Large corporations and general contractors have evaluated the safety programs and performance of subcontractors—including electrical contractors—for years. Now, the number of companies evaluating contractors seems to be growing. What’s more, many host employers are turning to a third party to perform these assessments. The focus on contractor safety evaluations has raised questions regarding the need for an assessment, its value versus cost, the lack of consistency and what contractors must do to comply.
Looking at the issue from a host employer perspective, one has to understand their desire to conduct a review. An unsafe act by a contractor can cause serious injury or death to the contractor’s employees while on the host’s property and can also result in injury or death to the host’s own employees. In addition, structural damage to the host’s property, a shutdown in the operation for investigation and repairs, or minor delays in project completion can result in losses in the millions of dollars. Unfortunately, one doesn’t have to research long to find cases such as these:
• “Oil refinery explosion due to subcontractors failure to follow host employer’s lockout/tagout procedures”
• “Painter using acetone and an electric floor buffer to remove a stain … explosion resulted in structural damage and painters receiving second- and third-degree burns”
• “Power Co. has ordered one of its contractors to stop work pending an investigation into the death of an employee who fell from a utility pole … safety harness is being held by police for the investigation.”
Statistically, it makes sense for host employers as well. Figures published by ISNetworld, a third-party evaluator used by some companies to assess contractors, show a decrease in the recordable incident rate (RIR) of contractors in their program from 2008 to 2010 of 2.41 to 1.93 per 100 workers. Similar figures from contractors evaluated and allowed on-site by the Department of Energy show a decrease from 1.37 in 2009 to 1.15 in 2011.
Granted, national figures for contractors from the Occupational Safety and Health Administration (OSHA) have declined as well, but the overall levels have a much higher starting point at 4.3 in 2009, decreasing only a few tenths of a point each year. Of course, there also is the question of whether the evaluation caused the lower rates or if other drivers exist. As identified by Wilson Yancey, vice president, Health, Safety & Environmental at Quanta Services, Houston, “Our safety metrics continue to improve, but it has nothing to do with third-party evaluators.”
Quanta Services, one of the original members of OSHA’s Transmission & Distribution Electrical Construction Contractors Safety Partnership, prides itself on its safety program. The company is not alone in its thoughts on what has driven improvements in its safety record.
Regardless, the bottom line is that contractor safety can be measured, and the data can identify these exemplary contractors. Trade association safety award programs can further demonstrate merit in safety. For instance, the National Electrical Contractors Association (NECA) awarded its Zero Injury Award to more than 50 contractors in 2012. Winners included many companies in the 150,000+ man-hour category. Host employers want to know they have safe contractors on-site. Rates are one measurement.
Be it ever so slight, luck factors into the rates. Therefore, host employers look beyond those numbers. True risk management involves reducing risk factors, thereby leaving less to chance. Host employers know contractors who consistently show exemplary safety records typically have an effective safety program. Conversely, the lack of a program means accidents could easily occur. So, effective assessment programs need to track rates over a period of years and/or include a component that ensures the contractor has a working safety program.
To contractors, their safety programs are an even greater part of the company’s sustainability. Contractors who continue to experience numerous accidents and/or fail to implement effective safety practices to prevent injuries and illnesses will be unable to find work. Of the contractors surveyed for this article, only one reported that it had customers who did not require an assessment. The respondent estimated only 20 percent of the company’s work came from host employers without assessment programs.
Of significance is the use of third-party evaluators in this process. Third-party evaluators have entered the contractor assessment arena with software applications to collect and review OSHA and other regulatory data, safety program documents, insurance certificates and more. Some of the companies used for this purpose include ISNetworld, PICS Auditing, PEC Premier, Achilles, and Browz. Contractor frustration lies mostly with these companies. Contractors reported the following:
Contractor 1: “I believe a third party requires too much unnecessary information that can skew the possibility of work.”
Contractor 2: “Third-party evaluators spend their time evaluating paper programs. The host employer is more involved in understanding our work.”
Contractor 3: “[Third parties] tend to be quite rigid in format and content. No room for context. At least with host employers, they are consistent in what they ask for. Host doesn’t cost anything; [with] some third parties, you pay exorbitant fees.”
