When you receive a Request for Proposal (RFP), your company is presented with a unique opportunity to stand above your competitors. For whatever reason--better marketing, effective networking, or well-established business relationships-- you made the bidder's list. Now you want your bid document to make the most positive impression. Promoting safety and insurance control programs can help you win the job and showcase your performance. This article explains how to determine the impact of safety/loss control program requirements on your company's ability to bid a project; avoid the common mistakes in presenting safety/insurance credentials by properly addressing the typical safety questions found in most RFPs and how to impress the customer's bid evaluation team by your safety and insurance pre-plan.

Typical contractor bid proposal documents

Since responding to numerous RFP documents requires a substantial commitment of a company's staff and resources, many companies routinely use only boilerplate marketing brochures and standard promotional materials. Contractors may even fill in outdated on the RFP. This is especially true for the safety and insurance sections.

There may be a historical perception that a general contractor (GC) won't consider a subcontractor's past safety and insurance performance record and, more often than not, will just select the lowest bidder. However, many owners are now requiring general contractors to do a more thorough job at pre-qualifying subcontracting bidders, particularly concerning safety and insurance performance records.

To bid or not to bid: 10 safety-related factors

1. Scope of project work - Have you handled projects of the same size and type before? Can you break out your safety and insurance performance records to clearly demonstrate that your company has successfully completed similar projects on time, within the original budget, per specifications, and in fulfillment of targeted safety and insurance performance goals?

2. Regulatory requirements - Does the project's scope of work mandate that the company comply with unusually stringent federal or state safety or environmental standards, such as removal of PCB-contaminated transformers? Can particularly hazardous work be contracted out to a fully qualified, reliable, and properly insured specialty subcontractor? Does your company have adequate insurance for this new or unusually hazardous exposure?

3. Customer's requirements - At the pre-bid review meeting, can you obtain a copy of the customer's facility and project standards, studies, manuals, handbooks, permits, action plans, and other safety/loss control procedures? Examples:

* constructability review studies
* site drawings for trailers, storage, and laydown areas
* value engineering review studies
* project design safety standards and codes
* risk assessment and job hazards surveys
* operating plant safety and loss control manual
* plant process safety management manual
* plant utilities and facilities tie-ins and permits
* contractual insurance and safety requirements
* master project safety and loss control manual
* project site employees' job rules and safety handbook
* project safe work permit and procedures
* project safety administration forms
* plant and project emergency/disaster plans

Have your estimators and project planning staff actually ferreted out all the potential safety, insurance, and liability provisions inside the contract, specifications, and blueprint notes? As necessary, have upper management, the safety/insurance department, your insurance agent/broker, your legal counsel, and customer representatives been consulted? All should review your prescribed safety performance; risk assessment, avoidance, transfer, and acceptance practices; and the full extent of needed insurance coverages in keeping with job exposures and customer requirements?

4. Project exposures beyond your control - Does the work to be performed expose site employees to actual or potential operating plant conditions and/or hazards of other site contractor's operations? Will the customer and its representatives (project manager, construction management firm, general contractor) mandate your site employees comply with their site safety practices, such as pre-hire orientations, gate entry requirements, daily work permits, special personal protective equipment (PPE) requirements, lockout/tagout, confined space entry, hazardous waste disposal? Will you be required to provide services to other site contractors with which you have no contractual agreement and, if so, are these additional work services within your scope of work? Some examples of such possible services include testing of site contractors' small electrical tools, project temporary lighting installations, and maintenance of ground fault circuit interrupter (GFCI) systems. Will there be adequate lighting on all shifts, suitable parking, secure laydown and storage areas, first-aid facilities, security personnel, customer/GC-initiated training, etc.?

5. Company personnel - Have you reviewed your candidate for site superintendent's safety and insurance record on his/her last project and on projects similar in size and scope to the one proposed for construction? Will obtaining and retaining qualified foremen and skilled field personnel be a problem? Will special safety training and/or certifications be required for certain personnel before they begin work?

