan to contractors

OSHA Standard #7

‖ Hazard Communication, 1910.1200 (e) (2): • Multi-employer workplaces: Employers who produce,

use or store hazardous chemicals at a workplace in such a way that the employees of other employers may be exposed (contractors) shall ensure that the hazard communication program includes:

- Method used to provide the other employers on-site access to Safety Data Sheets

- Precautionary measures needed to protect workers during normal conditions and emergencies

- Labeling system used in the workplace

Business Implication #1

‖ Multi-Employer Citation Policy, CPL 2-0.124: • On multi-employer worksites (all industry sectors), more

than one employer may be citable for a hazardous condition that violates an OSHA standard (types of employers):

- Creating – created the unsafe condition

- Exposing – their employee’s were exposed

- Correcting – responsible for installation/maintenance

- Controlling – worksite supervisory authority

Business Implication #2

‖ Voluntary Protection Program, CSP 03-01-003 H&S pre-qualification screening Provided “equally effective protection” and abide by

rules of host Orientation, EAP, and knowledge of VPP site Hazard ID and correction Provision for removing contractor or its employees for

violating work rules Contractor participation and worker interviews

conducted by OSHA Annual site review

Combined workforce injury/Illness rates

VPP, a great benchmark

What are the elements of a good screening program?

Protocols & Metrics

Gather

Verify Assess

Track/Share

What types of data should you collect?

‖ What’s Important? Benchmark with industry peers and others

Conduct an internal assessment to determine what’s needed:

Existing company policies and procedures for contractor pre-qualification

Organization’s willingness for change

Metrics/KPI’s

Organization Objectives

Company/community image

Current risk exposure/liabilities

Annual assessment & report

Metrics

Injury/illness logs (annual updates)

Experience Modification Rate

OSHA Establishment search

Policies/procedures – related to site work

NAICS/BLS industry comparisons

Employee training programs and records

Observation program

Labor/management safety committee (employee involvement)

Supervisor training

Sub-contractor pre-qualification

HS&E Data Collection

Professional memberships – Safety Council, VPPPA, etc.

Spill control/counter measure plans, equipment and training

Human performance tools: self checking, stop work authority, co-worker coaching, verbal communication and shift turn-over

Injury/incident and near-miss reporting

Hazard awareness/injury prevention tools: JSA, Tailgate, etc.

Dedicated site safety professional and/or competent person with duties for site inspections

Requirement for crew safety meetings and safety stand-downs (if necessary)

HS&E Data Collection

Endorsements

Coverage limits

Workers Compensation

Bankruptcy

Liens

Judgments

Ongoing monitoring of policy changes and expiration dates

Insurance & Risk

Corporate citizenship

Special licenses or certification requirements

Security and clearances

Drug and alcohol screening

Weapons ban

Sexual harassment

Equal Opportunity Employment

Proprietary non-disclosure policies

Organizational Specific Data

Who needs to be involved?

Stakeholder: Area of concern / involvement: Supply Chain / Procurement Will you be circumventing my current processes?

Project Manager Can I hire contractors I want? Is this going to slow things down?

Safety Department What if contractors aren’t safe? How will I know when they are on-site?

Legal What if processes are not documented correctly? Are we increasing our liability exposure?

Current Contractors What are the expectations? Are there equal safety expectations for similar contractors? Why do I have to submit so much information?

Government / OSHA Was the event preventable? Were contractors involved? Were the contractors pre-screened?

Consider perspectives of other stakeholders

Prequalification Option #1

Bad idea

Prequalification Option #2

‖ Perform the function in-house (prerequisites):

Established policy, procedure, tools & training

Sufficient number of staff, agreement on departmental duties - responsibilities & authority

Robust repository for storing & updating documentation

Agreed upon protocols & metrics

Ability to apply special provisions

Auditing function (internal & contractors)

Prequalification #3

‖ Partner with a prequalification service provider (prerequisites):

Established policy, procedure, tools & training

Do your homework – know what you want to accomplish:

- Relief of administrative burden

- Repository - information verification & updating

- Configurable system to meet your protocols

- Customer support – single point of contact for clients & contractors

- Straight forward pricing

- Ability to benchmark ‘best practices’ & desire for continuous process improvement

Ready to get started?

‖ Where is your organization today?

Contractor Safety Risk Assessment

- Prequalification Program Elements

- Score indicator (gap analysis)

- Will be emailed to you

Take risk assessment

Closing “Nuggets”

‖ Summary:

Contractor companies are utilized by most companies, the added risk exposure should be assessed and there are benefits to managing the risk

While there is no single source document from OSHA regarding their expectations for contractor pre-qualification, there are requirements embedded into various standards

There is a wealth of information that can be collected from contractors – client specific

Many stakeholders – whose perspectives all need to be incorporated into the decision making process

Two options for managing contractor pre-qualification: in-house, or use of a service provider

Closing comments

Become to others, “The ____ Guy or Gal“

Respect for all workers & create win-win situations

Leave a positive legacy

Contact Info

‖ Pat Cunningham, MS

Director, Safety & Auditing Services

pat.cunningham@browz.com

www.browz.com