In defense of the third-party evaluators, they claim to only request what the host has requested. PICS Auditing, Irvine, Calif., described the following benefits of participating in their program: “… PICS is a consortium-based membership. This means that you can market to the other companies that use the PICS database as well. We will issue a PICS Membership Certificate for your use in bids, provide an optimized press release on your membership and help improve your search engine rankings with a PICS Membership Tag.”
“Safety is important to your customer, and PICS provides customer service to help your complete your customer’s prequalification process. Using PICS, you can show a client the programs you have in your safety manual, your certificates of insurance, and any safety data about your company—anytime,” said Catherine Gutierrez, marketing manager, PICS Inc.
Rick Dorsett from ISNetworld, Dallas, offered these benefits of his company’s program: “ISNetworld is the resource for connecting organizations around the world with safe and reliable contractors. As a standardized process, ISNetworld allows contractors to comply with multiple owner-client requirements and industry regulations within their subscription. Additionally, contractors have the opportunity to gain marketing exposure to hundreds of owner clients, track employee-level information, training certifications and remain informed of industry news and owner-client updates.”
Both contractor and third-party evaluator perspectives are not without merit, and the host does not decide on a whim to have an assessment done to ensure it has a safe contractor. The issue seems to be inconsistency and cost. In the words of one contractor, “One day, a written process is accepted, but yet on another day, they’ll require you to rewrite it.”
And, with third-party evaluation programs, there is no consideration for industry programs using nationally accepted safety language. For example, an automated system failed to accept the NECA Safety Manual section on Aerial Lifts because NECA’s manual followed the OSHA regulatory model of placing this within the scaffolding sections instead of within a separate chapter.
This inconsistency makes it difficult to offer any recommendations on dealing with direct host or third-party evaluator programs. A cottage industry has sprung up with consultants whose primary focus is third-party compliance. These consultants have not been tested but may be worthy of review. An Internet search using the third-party name with the word “compliance help” can lead you to them.
Another thought is to impose on the third-party evaluator. Many offer a consultant or customer service representative who may be of assistance.
“ISN also offers many levels of support to contractors including unlimited customer service assistance, training sessions, one-on-one help desk appointments, face-to-face users’ group meetings and video tutorials to assist contractors with meeting each owner-client’s requirements,” Dorsett said.
There is hope. Some host employers have recognized the issues with the assessment. One utility that abandoned a third-party program and requested to remain anonymous said, “management underestimated the amount of internal resource it would take to make the effort successful” and “the third-party evaluator was not delivering as promised.”
Overall, the electric utility industry, through its trade association, the Edison Electric Institute (EEI), has taken notice of the contractor safety issue. In 2007, the CEO unanimously adopted a contractor safety initiative to align and define contractor safety expectations. The result of this initiative was the creation of a set of Model Contractor Safety Program Guidelines.
To assist in implementing this program, EEI has established a Joint Contractor Safety Task Force, which includes representatives from member utilities and contractors who work for utilities. The task force has directed EEI to advance consistency in assessment programs by develop an application for baseline data and the resources needed to assist contractors in this effort. At its 2012 Spring Safety and Health Conference, EEI introduced the EEI eSafetyLine Contractor Safety Program website. Going forward, EEI will continue to work with users of the program and the task force to achieve the goals of the contractor safety initiative and deliver clear and consistent expectations.
On a final note, one component that probably has not gone unnoticed is this topic’s sensitivity. Certainly, the anonymous quotes by both contractor and utility representatives indicate that concern. This is unfortunate. Safety is a common goal. It is important we find a way to work together to resolve issues. Contractors are encouraged to share concerns with their host employers and others on anything that will impede their efforts to focus on job site safety. Communication on contractor and host responsibilities has already been prescribed in part by NFPA 70E, Standard for Electrical Safety in the Workplace, and is slated to be part of the OSHA regulations 1910.269 Electric Power Generation, Transmission, and Distribution and 1926 Subpart: V Power Transmission and Distribution. Expanding this to common expectations agreed on by both industries is warranted.
O’CONNOR is with Intec, a safety consulting, training and publishing firm that offers on-site assistance and produces manuals, training videos and software for contractors. Based in Waverly, Pa., he can be reached at 607.624.7159 and firstname.lastname@example.org.