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Best Practices in Contractor Management

By Avetta Marketing
October 08, 2020
5 minutes
Best Practices in Contractor Management

 

The Campbell Institute recently headed a research project among its Institute participants in an effort to identify best practices for contractor management. They started by first collecting information regarding the major steps of a contractor’s life cycle which are:

  • Prequalification
  • Pre-job task and risk assessment
  • Contractor training and orientation
  • Monitoring of job and post-job evaluation

Through a series of interviews, Q&A’s, analyses, and presentations, the Campbell Institute staff identified the top compromising factors of using contractors tied in with their mitigating practices. These issues included financial pressures and deadlines which lead to shortcuts, careless training and supervision, and inadequate and relaxed safety standards. By outlining the top compromising factors, the Campbell Institute staff concluded their research and highlighted some of the best practices performed by their participants:

Prequalification

Most of the participating organizations use third-party prequalifying companies due to the size, number, and location of projects by contractors. All of the companies that participated in the study assess their contractors’ safety statistics, such as EMR, DART, and other OSHA recordables. Most organizations include an internal scale or metric to assign a “passing grade” for work approval. Others do not have a grading method but still maintain a form of rating system for their contractors.

Pre-Job Task and Risk Assessment

Two-thirds of the participants used a risk rating method to determine the risk of work to be performed. For example, Georgia Pacific assesses the severity, frequency, and probability using a risk matrix before starting a work project. NASA uses a similar matrix using other values such as cost, incident likelihood, and schedule. In addition, organizations will categorize contractors depending on their insurance liability, type of work involved, equipment used, etc. Some contractors will use subcontractors for certain projects, but subcontractors will be held to the same standards as the main contractor.

Contractor Training and Orientation

All organizations require their contractors to participate in skill and safety orientation training on-site. Other special permits and training for specific jobs will also be required for contractors. Contractors must receive these trainings in order to work. This will ensure more safety awareness and lessen the probability of careless job performance.

Monitoring of Job

Organizations will monitor their contractors through a variety of inspections which may include daily checklists, monthly assessments, or weekly walkthroughs. AECOM, for example, uses a mobile app to report any non-compliance or unsafe conditions. The contractors will then be alerted when the incident is logged. Incident logs are also used to monitor contractors’ safety and ensure an appropriate action plan.

Common Challenges

The research participants shared some common challenges that come mainly in the latter stages of the contractor life cycle. Over half of the organizations lacked a specific course of action regarding contractor infractions, which increases the risk of future and more serious infractions. Another issue is having no integration of the contractor’s lagging metrics into the business owner’s own safety statistics. Though it’s more difficult to achieve EHS goals with a contractor’s metrics integration, organizations can still have a better overview of their business’s overall performance and have a stronger vision and bond with the contractor. A final challenge involves a lack of a formalized post-work evaluation process.  Having a specific post-work plan allowed the organization to assess not only the performance of the contractor but also the organization itself.

Conclusion

The findings of this research project have highlighted some key factors to having successful and safe contractor management. Investing in a safer environment for the business and its contractors will allow for better productivity and success in the long run.

For more information about Avetta's Contractor Management software, Contractor Prequalification or Supply Chain Risk Management, visit avetta.com, email [email protected] or call 844.633.3801.

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