6. Safety budget - Have you identified the full estimated cost of providing a safe and healthy environment for all of your company's site employees? A rule of thumb for a safety budget: Allocate four percent of your direct labor cost for routine work and five to six percent of your direct labor cost for more stringent customer requirements, strict regulatory provisions, or particularly hazardous work.

7. Site-specific safety training requirements - Does the customer mandate that new-hire employees attend safety orientation sessions conducted by the customer's project safety staff?

Are lengthy pre-hire company orientations required? Are weekly toolbox talks mandated? Are daily pre-work safety briefings required? Is specific training required for the project, such as respiratory program training and fit testing procedures, fire watches, entry into chemically hazardous environments? Will you be required to conduct training for subcontractors?

8. Site medical and first-aid program - Does the customer have an on-site medical and first-aid facility for site employees? If not, are medical facilities readily available to service all shifts and weekend work? Will medical examinations and testing be necessary before respirator usage or during exposure to certain chemicals? Do special hazards, such as radiation, call for unique relationships with medical providers?

9. Substance abuse program - What are the customer's requirements for drug and alcohol testing for new hires and on-site employees? Will the customer pay for company employees being drug and alcohol tested? Does the customer mandate random drug testing, testing for cause, or post-accident drug testing? On-site/off-site? If there is no customer-required program, will the company's own substance abuse program be implemented?

10. Special Project Requirements - Does the customer have an owner-controlled insurance program? Minority and women-owned preferential considerations? Surety support assistance? OSHA voluntary protection program (VPP) site? Brownfield project?

Most common mistakes in presenting safety and insurance credentials

Most contractors simply complete the customer's pre-qualification safety questionnaire by checking off "Yes" to all the "Do You Have" questions. They then fill in the blanks covering the company's experience modification rate and OSHA statistics for the last three years. Bid team members think or even say: "Why worry - nobody ever checks on this stuff anyway! The customer only looks at the general contractors' numbers. They don't follow up on a subcontractor's safety numbers. Never happen!" A company's bid team may be in for a real surprise, if they continue this line of reasoning.

Our Company's Safety Statistics Are Not Important - You should assume that the customer would have a Contractor Safety Pre-Qualification Questionnaire as part of the bid proposal package. Bidders may be required to provide their safety statistics based upon their OSHA 200 Logs for all their projects during the last three years.

Bid team members say, "Why worry - nobody ever checks on this stuff anyway! The customer only looks at the general contractors' numbers. They never follow up on a subcontractor's safety numbers." A company's bid team may be in for a real surprise, if they continue this line of reasoning.

Our company's safety statistics are not important - You should assume the customer has a Contractor Safety Pre-Qualification Questionnaire in their bid proposal package. Bidders may be required to provide their safety statistics based upon their OSHA 200 Logs for all their projects during the last three years. In the past, most customers just reviewed the GC's safety and insurance performance records and very rarely checked up on other site contractors. However, the trend today is for customers to mandate that the GCs do a better job of pre-qualifying subcontractors and even lower-tier contractors. Both the customer's and general contractor's evaluation teams will look at the bidders' performance history and watch for the following red flags:

* Number of fatalities -- If your company has had any fatalities during the last three years, this will definitely be a warning signal to the customer's/GC's review team. If you don't provide the customer and the GC with a detailed description of exceptional circumstances surrounding a fatality, how the overall impact was controlled, the corrective actions taken to prevent reoccurrences, and/or other steps to improve your company safety programs, you may not make the bidder's short list.

* Number of lost-time cases - If you can't clearly demonstrate a history of continuous reduction in the number of company lost-time injury cases over the last three years, this will be another alarm bell for the project bid evaluation team. The customer and GC will assess your commitment to ensure no lost-time injuries involving your site employees and those of your subcontractors. They will especially be interested in reviewing your bid proposal to see what site-specific safety plans and procedures your project manager will be implementing, including enforcement activities.

Number of hours worked - Customers/GCs often ask for the contractor's total number of employee work hours for each of the last three years. What they are really looking for are your company's total field man-hours for the same type of construction operations as you will be performing for them. You may want to exclude man-hours for your company's parent company or your home office staff. You may want to advise the customer of what you have included to ensure fair measurement against other bidders, such as construction, not maintenance, man-hours; field workforce man-hours excluding office engineering; and line construction division numbers versus inside work.

