Grade Contractors and Maintain a Rating System - Safetip #172

Safety Tip and Best Practice
May 22, 2019

This week’s Safetip is about assigning grades to contractors and maintaining a rating system as part of a contractor safety program.

The Growing Use of Contractors

A report from ISN Analytics shows that the use of contractors and the outsourcing of work are on the rise. According to the report, 23% of contractor hiring organizations use over 1,000 contractor companies. In addition, almost half of the surveyed organizations have a minimum of 40% of their on-site work completed by contractors, some even going as high as 100%.

These statistics clearly show that contractor safety must be a high priority for EHS departments. In fact, the same ISN Analytics report shows that EHS owns (alone or with other departments) the contractor management process in 55% of surveyed organizations, putting EHS ahead of other departments, including operations, engineering, maintenance and procurement.

Leading Organizations Grade Contractors

A few years ago, the National Safety Council’s Campbell Institute conducted research into the best practices of world-class organizations in EHS around the management of contractor and supplier safety.

One of the identified best practices consists of assigning grades and maintaining a rating system for contractors. Grades are used to evaluate contractors during prequalification.

According to the Campbell Institute’s research, a majority of research participants (11 out of 14) have some type of internal scale, checklist or metric for which a contractor must receive a passing grade to be approved for work projects.

For example, contractors are assigned a letter grade based on safety statistics, the presence of a written safety program, leading indicators, responses to a safety questionnaire, a field audit of the safety program, and/or performance evaluations. Contractors must receive and maintain a grade of A or B to be hired.

Some organizations do not assign grades but maintain a rating system. One research participant calculates a “Contractor Safety Performance Metric” that is based on safety and health history, proof of permits and licenses, and documented safety practices and policies.

Another participant uses a contractor’s safety statistics, EHS policies, training offered, incident reporting, EHS meetings, pre-task planning and inspections to rate them as: “satisfactory”, “satisfactory with advisory notice”, “satisfactory with corrective action plan”, or “unsatisfactory”.

As part of your contractor safety program, implement a system where contractors are assigned grades, and use the ratings to determine which contractors to hire.

Each week we publish a Safetip where we share a safety tip or best practice that contributes to safety excellence. Visit Enablon Insights again next Wednesday for a new Safetip!

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Jean-Grégoire Manoukian

Content Thought Leader