Nobody will ever check your statistics - If the contract award selection comes down to your company and another bidder and both bids are close on the total price quoted, the customer's and GC's choice may very well be which of these two contractors has the best, verifiable safety and insurance record.

Nobody will check with your previous customers - A major benefit of belonging to a business association is the opportunity to network and establish trusting relationships with other industry leaders. Customers/GCs are verifying with other industry leaders that the bidder has: performed very well on recent similar projects; retained key company personnel throughout the length of the projects; delivered the project's scope of work on time, within the original schedule, with a high degree of quality control, and inside the targeted safety and insurance performance goals; and has not underbid previous projects to get the job and then submitted numerous requests for information (RFIs) and change orders as well as been argumentative about the need for safety program expenditures.

Nobody will check on the company's previous lawsuits - Lawsuits are public records. Detailed information concerning the number and types of your company's lawsuits can be requested for a mere $1.50, while additional information about each lawsuit can be obtained for only $15. For $16.50, a customer/general contractor can spot check your company's history of filing lawsuits or being a defendant. This also means that you can check out a customer's or GC's history of legal cases before entering a contractual agreement. How? See the Internet Web site at www.knowx.com.

Nobody will check on the number of OSHA inspections - By bringing up the OSHA Web site at www.osha.gov, selecting "Library/Reading Room," and then "Statistics and Inspection Data", you can enter the name of any company to find out the following:

* Number of Federal/State OSHA inspections at a certain company's worksites in a given year.
* Number of OSHA citations issued.
* Type of OSHA violations.

* Amount of fines issued to the company.
* If the inspection was planned by OSHA, due to a complaint, or because of an accident.
* Outcome of contested OSHA cases.

Nobody will ever check on the company's experience modification rate (EMR) - In the past, many customers only asked the project's GC for their EMRs, but there is a trend that all site contractors, including lower sub-tier contractors, must have an EMR of 1.0 or less to work on a project. Customers and GCs will require the company to provide their workers' compensation interstate EMR for the most recent three years along with a verification letter from the company's insurance agent. If a company's EMR exceeds 1.0, that company will not be allowed to bid the work; allowed to bid the work, but eliminated immediately; or be required to demonstrate that the company has initiated the proper programs, policies, and attitudes, which will result in an EMR of less than 1.0 for the work being bid.

We'll get the job, because the customer likes us - It is not a coincidence that many times the contractor with the best credentials doesn't win the job. Misunderstanding the project's priorities, underrating the selection committee's expertise, and failing to address the project's scope of work are the most common mistakes bidders make in presenting their credentials for project consideration. Working for the customer/GC before often gives the bidder a false sense of having an inside track in winning the job. Rules change and higher-ups in a customer's organization change the rules to maintain an edge or to keep up with competitors. Know the rules and be prepared to meet all bid requirements, including safety/insurance provisions.

How to impress the bid evaluation team

* Demonstrate your firm's safety and insurance performance records visually using charts, tables, etc.
* Include in your bid proposal a company-specific safety plan addressing the actual and potential exposures of the project.
* Show your site superintendent's safety performance record for his/her last three projects.
* Address how your firm will interface with customer's plant personnel and/or other site contractors concerning safety procedures and practices, particularly for such activities as lockout/tagout, confined spaces, fall protection, fire prevention, and security.
* Explain your subcontractor's safety pre-qualification policy or how you will enforce the requirements of the customer and general contractor.
* Provide current resumes of the company's planned site safety coordinator and other key employees spotlighting their applicable safety knowledge.
* Describe your firm's proposed safety award and incentives program for the project.
* Define your firm's policy and procedures for providing drug-free employees.
* Describe the steps your firm will take to work with the customer's and/or general contractor's start-up team members.

By following these guidelines, your firm should improve the odds of being selected as the successful project bidder. Bid wisely, bid safely.

GRAHAM is a consultant providing a full range of construction safety and loss control services. He can be reached by telephone at (770) 947-8817). POTTS is NECA Director for Safety and Insurance. He can be reached by telephone at (301) 215-4526.